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How can SAP's S&OP application improve demand planning?

One expert weighs in on how SAP Integrated Business Planning for sales and operations, which runs on HANA, may help organizations become more demand-driven.

Materials and financial planners have long struggled to gain real insight from the enormous amounts of business...

data coming in from various sources. Modern technology vendors have set their sights on solving that issue, and such is the case for SAP. Its S&O application, Integrated Business Planning for sales and operations is intended to help companies make informed decisions and react to changing business dynamics. Running on HANA, the S&OP application distills the myriad sources of data streams into a predictive analytics tool to offer a holistic view of materials' demand, supply and working capital.

IBP for sales and operations harnesses the processing prowess of SAP HANA to create predictive analytics by streaming business data from varied sources such as the SAP ERP system, Advanced Planner and Optimization (APO), Business Intelligence (BI), Business Warehouse (BW), and Business Planning and Consolidation (BPC). It even accesses data from Microsoft Excel files. In SAP's S&O application, various simulative and business models predict what-if business scenarios that can help various stakeholders to make informed business decisions. Demand planners, sales and marketing professionals, production and supply chain planners, financial planners, and other stakeholders provide input to create real-time analytic dashboards of products, regions or countries, and any user-defined drilldown levels. For example, with Integrated Business Planning for sales and operations, financial planners can get an instant financial impact plan of various simulated business scenarios and the associated capital tie-ups, and supply chain planners can work on numerous simulations of constrained demand or supply planning.

IBP for sales and operations uses attributes -- such as products, regions, customers, and countries -- and the key figures -- such as an increase in sales values for a product or a region and a reduction in lead time -- so companies can take action to prevent supply chain bottlenecks (constrained planning), capacity constraints, or a reduction in  product profitability.

The S&O application offers real-time and customizable analytics that predict where the company may face logistics or supply chain constraints. It also offers customizable alerts so materials and financial planners can take remedial or corrective actions. More importantly, it enables the planners to work on a familiar Microsoft Excel layout to build simulation models, while the analytics are available on Web or mobile platforms.

The data from various sources that streams into the Integrated Business Planning for sales and operations application is meant to eventually stream out to the SAP ERP system for smoother planning. Stakeholders can then compare how projected planning outcomes stack up against execution and are able to attend to any alerts or situations that need actions.

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This was last published in January 2016

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