sap customer business planning

Top Retailers Using Tech to Build Lifelong Customer Relationships

As 2024 begins, today’s retail leaders face a number of industry headwinds, including continued supply chain challenges, persistent staffing issues, ongoing inflation, increased competitive pressures, and more. These difficulties are expected to persist going forward and, in some cases, accelerate. The fact of the matter is disruption is no longer a temporal state of being in retail. It’s the norm.

That’s why innovation in technology, business processes, and how these come together will be key to better business results in 2024 and a sustainable future going forward. Retailers must learn how artificial intelligence (AI), cloud, robotics, the Internet of Things (IoT), virtual and augmented reality, and other tools can assist in strengthening customer loyalty and trust. Because, after all, the primary goal of retailers is to create memorable, repeatable shopping experiences that will satisfy and even delight consumers.

At SAP, we’re seeing enterprises pursue that goal every day, using the power of AI-driven business solutions to create strong, lifelong relationships with customers. Whether you’re designing personalized shopping experiences, improving demand planning, minimizing the cost of returns, or addressing other challenges, SAP solutions can help you transform your approach.

Throughout 2023, SAP enabled retail and consumer-packaged goods (CPG) leaders to overcome today’s biggest obstacles – and position them for a brighter tomorrow. This includes partnerships and success stories with leading brands like Leanin’ Tree , Benjamin Moore , Cangshan Cutlery , HP , HanesBrands , Pandora , Levis , Coop Norge , PUMA , and Maui Jim .

More specifically, SAP has worked with global leaders to help them drive meaningful customer experiences, adopt more sustainable practices, and set their organizations up for great efficiency and innovation.

• ALDO : As one of the world’s leading fashion retailers, the ALDO Group is using SAP to help improve customer loyalty and better deliver on consumer expectations. Specifically, the ALDO Group is using SAP Commerce Cloud to help improve the customer experience – from personalizing product selection to building a seamless checkout experience – and SAP Emarsys Customer Engagement, which is helping to increase customer loyalty and retention.
• Kaufland/Schwartz IT : Schwarz IT is the technology partner and central service provider for the Schwarz Group, one of the leading retail groups around the world. Kaufland, a company of Schwarz Group, operates grocery stores in Europe, offering a wide selection of high-quality foods and everyday items at the best price. Customer satisfaction, sustainable action, and the reduction of food waste play important roles for Kaufland. To further improve demand and replenishment planning, Schwarz IT and Kaufland decided together to implement an innovative, self-learning solution with artificial intelligence capabilities.
• Swarovski : As one of the world’s premier jewelry and accessories brands, offering high-quality experiences that draw on its long heritage in luxury is key for Swarovski. In the latest step of its 40-year partnership with SAP, Swarovski will be leveraging RISE with SAP and SAP Commerce Cloud, among other solutions. Taken together, SAP can help Swarovski further customer loyalty as well as create unique customer experiences, all while having a future-proof digital core with the flexibility and security to support continuous innovation.
• Hunkemöller : Hunkemöller, Europe’s fastest growing lingerie brand, will be using SAP to further offer customers personalized experiences and help keep up with the strong demand for its products. Moving to SAP S/4HANA Cloud Public Edition marks the first major step for Hunkemöller in its digital transformation journey. Through its future implementation of SAP S/4HANA for fashion and vertical business, a version of SAP S/4HANA optimized for the fashion industry, Hunkemöller can manage its business from design to wholesale and retail all on one platform. This helps Hunkemöller deliver collections faster on all channels, optimize inventory and cost, and increase margins.
• Chow Tai Fook : Chow Tai Fook Jewellery Group (Chow Tai Fook), the renowned jewelry retailer headquartered in Hong Kong that has an extensive retail network in China, Japan, Korea, Southeast Asia, the U.S., and Canada, has adopted SAP SuccessFactors solutions to help accelerate its human resources digital transformation. Leveraging SAP SuccessFactors Employee Central and SAP SuccessFactors Recruiting, Chow Tai Fook is aiming to streamline core HR processes, optimize recruitment, and enhance employee experience and the productivity of its workforce, thereby driving sustainable business growth and an ability to meet future development needs.
• Blue Diamond Growers : Blue Diamond Growers is a grower-owned cooperative representing approximately 3,000 of California’s almond growers. It is also the world’s leading almond marketer and processor. Through its use of SAP, including, among other solutions, SAP S/4HANA and SAP Integrated Business Planning for Supply Chain, Blue Diamond has been able to improve its supply chain, on-time delivery rate, inventory management, and demand forecasting. Taken together, it allows this century-old agricultural cooperative and global consumer-packaged goods company to provide the best value and experience to its growers and customers.
• e.l.f. Beauty : For almost two decades, e.l.f. Beauty has been producing premium quality cosmetics and skin care that’s clean, cruelty free, vegan, and Fair Trade Certified at an extraordinary value. To modernize its backend and help meet customer demand, e.l.f. will be using SAP. Through solutions such as RISE with SAP, SAP Analytics Cloud, and SAP Integrated Business Planning for Supply Chain, not only does e.l.f. expect to improve demand forecasting but also further enhance its customer experience.

