SAP IBP has evolved as next generation planning tool when it comes to managing your Supply Chain. From time to time SAP IBP has been adding many features under its umbrella to suit different business needs and meet the customer expectations. In this blog I will try to list out the features related to managing the Product Life cycle , which are available within SAP IBP and the potential use cases under which they can be used by the businesses.
Some of the decisions like Phase In Products are permanent/Long term in nature while other decision like Components Substitution can be temporary decision just to maximize the profitability or to keep the customer service levels high.
1 . New Product Introduction : NPI has been a key business process for any industry when it comes to Product Portfolio review. On a regular basis the businesses review their offerings and Phase In some of the products which they see as more profitable or as a need to meet the changing customer buying patterns. In order to Forecast for this new Phase In Materials we need to find the existing products which might show same Sales Pattern. In SAP IBP we can make use of the Manage Product Life Cycle functionality to model this reference. This helps for a smooth phase in of the new material and stability in long run.
2. Realignment : For different business decisions Data Realignment can also an important functionality to be used. One such use case can be we stop selling a product from one distribution warehouse and instead sell them from a newly setup warehouse. In this case we need to align all its existing stocks from old warehouse to new warehouse and this can be achieved via Data Realignment functionality within SAP IBP.
3.Product Substitution : Under many circumstances Now a days Company decides to offer alternatives of the existing products. It might be due to the fact they want to offer varieties to the customers or It can also be production decision that they have constraints to produce the one product they can offer other alternative (Having same characteristics) to the customers. Of course The customers in the end will decide if they buy the substitute products or they stick to main products. This use case is supported in SAP IBP via Product Substitution functionality. This functionality is applicable for goods directly sold to customers only.
The other scenarios include exchanging Materials with the substitutes on a particular warehouse or plant in case of Discontinuation (forever stop) or Promotions (stopped for certain period of time).These are covered by Location Product Substitution feature in IBP.
4.Component Substitution : So far we discussed the use cases where we have to introduce or exchange a sold to materials but on the other hand we also have many business scenarios where we have to substitute the components in the BOMs. One such example case can be that we have some shortage of chemicals materials to produce drugs and we have some alternate chemicals which can also be used but instead they produce more waste or they more costly. Using the alternatives in this case can still make your customer orders on time. This scenario is supported by Component Substitution functionality in SAP IBP.
5.Component Validity : Another very interesting feature can be that you want to define the validities for your BOM components and plan according to these dates. For example Let say due to some government regulations some of the engines which are not complying the thresholds are banned in future. In this case you can make use of the Production Source of Item Validity feature to model the BOM components with a validity dates. After the validity date is over these components will not be planned/consumed in the production process. You can already define another component with a validity date starting immediately once the validity of original component is getting over.
There can be many other requirements which needs changes in Product Portfolio. I hope this gives a good overview about these functionalities and perspective in which they can be brought into practice.
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