Making the difference with the right IBP-strategy and roadmap

According to the latest news from SAP, support for ECC will end in 2025 and for APO in 2020. Extended support might still be possible but most probably at significant additional costs.

Many companies have already started initiatives to get a better understanding of the different impacts of an ECC to S/4-HANA and APO to IBP migration. They still do remember the big obstacles they had to overcome when implementing R/3 / ECC or APO. One big lesson each company had to learn was that it is not possible to just replace an existing IT tool with a new one and to keep everything else (organization, processes, data, way of working) as it is. Those who tried it, ended up extending SAP-standard so much (using User-Exits, BAdIs, Enhancement Spots and even Modifications) that each release or support package upgrade became a time-consuming and costly adventure.

For Life Sciences companies, these new SAP solutions coincide with significant changes in the Industry itself driven by new Technologies (Digital, 3D Printing, Augmented and Virtual Reality, Body Sensors and Deep Learning / Artificial Intelligence) and Big Data. Consequences are lower market entry barriers and therefore new competitors. Innovation and the ability to react fast will be key success factors for the future. Consequently, in the future, processes and their realization in SAP have to be much more standardized in SAP. The key message is: Transformation through Simplification.

In Supply Chain in general and Supply Chain Planning accordingly in future, the following topics will become much more important than today: Extended Supply Chain Visibility including external business partners like contract manufacturers or wholesalers, Demand Management including Predictive Analytics, Contingency Planning, seamless integration of logistics and financial planning.

Looking at APO today these topics are not properly covered related to the future requirements. Therefore, one key statement can already be made: Migration from APO to IBP cannot be just a technical one. It must be embedded into a holistic future supply chain strategy to remain successful in the market. Since all these topics are relatively new, no one knows “the Holy Grail” yet.

Therefore, Tenthpin Management Consultants is convinced of a smart and iterative approach to allow companies to go through a learning process stepwise. Transformation must take place in all areas of a company (Organization, Processes and IT-solutions) to be successful. This big challenge can only be mastered via an evolutionary process.

Tenthpin Management Consultants recommends starting with the IBP-modules “Supply Chain Control Tower” and “IBP for Sales and Operations” because of the following reasons:

  • Regular operative logistics planning process in APO is not impacted.
  • ATP and PP/DS – with Release 16/10 now part of S/4 HANA core – are not impacted neither.
  • That project can therefore be done independently of any S/4 HANA related one. There are no prerequisites required accordingly.
  • Usage of new HANA DB at an early stage will gain important experience related to future S/4 HANA related projects.
  • Become familiar with new User Interface with Excel-based front-end, Reports, Dashboards, collaboration platforms etc.
  • Level of functionality and maturity of the other IBP-modules will be much higher when implementing them at a later stage.

Based on that, the next steps should be:

  • Prototyping for the modules “IBP for Demand” and “IBP for Response and Supply”.
  • Evaluation of “IBP for Inventory” to check its capabilities since APO does not offer much functionality in that area.
  • Evaluation of the situation related to APO-ATP and APO-PP/DS and embed them into a S/4 HANA strategy in alignment with the IBP one.
  • Evaluation of “SAP Ariba Supply Chain Collaboration” to connect important business partners like external manufacturer and wholesalers. This will be a key success factor for all life sciences companies in future.

Analytics initiatives with e.g. SAP Analytics Cloud must be considered to define a successful IBP-strategy because of the following reasons:

  • Integrative Analytics solutions based on a harmonized data basis for Supply Chain and Supply Chain Planning will be a key success factor for companies in future.
  • This requires a seamless integration between the IBP-module “Supply Chain Control Tower” and e.g. SAP Analytics Cloud
  • Overlapping between “IBP for Sales and Operations” and e.g. “SAP Analytics Cloud for planning” will be avoided

Of course, this journey won’t be an easy one. However, it will be the same for all. Companies should see all these topics listed in this article before as a huge opportunity to make the difference in the market. Now it is the right time to start working on an IBP-strategy and roadmap.

Tenthpin Management Consultants is the expert for entire Supply Chain and Supply Chain Planning in Life Science. With our broad Industry experience and various projects in that area we develop and realize best-in-class strategies for companies in that area:

  • We understand Supply Chain and Supply Chain Planning holistically
  • We understand the future Life Science Trends and their impacts on Supply Chain Planning
  • We know how to setup Supply Chain Planning Projects and how to embed them into overall SAP Transformation Strategies and Programs successfully
  • Our Consultants have between 10 and 25 years of Consulting and SAP experience
  • Our Consultants are all Life Sciences experts
  • We deliver Supply Chain Planning Projects successfully on time and under budget

Contact our industry experts at Tenthpin Management Consultants if you would like to learn more.

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