Weathering the Storm: SAP IBP’s Real-Life “What If?” Simulations Put to the Test

Whatever your political leanings, it’s safe to say we can all agree on one thing; the current climate is nothing if not unpredictable. This unpredictability puts stress on today’s supply chains like never before. Global supply chains are commonplace today, with components procured from suppliers all over the globe, and customers in every continent (prob Antarctica right?) and flexible manufacturing capabilities, today’s supply chains are exposed to the risk of global politics in ways never before imagined a generation ago.

Fortunately, our tools have evolved as well. Fully-integrated, cloud-based solutions like SAP’s Integrated Business Planning (IBP) solution provide today’s planners with powerful tools to predict the formerly unpredictable. And we at SCM Connections are lucky enough to have a front-row seat to the whole show. As a premier supply chain consulting firm specializing in IBP, not only do we have implemented solutions, but have seen them actually work! We’ve demonstrated our ability to help our clients manage unexpected tarrifs, fluctuating commodity prices, and Wall Street pressures with resounding success. Want to know what’s made the difference for the most successful users? It’s the ability to unlock insights using these three innovative capabilities:


Integrated Simulations

No more interfaces, planning areas or spreadsheets to integrate. If your supply chain’s integration model hinges on a VLOOKUP function, then you are exposed. Today’s IBP application has a unique and innovative feature called a “unified planning area” or UPA for short. This UPA concept provides all supply chain functions, from demand to supply and even inventory optimization, within a single database. No more interfaces AND a common data model? Brilliant!

But what does it do, really? It allows real-life planners (just like you!) to create, compare, change and evaluate fully integrated simulations without anyone from the IT department by your side. With this function we see planners create, solve, evaluate and decide on scenarios IN THE MEETING. What used to take days now takes hours. That means more scenarios, more innovation and more insight. Less time with VLOOKUPs means better answers, and that’s what a tool should do in the first place, right?


Financial Integration

Next level supply chains (Gartner stage 3 and 4) require financial integration. Decisions should be made based on impacts in both units AND dollars. And with a fully integrated planning platform like IBP, that can happen. Decisions change from “Can we…?” to “Should we?” Take the unknown out of the decision and align on the one language we all speak: PROFITS!

Tools like the IBP supply optimizer can quickly and efficiently provide the lowest-cost option to react to multiple scenarios at the same time. Parallel optimizations speed decision time and provide a level of innovative answers that humans just can’t beat. When a butterfly flaps its wings on one side of the world, optimizers may help predict just where the hurricane will hit, but with IBP you know exactly how much it’s going to cost.


Risk Mitigation

Risk mitigation is everywhere these days, and with IBP’s inventory optimization tool you can run multi level inventory optimization scenarios that distribute risk and supply chain costs with confidence. Confident risk management is key to efficiently managing unpredictability. The old fashioned way is to just build a moat around your company of inventory and hope that it can withstand the storm. Not only is hope an ineffective strategy, but when deployed this way, it’s an expensive one as well.

Multi-level inventory optimization in IBP will take into account risk, lead times, and changing supply chain costs to provide the most efficient and effective deployment of capital possible. This ability combines the simulation and financial integration capabilities above and allows effective users to demonstrate where and how inventory (read capital((read investment))) should be deployed to meet service level commitments while minimizing the capital required to do so. Keep inventory as components? Forward deploy? Shift around the world? These are all simulations you can do with IBP Inventory optimization to mitigate the risk to your supply chain with confidence.

In an unpredictable world, it’s easy to feel helpless. When organizations are too busy moving information around, they have less time to solve their problems. IBP, in this sense, is a time machine- as it gives you that time back. The ability to integrate across demand, supply and inventory, translate that data to both financial and unit impact seamlessly and efficiently will provide confidence and solutions never before possible with disparate systems, and VLOOKUP in excel.

SCM Connections has seen these tools deployed to solve real world problems with real users, and more importantly save more money for everyone in the process. Join us for our premiere webinar on “Weathering the Storm”, Monday 8/13, to see how it works.



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