Integrated Business Planning Overview and Preview of the New Demand Application. Tod Stenger SAP

Transcription

1 Integrated Business Planning Overview and Preview of the New Demand Application Tod Stenger SAP

2 Agenda Integrated Business Planning Overview Integrated Business Planning for Demand: Introduction Demand Sensing IBP for Demand: Details Demonstration Wrap-up 2015 SAP SE or an SAP affiliate company. All rights reserved. 1

3 Integrated Business Planning Overview

4 Why a New Solution for Supply Chain Planning Is Needed Complex and granular data models encumber what if analyses Supply chain planning systems in the market tend to be fragmented, requiring many interfaces Customer-centricity and the need for speed SPEED Disconnect between planning and execution system SPEED Duplicate data transfers between planning and analytics systems encumber performance 2015 SAP SE or an SAP affiliate company. All rights reserved. 3

5 Buyer Supply Chain Collaboration Application Business Partner Portal SAP Integrated Business Planning Solution Architecture Enhanced User Experience Introduce state-of-the art user experience with communication capabilities (SAP JAM) and MS Excel Spreadsheets Built on SAP HANA Demand Networks require real-time monitoring and a focus on short-term planning One Harmonized Data Model Avoid any latency due to integration efforts and leverage the SAP ERP data model SAP Integrated Business Planning Enhanced User Experience Inventory Sales & Operations Planning Response and Supply SAP HANA Platform Demand SAP Supply Chain Orchestration Suppliers New Planning Algorithms Leverage predictive analytics (e.g., demand sensing) algorithm in combination with optimization Cloud-First Approach The solutions will be provided in the SAP Cloud, but will also be made available onpremise Customers Carriers/LSPS Manufacturers B2B,High Availability, Open 2015 SAP SE or an SAP affiliate company. All rights reserved. 4

6 Integrated Business Planning powered by HANA A Single Data Model to Swiftly Drive Collaboration and Action in Your Business Sales and Operations: Drive your business with one set of numbers Supply Chain Control Tower: Visibility Inventory: Master Uncertainty, drive S&OP decisions to the Planners Supply Chain Monitoring and Integrated Business Planning Enhanced User Experience Supply Chain Control Tower IBP for demand IBP for sales and operations IBP for inventory SAP HANA Platform IBP for response and supply Demand: Demand analytics, demand sensing. Forecast Better. Response and Supply: Master supply planning and response intelligence 2015 SAP SE or an SAP affiliate company. All rights reserved. 5

7 SAP Supply Chain Control Tower Enable supply chain professionals to navigate, analyze and profitably manage the end-to-end supply chain in real-time Increase end-to-end visibility Supply Chain Monitoring Supply Chain Control Tower Integrated Business Planning (IBP) User Experience IBP for sales & operations IBP for demand IBP for supply IBP for inventory IBP for response SAP HANA Platform Increase on-time delivery performance to customer Decrease overall inventory levels while reducing risk Increase supply chain agility and reduce supply chain cost 2015 SAP SE or an SAP affiliate company. All rights reserved. 6

8 SAP Integrated Business Planning for sales and operations Deliver a cross departmental sales & operations plan balancing the impact on inventory, service levels and profitability Create the optimal business plan to drive revenue growth and increase market share Supply Chain Monitoring Supply Chain Control Tower Integrated Business Planning (IBP) User Experience IBP for sales & operations IBP for demand IBP for supply IBP for inventory IBP for response SAP HANA Platform Effectively balance demand and supply and attain financial targets Increase speed and agility of planning and drive most profitable responses Improve forecast accuracy and on-time delivery 2015 SAP SE or an SAP affiliate company. All rights reserved. 7