Success in retail requires clarity and conviction around business planning and digital adoption. Businesses can grow intelligently and take control of their future, bringing together rich enterprise data and AI-embedded applications to empower everyone in the organization.

Join us at NRF 2024 to see what advancements we have planned for enterprises this year and learn how our retail-focused solutions can unlock the power of AI for your business. Schedule an in-person meeting or booth tour with us today.

Matt Laukaitis is EVP and Global GM for SAP Consumer Industries.

SAP Announces New AI-Driven Retail Capabilities to Enhance Customer Experience – From Planning to Personalization

How SAP’s Retail Partners Became Innovation Multipliers in 2023 and Created the Ultimate Consumer Experience

SAP Celebrates Its Retail Industry Heroes at NRF 2024

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SAP Best Practices for SAP IBP

After completing this lesson, you will be able to leverage SAP Best Practices for SAP IBP .

The tool to access the SAP Best Practices content starting with SAP IBP 2305 is SAP Signavio Process Navigator. SAP Best Practices for SAP IBP will be updated and enhanced every quarter and gives you everything you need to run Planning processes in the following applications:

• SAP IBP for sales and operations
• SAP IBP for response and supply
• SAP IBP for demand
• SAP IBP for inventory
• SAP IBP for demand-driven replenishment
• SAP Supply Chain Control Tower

All scope items are based on a comprehensive data model, which enables you to execute an integrated, end-to-end business process. SAP Best Practices comprises Planning View templates for interactive simulations and what-if analyses, predefined dashboards for embedded analytics, alert definitions for exception-based Planning, integration for context-aware social collaboration, and sample data to showcase the end-to-end process.

Business Benefits

• Reduce Sales and Operations Planning costs
• Improve demand forecast accuracy and react more quickly to changes in demand
• Increase sales forecast accuracy
• Reduce inventory carrying costs and increase inventory turnover/reduce days in inventory
• Improve on-time delivery performance
• Increase revenue and reduce revenue loss due to stock-outs
• Increase user productivity by using Microsoft Excel for interactive Planning and by integrating social collaboration

Important covered Process Steps

• Detailed configuration documentation for setting up predefined SAP Best Practices processes
• Predefined Planning Views in Microsoft Excel
• Predefined charts and dashboards to analyze trends and exceptions
• Predefined process management to track progress and integration into social collaboration
• Based on integrated Planning areas, allowing you to operate and end-to-end process across all SAP IBP applications

You can use the unified Planning area (SAPIBP1) to jump-start the implementation in case your business process requires integration across different SAP IBP applications. The unified Planning area is a comprehensive sample Planning area that supports an integrated Planning process covering all of the applications listed above. Just like any other sample Planning area, this Planning area delivers an out-of-the-box integration scenario, which you can customize to fit your unique requirements.

For the integrated Planning process based on the unified Planning area, the SAP Best Practices for SAP IBP provides sample data, Planning View templates, predefined dashboards, configuration guides, test scripts and more. Customer test tenants and SAP Integrated Business Planning for Supply Chain, starter edition instances include an activated copy of the unified Planning area with sample content.

Please note that the sequence of the process steps demonstrates a typical use case. You can use this process "as is" or you can adapt it to your business needs.

SAPIBP1 is a sample model entity defined to unify Planning processes under one roof, included in every SAP IBP Tenant.

SAP7F is a sample model entity defined to plan orders, included in every SAP IBP Tenant and integrable within SAPIBP1 via the Disaggregation Operator .

Demand Planning

In the Demand Planning phase, the Demand Planner plans the upcoming demands. This is done in weekly cycles and involves the following tasks:

The Demand Planning process expert creates the statistical forecast based on the historical sales data.

