Inventory planning - faster and more efficient

If you plan and forecast skillfully, you can reap success quickly and sustainably, as the Trilux company has done as a successful example. What are the challenges?

Volatile markets, price and cost transparency, the increasing speed of market interaction present many manufacturers with the dilemma of having to deliver at ever shorter notice at ever lower prices.

In the past, many companies have paid dearly for this ability to deliver with large inventories and safety stocks. The negative effect on costs and capital commitment is obvious, as is the discrepancy with the price expected on the market.

The aim is therefore to secure or even improve delivery capability while significantly reducing inventories. Effective demand planning could help if it provides reliable results on which solid material requirements and production planning can then be based.

Although the majority of companies already have the necessary data available in SAP, many planners still rely on manual, time-consuming optimization in Excel.

"We often see our customers using Excel solutions even though all the necessary information is available in the SAP system"

says Marco Fries, Manager Global Consulting, Academy and Support at GIB.

"Many contacts appreciate the flexibility that Excel offers. However, the fact is that the data read in is already outdated the moment sales planning can begin in Excel and, of course, new framework conditions and requirements constantly arise during the planning process that are not taken into account."

Error-proneness is also a problem, from undesirable transmission errors to all-too-human typos. So if you want to create and use consistent, interface- and error-free planning, you need an SAP-integrated tool that always determines the best possible sales plan with the most up-to-date data and without transmission errors, just like GIB-Forecast.

"In our solution all data is consolidated".

says the expert.

It is also desirable if planning is possible on a more individual basis, not only at plant and material level, but adapted to the company's processes; for example, GIB-Forecast additionally enables sales planning if required.

Different materials require corresponding forecasting methods. In order to be able to plan the largest possible number of materials, a solution with a comprehensive selection of useful forecasts is a good idea. There are currently 20 statistical methods available in Forecast, and more are added with each release.

The currently available version can be used, among other things, to forecast the requirements for sporades, such as spare parts and seasonal materials.

"Our recommendation is to include data from the past three years in the forecasts to get more reliable statements"

Fries continues.

The forecast solution calculates how the consumption series match different forecast series and takes into account internal tracking signals, i.e. mathematical deviations, such as standard deviations, the percentage forecast error and others.

A scoring map is used to determine the method that best matches the consumption series. This is then used for future forecasts. This matching takes place every week or every month, as required.

Due to the possible connection of sales and marketing, promotions can be taken into account. In addition, there is the possibility to add manual planning.

To ensure that the results are comprehensible, users or the administrator can display details of the forecast calculation graphically and parameterize the system.

Usability and Simplification

Usability is an important decision criterion for small and medium-sized enterprises when acquiring software, in addition to the range of functions, service, SME specificity, as it contributes a large part to successful use.

"User-centered design plays a big role in our current developments. That's why we're increasingly relying on Fiori interfaces, which make using the forecast as well as other areas of the GIB suite more pleasant,"

Fries explains further.

"In the future, we plan to adapt other areas in this regard, where it makes sense to do so. With GIB-SCX, our new S/4 Hana-based solution, we are going one step further. Here, we plan to design the front end with Fiori throughout.

Behind the solution is another complex logic with algorithms as well as intelligence inherent in the system. Currently, various heuristics are already in use in the GIB-Suite, our proven software solution. In the future, we will increasingly devote ourselves to this logic in order to be able to map the requirements of our customers even better."

However, usability also means, for example, that each company can map its own organizational structures and requirements and carry out the forecasts accordingly.

The Forecast offers this possibility of adjusting the sales planning. All information is presented graphically in a clear dashboard. The solution is also suitable for collaboration between the departments involved in the supply chain process, such as sales, distribution, supply chain management and production. Planning and information can be prioritized by different departments and support the operational planning result.

Time can be saved not only through good usability, but also through rapid installation and implementation. GIB-Forecast has been developed according to SAP's Rapid Deployment Solutions approach and offers this advantage.

Fit for the future

Upgradeable to S/4? This question can be answered with "yes" for the SAP-integrated and certified GIB software. Thus, already the GIB suite with all known and proven modules is fully functional in S/4.

GIB is an SAP Silver Partner and already SAP Certified Integration with SAP S/4 Hana. The big hit with a suite specifically optimized and process-oriented in S/4 will then take place in 2020 with the GIB-SCX.

This promises new logics that are even better adapted to the SCM process, more performance and innovative functionalities that were not feasible in the R/3 world.

In sales planning, one will primarily benefit from near-real-time analyses on the most current and broad data basis. However, the core is the cross-process control and optimization possibility.

This enables potential in inventory management, service levels and optimization of the overall process to be identified and leveraged faster than ever before. An important aspect for effective competitive and cost advantages.