While both regions had robust manufacturing capabilities, North America was heavily dependent on European production for several critical product categories to meet the growing customer demand.

The company struggled with:

• Inefficiencies in planning: Manual processes led to errors and delays in forecasting demand and managing supply across regions.
• Dependency management: North America relied on Europe for key products, creating supply chain bottlenecks.
• Regional collaboration: The two regions operated with disparate planning systems, leading to communication gaps and inconsistent demand forecasting.
• Inability to meet customer expectations: The company faced stockouts in North America due to fluctuating demand and lack of real-time visibility into supply availability from Europe.

Challenge

A major manufacturing giant with operations in North America and Europe faced complex challenges in synchronizing their demand and supply planning processes. The North American region depended on European production facilities for several key product categories. However, due to manual planning processes, the company struggled with inefficiencies that led to:

• Inconsistent demand forecasts between regions, leading to supply shortages and overproduction.
• Delayed communication between the regions, creating gaps in fulfilling customer orders on time.
• Fluctuating demand in North America, which made it difficult for Europe to adjust production levels quickly.
• Limited visibility into inventory levels and supply constraints across the two regions, impacting customer satisfaction.
• Regional collaboration: The two regions operated with disparate planning systems, leading to communication gaps and inconsistent demand forecasting.
• Dependency management: North America relied on Europe for key products, creating supply chain bottlenecks.
• Inability to meet customer expectations: The company faced stockouts in North America due to fluctuating demand and lack of real-time visibility into supply availability from Europe.

Solution

Implementing SAP IBP with SCM Innovators

To address these challenges, the company partnered with SCM Innovators to implement SAP Integrated Business Planning (IBP). The project aimed to automate and harmonize the company’s demand and supply planning processes across both regions.

Key components of the solution included:

1. Automated Demand Planning:

• With SAP IBP for Demand, the company automated forecasting processes using statistical models and real-time data integration. The solution provided real-time visibility into regional demand fluctuations, enabling North America to forecast more accurately.
• The automated system used historical sales data, seasonal patterns, and market dynamics to provide highly accurate demand forecasts for both regions, ensuring seamless communication between North America and Europe.

2. Cross-Regional Supply Planning Synchronization:

• SAP IBP for Supply allowed for synchronized supply planning between North America and Europe. The tool provided real-time insights into available inventory, production schedules, and capacity constraints in Europe, allowing North America to plan product availability more effectively.
• The company was able to balance production loads between European factories and dynamically adjust to shifts in demand from North America, thereby optimizing their global supply chain.

3. Scenario Planning and Collaboration:

• SAP IBP’s scenario planning capabilities enabled both regions to simulate various demand and supply situations, such as unexpected spikes in North American demand or production disruptions in Europe. This allowed both regions to collaboratively design contingency plans, ensuring uninterrupted supply.
• The collaborative features within SAP IBP fostered greater alignment between regional teams, facilitating seamless communication on production and logistics adjustments.

4. Real-Time Visibility:

• The integration between SAP IBP and the company’s existing SAP ERP system provided real-time updates on inventory levels, order statuses, and production capacity. This enhanced visibility allowed the company to respond quickly to changes in customer demand and optimize order fulfillment.

The Benefits

1. Increased Forecast Accuracy:

• The company saw a 15% improvement in demand forecast accuracy across both regions, reducing stockouts and overproduction, leading to better inventory management.

2. Faster Response Times:

• With real-time synchronization, North America and Europe were able to adjust production and shipping schedules faster, resulting in a 20% reduction in lead times for key product categories.

3. Optimized Inventory Management:

• The automation of demand and supply planning processes significantly improved the company’s inventory turnover rate, leading to a 10% reduction in excess inventory across both regions.

4. Enhanced Customer Satisfaction:

• The ability to meet growing customer demand in North America without overburdening European production facilities improved the company’s on-time delivery rates by 15%, resulting in higher customer satisfaction.

5. Seamless Cross-Regional Collaboration:

• SAP IBP facilitated better communication between the two regions, allowing them to operate more efficiently as a unified supply chain. This collaborative approach minimized production disruptions and improved overall supply chain performance.