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Today’s modern supply chains are more global and complex than ever before, moving from fully owned operations and logistics towards networked operations with outsourced manufacturing, logistics and so on. Even though supply chains become more and more intelligent, they remain vulnerable. But what happens if unexpected disruptions hit the supply chain?

There is definitely no universal answer to it as each supply chain and organization is different. But everyone will agree that proactively managing business risks and opportunities makes sense.

Learn from Raghav Jandhyala, Senior Director Product Management, SAP Integrated Business Planning, about key influential drivers and how to manage business risks and opportunities in SAP Integrated Business Planning. Assessing their probability, impact and likelihood in S&OP meetings can make or break your company’s success:

The first step into managing business risks and opportunities in a systematic way is to set a common understanding and framework around how to deal with them. SAP IBP with its driver-based planning capabilities enables a framework to capture these business risks and opportunities and create transparency across all stakeholders and combine qualitative information with quantitative impacts.

Driver-based planning has been introduced in SAP IBP’s 1905 release with the main purpose to enrich quantitative assumptions with qualitative information coming from the market or internal factors. Planners can now flexibly define the business drivers, analyze which drivers are important and include the relevant drivers into the supply chain plans.

Identifying these drivers can help your organization to react to their possible effects and adjust your supply chain plan as needed. This now changes the way the business review meetings are conducted where the decisions are based on understanding the consolidated top-down and bottom-up business drivers, its assumptions and impact on the plan, enabling transparency among all stakeholders.


Risks and Opportunity Management with Driver-Based Planning

Risks and opportunities management is an integral part of the S&OP process to capture vulnerabilities and chances at multiple hierarchy levels and include the risks or opportunities that are budgeted, highly probable and in the right granularity in the plan. An example of risk or opportunity are shown in the figure below.

SAP IBP provides sample modeling for managing risks and opportunities along with best practice content on how to create and include risks and opportunities in your plan. This can be extended to your specific business needs. By defining various event types, assumption categories and linking the information to the impacted scope (e.g. revenue, profitability, budget etc.) you not only gain a structured overview about the different types of drivers, but as well their financial impact throughout the “financial” supply chain.

Using the driver-based planning app, you can define specific planning views for managing different drivers like risks & opps, events, promotions, assumptions, and so on.

There are two views provided in this app. The Summary view provides the summary of all drivers where each row represents a consolidated business driver across a time range and planning level attributes. This view is used to analyze and edit the drivers, and include the most relevant drivers in the plan, directly from the data grid view.

The Details view is similar to an excel or web-based planning view where you can see the details of the driver across each time bucket and planning combination. Here you can make adjustments to the driver. For example, giving more weightage for the first 2 months than other months for the driver.

Users can create a business driver in a single screen including the driver details, planning levels, time range and key figure value.

Upon save, the following activities are triggered: Master data entry creation, planning objects creation, key figure disaggregation. When you modify a driver, example change from product family 1 to product family 2, the system takes care of the deletion of necessary combinations.

The drivers created at an aggregated level can be viewed at a detailed level to see the contribution of each driver and its impact on the plan. Once drivers are created in the driver-based planning app, they can be viewed, and its key figure values changed in the Excel Add-In or web-based planning.

Further, with IBP 1911, you can embed analytical and alert charts to the Driver Planning Views to analyze and visualize the affect of the drivers to your supply chain plans. For example: Top 5 opportunities, risks and opps effect on consensus plan, risks above threshold, and so on.

How are you planning to use the capabilities of driver-based planning in IBP to drive decisions based on influential business drivers?

For more information on driver-based planning, please refer to the application help :