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How much inventory is ideal? From setting service target levels and lead times to managing demand variability, learn to calculate and plan the best way to handle your inventory. Configure SAP Integrated Business Planning for inventory and model your supply network. Then optimize your inventory practices and measure your performance through KPIs, reports, and dashboards. Plan and control your stock levels with this all-in-one guide!

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... Preface ... 15

... Who This Book Is For ... 15

... How This Book Is Organized ... 15

... Acknowledgements ... 18

... Conclusion ... 19

1 ... Introduction to Inventory Planning and Optimization ... 21

1.1 ... What Is Inventory? ... 22

1.2 ... Where Is Inventory Held? ... 28

1.3 ... Building an Inventory Management Approach ... 29

1.4 ... Objectives of Inventory Planning and Optimization ... 34

1.5 ... Role of Technology in Inventory Planning and Optimization ... 36

1.6 ... Introducing SAP Integrated Business Planning ... 40

1.7 ... Summary ... 56

2 ... Understanding Inventory Variables ... 57

2.1 ... Primary Factors that Drive Inventory ... 57

2.2 ... Breakdown of Variability Drivers ... 75

2.3 ... Additional Factors that Influence Inventory ... 92

2.4 ... Summary ... 104

3 ... Configuring SAP IBP for Inventory ... 105

3.1 ... Architecture ... 105

3.2 ... Building Blocks ... 106

3.3 ... Planning Area Setup Using Predelivered Content ... 134

3.4 ... Versions ... 139

3.5 ... Scenarios ... 142

3.6 ... Planning Operators ... 143

3.7 ... Reason Codes ... 146

3.8 ... Data Integration ... 148

3.9 ... Planning Views ... 148

3.10 ... Dashboard and Analytics ... 153

3.11 ... Summary ... 156

4 ... Modeling a Supply Network ... 157

4.1 ... Introduction to Supply Networks ... 157

4.2 ... Supply Network Complexity ... 159

4.3 ... Elements of a Supply Network ... 164

4.4 ... Visualizing Supply Networks in SAP IBP ... 181

4.5 ... Summary ... 184

5 ... Optimizing Inventory in SAP IBP ... 185

5.1 ... What Is Network Inventory Optimization in SAP IBP? ... 185

5.2 ... Building Blocks for Inventory Calculation ... 187

5.3 ... Network Multiechelon Inventory Calculation ... 201

5.4 ... Summary ... 230

6 ... Structuring Inventory ... 231

6.1 ... Types of Inventory ... 231

6.2 ... Further Decomposition of Safety Stock ... 237

6.3 ... Calculating Inventory Components ... 241

6.4 ... Summary ... 251

7 ... Designing Your Inventory Planning Process ... 253

7.1 ... Centralized and Decentralized Inventory Planning Teams ... 253

7.2 ... Frequency of the Inventory Planning Cycle ... 255

7.3 ... From Reactive to Proactive Planner Tasks ... 257

7.4 ... Inventory Planning in Sales and Operations Planning ... 258

7.5 ... Sequence of Planning Tasks ... 260

7.6 ... Segmentation ... 270

7.7 ... Role of the Inventory Planner ... 272

7.8 ... Summary ... 273

8 ... Measuring Inventory Performance ... 275

8.1 ... Example Supply Chain for Inventory Planning ... 275

8.2 ... Key Performance Indicators for Inventory Optimization ... 279

8.3 ... Validate Input Quality ... 281

8.4 ... Review Inventory Plan ... 287

8.5 ... Assess Inventory Drivers ... 289

8.6 ... Finalize Inventory Plan ... 294

8.7 ... Create Custom Inventory Alerts ... 299

8.8 ... Summary ... 310

9 ... Building Intuition and Conducting What-If Analysis ... 311

9.1 ... What-If Analysis with Versions and Scenarios ... 312

9.2 ... Perform What-If Analysis ... 313

9.3 ... Simulating Situations ... 319

9.4 ... Intuition Building ... 332

9.5 ... Strategic What-If Analysis ... 334

9.6 ... Tactical What-If Analysis ... 337

9.7 ... Summary ... 338

10 ... Integrating SAP IBP for Inventory ... 339

10.1 ... Data Integration Technologies ... 339

10.2 ... Manual Data Integration Using the Web UI ... 342

10.3 ... Integration using SAP Cloud Platform Integration for Data Services ... 350

10.4 ... With SAP IBP Applications in the Unified Planning Area ... 361

10.5 ... With SAP ERP and SAP S/4HANA ... 362

10.6 ... With SAP APO ... 365

10.7 ... With Non-SAP Systems ... 366

10.8 ... Exporting Data Using OData Services ... 367

10.9 ... Summary ... 367

11 ... Planning Your Implementation ... 369

11.1 ... Cloud Software Considerations ... 369

11.2 ... Manual versus Automated Workflo

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