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COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Integrated Business Planning with SAP – IBP Overview & Use Cases
SAP User Conference
Lillestrøm, October 27th 2016

Westernacher Business Management Consulting AG


Vittorio Cotroni, IBP Solution Architect

© 2015 Westernacher Consulting AG


COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Agenda

Challenges in today´s Supply Chains

SAP IBP Overview

Customer Case Studies

Westernacher Approach

Questions and Answers

1 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Challenges in today´s Supply Chains

Individualized product Increased vision

Customer centricity Improve responsiveness

Sharing economy Higher collaboration

Resource scarcity Easier integration

Complexity User friendliness

2 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Westernacher has IBP experience from the beginning, first hand experience in all released modules.
We use our own SAP IBP system for Proof of Concept and Prototypes.

Our Competence in SAP IBP

Control Tower
Sales & Operations Planning

Supply &
Demand Inventory
Response

3 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Enables to increase visibility in the end-to-end supply chain, reducing complexity allowing to make better
decisions

Control Tower

Value Drivers
 Reduction of system/tool/process
complexity
 Increased visibility of the End-to-End
Supply Chain
 Improve Responsiveness in the short
Demand Supply term
 Faster, more effective decision
making

4 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Deliver a cross departmental sales and operations plan balancing the impact on inventory, service levels and
profitability

Sales and Operations Planning

Sales
Manufacturing
Marketing Value Drivers
 Reduction of system/tool/process
complexity
Transportation  Close to real-time scenario &
& Distribution planning capabilities
Research &
 Rapid adoption / easy-to-use,
Development familiar interface(s)
 Faster, more effective decision
making
Procurement

Finance &
Controlling

5 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Gain full demand transparency for short-, mid- and long-term forecasting by leveraging demand sensing and
statistical forecasting methods

Demand
Create Create
Run
Gather and Cleanse Local Global
Statistical
Historical Data Demand Demand
Forecasting
Plan Plan

Demand added Value


 Automated outlier correction
 Need of using advanced forecasting
models in order to Develop more
accurate mid-or long-term statistical
forecasts
 React faster to short term demand
changes with pattern recognition
based algorithms
 Drive more accurate deployment of
products, based on short term
demand

6 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Optimize multi-stage inventory targets to most efficiently meet or exceed customer service levels, fully
considering uncertainties like forecast error and supply uncertainty

Inventory
Run and Approve and
What-if
Validate Data Inputs Review Update
Analysis
Inventory Plan Inventory Plan

Inventory added Value


 Improve inventory planner
productivity through the use one of
the best in class inventory
optimization algorithms (single and
multi-echelon)
 Standardize the inventory target-
setting process at each tier within the
supply chain to feed operational
plans
 Improve customer service levels
 Optimize the efficiency of inventory
and working capital throughout the
Supply Chain

7 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Generate a short to mid-term supply plan based on prioritized and categorized demand such as orders and
forecasts.

Supply & Response

Response and Supply added Value


 Supply optimization based on supply Chain
constraints in order to reduce costs or
increase profitability
 Pegging and gating-factor analysis
 Rules-based prioritized, constrained
Demand / Supply Match
 Generate and provide allocations to ATP,
and reschedule sales orders
 Forecast consumption

8 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Overview of the cloud based IBP on HANA

System Architecture

Marketing & Sales Demand Planning Finance Supply Chain Executives

ERP

MS Excel Web Mobile Devices


CRM
HANA Cloud Integration

BPC SAP HANA


Data Services of

IBP Model & Engine


• Attributes • Heuristics & Optimization
APO • Key Figures • Process Workflow
• Scenarios & Simulation• Cases & Alerts
• Predictive Analysis

BW
SAP JAM
HCI

Social Collaboration
Files

Other

9 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

SAP IBP in a nutshell

SAP IBP Unifies


 Demand, Flexible Process Definition
1  Supply and 4 Define the process and the number of
 Financial Planning steps exactly as required
to Drive Maximum Business Value

HANA is fast Analytics


2 Spend more time planning and performing 5 Immediately define new reports and charts
simulations and less time waiting using the focused data

Collaboration
Real-time simulation
3 6 The JAM platform changes the way you
Update the system during meetings and
communicate, and can be an advantage
immediately see the impact
with people from different cultures

10 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

References
The following is an extract of relevant references in the IBP space

1 2 3

Topic Supply Planning and Global Sales &


Multi-Tier Inventory
Supplier Integration Operations Planning
Optimization

Change From sporadic changes From disconnected


From manual planning to
From - To to supplier forecast to collaboration
Inventory Optimization

