Advanced Demand
SAP Integrated Business Planning (IBP) is a powerful solution for integrated business planning. It helps companies optimize their planning across the entire supply chain and respond flexibly to changes. IBP consists of several modules, each with its own focus, such as sales planning, inventory, or supply chain planning. The modular structure, combined with the appropriate licensing model, allows for optimal customization of the available functions to meet company-specific requirements and enables future scalability. In this blog post, we’ll discuss the IBP, Advanced Demand module. For more modules, visit our solutions page.
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What is SAP IBP, Advanced Demand?
SAP IBP, Advanced Demand is a module of the IBP solution designed to map demand planning processes using robust planning capabilities. Information on historical sales as well as current trends—such as temperature or oil prices—is used to generate demand forecasts. To improve forecast quality, IBP, Advanced Demand offers not only options for analyzing forecast errors but also algorithms for automated data cleansing, as well as the ability to account for promotions, product life cycles, and opportunities and risks. The focus is on combining statistical methods or machine learning with manual, collaborative criteria to enable automated planning processes that allow for human intervention. The resulting high quality of the demand planning results serves as the basis for the subsequent processes of network, inventory, procurement, and production planning.
An example from the food industry:
A dairy products manufacturer faces the challenge of accurately forecasting fluctuating demand for yogurt and cheese. Seasonal fluctuations, retail promotions, and changing consumer habits make precise planning difficult. With the help of IBP, Advanced Demand, the company can combine historical sales figures with current market data to identify short-term demand trends. This allows it to identify rising demand for lactose-free products in a timely manner, enabling targeted adjustments to production and procurement—without risking overproduction or shortages.
With SAP IBP, Advanced Demand, uncertain forecasts become a reliable foundation for informed decisions throughout the entire supply chain.
Typical demand planning process with SAP IBP, Advanced Demand
The creation of the demand plan can be broken down into the following steps:
- Data integration: Consolidating relevant information from various sources. SAP Cloud Integration is used to integrate master data, while Real-Time Integration (RTI) enables transaction data to be delivered to SAP IBP in real time.
- Data cleansing: Manual or automated cleansing of incorrect or incomplete data
- Automatic forecasting: Use of demand pattern analyses to apply optimal static methods or machine learning algorithms, and utilization of product lifecycle information for more accurate forecasts
- Forecast adjustment: Review and adjustment of demand figures by experts
- Calculation of forecast accuracy: Continuous optimization based on historical data
- Demand review & consensus plan: Creation of a demand plan coordinated with affected departments, taking all relevant influencing factors into account
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CONSILIO supported us in the successful transition from APO DP and SNP to IBP for Demand and S&OP with its extensive expertise.
What Sets IBP, Advanced Demand Apart
Cloud Solution
Instead of high upfront costs for purchasing your own IT infrastructure, you only incur predictable, recurring usage fees. In addition, you benefit from regular, automatic upgrades with new features, reduced workload for the IT department, mobile access, collaboration with various departments and external partners, and accessibility from anywhere.
Fiori + Excel UI / High User Acceptance
The combination of intuitive Fiori apps, such as the Planner Workspace, and the long-established SAP IBP Excel add-in is particularly popular with planners and reduces training requirements for new users.
State-of-the-art algorithms and AI
A wide selection of algorithms and the use of machine learning ensure precise forecasts. Additional AI features available as part of Joule Premium for Supply Chain Management can make it easier for planners to use automated forecasts.
Exponential smoothing is a suitable method for forecasting demand patterns that include seasonal fluctuations or trends. To avoid having to manually select algorithms for each product and demand pattern, IBP, Advanced Demand automatically selects the best algorithm.
Example:
A dairy company produces various dairy products, including yogurts with seasonal flavors such as strawberry or cinnamon yogurt. Demand for these products fluctuates significantly depending on the season—strawberry yogurt is in particularly high demand in the summer, while cinnamon yogurt booms during the Christmas season. IBP, Advanced Demand automatically recognizes the seasonal demand pattern and applies third-order exponential smoothing for forecasting.
Integrated Product Lifecycle Planning
Products go through various phases of their lifecycle—from launch to end-of-life. SAP IBP enables integrated planning of these cycles using reference products and customizable launch and end-of-life strategies. This allows demand forecasts to be adjusted early on to avoid excess inventory or shortages.
Promotion Planning
Promotions and sales campaigns often have a significant impact on future demand, particularly in the consumer goods sector. SAP IBP, Advanced Demand offers transparent promotion planning as well as data cleansing of sales figures to refine the forecasting basis. This makes it easier for companies to assess the impact of promotions, manage potential campaigns, and optimize overall supply chain planning and operational processes.
Example:
A large dairy company regularly launches new yogurt varieties to cater to current trends and consumer preferences—such as a high-protein Greek yogurt with superfoods. Since this is a new product, there is no historical sales data available to use for forecasting. In this case, sales figures from previous Greek yogurt launches are used as the basis for the forecast.
At the same time, classic vanilla yogurt is being removed from the product range due to declining demand. The delisting is modeled using SAP IBP, Advanced Demand’s phase-out management with custom phase-out curves.
Companies that don’t just react to demand but intelligently predict it gain a clear competitive advantage with SAP IBP, Advanced Demand.
Opportunity and Risk Planning with Driver-Based Planning:
Another key feature of SAP IBP, Advanced Demand is the Driver-Based Planning function. It enables flexible opportunity and risk planning at the aggregation level. Planners can flexibly adjust relevant influencing factors and simulate and analyze various scenarios.
Example:
A dairy producer uses Driver-Based Planning to simulate the impact of rising milk prices on demand for premium organic products. SAP IBP, Advanced Demand takes into account external factors such as raw material costs, competitive promotions, and consumer trends, and automatically adjusts the forecast. This allows the company to decide early on whether price or portfolio adjustments are necessary to remain competitive.
Summary
SAP IBP, Advanced Demand is particularly well-suited for companies that require precise and collaborative demand planning. Industries with fluctuating demand, complex supply chains, and products with varying demand patterns benefit most. Powerful algorithms, flexible integration of external data sources, and key features such as promotion planning and opportunity and risk planning measurably improve planning accuracy. Companies benefit from greater transparency, optimized processes, and more efficient decision-making. The solution is used across a wide range of industries, from the food industry to the pharmaceutical and chemical sectors and mechanical engineering.
