SAP Integrated Business Planning
Dear SAP Friends
Welcome to another Interesting Topic in SAP “Integrated Business Planning”
In this Blog Will try to understand overview of SAP Integrated Business Planning, in short, we call SAP IBP.
SAP Integrated Business Planning
- SAP Integrated Business Planning (SAP IBP) is an SAP HANA-based cloud solution to manage the strategic, tactical, and operational objectives of the company—all in an integrated environment.
- Some of the key highlights of SAP IBP are real-time simulations of business scenarios to bring demand, supply, and financial models together
- A collaborative approach to reaching consensus on important business decisions
- User-friendly interface—all while using the enormous data processing prowess of SAP HANA.
SAP Advanced Planning and Optimization
SAP APO used to be the go-to planning tool for use with PP, but it has since been
depreciated in favour of SAP IBP. The core components of SAP APO are as follows:
- Demand Planning
- Supply Network Planning
- Production Planning and Detailed Scheduling (now part of SAP S/4HANA)
- Global Available-to-Promise (GATP)
- Transportation Planning/Vehicle Scheduling
Applications of SAP IBP
- SAP IBP for sales and operations
- SAP IBP for demand
- SAP IBP for response and supply
- SAP IBP for inventory
- SAP Supply Chain Control Tower
SAP IBP for sales and operations
SAP IBP for sales and operations is often the first application companies implement
because they almost always start out the long-term and mid-term sales planning
that needs to synchronize with operations (production, procurement,
logistics) planning. The ability to use different forecasting models coupled with
the ability to simulate various demand, supply, and financial models provides a
a holistic view of the entire supply chain network, which includes customers, suppliers, manufacturing units, and distribution units. To ensure a quick and steep
learning and adoption curve, this SAP IBP application uses the all-familiar Microsoft
SAP IBP for demand
The ability to predict the demand for products is perhaps one of the most critical success
factors in the whole planning process because it impacts the entire upstream
planning of procurement, production, and inventory. Even the best forecasting
tools can only predict the demand to a certain degree of accuracy; the key to better
demand planning lies in a collaborative and consensus approach to predicting demand and working backwards to ensure timely supplies. However, with this SAP
IBP application, the possibility to adopt a demand-driven approach to the material
planning becomes a reality in the short- to medium term when verifiable demand
signals, such as confirmed sales orders, help the supply chain planners quickly
adapt the supplies.
SAP IBP for response and supply
- Like SAP IBP for demand, this SAP IBP application also takes advantage of the
demand-driven materials planning to account for the demand variability or supply
disruptions that can’t be planned for in advance.
- Starting with the rough-cut capacity planning, the SAP IBP for response and supply planning application simulates and evaluates different planning scenarios to strike a balance among demand, supply, and capacity constraints while considering the procurement, production, inventory, and warehousing costs.
- The output from this SAP IBP application forms the basis for input into the SAP IBP for sales and operations application.
- The response planning considers the demand variability and how best to allocate constrained supplies to meet the highest service level and fill rate while keeping all costs to a minimum.
SAP IBP for inventory
- SAP IBP for inventory enables complete modelling of the inventory network, that is, from a raw material supplier to the end customer and all the logical supply chain links involved in between.
- This SAP IBP application uses an advanced algorithm to balance inventory investment with service levels at each supply chain link to come up with optimum inventory and service levels for each product and physical location combination.
- For example, in a multi-sourcing environment, where one product can be sourced or distributed from multiple sources, this SAP IBP application strikes the right balance by considering transportation costs, replenishment lead time, targeted service level, and fill rate to suggest where and how much of a product’s inventory should be available at a specific location.
SAP Supply Chain Control Tower
- This SAP IBP application is a dashboard and analytics tool to provide real-time, end-to-end visibility of the entire supply chain of the company.
- Apart from the ability to set up user-defined alerts when there’s a potential disruption to the supply chain, this SAP IBP application also can drill down to the lowest level to evaluate the root cause leading to supply chain issues or disruptions.
- Further, this SAP IBP application can integrate with different SAP logistics and supply chain solutions
such as SAP Extended Warehouse Management (SAP EWM) and SAP Transportation Management (SAP TM), as well as non-SAP systems.
Empower Planners to Do More in Less Time (Benefits)
- SAP Integrated Business Planning supports holistic, synchronized planning for better decision-making in a continuous fashion that enables you to quickly adapt plans to true demand and supply.
- With the solution, you can unify and transform planning, moving from sequential manual activities to streamlined, automated, and integrated processes.
- In-memory computing power, machine learning, and real-time data help you anticipate and optimize planning decisions based on changing conditions, customer demand, and customer behaviour.
- Planners can move from intervening in individual exceptions to managing overall flow, aligning goals with strategy and improving performance.
- You can react faster to disruptions to drive higher revenues and service levels with lower costs and working capital.
- You can take advantage of new business opportunities without lengthy analysis. The solution speeds sales and operations planning and helps optimize product profitability and product mix.
- By managing inventory levels and finding new opportunities for cost savings, you can minimize costs.
- The cloud-based solution helps you benefit from technology innovations while limiting IT costs, and you can deploy the modular business functionality to suit your priorities and budget requirements, now and in the future.
Hope Understood Introductions of SAP IBP
Please share, Like and Comment anything else you want to share or add points.
Thanks & Regards
SME – S/4 HANA Manufacturing & Procurement
SAP Ariba P2P
Hi Ruthvik. Nice article. The topic can be bewildering so it’s good to see something more concise like this. Question for you – my understanding is there is no functionality in IBP to replace gATP. Can you confirm this? Some colleagues of mine thought there was but I had heard this is not the case. Rather instead aATP in S/4 is the real successor of gATP from APO. Also that aATP needs some more time to mature to become on par with gATP features. Thanks. David F.
First of all, thank you very much David Finlay for your lovely response and feedback
What you understood is correct APO is going to sunset soon so all the components of APO are getting introduced in different tools gATP as aATP in HANA, PP/DS has already introduced in to HANA. other tools are also going to happen. even S/4 HANA took 2 years to get metured, in 1909 version more features are introduced to aATP refer https://blogs.sap.com/2019/10/31/whats-new-in-aatp-1909/ to know more
Thanks for all the content and context Ruthvik.
One thing I'm left wondering is if the future direction for SAP is PPDS, or IBP response and supply - any insight into this?
Hi Dan Peters
PPDS has been introduced into S/4HANA Box as support withdraw of APO, and rest planning functionality is been introduced in IBP so both IBP and PPDS will be available in SAP, in fact, both need integration as well for some functionality.
Hope I cleared your doubt ?
Thankyou for sharing insightful article Ruthvik.
I am new in SAP IBP and I have one question regarding SAP IBP learnings.
Should I have knowledge of any other module (such as SAP APO) to learn SAP IBP ? I have already checked SAP IBP leaning path and it does not show any prerequisites required to learn SAP IBP.
Your reply is highly appreciated. Thank you
Hi Pragati Khare
Basically, SAP IBP is a replacement of SAP APO and also should have some basic idea of APO tools and their functionality to understand totally IBP
So my recommendation is to first understand SAP SCM at very highlevel