9 SAP Integrated Business Planning for inventory Optimize multi stage Inventory Targets to most efficiently meet or exceed customer service levels, fully considering uncertainties like forecast error and supply uncertainty. Supply Chain Monitoring Supply Chain Control Tower Integrated Business Planning (IBP) User Experience IBP for sales & operations IBP for demand IBP for supply IBP for inventory IBP for response SAP HANA Platform Improve customer service levels Maximize the efficiency of inventory and working capital Improve planner productivity, standardize planning processes Standardize the inventory target-setting process at each tier within the supply chain to feed operational plans Reduce production and distribution costs 2015 SAP SE or an SAP affiliate company. All rights reserved. 8

10 SAP Integrated Business Planning for demand Gain full Demand Transparency for short-, mid- and long-term forecasting by leveraging demand sensing and statistical forecasting methods Supply Chain Monitoring Supply Chain Control Tower Integrated Business Planning (IBP) User Experience IBP for sales & operations IBP for demand IBP for supply IBP for inventory IBP for response SAP HANA Platform Develop more accurate mid-term statistical forecasts React faster to short term demand changes with pattern recognition based algorithms Drive more accurate deployment of product based on short term demand Manage multiple demand signals Collaborate to ensure the most accurate forecast 2015 SAP SE or an SAP affiliate company. All rights reserved. 9

11 SAP Integrated Business Planning for supply Create advanced supply planning simulations for S&OP based on forecasts, orders, and inventory or safety stock targets. Supply Chain Monitoring Supply Chain Control Tower Integrated Business Planning (IBP) User Experience IBP for sales & operations IBP for demand IBP for supply IBP for inventory IBP for response SAP HANA Platform Simulate either constrained or unconstrained production and distribution plan, using heuristics or optimization based algorithms Multi level sourcing determination for both distribution and Bills of Material Development of rough cut capacity plan in a times series bucketed supply plan Simulation capabilities for scenario planning 2015 SAP SE or an SAP affiliate company. All rights reserved. 10

12 PLANNED (will supercede IBP for supply in 6.0) SAP Integrated Business Planning for response and supply Fast, flexible supply planning supporting a variety of approaches, suitable for many industries, including: Support of tactical (rough cut) supply planning in conjunction with IBP for sales and operation, as well as operational supply planning capabilities User Experience Supply Chain Control Tower Demand Sales and Operations Inventory Response and Supply SAP HANA Platform What-if analysis of actual or hypothetical changes to demand and / or supply Pegging and gating-factor analysis Constrained optimization and priority rules-driven algorithms. Unconstrained demand propagation and heuristics options as well Optionally generate and provide allocations to ATP, and reschedule sales orders Production and distribution (deployment) use cases 2015 SAP SE or an SAP affiliate company. All rights reserved. 11

13 Benefits of Advancing on the IBP Maturity Curve Metric Inventory write-off as % of revenue % of Revenue Loss due to stockouts On Time Delivery (as %) Forecast Accuracy (as %) Improvement -14% % % % Best-in-Class Companies: Aberdeen 2011 Experienced 81.9% forecast accuracy level for three months out into the future 97.2% of orders delivered to customers complete and on time Decreased cash-to-cash cycle time by -.3% year over year Order Fulfillment Lead Time (in days) Note: KPI performance improves with increasing best practice adoption from Low to High Source: SAP Benchmarking SAP SE or an SAP affiliate company. All rights reserved %

14 HCI Out-of-the-box or configured Integration Web UI/https IBP Solution Architecture SAP Integrated Business Planning 5.0 Excel ERP CRM BPC APO BW SAP HANA IBP Model & Engine Attributes Key Figures Scenarios & Simulation Predictive Analytics Heuristics & Optimization Process Management Alerts Web Sales/ Marketing Demand Planning Finance Any other system SAP Jam Mobile Supply Chain Files Social Collaboration Executives 2015 SAP SE or an SAP affiliate company. All rights reserved. 13

15 Integrated Business Planning for Demand: Introduction

16 What Problems Are We Solving? Top Business challenges High market volatility Variation in demand is increasing Lean supply chains and demanding customers Challenges in daily work Poor forecast accuracy Inefficient operations Low service level and excess inventory An unprecedented amount of data (or signals) is available today to drive better decisions 2015 SAP SE or an SAP affiliate company. All rights reserved. 15