Project Full IBP Implementation PoC IBP IO Full IBP Implementation

Customer Global Wind Energy Global OE


Multinational Appliance
Company Manufacturer
Manufacturer

11 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Using IBP to improve the S&OP process in the Wind Turbine industry
Objectives
Challenges
 Retrieval of information from different sources • Provide one set of numbers to support decisions
and within different departments in the definition of the Sales and Operations
plan for the coming 7-24 months
 Difficulties in some cases to formalize
• Profitably balancing long term supply & demand
Company: Vestas requirements
enabling Vestas to proactively respond to
Headquarters: Aarhus, DK  Project based business market changes
• Support the Finance department to identify the
Industry: Wind turbines  Management of expectations
decisions taken within the S&OP process and
Revenue: €8.423 billion (2015)  New technology verify their effects for the cash-in/cash-out flow
• One standardized process through the
Customer Website: www.vestas.com
organization
Initial situation Expected Benefits
 embryonic S&OP process  Reduced Planners workload
 Not sufficient communication between  Increased visibility along the supply chain
departments
 Reduced planning cycle
 no clear S&OP accountability
 Increased Data consistency
 many locally stored excel files, each one with its
own data  Quick scenario evaluation

 difficulties to re-adapt the plan when short term


changes are made within the supply chain
 Fragmented/not standardized process

12 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

References
The following is an extract of relevant references in the IBP space

1 2 3

Topic Supply Planning and Global Sales &


Multi-Tier Inventory
Supplier Integration Operations Planning
Optimization

Change From sporadic changes From disconnected


From manual planning to
From - To to supplier forecast to collaboration
Inventory Optimization

Project Full IBP Implementation PoC IBP IO Full IBP Implementation

Customer Global Wind Energy Global OE


Multinational Appliance
Company Manufacturer
Manufacturer

13 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

PoC on IBP to evaluate Inventory optimization in the House holding industry


Objectives
Challenges
 Lack of unified data model
 Increase target service level
 Scattered knowledge across the organization
 Reduce Inventory cost
 Complex supply chain
 Increased visibility
 Transparency in Demand planning (direct
 Easier inventory planning
Industry: house holding appliances shipments)
Revenue: 12.4 billion € (2015)

Initial situation Expected Benefits


 The company had to increase stock targets in  Increased Service Level (up to 95%)
order to achieve the target service level
 Estimated 12% reduction in Safety Stock (21
 Lack of simulation tools pipe-
 A lot of manual calculations were performed out  Increased collaboration
of the system
 Easier What-if analysis

14 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

References
The following is an extract of relevant references in the IBP space

1 2 3

Topic Supply Planning and Global Sales &


Multi-Tier Inventory
Supplier Integration Operations Planning
Optimization

Change From sporadic changes From disconnected


From manual planning to
From - To to supplier forecast to collaboration
Inventory Optimization

Project Full IBP Implementation PoC IBP IO Full IBP Implementation

Customer Global Wind Energy Global OE


Multinational Appliance
Company Manufacturer
Manufacturer

15 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Use Case IBP Sales & Operations | Weir Minerals

http://westernacher-consulting.com/click-and-go-webinars/sap-integrated-business-planning-ibp/

16 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

INTRODUCTION
Westernacher Consulting has completed several IBP implementations by now.
Our accumulated experience and knowledge is used to continuously improve our implementation approach.

CRITICAL SUCCESS FACTORS


After ‚lessons learned‘ sessions, we saw that the following factors are critical for the success of the implementation

Involvement of the business department


1 It is essential that the business department get familiar with the system as soon as possible, for them influence the
development of the solution and for them to stay involved

Industry Knowledge + IBP Solution expertise


2 To achieve the best result it is essential that the implementation partner has both industry and IBP implementation
experience

Agile Approach
3 Our experience is that the attempt to define and document all details ahead of time (Waterfall Approach) is taking
too long and is not delivering true value.
An agile approach where you gradually improve the solution is giving you the best result.

To get the business department on the system quicker, capture our industry knowledge and to
accommodate an agile approach we have developed the Westernacher Industry Templates
17 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Generate a short to mid-term supply plan based on prioritized and categorized demand such as orders and
forecasts.

Current SAP approach


Focused on functionality SAP Templates (RDS)
“one size fits all”

Westernacher Templates
Industry specific:
- Data Model
- Dashboards Westernacher DI Westernacher Westernacher Westernacher
- Planning Views Template PI Template WS Template AS Template

Discrete Industry Process Industry Wholesale After Sales


Industry Industry

18 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Supply Chain Challenges SAP IBP Overview Customer Case studies Westernacher Approach Q&A session

Agenda

Challenges in today´s Supply Chains

SAP IBP Overview

Customer Case Studies

Westernacher Approach

Questions and Answers

19 © Westernacher │ www.westernacher.com
COMPETENCE IN SUPPLY CHAIN MANAGEMENT AND SAP CONSULTING

Your contact

Vittorio Cotroni
IBP Solution Architect
Mobil: +41 (0) 79 309 2349
E-Mail: vittorio.cotroni@westernacher.com Westernacher & Partner Consulting
GmbH

Sihleggstrasse 23
8832 Wollerau, Switzerland
More on our planning expertise can be found on our webpage: Phone: +41 44 787 1562
http://westernacher-consulting.com/business-it/planning-and-analytics/

20 © Westernacher │ www.westernacher.com