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Introducing new products and delisting old ones is a crucial aspect of any supply chain planning strategy, and it’s important that these products are taken into consideration during the demand planning in the proper way, to make sure that the forecast reflects the changes in the products.
Product Lifecycle Management (PLM) in SAP IBP for demand focuses on supporting the forecasting of future demand for new and existing products at the end of their lifecycle.
For new products that lack historical data, reference products with similar historical sales patterns can be used for demand forecasting. Manual forecasting is another option, relying solely on relevant parameters and not requiring reference products.
The process of introducing new products in SAP IBP involves creating planning objects, defining or uploading reference products, selecting relevant dates for the phasing in and out.
The purpose of this blog is to give an overview of the existing product lifecycle management functionality in SAP IBP for demand and how to take advantage of it.
Manage Product Lifecycle App
The Manage Product Lifecycle app within SAP IBP allows users to define reference products which provide historic data for new products, define the dates when the new products will start to be sold and dates in which old products will be retired from the market.
The new products and reference products have to exist as planning objects in the baseline version of the planning area.
In the Manage Product Lifecycle app you can:
- Display a list of all product assignments (and filter according to specific attributes).
- Assign any number of reference products to a new product (the assignment can be done based on attributes defined in the Settings for Product Lifecycle app).
- Wildcards can be used to symbolize “any attribute value”.
- A product can be assigned as a reference to itself (“self-reference”) if its history should also be used when generating the forecast.
- Create, edit and delete product assignments.
- Simulate sales history.
- Define weighting factors, offsets, or validity dates for reference products.
- Display a list of all forecast dates, start and end dates for phase-in (new product introduction) and phase-out (delisting).
- Define, edit and delete forecast dates, start and end dates for phase-in and phase-out.
- Start and end dates for phase-in and phase-out are defined per “launch dimension”. A launch dimension is an attribute value that represents the level at which you want to define the dates. Typically used launch dimension are Customer ID or Location ID.
If the launch dimension is Location ID, then a launch dimension value could be “Heidelberg” or “GER01”, depending on how the attributes are defined in the planning area. One can define up to two launch dimensions (if the corresponding setting is enabled in the Settings for Product Lifecycle App).
- Start and end dates for phase-in and phase-out are defined per “launch dimension”. A launch dimension is an attribute value that represents the level at which you want to define the dates. Typically used launch dimension are Customer ID or Location ID.
- Download or upload templates with relevant product references, forecast dates, and phase-in/phase-out curves.
Moreover, the app allows users to view modifications made to product assignments, forecast dates, launch dimensions, and curves over the last 120 days through a change log. The change log can also be downloaded as a CSV file.
In order to define reference product assignments or forecast dates, you have two options:
- Use the pre-defined scenarios available through a guided procedure (recommended for new and occasional users and/or when only few new entries are to be defined).
- Use the table maintenance available by clicking “Edit” in the overview page (recommended for expert users and/or when many entries need to be maintained).
Guided Procedure
There are several scenarios available for adding product assignments and forecast dates for single products:
- Phase-In: This scenario is used when introducing a new product to the market. It allows the definition of the reference products, launch dimension and phase-in start and end dates.
- Phase-Out: This scenario is used when planning to withdraw an old product from the market. It allows the definition of the launch dimension, and phase-out start and end dates.
- Product Replacement: This scenario is applicable when introducing a new product that will replace an old one. For example, this could be used when introducing a new packaging for a product which results in a new SKU number, but product with the new packaging is expected to behave as before.
It allows the definition of reference products, launch dimension values, phase-in dates for the new product, and phase-out dates for the old product. The old product is automatically added as a reference product for the new one. However, the launch dimension needs to be identical for both products. References Only: This scenario is used when the aim is just to add reference assignments for a product, without defining any forecast dates. This is not a very common scenario.
Where can you use product lifecycle management?