17 SAP Integrated Business Planning for Demand Supply Chain Control Tower Sales & Operations Planning Demand Inventory Response and Supply SAP HANA Platform 2015 SAP SE or an SAP affiliate company. All rights reserved. 16

18 Simplified Definition Integrated Business Planning for Demand Integrated Business Planning for Demand = Traditional demand planning + Demand sensing/short-term forecasting + Predictive/forecasting analytics techniques 2015 SAP SE or an SAP affiliate company. All rights reserved. 17

19 Demand Sensing

20 Integrated Business Planning for Demand Demand Planning vs. Demand Sensing Demand Planning is a demand planning tool that helps you to cope with the uncertainty of the future, relying mainly on data from the past and analysis of trends Demand Sensing is the science of making these forecasts more accurate/more profitable in the short-term horizon, relying mainly on data from the present and recent past and analysis of patterns Forecast Demand Planning: E.g., executed monthly in weekly buckets Demand Sensing: Generally done daily in daily buckets Difference between short-term forecast and consensus mid/long-term forecast wk1 wk2 wk3 wk4 wk52 time 2015 SAP SE or an SAP affiliate company. All rights reserved. 19

21 Demand Sensing Bridges the Gap Between Planning and Execution Years Long-Term Months Medium-Term Weeks Short-Term Days Execution Annual budgeting Annual strategic planning Network design Sales and Operations Planning Demand management Demand planning Inventory planning Production planning Demand sensing Deployment Kitting/packaging Order fulfillment Logistics execution Forecasts Used Annual Budget Statistical Consensus Orders Data Granularity 2015 SAP SE or an SAP affiliate company. All rights reserved. 20

22 Demand Sensing Identifies Optimal Blend of Inputs to Better Predict Demand Weekly Adjustments Open Order data correlation corrections Bias Tracking Controls Intelligent forecast consumption logic Daily Disaggregation Forecast patterns Shipment patterns Demand Signal data patterns Optimal weighting and pattern recognition Output Optimal blend by lag patterns Daily outputs for execution systems Aggregated weekly or monthly values for planning and reporting Bias and variability calculations 2015 SAP SE or an SAP affiliate company. All rights reserved. 21

23 What Planning Processes Does Demand Sensing Impact? Illustration of the Different Planning Horizons Deployment & Transportation Decisions Production & Packaging Sequences Material Purchasing Future week 2015 SAP SE or an SAP affiliate company. All rights reserved. 22

24 Mon Tue Wed Thur Fri Mon Tue Wed Thur Fri Effect of Demand Sensing National DC Daily Replenishment Schedule with updated forecast East DC East Daily Demand Trend Weekly forecast of 40 units West DC West Daily Demand Trend 2015 SAP SE or an SAP affiliate company. All rights reserved. 23

25 Mon Tue Wed Thur Fri Mon Tue Wed Thur Fri Effect of Demand Sensing (cont.) National DC Daily Replenishment Schedule with updated forecast East DC East Daily Demand Trend Weekly forecast of 40 units West DC Sales trends are picked up with Demand Sensing which updates short-term forecast West Daily Demand Trend 2015 SAP SE or an SAP affiliate company. All rights reserved. 24

26 IBP for Demand: Details

27 Simplification What We Heard Demand Planners aren t and shouldn t be statisticians Management We need to align our demand plan with our S&OP plan I really need to focus on adding business insights to the forecast We need better input from Sales Demand Planner The system should pick the best statistical model I need more powerful statistical tools Data Scientist 2015 SAP SE or an SAP affiliate company. All rights reserved. 26

28 Simplification What We Are Doing Role-based UI concept Local Demand Planner Global Demand Planner Data Scientist Simplified UI concepts Use of Excel as a planning front end Mobile-ready HTML 5 UI Use of Fiori concepts for user interaction 2015 SAP SE or an SAP affiliate company. All rights reserved. 27

