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SAP INNOVATION FORUM ISTANBUL

SAP ile Stok Optimizasyonu: SAP IBP for Inventory

Speaker’s Name : Sait Kalender – Jesper Waaben

Company Name : IMPROVA Consulting

DIGITAL ERA

Connected Innovation

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Internal

Agenda

Basic Idea

Uncertainties in the Supply Chain

Why Stock Targets are important?

Problem Definition

The Solution : SAP IBP for Inventory

The «One Model» Approach with SAP

Multi-Stage Optimization

Simulation and Analytics

Result & Benefits

Specific Industry Applications and References

Basic IdeaProblem Definition


…things rarely go exactly as expected on the demand side


…nor do things go exactly as expected on the supply side


Now take all those uncertainties…


…and multiply

We have Complex Uncertainty ChainsPlant

Plant

Plant

Plant

Plant



TOLERATE UNCERTAINTIES

STOCK = COST

NO STOCK = COST



OPTIMAL STOCK TARGETS

bring

Improved Profitability

Improved

customer

service levels

Reduced

operational

costs


Problem Definition

Find the optimal way

to meet the desired

service goals

while

keeping stock holding

costs at possible lowest

levels

across the entire supply

chain

SAP IBP for InventoryThe Solution


Traditional methods loose points


The Real-Time Supply Chain


One Model Approach – Complete Scalable Model

Supply

Demand Inventory

=Optimal

Inventory

Targets


Inventory Target Setting: Multi-stage Optimization

SAP IBP for

Inventory


Simulation and Analytics


How does SAP IBP for Inventory deliver value?

-3%-5%

-12%

11%

-18%

-25%

-6%

-18%

-30%

-19%

-40%

-7%

-16%-21%

2%

-25%

-33%

15%

-31%

-7%

-35%

13%

-28%-30%

-23%

-30%

-19%

-43%

13%

-25%

-10%

46%

8%4%

-14%

-33%

-60%

-40%

-20%

0%

20%

40%

60%

Fix the Mix of Inventory!

Inventory reduction is not just across-the-board… for many

stocking points, tool recommends higher inventory levels

to protect service levels

Very often the net impact is a significant reduction in

inventory requirements, while maintaining or even improving customer service

Inc

rea

se

De

cre

as

e

Achieve the Right Balance Between Inventory

and Service Levels

Provides management visibility into the tradeoff between

inventory investment and service objectives

Customer service becomes a corporate objective, as

opposed to an outcome of the planning process

Scenario Capability allows exploration of root-cause

improvements90% 92% 94% 96% 98% 100%

Inve

nto

ry (

$)

Customer Service Level (%)

SAP Integrated Business Planning for inventory

Company Current Performance

Results & BenefitsThe Output


Result & Benefits

Optimal Inventory Targets


Result & Benefits

Case Studies


Master Uncertainty™ with SAP Inventory Optimisation

Chemical Consumer Products Manufacturing

High Tech Distribution/RetailLife Sciences

Leading provider of inventory and

service-level optimization

solutions deployed in the cloud,

hosted, or on-premises

Track record of delivering

significant sustainable value to

customers worldwide

Pioneer in supply chain

management research and

innovation

SAP Inventory

Optimisation

http://www.celestica.com/Home/Home.aspx

http://www.celestica.com/Home/Home.aspx

http://www.jabil.com/

http://www.jabil.com/

http://www.honeywell.com/

http://www.honeywell.com/


3. Grow Market

Share

Provide best-in-class customer

service

SAP Inventory Optimization enables an agile,

Cost-competitive Supply Chain

Benefit:

2. Lower Costs

Drive higher margins & supply

chain efficiency

Benefits

Improved service levels with a 20%

reduction in days in inventory

Enhanced capacity planning

Significant cost reductions in

inventory, expediting and

transportation

Improved productivity by automating

manual processes

1. Decrease Risk

Improve visibility of supply chain

uncertainty

Benefits

Customer service levels lifted from

93.7% to 99.1%

Exceeded inventory reduction goals

Increased throughput due to improved

planning and scheduling

Consistent planning process across

organization

Consumer Healthcare

Benefits

Improved service levels with a 14%

inventory reduction

Optimized $335 million in reorder point

value across 27,000 SKUs

Improved accuracy with formal,

globally applicable inventory

management process

Reduced planning cycle time by 67%


Planning More Effectively with SAP EIS, APO, and S&OP

Business challenges

• Manual and disconnected planning process

• Unable to effectively respond to demand and supply fluctuations

• Planning across organizations and with external business

partners

• Management and usage of massive amounts of data for S&OP

planning

Implementation

• SAP® Sales and Operations Planning and SAP Enterprise

Inventory and Service-level Optimization

Key benefits

• Improve confidence and integrity in the S&OP process

• Respond rapidly to demand changes and optimize inventory targets across entire distribution channel

• Improved forecast accuracy and plan performance due to ability to generate KPIs and apply learnings from past performance into future plans

• Assess impact of constraint Supply on Customer Demand and determine optimal Supply Plan

• Develop optimal business plan to meet financial targets

• Interactive, real-time collaboration and communication across organizations and with external Partners

• Automated and efficient S&OP process

Business Challenges

Support a growing business without increasing working

capital

Eliminate the varying “rules of thumb” utilized by 100+

planners

Optimize inventory across the entire network in a dynamic

fashion

Improve inventory productivity with a “Fix-the-Mix” approach

Adopt a standardized approach to calculate safety stock

targets

Solution easily integrated with next-generation SAP

implementation

Provide total inventory simulation capability

Implementation

SAP Advanced Planner and Optimizer and SAP Enterprise

Inventory and Service-level Optimization

Key Benefits

Reduced safety stock by 20%

Reduced overall inventory by 5%

Supported Dow AgroSciences’ lean processes and

continuous improvement initiatives

Changed inventory process so it would be driven by right

fundamentals

• Business Challenges

• Matching demand, supply, and capacity in the complex network

• Planning for large number of SKUs with different mix of characteristics

• Transform to fully integrated, end-to-end supply chain

• Find optimal mix and staging of SKUs across locations

• Improve collaboration in extended supply chain

• Provide specific inventory optimization functionality, including variability analytics and root-cause analysis reporting

• Implementation

• SAP Advanced Planner and Optimizer and SAP Enterprise Inventory and Service–level Optimization

• Key Benefits

• Improved asset utilization and inventory turns

• Improved customer service levels

• Increased visibility into inventory drivers

• Better manage complexity and minimize risk


Joy Global: Line of Business Video

https://www.sap-customers.com/video/#/3530/joy-global-line-of-business-video-english

https://www.sap-customers.com/video/#/3530/joy-global-line-of-business-video-english

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