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The Four Pillars of a solid, software based
 Inventory Planning Management Foundation

We are often asked about Best Practices for Inventory Planning – what are main factors for companies to succeed in their projects to introduce an Inventory Planning software tool to support the process?

Looking at the recent journeys we supported, we figured there are four big topics that should be addressed and / or decided upon to drive a successful project:

Planning Ownership          

  • Center of Excellence over Siloed inventory planning team
    • should be comprised of Superusers who own & understand the solution
    • trainers for the rest of the team, also giving feedback to the solution product management
  • Standardized work and online templates over Ad-hoc offline spreadsheets
    One streamlined process and one single source of truth for all planners to come together
  • Support end users over Black Box tools
    • help users understand the results and guide them in the usage,
      make use of the CoE for training
    • Report planning decisions to end users and engage regional teams with planning questions
    • Respond to scenario analysis requests from end users

Frequency of Planning Cycle         

  • Agile over Infrequent
    The tool produces time series based outputs on a weekly level, but the planning cadence often is on a monthly recurrence (simulations and scenarios are being used day in day out)
  • Monthly vs. Quarterly (Agile)
  • Weekly vs. Monthly (Very Agile)

Review Process          

  • Validate data inputs
    As for any Planning process, data quality is key: gigo!
  • Review inventory plan
    Understand changes, focus on specific product groups and / or use alerts to spot deviations
  • Assess drivers of inventory
    Leverage dashboards to understand the causes of the results
  • Analyze running/ad-hoc scenarios
    Leverage simulation capabilities to adjust / enhance the plans
  • Update inventory plan
    Changes keep happening – consider updates and don’t keep the tool disconnected from reality
  • Further tips & tricks on the result review process: 
    SAP IBP-I Results Validation Webinar (April 19)  PDF | Recording

Performance Review        

  • Formal ownership of inventory health metrics over reactionary metrics
    Formalize goals that you want to achieve and decide on the relevant KPIs
  • Review historical inventory performance key performance indicators
    Measure the KPIs upfront to be able to track progress
  • Review projected inventory KPIs
    Use projections as first performance indicators and input for planning

Further Resources           

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