Statistical forecasting is not the only process in SAP IBP for which the consideration of reference products is useful. The PLM settings in SAP IBP can be considered by the following process:
- Statistical Forecasting
- Forecast Automation (Time Series Analysis)
- ABC/XYZ Segmentation
- Curve Clustering
By default, you can only use PLM settings in statistical forecasting. To also use them in the other processes, you need to activate the PLM engine. The activation of the PLM engine is a manual step today, but it is planned to become default in future.
To find out how to do this, you can check the 2405 What’s New Webinar recording and consult the documentation.
Aggregated lifecycle planning
Oftentimes, reference products are defined at the SKU level (Product ID, the most granular level) while forecasting-related processes are run at a more aggregated level, such as product group. If the PLM engine is active, you can make use of the aggregated lifecycle planning functionality: with this, product assignments are considered during forecasting (and other processes) also when you are running these processes at a calculation level which is more aggregated compared to the level at which you have defined product assignments.
The following table illustrates when reference products are considered and when not:
Calculation Level (e.g. forecasting level) | Assignment Level (as defined in the Settings for Product Lifecycle App) | Product References Considered |
Product ID | Product Group | Never (Assignment level always needs to be more granular than calculation level) |
Product ID | Product ID | Always |
Product ID - Location ID | Product ID | Always |
Product ID - Location ID | Product ID - Location Region | Always |
Product Group | Product ID | Only if the Use Aggregated Lifecycle Planning for Product Assignments option is enabled for the planning area |
Product ID | Product ID - Location ID | Only if the Use Aggregated Lifecycle Planning for Product Assignments option is enabled for the planning area |
Product Family | Product Group | Only if the Use Aggregated Lifecycle Planning for Product Assignments option is enabled for the planning area |
Settings for Product Lifecycle App
The Settings for Product Lifecycle app is instrumental in tailoring the Manage Product Lifecycle app to suit specific company needs and defining granularity for product assignments.
By defining role-based profiles in the Settings for Product Lifecycle app you can streamline the process for demand planners in the Manage Product Lifecycle app.
In this app, different settings can be defined for each planning area, allowing administrators to define up to three attributes as assignment levels and to decide whether demand planners can create assignments for master data for planning objects that do not exist yet and whether multiple launch dimensions can be used.
Additionally, the Settings for Product Lifecycle app is used to create settings profiles. These profiles, which can be created, copied, deleted, and assigned to users or user groups, simplify the definition of product assignments and forecast dates in the Manage Product Lifecycle app and can be tailored to suit the preferences of demand planners.
They can also specify the ability of demand planners to create notes, delete product assignments and forecast dates, use offsets or validity dates, select key figures for simulation, check planning objects, and use phase-in and phase-out. Administrators can also define phase lengths, select a default launch dimension, and add preferred values to the defined launch dimensions.
The most commonly used settings are the ones below:
All of the settings one can manage in the Settings for Product Lifecycle app help reduce the time needed by planners to introduce new products and phase out old ones.
To find out more about how the Settings for Product Lifecycle Profiles works, check out our how-to videos:
- How to Create Settings Profiles and Assign Users and User Groups in the Settings for Product Lifecyc...
- How to Make Phase-In and Phase-Out Settings in the Settings for Product Lifecycle App
- How to Make Product Assignment Settings in the Settings for Product Lifecycle App
Manual Forecasting
The Manual Forecasting app allows users to define settings for manual forecasting. This method is beneficial when reference products are not available or exhibit dissimilar trends or seasonalities to the new product. The user can select if and when manual forecasting should be applied to each product, defining end dates for manual forecasting, after which statistical forecasting will be used.
You can find more details on manual forecasting here.
Conclusion
Utilizing Product Lifecycle Management in SAP IBP is an effective strategy to maintain accurate forecasting for both new products with no or little history and for old products which are being retired from the market. Get started with the Manage Product Lifecycle Guided Procedure and make sure to use Settings for Product Lifecycle to tailor the functionality to your needs!
For more information, look at the official documentation.
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