Supply Chain Excellence

SAP Integrated Business Planning

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 2Confidential

IBP

One Harmonized Data ModelAvoid any latency due to integration efforts and leverage the SAP ERP data model

Cloud First ApproachThe solutions will be provided in the SAP Cloud but also be made available on-premise

Enhanced User ExperienceIntroduce state-of-the art user experience with communication capabilities (SAP JAM) and MS Excel Spreadsheets

Built on SAP HANADemand Networks require real-time monitoring and a focus on short-term planning

New Planning AlgorithmLeverage predictive analytics (e.g. demand sensing) algorithm in combination with optimization SAP Business Network

Supply Inventory Response Demand

Sales & Operations Planning

Enhanced User Experience

Supply Chain Control Tower

SAP HANA Platform

SAP Integrated Business PlanningSpeeding up the Supply Chain requires a new Supply Chain Planning approach

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 4

S&OP Customer Testimonial

“”Colgate Business Planning (CBP) is our integrated business planning process focused on accelerating profitable growth. We have engaged with SAP as an co-innovation partner and collaborator to utilize their S&OP tool to enable our integrated monthly CBP process to synchronize demand and supply.

The S&OP capabilities on HANA include the real time simulation and analysis of demand opportunities during planning sessions. The tool’s contextual social collaboration capabilities have facilitated more timely communication and updates of demand changes across the organization. It has also streamlined the preparation and information exchange leading up to key consensus meetings by providing one tool and repository for information.”

Jim Davis

Global Director of Demand Planning and Customer Service

Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 223 countries and territories around the world.

The IBP Pillars

IBP: Plan in Real-time With a Unified Data Model

Capabilities: Plan in real-time, using a unified model of your demand,

supply chain and financial data within a single data model, allowing planning on qty or value

Analyze massive volumes of complex data instantly at any level of granularity, aggregation, and dimension

Import massive amounts of detailed data directly from SAP and non-SAP sources

Benefits: Optimize product/customer profitability and product mix,

considering supply and financial constraints Adjust inventory levels to reduce cost, while meeting

target customer service levels

Manage capacity utilization to avoid capacity and material shortages

QtyValueUser-driven embedded analytics

User-defined process templateAlert management

IBP: Run Simulations and Scenarios Instantly

Capabilities: Rapidly run simulations of demand, supply and

financial changes using your full data model to support what-if analysis

Compare planning scenarios and their impact on key performance indicators in real-time

Drill down into simulated data to perform detailed analysis without the need for manual disaggregation

Benefits: Identify optimal set of tactics to drive revenue growth

and increase market share

Uncover opportunities to reduce supply chain cost

Prepare for potential changes in demand and supply before they happen

Plan on select key figures Plan on select hierarchy level and disaggregate

Select quantity or value

Create own master data for simulationAddresses NPI and invisible demand

Embedded alerts

IBP: Enable Rich, Contextual Social Collaboration

Capabilities: Track progress of your business process, including

assignment and monitoring of action items and the stakeholders responsible

Collaborate quickly and easily using embedded role and context-aware social tools

Plan using user-friendly web and Microsoft Excel interfaces

Benefits: Increase speed and agility of planning

Drive greater engagement and improve input from users across your organization

Improve precision of demand and supply balancing

Messenger to key stakeholders

Collaborate and share analysis

Wealth of collaboration tools

SAP Integrated Business Planning (IBP)

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 13

• Consider an airport control tower’s real time visibility of all airlines events in the region.

• The air traffic controllers has all the relevant information presented to them in real time and are able to analyze, interpret and act on the information presented.

• They have a single interface to manage actions, corrective actions and communication with stakeholders.

• Taking these lessons learned into supply chain planning… reacting to events in your supply chain timeously helps to prevent losses and increase profit.

