Supply chain challenges continue to dominate headlines as companies struggle to procure raw materials and finished goods and deliver products on schedule. Constraints on incoming orders' availability and timeliness are revealing just-in-time inventory management's weaknesses and driving a need for better supply chain visibility, predictive analytics and resilient operations.
SAP's Integrated Business Planning (IBP) product could help with some of these challenges, including facilitating demand-based planning and analyzing inventory levels.
Here's a closer look at IBP and how it could potentially help companies improve their supply chain operations.
What is SAP IBP?
In 2014, SAP launched the first version of its IBP product, which incorporated operational planning and analytics into a single application designed to leverage SAP's HANA database performance advantages.
IBP capitalizes on one of the HANA platform's key capabilities: driving predictive analytics based on very large data sets. IBP also attempts to encourage a cross-functional organizational perspective, shifting the focus away from a siloed supply chain perspective toward a more holistic business view and increasing collaboration among sales, finance and other departments.
How SAP IBP can optimize the supply chain
Some of IBP's capabilities could potentially help improve supply chain operations. Here are a few of them.
IBP's real-time analytics could help companies embrace demand-driven planning. The analytics could also help supply chain managers better balance supply and demand.
Extended planning capabilities
IBP offers some planning capabilities to users outside the main organization, such as customers and distributors. And as disruption hits supply chains across multiple industries, collaboration is more important than ever.
For example, collaborative planning with upstream suppliers is critical in the automotive industry. Meanwhile, consumer packaged goods companies typically work closely with key customers and distributors to attempt to match supply with demand.
IBP uses algorithms to analyze a warehouse and supplier network's inventory levels. The analysis accounts for locations' transportation and storage costs, as well as lead times and targeted service levels.
IBP's analysis capabilities could help identify other ways to optimize supply chain value as companies try to move away from a just-in-time philosophy.
Supply Chain Control Tower
SAP's Supply Chain Control Tower adds real-time analytics to the rest of IBP, giving supply chain managers real-time, end-to-end supply chain visibility. It also includes configurable alerts and can inform managers about disruptions like shipping delays.
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