Based on the statistical forecast, the local Demand Planner creates the local demand plan, typically for a specific location product or product group.

Based on the local demand plan and the final consensus demand defined in the previous Sales and Operations Planning cycle, the global Demand Planner creates the global demand plan.

Demand Sensing

In the Demand Sensing phase, the system creates the sensed demand as follows: Based on the future ordered quantity, confirmed quantity, the delivered quantity data from SAP ERP, and the global demand plan defined in Demand Planning, the sensed demand is calculated on a daily basis. The sensed demand is an input for creating the combined demand plan in Demand Planning.

Demand Review

In the demand review phase, the Demand Planner creates a complete consensus demand plan in the medium to long term Planning horizon based on the global demand plan on a monthly basis. The plan also takes into account sales and marketing inputs and ensures that financial targets are met.

Some of the data used in the Sales and Operations Planning process needs to be retrieved from external sources. Examples of such data are the marketing plan, the financial plan, and the sales plan.

During the demand review, representatives from sales, finance, marketing, and Demand Planning define a consensus demand plan, using the input key figures derived from Demand Planning, Inventory Optimization, and external sources.

SAP Integrated Business Planning for Inventory

SAP IBP for inventory runs weekly and uses the combined output of the Demand Planning and Demand Sensing processes to create an inventory plan. Inventory Optimization calculates inventory targets for each material at each location in a Supply Chain, considers and compensates for uncertainties in demand forecasts, supply timing, and supply quantity. The inventory plan serves as an input to the Sales and Operations Planning process.

Supply Review

Supply review is performed in monthly cycles and includes the following tasks:

As a preliminary step in the Sales and Operations Planning process, a copy of the Combined Final Demand to the Consensus Demand and the Recommended Safety Stock key figures are created. This copy is used in the Sales and Operations Planning process, while the original key figure values are kept stable.

During the supply review, the Supply Planner creates a constrained demand plan. To calculate the constrained demand plan, the Planning algorithm uses Master Data such as sourcing rules or quotas, resources, production sources (bills of material), lead times, lot sizes, and co-products, and input Planning data such as consensus demand, inventory target, and available capacity.

Supply and Allocations Planning

You can use Supply and Allocations Planning to create product allocations and a supply plan based on prioritized forecast demands and on Supply Chain constraints. For this process, the combined final demand is copied from SAPIBP1 to sample Planning area SAP7. Later on, the constrained forecast established in SAP7 is copied back to SAPIBP1. The Disaggregation Operator is used for copying between Planning areas.

You can take care of the process making use of the following key capabilities:

The plan is the result of a Planning run considering rules and constraints.

The Planner analyzes the projected stock, the constrained forecast, and the product allocations and checks potential alerts for the constrained forecast.

Regular gating factor analysis can help the Planner build up an even more comprehensive overview of the Supply Chain and make any necessary changes so the gating factors don't occur again in the future.

The Planner can use simulations to try out potential solutions, and then update the plan accordingly.

Response Planning

You can use Response Planning to react quickly to incoming customer orders by creating order confirmations and an adopted supply plan based on prioritized demands, allocations, and Supply Chain constraints.

The orders are confirmed based on priority rules and supply constraints.

The Planner can review the outcome of the order confirmation run to identify any potential problems, such as stock shortages.

The Planner can use simulations to try out potential solutions, update the plan accordingly, and then perform order confirmation run.

Deployment Planning

You can use Deployment Planning to create a reliable short-term distribution plan that will consider unforeseeable events in the Supply Chain.

A Planner can check alerts to identify a potential issue. For example, an alert is created for each location product when the value of the projected stock is negative.

The Planner can then consider these issues when distributing available supply across the network.

The Distribution Planner plans the distribution of available supply to demand.

The run takes all customer demand (sales orders), all confirmed component demands (for example, from production orders or stock transfer orders), all forecasted customer demands, and safety stock into account. It then tries to satisfy the demands with the existing supply elements. It does not look at the possibility of creating planned orders or purchase requisitions.

During the deployment run, stock transfer requisitions are created. Those stock transfer requisitions that are pegged only to supply elements that are considered available to deploy become deployment stock transfer requisitions. This is your short-term deployment plan.

The Planner can review the outcome of the deployment run in the SAP IBP, add-in for Microsoft Excel and the Projected Stock app to identify any potential problems, such as supply shortages and adjust a plan accordingly.