• SAP enables global visibility of the supply chain linked to sales, operations and inventory planning in real time through the SAP Integration Business Planning solution delivered in the SAP Managed Cloud

SAP Supply Chain Control Tower

SAP Supply Chain Control TowerUnderstand current supply chain status with flexible dashboards

Enable supply chain professionals to navigate, analyze and profitably manage the end-to-end supply chain in real-time• Increase end-to-end visibility• Provides historical and forward looking

KPIs in a single view• Drive visibility and action with user

configurable dashboards and analytics• Monetized impact of exception conditions

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

SAP SUPPLY CHAIN CONTROL TOWER

KPI dashboard Global visibility

Task and Case management Alerting to Action

SAMPLE USE CASES

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

• 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

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

SAP Integrated Business Planning for sales and operations

S&OP process management Simulation

Collaboration Dashboard analytics

Supporting different Business Models and Challenges

Net Business Impact

Value Proposition with S&OP powered by HANA Benefits

Real-time Planning

Plan in real-time, using a unified model of your demand, supply chain and financial data

Analyze massive volumes of complex data instantly at any level of granularity, aggregation, and dimension

Import massive amounts of detailed data directly from SAP and non-SAP sources

Optimize product/customer profitability and product mix

Single business plan for all stakeholders

Avoid shortages

Instant Simulations & Scenarios

Rapidly run “what-if” simulations of demand, supply and financial changes using your full S&OP data model (30 to 40% improved response time)

Compare planning scenarios and their impact on key performance indicators in real-time

Drill down into simulated data to perform detailed analysis without the need for manual disaggregation

Become prepared to seize opportunities or deal with imminent threats

Lower safety buffers without raising risk

Social Collaboration

Track progress of the S&OP process, including assignment and monitoring of action items and the stakeholders responsible

Collaborate quickly and easily using embedded role and context-aware social tools

Plan using user-friendly web and Microsoft Excel interfaces

Improve forecast accuracy through a faster and collaborative S&OP process

Greater accountability & adoption from stakeholders

Net Business Impact

Value Proposition with S&OP powered by HANA Business Impact

Standardize Process

• Standardize process with automated workflow and task management

• Enable collaboration with field providing ability for customer program managers to directly input forecast data

• Integration and consolidated data provides single version of the truth

Participation &

Accountability

Optimize Demand

Plan

• Optimize demand planning by leveraging historical data (previous forecast, actuals, etc.) and current backlog data

• View different demand inputs to create a single consensus

Forecast Accuracy (%)

BalanceSupply-

Demand

• Run financial impact simulations, e.g. revenue impact based on supply plan

• Perform constraint based supply planning

• Perform material and capacity analysis to balance supply-demand

Inventory Costs

Real-time Data

Refresh

• Real-time refresh of data fields including: product family, part number, ASP, customer master, form factor

• Run simulations in real-time to make better business decisions, faster

• Paradigm shift from time spent on data gathering to data analysis to uncover opportunities for improvement

Time for Data Analysis

vs. Gathering

1234

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 21

CompanySMART Modular Technologies Inc.

HeadquartersNewark, California

IndustryHigh tech

Products and ServicesDesign, development, and deployment of current and next-generation memory products

Employees1,400

Web Site www.smartm.com

PartnerIntrigo Systemswww.intrigosys.com

Business challenges Planning processes that could not be scaled to keep up with fast company

growth Lack of capabilities to support a value-driven and profitability-oriented sales and

operations planning process that is linked to business strategy

Technical implementation Implemented the SAP® Sales and Operations Planning application powered by the SAP HANA® platform

Key benefits Standardized, optimized, and automated the sales and operations planning

process, substantially reducing planning cycle times and workload Increased efficiency and accuracy of the forecasting process, and enabled the

identification of critical component shortages Enabled integrated business planning

“SAP Sales and Operations Planning powered by SAP HANA helps SMART Modular manage our sales and operations planning in a collaborative and efficient manner. We see a single version of the plan from sales to planning to materials to the factory, all of which can be correlated to financial performance. The result is true integrated business planning.”Srini Tanikella, Director IT Solutions, SMART Modular Technologies Inc.

