Recordati Increases End-to-End Visibility with SAP Integrated Business Planning
About Our Client
Established in 1926, our customer is a pharmaceutical company with a global presence. The organization is dedicated to research, development, manufacturing, and marketing pharmaceuticals.
Initially, their operations were restricted to Italy; however, they grew as a multinational company by acquiring other companies. They have operational facilities in major European countries, North American and North African countries. They are also present in Japan, Australia, and even South America.
With time, our customers started acquiring pharmaceutical companies from all parts of the world. This resulted in the exponential growth in size, which required efficient management. The incorporation of new companies within their own landscape was the primary challenge faced by our client. The business integrations were successful. However, business integration must also be supported by processes and systems integration. For this reason, the customer required our collaboration.
One of the main challenges was the information technology landscape. Due to the multiple acquisitions, the IT landscape was quite fragmented in ERP systems (4 different ECC installations plus multiple local ERP systems) and satellite systems (BI tools). The same information could sit in multiple systems with different codes, so it was challenging to have an E2E overview of supply chain planning.
At the same time, employees of this organization were totally dependent on the multiple excel files used during the planning process to overcome the lack of an integrated planning system. With such expanded operations, the amount of data generated from all ERP systems and other financial systems was significantly large.
Besides, during the COVID pandemic, they had to review all the plans quite frequently to mitigate as much as possible the demand uncertainty and correctly position the stock to react quickly and efficiently to market changes. The customer needed an efficiently functioning supply chain planning system to manage this enormous amount of data. For this reason, SAP IBP was basically the first project involved in integrated systems that can provide end-to-end visibility across the supply chain.
We used the Hybrid-Agile approach to implement the solutions designed by us. This unique methodology is a combination of waterfall and agile methodology. According to this methodology, the project begins with analyzing planning pillars according to the main requirements.
This model allowed us to set up and customize SAP IBP system according to the pillars having at the same time the possibility to review and fine-tune more minor requirements (and related system functionalities the businesses learn about the systems’ capabilities during the realization phase.
While following the methodology, we began with mobilizations and workshops as per the requirements. We defined a formal consensus demand process in the project’s scope and created the related supply plan while propagating demand across the supply network.
With workshops, we deep-dived planning processes to better understand them, which helped us inform the pillar document with a detailed analysis. Then, we shared this document with the respective teams of the customer to start the realization phase.
We worked with prototypes during the realization phase to develop specific solutions for the challenges. Then, we ran the prototypes in the system using as much data as we could to recognize the system’s functionality. We used their master data, network, and information, which enabled the customer to see the translation in the system of the business requirements. This activity also gave them a chance to fine-tune the requirements.
SAP Integrated Business Planning
The project began in 2019, which was just before the COVID pandemic. As the project progressed, this company started observing the issues related to supply chain planning. However, our team developed competent solutions to eliminate them and enabled all the processes to handle them effectively.
We designed and then fined-tuned the business processes by implementing our solutions in SAP IBP system of the company. We designed the planning processes in IBP, interfacing them with all ERP systems of this organization.
1. SAP Integrated Business Planning for Sales and Operation Planning Module:
The S&O planning module enhances both the organizations’ demand and supply planning capabilities.
For Demand Planning: we implemented solutions without using the licensed forecast algorithms.
For Supply Planning: we used heuristic algorithms (infinite capacity algorithms). So, we started by aggregating and propagating the demand of different markets across the network. We used heuristic algorithms because they offer comprehensive and time-efficient solutions that are easy to implement and understand. They are practical and serve as feasible solutions for planning-related issues.
We also implemented a rough-cut capacity plan functionality to help the business understand possible issues from a capacity standpoint.
2. Implementation of the New Supply Chain Planning Process:
The customer wanted a new planning template to differentiate all planning processes into local and corporate processes. So, together with system implementations, we also implemented a new planning process.
Each market or subsidiary managing local demand and local supply plan: The result propagated down corporate and developed corporate strategy from that.
Corporate reviewed the local demand plan to ensure everything was fine and aligned with the corporate targets. Then, they performed the supply part at the corporate level. All production is managed by the corporate department, whereas local supply planning is managed by the contract manufacturers, i.e., local purchase.
We used the following technologies to incorporate our solutions:
1. SAP Integrated Business Planning for Supply Chain:
It is a cloud-based solution equipped with SAP HANA in-memory technology. It combines S&OP planning to forecast and demand. Also, it helps in better management of inventory planning. SAP IBP empowers the organization by harnessing efficient supply chain analytics and what-if simulations and responsiveness to improve processes.
2. Cloud Platform Integration (CPI)
With this middleware, we connected the IBP systems with all local source systems, which include:
- 4 different ECC systems
- Financial system
- MDM system
- Flat files
Business Value Added
We helped our customers establish an efficient team for functional and technical support with our solution. We developed one single planning system (SAP IBP) consisting of the crucial information produced by all customer processes. As a result, now they have end-to-end visibility across the supply chain. Also, today they have one single source of truth for all the information regarding planning activities.
The new planning process template provided a unified platform for incoming information of all affiliates. All their departments share the same planning calendar, processes, and functionalities. In a way, the new template has provided them better control over all the ongoing activities within their operational units.
Having implemented a standard planning process leveraging SAP IBP capabilities also brought a relevant improvement in terms of reporting (such as automatic MAPE&BIAS calculation, stock projection across all supply nodes, etc.) and significant saving in all manual activities that were necessary before to collect and consolidate all data. This also allowed a big step forward in all simulation activities.