Optimal predictions: the power of IBP external forecasting
In today's world, tactical planning is the key to success, and that's precisely where IBP (Integrated Business Planning) shines. SAP IBP is a cloud-based solution that enables business to respond quickly to changes in demand or supply, for example by reallocating resources, re-planning supply and gaining a more accurate forecast. Forecasting has long been a tried-and-true method in the business world, but it has taken (thanks to machine learning) a significant leap forward over the years. This technology can now handle complex data, bringing new insights into the mix. These insights include changes in the market and emerging trends. With external forecasting in SAP IBP, you can make an even bigger impact at an operational level, reduce waste, and perform well in the long run. What does this mean for your company? We will explore the possibilities with you.
One step further with external data
In the current market, you face various challenges. Think of challenges as the continuously shortening product life cycles or consider disruptive events such as the covid-19 virus, or the blocking of the Suez Canal by the ship 'Ever Given'. Such challenges lead to volatility and add substantial complexity to your supply chain planning processes. To stabilize your sales & pperations process, it is critical to have accurate forecasts. With SAP IBP, you can employ many traditional forecast algorithms that have earned their stars and stripes in forecasting. One could think of Exponential Smoothing, Seasonal Linear Regression, or ARIMA. With SAP IBP, you can select the best-fitting algorithms based on the MAPE or other ‘error’ measures.
To stay ahead of the competition, you could go one step further than the advanced forecasting methods included in IBP. From Update 2205, you have the possibility to use SAP IBP External Forecasting. By integrating external algorithms in IBP, you elevate your predictions to a higher level and achieve greater precision to align with your business goals. Not only does this tool expand your preprocessing capabilities and analyze your internal data, but it also utilizes external data sources. You are able to examine historical data, economic indicators such as oil prices, consumer indices, trends, and weather patterns. By harnessing the latest AI and ML technologies, you uncover complex patterns and discover connections within data that were previously hidden. Want to know how successful your recent marketing campaign was? No problem. Interested in understanding competitive behavior or your customers' (regional) taste preferences? This makes every prediction relevant to your unique situation.
From external to beyond
The external forecasting extension in SAP IBP is a powerful tool that, can elevate your supply chain planning to a higher level. This feature seamlessly integrates with external programs like Python scripting, augmenting the data and enriching the analytical capabilities in SAP IBP.
This external forecasting extension goes beyond mere demand prediction; it empowers you to have your products available at the right place and time. Imagine no longer missing any sales opportunities, while avoiding costly excess inventory. In essence, you will elevate your supply chain planning beyond forecasting, equipping you to make informed decisions that give you the edge to stay ahead of the competition.
No more crystal ball gazing
Forecasting in IBP helps streamline and automate your approach. With external forecasting, you can tailor the strategy to your unique situation and objectives. If you're still using systems like APO or working with Excel spreadsheets, we can assist you in making the transition from Excel to IBP. We can even add custom functionalities in the future. Once the foundation is in place, we go a step further and explore external forecasting. We always ensure that IBP seamlessly integrates into your organization. An implementation without knowledge training and workshops? That’s not how we roll. Our approach is always customer-centric and focused on people. At McCoy we are in it ‘for life’.
Summing it up
Here are all the benefits of IBP (external) forecasting summarized:
Eliminating subjective interpretations: IBP generates accurate predictions based on historical data and advanced analytical tools, eliminating subjective interpretations.
Greater flexibility: IBP allows you to create custom forecasting models tailored to your business needs.
Always the right decision: External forecasting in IBP incorporates external sources, such as economic trends and market indicators, ensuring that you make the right decisions.
Increased efficiency: By aligning supply and demand more effectively, forecasting in IBP helps optimize production, inventory, and resources.
Data-driven Insights: External forecasting in IBP provides in-depth analysis and insights to identify trends and explore future growth opportunities.
Time and cost savings: Say goodbye to excess inventory. External forecasting contributes to cost savings and efficient resource utilization. Plus, it enhances your agility to respond quickly to market changes.
Happy customers: With forecasting in IBP, you always have accurate predictions that meet customer demand, increasing customer satisfaction. What more could you ask for?
To sum it all up, IBP forecasting offers an integrated, flexible, and data-driven approach for your forecasting and planning needs.
Curious? Contact Jacques Scheutjens.