The Planning results can also be transferred to an external system and use them in execution processes to prepare the physical transport of goods.

Reconciliation Review

During the presales and operations meeting, representatives from sales, finance, marketing, production, and Demand Planning try to resolve deviations between the constrained demand plan and the consensus demand plan, and agree on solution proposals to be decided in the sales and operations executive meeting.

Management Business Review

During the executive sales and operations meeting, senior management assesses the solution proposals from the previous step. A decision on the final consensus demand is reached, based on the final constrained demand plan. This approved value is used as an input for the Demand Planning process, for creating the global demand plan for the following week.

Visibility, Alerts, and Case Management

The SAP Supply Chain Control Tower provides visibility over the end-to-end Planning process, offers alerting capability for exception-based Planning and enables effective issue resolution with the collaborative case management functionality.

Overview of Data Flow and Granularity

The following table shows the data flow between the SAP IBP applications and between SAP IBP applications and external systems:

Periodicities and Aggregation levels

The following table lists the periodicities and the aggregation levels per Process:

These periodic and aggregation levels represent general guidelines and they can be adjusted for specific requirements as needed.

For additional content related to the unified Planning area, see https://me.sap.com/processnavigator/SolS/EARL_SolS-034 .

For general information about Planning areas, see the model configuration guide on SAP Help Portal at http://help.sap.com/ibp . Choose your release and then choose Model Configuration Guide .

The SAP IBP web client provides access to sample SAP Planning areas, which are shipped with SAP IBP. You can use sample Planning areas as a basis for creating your own Planning areas. You can copy one of the Planning areas and extend it as necessary to meet your particular business needs. You can add your own Master Data types, key figures, calculations, and attributes.

Planning Processes and Model Entities

Time-series based Planning (TSP) , using advanced algorithms, helps you to calculate the flow of products through your Supply Chain to satisfy demand. Using customer demand as the starting point and taking different constraints and Planning data into account, the algorithms calculate which locations in your Supply Chain can supply the product to the customer and how much each location can supply in each period of your Planning horizon.

Order-based Planning (OBP) helps you to create a supply plan using operational data and react to short-term changes. This approach enables Supply Planning from an operational perspective: It uses detailed data from external systems, and takes into account, for example, planned orders, production orders, sales orders, and purchase orders. Compared to the time-series-based Planning functions of SAP IBP, the order-based approach takes a shorter-term view.

The main objective with DDMRP implementations is to enable material and information flow through a Supply Chain. In DDMRP, flow is achieved in the following three ways:

By dampening the effect of variation across the Supply Chain by decoupling lead times and identifying where to buffer quantities of inventory, and how much to buffer to ensure the shortest possible lead time and the optimum amount of inventory.

By driving replenishment based on actual demand, rather than forecasts.

By exposing downstream inventory and demand status to upstream sources to facilitate demand-driven prioritization of supply.

SAP Integrated Business Planning for demand-driven replenishment supports Demand Driven Materials Requirement Planning (DDMRP) as defined by the Demand-Driven Institute.

The five components of DDMRP are as follows:

• Buffer positioning
• Buffer sizing
• Dynamic adjustments
• Demand-driven Planning
• Visible and collaborative execution.

As shown in the figure, these five steps are being supported by SAP IBP.

As well as these Planning areas, small sample Planning areas with examples of advanced configuration to meet different business requirements are provided in SAP Notes, together with information on how to request L-code if configuration can't meet your requirements.

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Transform procurement into a proactive, data-informed, and agile operation with AI-driven automations, recommendations, and guidance.

• Simplify buying while staying compliant with on-screen recommendations
• Streamline data extraction, minimize errors, and reduce manual effort 
• Receive data-driven, prescriptive guidance at critical decision points
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AI in human resources

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• Grow your employees’ skills and careers with personalized recommendations 
• Optimize workforce planning with intelligent staffing analysis 
• Identify highly-qualified talent and match them to opportunities 
• Enhance the employee experience with an AI copilot

AI in sales and customer service

• Quickly grasp account and lead details with AI summaries
• Effortlessly draft compelling emails using case and opportunity context
• Gain valuable insights from customer and operational data for personalized interactions

AI in marketing and commerce

• Anticipate customer behavior and create relevant offers
• Automate routine tasks and free up your team to exceed customer expectations
• Personalize each step of the customer journey with operational and contextual data

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Put the power of trusted AI and machine learning to work in your industry to manage complexity, overcome challenges, and modernize your business.

