(By Mike Raftery)
OK you’ve realized that IBP is coming. Maybe soon? Maybe not? But what do you do now? IBP is not quite ready to be a full standalone platform to run a complex supply chain on its own in Q1 2016. But that doesn’t mean you shouldn’t work to use its strengths to your advantage. IBP is meant to work very well with ECC, S/4, APO, and any other planning or supply chain application you can think of.
In today’s highly customized, made-to-order lifestyle there is no one answer. Over the past decade or so, everyone planning in the SAP and APO (SCM?) environment has taken their own slightly unique path. That means everyone encounters their IBP transition in a bit of a different spot. No fear, at this point there is something that everyone in every situation can do right now to start leveraging the advantages of IBP’s advanced planning and technology applications.
Existing APO Users
Stay the course. The key here is to keep leveraging your current platform while it is still delivering value. APO has many advanced planning features like shelf life planning and supply network collaboration that aren’t quite available yet in IBP. Plus, APO has at LEAST 9-10 years of life left in the tank. No need to jump ship just yet.
That doesn’t mean sit still. There are still a few gaps which IBP can work WITH IBP (yes it’s possible!) to give your APO solution new legs. The Inventory Optimization engine within IBP works right alongside APO and continues the SmartOps legacy within SAP to deliver best in class inventory positioning. The S&OP application also provides a high level strategic view of your network utilizing the performance of IBP on HANA. In addition S&OP has very powerful and easy to use simulation capability, comparing what-if scenarios was never APO’s strong suit. None of these features were in the original version of APO and now’s a great time to use IBP to fill these gaps.
Keep running and enhancing APO to meet your business needs
- Look to upgrade to 7.0 EhP4, or suite on HANA to get some more performance
- Evaluate filling APO gaps with IBP technology (IO & S&OP)
- Start preparing your organization for the evolution to IBP
Light APO Users
Fill out your template. If you’ve been using APO for spot work, maybe just demand planning, perhaps a standalone PPDS detailed scheduling implementation. Either way you have bits and pieces of APO turned on, but nothing that you would call a full scale implementation.
In this case we recommend an IBP first strategy. It’s not something we would have recommended a year ago, but this is changing quickly, and changing for the better. If you are going to build something new today, whether that be a rough cut plan, or a demand planning platform, look to IBP first. The demand sensing and S&OP modules are ready for primetime. If you can use IBP’s functionality then do it. You can leverage its flexible reporting features, and avoid adding reporting scope to the project. You can also avoid new hardware, livecache and other legacy backoffice functions that come with APO.
- Rule out IBP before investing in new technology.
- Shift focus to IBP for new planning scope in the organization
- Evaluate filling APO gaps with IBP technology (Inventory & S&OP)
- Start preparing your organization for the evolution to IBP
APO Users with… Less than Optimal Implementations
Face the facts. OK maybe everything didn’t quite go as planned. What looked great in a powerpoint, and worked flawlessly in a visio diagram now lies mostly unused and unmaintained and spreadsheets run the show. Well even the best laid plans go awry sometimes, but now what? You can’t plan in excel forever….. or can you?
IBP is a nice way to work your way back into a real live planning solution. The investment is minimal to see if it works. A starter edition is very cheap, and with a cloud based architecture it is easy to do a proof of concept or a production style pilot with very little investment. If it works, then great, if you need to retool the solution, then it’s easy to shut off the subscription with no lingering overhead. A small agile project would go a long way to understand and close any gaps along the way. S&OP and demand sensing would be great places to start if your current processes are offline. These solutions can be run in parallel with the legacy process to prove their worth and give your business users confidence that IT can actual add value.
- Take advantage of the excel based IBP solution for easy user adoption
- Investigate the root causes for why the original implementation struggled
- Take advantage of the low entry cost of the cloud to prove value without large investment
- Start cleansing the data, master data drives any system.
No APO at All
Transition with IBP. This opportunity is an example of being in the right place at the right time. Depending on the other systems in play this is a nice time to grow along with IBP. If you’re working purely on excel or home grown solutions today, and are ready for a real legit planning system it is a great time to grow along with IBP. You can utilize demand planning, S&OP and inventory today with IBP 6.1. By the time that scope is up and running you can move on to response and supply by the end of the year. Start simple, use the low overhead advantages of IBP to get up and running quickly and cheaply without investing in the overhead for a large backoffice suite, along with the hardware to support it, leave those tasks to SAP.
Start with a simple demand plan, and some S&OP and allow your processes to grow along with the solution. The processes changes that come along with working into your first planning system can NOT be underestimated. Specifically, the data rigor involved in running an integrated planning suite is a few degrees more intensive than you would have with no systems. After all, if you continue to run today as you did yesterday, you’re leaving a lot of value on the table.
- Consider APO for PP/DS
- Start IBP with the demand, S&OP and inventory functionality underway
- Evolve with IBP for full replenishment, optimization and demand sensing as it becomes available
- Start developing processes to enable the full value of the capabilities delivered.
In summary there is no single easy answer across the board, and I would bet that each organization finds itself straddling these broad categories anyway. The point is to look hard at where you are in your planning systems, and your maturity of planning processes and do what is right for your organization. There’s a great big opportunity just around the corner, and no matter where you are today, IBP and the benefits of an integrated, high performance, cloud based planning system should not be underestimated.