29 IBP for Demand 5.0 Features Demand sensing algorithms (short term forecasting) Statistical Methods (mid- / long-term forecasting) Pre-Processing algorithms Time series algorithms Regression based methods Integration with ERP and APO Exception management Fiori Apps and Excel as a planning front-end Data model: Key figures and attributes Key figure calculations Aggregation/Disaggregation rules User management and authorizations Pre-Processing algorithms: Substitute missing values Outlier correction with interquartile range test and variance test Time series algorithms: Simple moving average Weighted moving average Single exponential smoothing Double exponential smoothing Triple exponential smoothing Automated triple exponential smoothing with parameter optimization 1st order exponential smoothing with adaptive alpha Croston s method for intermittent demand Regression based algorithms: Multiple linear regression (MLR) Combination of these algorithms (similar to composite forecasting in APO) or Pick the best IMPORTANT! IBP 5.0 scope is focusing on Demand Sensing! 2015 SAP SE or an SAP affiliate company. All rights reserved. 28

34 Additional Concepts Planning Area and Planning Level Planning Level 1 Product Group Product Location Week Planning Level 2 Product Group Location Week Planning area = configuration/data container Planning levels = Data storage level Not aggregates of detailed data Planning Area 2015 SAP SE or an SAP affiliate company. All rights reserved. 33

35 Additional Concepts Calculations Calculations: = IF(ISNULL( ), ) Ability to define calculations between key figures including default values Planning area configuration (back end) User calculations also done in Excel APO Macros = Key figure calculations + Excel 2015 SAP SE or an SAP affiliate company. All rights reserved. 34

36 Adoption Scenarios For Current Demand Planning customers: Insert IBP for demand to calculate short-term forecasts Roll out to smaller business units that have not adopted APO DP yet APO (Demand Planning) Downstream demand signals Social Media Demand Signal Management Downstream demand signals Downstream demand signals* Forecast IBP for demand Short-Term Forecast Master Data, Delivered orders Forecast adjustments Master Data, Delivered orders, Open orders ERP (* Future) 2015 SAP SE or an SAP affiliate company. All rights reserved. 35

37 Adoption Scenarios (cont.) Use of IBP for demand (demand sensing) with APO (DP and SNP) and IBP for inventory APO (Demand Planning) Downstream demand signals Social Media Demand Signal Management Downstream demand signals Downstream demand signals* Forecast IBP for demand Short-Term Forecast IBP for inventory Master Data, Delivered orders Forecast adjustments ERP APO (Supply Planning) (* Future) 2015 SAP SE or an SAP affiliate company. All rights reserved. 36

38 Adoption Scenarios (cont.) Longer term vision: IBP for sales and operations IBP for response and supply IBP for inventory Integrated Business Planning for demand (Including Demand Planning & Short-term forecasting & Predictive Toolbox) Downstream demand signals Social Media Demand Signal Management Downstream demand signals* Forecast adjustments Master Data, Delivered orders, Open orders Master Data, Delivered orders ERP (* Future) 2015 SAP SE or an SAP affiliate company. All rights reserved. 37

39 What About APO? Support for APO 7.0 extended to 2025 APO integral part of SAP s Demand Management offering This is a time of transition: Not all features from APO are in IBP yet IBP has features not in APO IBP is currently only available on the cloud SAP can help develop a roadmap for APO IBP 2015 SAP SE or an SAP affiliate company. All rights reserved. 38

40 Demonstration

52 Wrap-Up

53 Where to Find More Information SAP Supply Chain on SAP.com SAPPHIRE NOW, Transform Your Supply Chain into a Demand Network (Hans Thalbauer) (YouTube, June 2014). SAP IBP, SAP Integrated Business Planning Solutions Overview (YouTube, July 2014). Solution Explorer SAP Integrated Business Planning for sales and operations Starter Edition Education Courses: SOP200 and SOP300 (no specific IBP for demand courses yet) SAP SE or an SAP affiliate company. All rights reserved. 52

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