• Automate and optimize complex industry processes
• Stay ahead of the competition with predictive, data-driven practices
• Disrupt disruption by enabling industry convergence
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SAP Business AI Customer Spotlight: Women’s Tennis Association (WTA)

Developing AI-powered solutions to enhance performance and safe-guard the health and well-being of WTA Tour players

The WTA and SAP have embarked on a journey to develop a state-of-the-art ‘Player Scheduling Zone’ to enable players to Bring out their Best.  With customizable features and tailored reports, the scheduling zone will:

Optimize playing and training schedules across the globe  

Receive detailed reports on impact of travel + play aided with recovery strategies

Minimize injury risk through analysis of medical records

See how more customers are succeeding with SAP

75% reduction in time spent on expenses.

Explore how Chobani uses SAP Business AI in SAP Concur solutions to fully automate their expense processes.

80% increase in automatic cash processing

Learn how Accenture transformed its lead-to-cash processes with ready-to-use AI.

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1.6 terabytes of historical game data analyzed

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Significantly reduced planning process times

See how Henkel uses SAP BTP solutions and AI to enhance resiliency across its value chain, enabling far more efficient global campaigns.

Frequently asked questions

What is artificial intelligence.

Artificial intelligence (AI) is a system that is able to perceive its environment and take actions to maximize the chance of successfully achieving its goals as well as interpret and analyze data in such a way that it learns and adapts as it goes.

What is generative AI?

Generative AI is a form of artificial intelligence that can produce text, images, and varied content based on the data it is trained on.

What is AI in sales and marketing?

The lead-to-cash process covers all activities related to marketing and selling products and services, managing and fulfilling sales orders, providing after-sales services, and finally, invoicing customers, managing accounts receivable, and collecting payment. It also covers the management of customers and channels as foundational elements of the process.

The process varies mainly based on the type of customer (such as B2B versus B2C), the channels through which the products and services are being offered (such as direct sales, digital commerce, and physical stores), and the type of products and services that are sold (such as simple, tangible products, configurable products, engineered products, intangible products, one-time or recurring services, complex solutions, or projects).

What is AI in supply chain?

The design to operate (D2O) process includes the entire lifecycle of products in an end-to-end, connected, and interoperable supply chain process from how a product is designed, planned, manufactured, delivered, to how it operates and is maintained.

The planning stage of the process involves defining supply chain, manufacturing and service-fulfillment strategies; planning demand, inventory, and supply; aligning plans through sales and operations planning; and finally, managing supply chain performance. The planning process culminates in the initiation of operational procurement.

The production stage of the process includes production planning, production operations, quality management, and production performance management – for both tangible and intangible goods.

The delivery-and-fulfillment stage of the process differs for tangible goods versus services. For tangible goods, it covers inbound or outbound deliveries in any context as well as order promising, warehouse and inventory management, dock and yard logistics, transportation management, and logistics performance management. For services, it involves service planning and scheduling, service execution and delivery, and service performance management.

The process concludes with enabling and foundational activities, such as data management, collaboration, identifying and tracking material, and sustainable manufacturing operations.

What is AI in procurement?

The source-to-pay (S2P) process includes all activities associated with managing the comprehensive sourcing and procurement of goods and services. It starts with procurement planning and managing spend, followed by sourcing and supplier selection, negotiating and managing supplier contracts, and preparing and executing operational procurement. The next steps are goods receipt, initiating potential returns and claims, processing supplier invoices and accounts payable, including final payment to the supplier, and managing supplier data.

The source-to-pay process varies mainly based on the type of product or service being purchased. Variations of S2P cover, for example, procurement of indirect and direct products, services, and solutions (such as a combination of products and services), as well as field service materials.

What is AI in human resources?

The recruit-to-retire (R2R) process includes all activities associated with hiring the internal and external workforce and managing their lifecycle in the organization. It involves strategizing and planning human resource requirements, identifying and onboarding new talent, developing talent to enable growth, and retaining talent through appropriate reward-and-recognition strategies, as well as managing all recurring and administrative tasks throughout the workforce lifecycle. The latter includes the management of workforce-related data and lifecycle events such as promotions, relocations, or final offboarding, managing travel and expenses, and periodic payroll and expense payments.

The R2R process will vary depending on whether internal employees or the external workforce is being managed. The entire travel-to-reimburse process is embedded within R2R as well.