SAP Enterprise Inventory Optimization by SmartOps

BENEFITS

• Multi-echelon, stochastic inventory optimization that allows customers to manage supply and demand uncertainty, maximize profit, and minimize assets
• Efficient management by exception workflows
• Total supply chain view and operational synchronization
• Advanced demand, production, and supply analytics leverage SAP NetWeaver BI and SAP SCM
• Robust industry data model and data confidence process
• Flexible workflows, content, and reporting through SAP or SmartOps user interfaces
  
  

PRICING AND IMPLEMENTATION

SAP Enterprise Inventory Optimization

FULL DESCRIPTION

SAP Enterprise Inventory Optimization by SmartOps is the leading solution for global inventory management. The solution is the standard for global inventory planning, optimization, and governance. SAP provides dynamic key operating targets across the enterprise, resulting in a sustainable and substantial reduction of inventory that exists in supply chains while improving customer service and responsiveness.

Functionality and Differentiation

SAP Enterprise Inventory Optimization uniquely complements and extends the capabilities of planning and execution systems by adding key capabilities including:

• Total Supply Chain View: Without a multistage approach, companies must use single-stage calculations for inventory targets and propagate these decisions back into the supply chain. This single stage approach incorrectly accounts for uncertainty and does not optimize the supply chain. The multistage algorithm considers all stages simultaneously, accounting for the inventory dependencies across stages at an item-location level of granularity. As a result, inventory is optimized across the entire supply chain.
  
• More Accurate Modeling of Supply Chain Reality: SAP Enterprise Inventory Optimization is based on advanced stochastic process algorithms that account for the uncertainty present in supply, demand, and production inputs at a level of granularity that results in reliable, actionable outputs. While existing planning systems make simple assumptions regarding real world, time-varying constraints - such as assuming unlimited capacity or static demand variability month-over-month - SAP Enterprise Inventory Optimization factors in storage and production capacity constraints and incorporates time-varying inputs to create the most comprehensive, yet easy-to-use, solution available. The result is that with SAP Enterprise Inventory Optimization a company is able to "Fix-the-Mix" of its inventory, resulting in both lower inventory and improved customer service.
  
• Ongoing Visibility into the Drivers of Inventory: Planners receive continuous insight into the most granular levels of their supply chains, identifying forms and purposes of all inventories in the system. With the ability to see how changes to supply chain parameters affect the profiles of inventory needed, planners can quantify the impact of potential improvement initiatives on operations, based on real operational data, and identify the best opportunities for improvement.
  
• Scalable and Automated: Setting inventory targets across an enterprise is a data intensive calculation. For example, 1000 finished goods items across 100 locations that are planned in weekly time buckets across a 26 week future horizon equates to 2.6 million inventory targets with each target consisting of a safety stock, cycle stock, pipeline, and pre-build value. Since each target would have anywhere from 10-25 key input values that would have to be incorporated into the optimization, the resulting quantity of data fields becomes tens if not hundreds of millions! SAP Enterprise Inventory Optimization is architected to handle this amount of data in a timely and scalable fashion, thereby ensuring that the inventory targets are available when the planner is making the planning decision. In addition, the solution can be connected through pre-built, automated data interfaces to existing ERP, APS, business intelligence, and database systems.
  
• What-if Analysis: Planners are able to quickly and easily evaluate one or more future planning scenarios. Questions related to potential changes in demand, demand variability, lead times, cost, and target service levels, to name a few, can be explored either individually or together in terms of what effects those changes would have on the required inventory in the supply chain.

Adding the Third Pillar to ERP and APS

Both Enterprise Resource Planning and Advanced Planning and Scheduling systems require planners, to relying upon either rules-of-thumb or custom spreadsheets, to manually enter what the inventory targets should be for all the different raw materials, components, and finished goods throughout the supply chain. This leads to either the wrong mix of inventory resulting low customer service or to excess inventory from over-buffering.

The SAP Enterprise Inventory Optimization reads supply chain and financial data in ERP and APS systems and calculates optimal inventory targets that are subsequently fed back into inventory target fields in the planning and execution systems.

CONTACT INFORMATION

SOFTWARE REQUIREMENT SPECIFIED BY PARTNER

Solution extensions are available directly from SAP. These third-party developed solutions integrate easily with SAP software - offering cross-solution and cross-industry functionality that complement SAP solution capabilities. To ensure the highest quality, SAP tests, validates, approves, and supports these partner-developed solutions - assuring you of SAP quality, commitment, and support, and greater return on investment.

SUPPORT

SAP Enterprise Support is delivered via specific components that are designed to address the increased needs of multifaceted systems - from design of support to ongoing support and upgradeability.

• Mission-Critical Support - Keeps core mission-critical applications running with continuous quality checks for technical risk analyses and continuous improvement, 24X7 access to SAP support advisory center with direct communications, leading-edge service-level agreements, and on-demand support integration to facilitate consistent collaboration among customers, partners and SAP.
  
• Global Support Backbone - Utilizing the enterprise edition of the SAP® Solution Manager application management solution, customers have all methodology processes and tools for quality management and integration validation. SAP Solution Manager facilitates support for distributed systems with functionality covering all key aspects of solution deployment, operation and continued improvement. As a centralized, robust solution, SAP Solution Manager combines tools, content and direct access to SAP and partners to increase the reliability of solutions and lower total cost of ownership.
  
• Run SAP Methodology - SAP's proven best-in-class operations methodology, Run SAP, is built upon SAP standards for solution operations, which help IT and business process experts harness their IT landscapes and better implement their SOA strategies. The new standards for solution operations are mapped out in the newest release of SAP Solution Manager. Via best practices, Run SAP structures and guides the implementation of these standards through a proven project management methodology.