Supply Chain Synchronization Tactics

Integrating SAP Advanced Variant Configuration (AVC) with SAP Integrated Business Planning (IBP) can help enhance the efficiency and accuracy of your supply chain and production planning processes. Here’s a high-level overview of how this integration can be achieved and the benefits it offers: Integration Overview 1. Data Synchronization: • Ensure that the master data (products, configurations, bills of materials) in AVC is synchronized with IBP. • Use SAP Cloud Platform Integration (CPI) or other middleware to facilitate data exchange between AVC and IBP. 2. Configuration Rules: • Define and maintain configuration rules in AVC, ensuring they are available for use in IBP for planning purposes. • Configuration profiles and constraints must be consistent across both systems to ensure accurate planning. 3. Demand Planning: • Utilize IBP for demand planning to capture customer requirements and forecast demand for configurable products. • Transfer demand data to AVC to generate appropriate product configurations based on forecasted needs. 4. Supply Chain Planning: • Use IBP for supply planning, taking into account the variant configurations defined in AVC. • Plan for component and sub-component requirements based on the configured products. 5. Order Fulfillment: • Integrate order fulfillment processes, ensuring that orders captured in S/4HANA with AVC are reflected in IBP for accurate planning. • Ensure real-time visibility of order statuses and inventory levels across both systems. Technical Steps for Integration 1. Set Up Data Integration: • Use CPI or SAP Data Services to map and transfer data between AVC and IBP. • Configure integration flows to handle master data, transactional data, and configuration rules. 2. Configuration of IBP: • In IBP, set up planning areas, key figures, and planning views that accommodate configurable products. • Incorporate constraints and rules from AVC into IBP planning models. 3. Testing and Validation: • Perform rigorous testing to validate that configurations in AVC are accurately reflected in IBP planning scenarios. • Conduct end-to-end tests to ensure that demand and supply planning processes work seamlessly across both systems. 4. Monitoring and Maintenance: • Set up monitoring tools to track data integration processes and handle exceptions. • Regularly update configuration rules and master data to ensure ongoing alignment between AVC and IBP. Benefits of Integration 1. Enhanced Planning Accuracy: • By integrating configuration data, IBP can more accurately plan for variant-specific demand and supply requirements. 2. Improved Efficiency: • Automated data synchronization reduces manual efforts and errors, improving overall process efficiency. 3. Better Decision-Making: • Real-time data integration provides a comprehensive view of the supply chain, aiding in better decision-making. 4. Increased Agility: • The integration allows for quick adjustments to configurations.

"Transforming Supply Chains: The Rise of Demand Driven Material Requirements Planning (DDMRP)" What is DDMRP? Demand Driven Material Requirements Planning (DDMRP) is an innovative approach to planning and managing inventory and materials in supply chains. It evolved from traditional Material Requirements Planning (MRP) and incorporates principles of demand-driven manufacturing. Key Features 1. Focus on Demand Signals Unlike traditional MRP which relies on forecasts and static lead times, DDMRP uses actual demand signals from the market and dynamically adjusts inventory levels accordingly. 2. Decoupling Supply Chain DDMRP emphasizes decoupling points in the supply chain to buffer variability and uncertainties, ensuring that disruptions do not affect the entire chain. 3. Strategic Inventory Positioning It advocates for strategic placement of inventory buffers at key points in the supply chain based on demand variability and lead times, rather than uniformly across the entire chain. 4. Dynamic Buffer Sizing DDMRP employs algorithms to calculate optimal buffer sizes (stock buffers) based on demand variability, lead time variability, and desired service levels. 5. Flow-Based Planning It promotes a flow-based approach to material and inventory management, ensuring materials move smoothly through the supply chain in response to actual demand signals. 6. Synchronization with ERP Systems While it can operate independently, DDMRP is often integrated with existing ERP (Enterprise Resource Planning) systems to enhance visibility, coordination, and synchronization across the supply chain. Benefits • Improved Responsiveness • Reduced Lead Times • Optimized Inventory Levels • Enhanced Visibility • Improved Customer Service • Cost Savings • Flexibility Challenges • Implementation Complexity • Data Accuracy & Integration • Organizational Change • Initial Investment • Risk of Over-Engineering • Continuous Monitoring • Dependency on Demand Variability Conclusion DDMRP aims to improve supply chain performance by reducing lead times, enhancing responsiveness to changes in demand, and minimizing excess inventory while maintaining high service levels. It is particularly useful in environments where demand is unpredictable or highly variable. #DDMRP #SupplyChain #InventoryManagement #DemandDriven #Manufacturing #Logistics #SupplyChainExcellence #LeanManufacturing #ERP #BusinessStrategy

🌏 “Supply Chain” - which of these two visuals best matches your mental model? It’s not a trivial question . I believe it deeply informs the choices you make as a leader. And what's right depends on your business, industry, capabilities and outcomes desired. 🚨 Let’s break it down. A linear “chain-like” approach has the advantage of simplicity. The legendary SCOR model (find it at www.ascm.org) was famously linear and it influenced most of my early thinking on network design - and it was undoubtedly useful. Over time, SCOR also incorporated feedback loops between nodes. I have used the model to design supply chain networks for new products and businesses by intentionally coupling nodes, their capacities, logistical and inventory plans etc. My takeaway - if you are designing from scratch, then linear visualization is a great starting point to be intentional. That said, the linear model can be a limiting framework that doesn't help with non-intuitive or creative solutions. Why? Because every supply chain leader knows they are on the hook for service levels, revenue attainment, cost, quality, efficiency, supplier relations, resilience, agility, sustainability and durable competitive advantage. Since when did anyone get a choice to only win on efficiency and declare victory? Enter the "network of gears" visualization. I call this visualization a “network of flywheels”. Each flywheel represents a critical process from the customer back into your network. And each flywheel has a different spin-rate; yet they must work in harmony to attain our diverse goals. Take a consumer goods manufacturer. Typically end consumer demand is happening every hour/day while you ship weekly to customers. So how frequently should you sense and respond to demand? Go too quick and you respond to noise. Go too slow and you’ll be late in reacting. No amount of "S&OP’ing" will help, if you get this synch wrong. In the extreme example, if you sell via quick commerce (<1 Hr delivery) but capture demand weekly and respond to it monthly, I am confident the business will not survive. This is why you need to invest in forecasting process, tech and talent to enable the right outcomes. On the other end, your factory and materials plans are being locked months in advance - so what signal do you give them and when? The factory wheel spins once for many demand spins. Wait till perfect information and you’re late. Make a high level estimate early and you’ll get it horribly wrong. This is where inventory comes in - it’s the grease to prevent squeaking. But decide the form/function of inventory & forecast aggregate to synchronize. And on and on for each flywheel in the network. That blueprint will then drive every other choice you make across process, tech and yes, even people. 🔔 Call to Action - Find the flywheels in your network, find their frequencies and connect them intentionally with the right process, people and tech/tools.