Planning More Effectively with SAP® IBP for sales and operations planning

UnifiedPicture of sales, profits, and share targets, all in one system

FastCycle times with fewer manual and labor-intensive sales and operations planning processes

IntuitiveUser interfaces and embedded collaboration tools that help boost user productivity

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• 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

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

SAP Integrated Business Planning for demand

Demand Sensing Scenario planning for demand

Issue Resolution Fiori appDefining a forecast model

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.• 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

• Determine right amount, right place, and right time for inventory to carry while meeting plan objectives

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

SAP Integrated Business Planning for inventory

Inventory positioning in network Inventory & Service optimization

‘What if’ analysis on inventoryDrivers of inventory

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 28

CompanyMcKesson Corporation

HeadquartersSan Francisco, CA, US

IndustryPharmaceuticals

ProductsPharmaceuticals, Healthcare products, Medical technology

Employees43,500

RevenueUS$ 122.455 billion

Web Site McKesson.com

PartnerSAP Consulting

Business challenges Spreadsheet-based planning approach prevented achieving aspired business

growth targets Limited to no possibility to gain insight / analyze vast amounts of relevant data on

the required levels of granularity Growing and enabling business organization quickly to fulfill growth targets

Implementation Integrated solution for sales & operations planning and inventory

optimization/replenishment planning SAP HCI pivotal piece of integrating IBP for s&o, EIS, ECC and BW One Business Unit globally first, subsequent Roll-out

Key benefits Improved confidence in and integrity of the S&OP process Optimal inventory positioníng and level setting in complex supply chain

environment Simplification of planning and fully exception-based procedures enabled scaling

up the business organization quickly Aggregation/disaggregation „on the fly“ through millions of relevant data records

for rapid insight for business users Generation of optimal constrained and balanced business plan in line with

corporate financial targets

“Simplification of sales and operations planning, the introduction of an optimized inventory positioning and replenishment process, and the rapid enablement of the human organization was key for scaling up the business according to the business growth targets.”Jim Smith, Director of Solution Management, McKesson Corporation

Mastering complex hub & spoke supply chain model with SAP® IBP for sales and operations and SAP® EIS

IncreasedUser acceptance through centralized analytics and alerting

DecreasedWorking capital through optimized invetory targets and levels

GreaterSpeed, efficiency and effectiveness of planning process

SAP Integrated Business Planning for supply 

Create tactical level supply planning simulations for S&OP based on forecasts, orders, and inventory or safety stock targets.

• 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

• Gain visibility for projected stock or shortages at relevant levels of aggregation

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

Fast, flexible supply planning supporting a variety of approaches, suitable for many industries, including:

• Support of tactical (time-bucketed, rough cut) supply planning in conjunction with IBP for sales and operation

• Create specific orders for production and procurement in short – mid term, in alignment with tactical plan

• Constrained optimization and priority rules-driven algorithms. Unconstrained demand propagation and heuristics options as well

• Make short-term supply adjustments

• What-if analysis of actual or hypothetical changes to demand and / or supply

• Pegging and gating-factor analysis

• Optionally generate and provide allocations to ATP, and reschedule sales orders

SAP Integrated Business Planning for response and supply

Demand Inventory Supply Response

Sales and operations planning

Supply Chain Control Tower

SAP HANA

SAP Integrated Business Planning for supply & response

Entry screen – KPIs and alerts overview Back order processing and confirmation simulation

Demand supply pegging analysisStock projection

SAP Integrated Business Planning for supply & response

Entry screen – KPIs and alerts overview

Demand supply pegging analysisStock projection

SAP Integrated Business Planning for supply & response

Entry screen – KPIs and alerts overview

Demand supply pegging analysisStock projection

Customers

Integrated Business Planning for sales and operationsCustomers and Industries

High Tech

Pharma

Chemicals

Manufacturing

Mill Products & Mining

Consumer Products

ServicesRetail

© 2015 SAP SE or an SAP affiliate company. All rights reserved.

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