Conversion of planning process of demand in "Moscow Hilt Brewery" for SAP IBP for Demand

To: problems and opportunities

• Planning process of demand was executed in spreadsheets
• The integrated data collection from the initial systems was not supported
• The most detailed forecasts were under construction at the Brand level - Region. It was very difficult to disaggregate data in spreadsheets
• Support of data integration of Volume Building Blocks into the final forecast was required.

This process was executed manually in the spreadsheet

Why SAP?

• The single integrated platform for support of planning process of demand
• Expert service which helped to perform effective implementation in only eight months
• Local data processing center in Russia for placement of cloud solutions

After: The results focused on profit

• The solution allowed to create the integrated process of data collection of the initial systems and semi-automatic data scrubbing
• SAP IBP for Demand allows to process huge amounts of data. Big detailing of data is supported, than it was planned initially — at the level of the warehouse / channel / commodity unit
• Comparison of a final demand forecast with expectations of AC Nielsen and average sales amount for the active customer base was carried out
• All special requirements the Hilt were implemented in the solution
• Forecasting accuracy at the previous low level (client / region) improved on 6 items after 1 go month of work. (*danny on TT channel). Improvement of forecast accuracy only on TT channel after the 1st month of work
  • More than by 20 times detailing of data at final demand planning increased
  • ~ 20% decrease in labor costs at demand planning
  • Improvement of processes of data collection, data scrubbing and preparation of the forecast
  • 8 months from planning before commissioning
  • Expansion of abilities to manage processes in a supply chain

Project History

In the Company business planning process of demand which included the following steps was formalized and approved in practice:

• Preparation of a basic demand forecast using methods of time series analysis
• Assessment and formation of uplifts of sales and marketing, among which:
  • Taking note on the forecast of an output to the market of new products, including – accounting of effect of cannibalization
  • Accounting of promotion actions in traditional and modern retail
  • Accounting of plans of inclusion of products in listing and exceptions of it
  • Other Volume Building Blocks - about 12

• Planning was performed at the Sales channel level - "A geographical division" - Brand
• The task of disaggregation of data of demand planning to the SKU level – "Business partner" was set
• Planning was performed in the MS Excel, support of formats of data was performed manually by forces of division of IT support
• Data preparation of base of disaggregation it was also performed manually by forces of division of IT support
• The task of disaggregation of data of demand planning on the week level and implementation of short-term planning was set

Process of mid-term forecasting

Preparation of the forecast

• Collecting of historical data
• Cleaning of history
• Creation of the baseline plan
• Preparation of base of cannibalization – the list of similar goods for new products and absorption coefficients

Meeting with marketing departments and sales

• Collection of data on marketing and sales
• Updating of events
• Determination and impact assessment

Consistency check

• Consolidation of forecasts
• Consistency check
• Assessment of discrepancies with business data
• Offer of the forecast

PreDRM; DRM

• Accomplishment of DRM: approval of the plan
• Providing feedback coupling to marketing departments, sales and finance
• Updating of events and assessment of the forecast
• Accomplishment of the detailed approved plan

Meeting S&OP

• Holding meeting S&OP
• Providing feedback coupling to marketing departments, sales, finance and SC
• Updating of events and assessment of the forecast
• Accomplishment of the detailed approved plan

Obvious difficulties

• Possibilities of the MS Excel as means of complex automation of business planning process of demand are insufficient
• Low automation of basic processes required the large volume of manual work on data purification of adjacent divisions and elimination of errors of a human factor
• Restrictions of the MS Excel as computing platform complicated:
  • disaggregation Implementation
  • Archiving and reuse of these last sessions of forecasting
  • Scenarios and versions
  • Management of powers on data access
  • Automatically prepared reporting in different cuts

• Inevitability of automation business - process on the industrial platform became obvious

Project milestones

Process of mid-term forecasting

System architecture

Integration flows:

• The entering flow of basic data: SAP BW-> IBP
• The entering flow of transaction data: SAP BW sales history-> SAP IBP
• The entering plan data stream promo in Modern Trade: Excel (with VBA)-> SAP IBP
• Outgoing flow of transaction data: results of forecasting of SAP IBP-> SAP BW

Testing

Prototyping was performed on limited scope of data:

• 2 most mass brands
• All regions / businesses clients / networks – the complete customer base

Integration testing was carried out in 4 steps:

• Working off of mathematics on limited scope in a test environment
• Working off of integration at complete volume in production environment
• Working off of disaggregation on complete volume in production environment
• Stress test in production environment

Project Results

• On presentation materials "Conversion of planning process of demand in one of the largest breweries of Russia with the SAP solutions IBP for Demand" on SAP Forum of 2018