Supply Chain Drivers (Risk & Opportunity) in SAP Integrated Business Planning

We all want to have the most accurate predictions in our supply chain. With the help of SAP Integrated Business Planning, planners together with the stakeholders will have the chance to accurately layout and target this by properly providing the business drivers in a form of risk or opportunity. Thanks to the Driver-Based Planning (under S&OP module), this requirement can be resolved!

Key Concepts of Driver-Based Planning

?Support in capturing business drivers such as Risks or Opportunities.

?Can be considered in adjusting the supply chain plans.

Examples

?Risk no. 1 – losing market share for your product portfolio in a customer country because some competitors will be launching a comparable product portfolio on the market.

?Opportunity no. 1 – opportunity of increasing the total revenue of a certain portfolio with a new marketing campaign.

Other common business drivers according to process areas

DEMAND

?Demand increases or decreases

?Demand below / above Business Plan

?Change in customer pricing

?Macro economic leading indicator change

?Demand shift across sales channels / brands

FINANCE

?Change in provisions for returns

?Change in provisions for inventory & obsolescence

?Planning & simulating of exchange rates

?Credit exposure changes

PRICING or COSTING

?Change in sales price

?Change in raw material cost

?Change in production costs

?Change in import duties

?Change in internal transfer price

?Change in transportation costs

PRODUCT

?Change in registration timelines

?Changes in subsititutions

?Changes in Phase-in / Phase-out

SUPPLY

?Change in production constraints

?Change in production capacity (e.g. shutdowns, additional shifts, subcontracting)

?New production lines

?Raw materials constraint

?Change in import / export flows

?Change in manufacturing footprint

?Change in product-to-plant allocation

?Change in transportation capacity

?Change in lead times

?Change in (un)loading capacity

?Change in storage capacity

Change in distributionfootprint

Common Master Data Prerequisites

Once everything is configured and planners started to key-in the drivers, planning data can be seen either in the Driver-Based Planning View, Planner Workspaces or Excel UI.

In conclusion, there could be more possible ways of representing the drivers in an organization depending on the type of risks or opportunities that they are dealing with. Fortunately, SAP IBP is flexible enough to configure those and the best practices are also available to speed up the setup.

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You can also contact us concircle if you are interested for any topics related to IBP, S&OP or supply chain planning.

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