Inventory Planning and Optimization with SAP IBP

... Preface ... 15

... Who This Book Is For ... 15

... How This Book Is Organized ... 15

... Acknowledgements ... 18

... Conclusion ... 19

1 ... Introduction to Inventory Planning and Optimization ... 21

1.1 ... What Is Inventory? ... 22

1.2 ... Where Is Inventory Held? ... 28

1.3 ... Building an Inventory Management Approach ... 29

1.4 ... Objectives of Inventory Planning and Optimization ... 34

1.5 ... Role of Technology in Inventory Planning and Optimization ... 36

1.6 ... Introducing SAP Integrated Business Planning ... 40

1.7 ... Summary ... 56

2 ... Understanding Inventory Variables ... 57

2.1 ... Primary Factors that Drive Inventory ... 57

2.2 ... Breakdown of Variability Drivers ... 75

2.3 ... Additional Factors that Influence Inventory ... 92

2.4 ... Summary ... 104

3 ... Configuring SAP IBP for Inventory ... 105

3.1 ... Architecture ... 105

3.2 ... Building Blocks ... 106

3.3 ... Planning Area Setup Using Predelivered Content ... 134

3.4 ... Versions ... 139

3.5 ... Scenarios ... 142

3.6 ... Planning Operators ... 143

3.7 ... Reason Codes ... 146

3.8 ... Data Integration ... 148

3.9 ... Planning Views ... 148

3.10 ... Dashboard and Analytics ... 153

3.11 ... Summary ... 156

4 ... Modeling a Supply Network ... 157

4.1 ... Introduction to Supply Networks ... 157

4.2 ... Supply Network Complexity ... 159

4.3 ... Elements of a Supply Network ... 164

4.4 ... Visualizing Supply Networks in SAP IBP ... 181

4.5 ... Summary ... 184

5 ... Optimizing Inventory in SAP IBP ... 185

5.1 ... What Is Network Inventory Optimization in SAP IBP? ... 185

5.2 ... Building Blocks for Inventory Calculation ... 187

5.3 ... Network Multiechelon Inventory Calculation ... 201

5.4 ... Summary ... 230

6 ... Structuring Inventory ... 231

6.1 ... Types of Inventory ... 231

6.2 ... Further Decomposition of Safety

Lei Wang is the director of product management, supply chain, at SAP and the product owner for the underlying supply chain algorithm library beneath SAP Integrated Business Planning for inventory and demand. He has more than a decade of experience in the research and development of enterprise inventory and service optimization solutions. He has also worked with expert users, planners, supply chain analysts, and consultants on various SAP Integrated Business Planning for inventory implementations. Lei Wang has a Ph.D. in industrial and systems engineering from the University of Minnesota. Sanchit Chandna is a manager for Deloitte Consulting LLP with more than nine years of experience in the design and implementation of SAP supply chain solutions, focusing on demand management, master production scheduling, rough cut capacity planning, inventory planning and optimization, and S&OP. He has deep knowledge of SCOR processes and is an expert in SAP IBP and SAP APO. He has implemented supply chain planning and optimization technology solutions in the chemical, food, life sciences and medical consumer products, auto, high-tech, and semiconductor industries. Currently, he is working with multiple SAP IBP customers as a subject matter expert. Jeroen Kusters is a senior manager for Deloitte Consulting with 10 years of supply chain planning experience. Jeroen started his career implementing SAP APO environment, with a focus on demand planning and service parts planning. Since 2013, his focus has been on SAP Integrated Business Planning; he works closely with SAP to drive new functionality enabling best-practice supply chain planning business processes. Atul Bhandari is the senior director of predictive supply chain analytics at SAP and product owner for SAP Integrated Business Planning for inventory. He has more than a decade of experience in helping companies adopt inventory optimization and demand-sensing capabilities. He has trained expert users, super users, planners,