It is fair to say that SAP Integrated Business Planning (IBP) for Response has struggled in a beauty parade when being compared with its elder statesman APO. In reality, IBP for Response has the potential to surpass what is expected and deliver far beyond the capabilities of APO. The order based Response and Supply planning application within the SAP IBP suite is in fact one step closer to providing an end to end planning solution.
In this blog I will explore the features of SAP IBP for Response and Supply (including planning operators).
The supply planning algorithms in the time series model when coupled with the forecasting options can deliver a flawless S&OP solution, albeit time series based in the mid to long term horizon providing efficient tactical planning.
The challenge intensifies around the challenge of bringing together time series data with order based planning and further integration to/from ECC. Currently it is possible to integrate IBP for Response to an ECC system via a Smart Data Integration (SDI) connection which can use either a file adapter to upload data or an ABAP adapter which sits on the ECC server.
As of the latest 1902 release, SAP IBP for Response supports multiple integration profiles, meaning it is possible to integrate to multiple ECC systems or file servers. Although a step forward in addressing one of the key integration shortcomings, it is not possible to integrate multiple ECC systems to a single planning area (but is currently on the IBP roadmap).
Integration of Forecast & Transactional Data
While the long term vision from SAP is to offer a unified planning area where time series and order series data live in harmony, I do not see this happening inside the next 12 months. There are several known issues with the existing unified planning area, with SAP now discouraging Partners and Customers from using the unified area in the short term.
However, for now there is a workaround in place to integrate the demand from time series into an order based planning area using the DISAGG operator which is now the SAP recommended best practice. With progression in time, once the much awaited unified planning area is recommended again, both time and order series key figures could be available in one single planning area. The master data, sales orders and other order – based transactional can be uploaded using file adapter or integrated with ECC via ABAP adapters. Once the forecast and customer orders are available in the order based planning area, the platform is laid.
The Demand Prioritisation App which is made available as a part of order based planning is a powerful tool which can be loosely compared to the demand prioritisation functionality within APO via Capable-to-Match (CTM). IBP offers rule based demand prioritisation to suit the business requirements and gives the users ability to remain agile and flexible in terms of priorities in which demands are fulfilled across the network. In case of supply shortages, demands are fulfilled based on priorities assigned to them.
A rule comprises of one or more segments which form the building blocks. These segments are nothing but selection conditions to group available demands based on pre-defined conditions such as Demand Type, Customer Priority, Order Quantity etc. The conditions need to be configured while setting up a rule. Within a segment, there is a possibility to sort demand based on standard attributes. Once the segments are defined and sorted based on attributes, they can be arranged based on priorities. Due care needs to be taken to ensure all demand is captured within a rule.
The following figure depicts pictorial representation of a Demand Prioritisation Rule.
Once the Demand Prioritisation Rule is defined, it is then possible to view demands by priority in an app. View Demands by Priority is quite a handy app when the planners would need to know how their supply chain is being modelled. It is now possible to quantify the demand based on priority and evaluate potential impact due to unfulfilled.
The subsequent planning runs within IBP order based planning feeds on the Demand Priority rule to achieve desired results.
Constrained Forecast Run
The constrained forecast run is the first bit where IBP could showcase its response capabilities. Despite achieving an accurate in-house plan, customers often face a setback due to component availability. This may be due to capacity constrains at the supplier, lead time constraints or any other supply chain disruptions. This can now be addressed through end to end supplier collaboration using the SAP Ariba Integration which provides end to end visibility in terms of component availability.
Constrained Forecast Run in IBP is rule-based on capacity, material and supplier constrains. As of the latest IBP release, Constrained Forecast Run based on Heuristic and Optimiser is available. Note that the Constrained Forecast run does not take into account sales orders.
In summary, Constrained Forecast run using either rule basedHeuristics or Optimiser, looks at the unconstrained forecast to generate a feasible plan taking into account component availability, supplier constrains and capacity constraints.
In a typical planning process, it is the role of a planner to analyse the results supplied by constrained forecast run. Of course the View Demands by Priority app is comes handy to determine how demand across supply chain network has been treated. In addition to this, gating factor analysis is a feature which translates system related issues into definite messages which can be acted upon by the business users without much intervention from system administrators
Once a constrained forecast is generated based on the previous runs, customer can use a COPY operator to copy the constrained forecast as the allocation quantities.
The confirmation run enables SAP IBP for response to confirm sales orders against allocated quantities.
As a prerequisite to an allocation check, it is important to define the product allocation profile in the location product master. This will enable the sales order to consume the open allocation quantity. IBP for Response provides a true end to end visibility as the delivered or cancelled sales order is no longer visible in the IBP, the product allocation is adjusted to reflect the true picture.
In addition to this the simulation capabilities enables the business to run scenarios and determine the system response to inflated or last minute customer orders, in order words, be “responsive” in a true sense.
Last but not the least, the deployment feature takes care of the issues related to distribution in case there are any mishaps on the supply side. Any such shortcomings can be addressed via deployment run which essentially confirms the supply plan generated by the response engine.
As a prerequisite to deployment run, we need to define the order categories which are Available-to-Deploy (ATD) in the ATD profile. With this as a reference, the deployment engine confirms the plan across the supply chain network, however doesn’t have capability to generate any planned orders.
The IBP for Response application, based on features discussed above, enables a tight integration across all the aspects of supply chain planning to deliver a high quality, state of the art responsive solution which caters to several disruptions.
However, there is definitely room for improvement in terms of missing functionalities like shelf life planning & interchangeability, and few other shortcomings such as the inability to run jobs from excel views while working with scenarios. Predefined KPIs to measure supply chain performance could be an added value while executing scenario.
Having said that, IBP for response has gained much needed attention from SAP over past few months which looks promising and without doubt we can see the maturity curve growing exponentially in recent times.
Consultant - Olivehorse Consulting