SAP’s advanced planning and optimization (APO) is a tool that helps manufacturers and distributors manage inventory and throughput. It’s a solution to better manage demand planning and supply network planning, by providing a consistent model for data, which can be used to make better planning decisions for any organization. Whether companies are predicting yearly sales, conducting production and purchase planning, or calculating capacity limits, APO can help them make accurate, efficient supply chain management decisions.
While APO’s capabilities for inventory management can help manufacturers and distributers make good business decisions, configuring, implementing and operating the system can be costly and resource intensive. Neogrid’s solutions can complement and enhance APO by adding automation capabilities to improve agility and increase inventory visibility. With real-time data, inventory adjustments can be made more quickly, allowing companies to more easily meet consumer demand.
Distribution Requirements Planning (DRP)
APO’s DRP capabilities include statistical forecasting, multi-level planning, promotion planning and simulation, among others, to help manufacturers and retailers understand what inventory is in demand within their network of distribution centers. By integrating Neogrid’s DRP solution with APO’s current demand planning capabilities, manufacturers can use automation to reduce production work and make planners more productive, effectively adding fuel to the current model.
Neogrid’s solution can tell manufacturers and retailers what they need at any distribution center, at any time, on an item-by-item basis. Neogrid also allows retailers and manufacturers to move away from a generic, “one size fits all” environment to an agile, customizable environment. This enables retailers to meet the unique demands of each individual customer and store location. Through this capability, manufactures can better serve their retail partners through multi-level configuration, while conforming to each partner’s distinct business rules.
Additionally, manufacturers can monitor SKUs at an aggregated level and the system will automatically deploy for the lowest levels to generate orders, increasing throughput efficiency and eliminating the need for manual alterations.
Supply Network Planning
Supply network planning encompasses everything required to find the optimal solution for the entire network based on data. It integrates each piece of the puzzle, including vendor managed inventory (VMI), purchasing, manufacturing, and transportation to create an optimized system to help reduce the risk of overstocks or out-of-stocks. By reducing excess inventory, companies can improve their bottom line.
With Neogrid’s VMI solution, manufactures will have a clear picture of external inventory, allowing for better supply network planning. The solution is able to receive input from people outside of the company that support the process, such as retailers and third party logistics (3PLs). With the opportunity to collaborate across the entire supply chain, manufacturers can make more efficient, informed planning decisions more quickly. Depending on the organization, this may even reduce the need for planning personnel, saving tens of thousands of dollars a year.
Sales and operations planning (S&OP) is another large factor in the success of manufacturers. Neogrid’s S&OP solution allows organizations that use APO to integrate their business management with their distribution requirements planning, for an even more comprehensive view of inventory and demand. By enabling collaboration throughout the organization, Neogrid’s S&OP solution can help businesses develop optimal plans, balance inventory with high turns, maximize efficiency and increase profitability.
When it comes to making precise long- and short-term sales and operations decisions, manufacturers and distributers will have clear-cut information from each area of the business to help them make better decisions and reduce lead times across the entire supply chain.
Implementing these three Neogrid solutions can help manufacturers and distributors control their inventory to deliver accurate orders and meet customer demand. While APO has the capability to help organizations manage inventory, DRP, VMI and S&OP solutions can add the fuel you need to increase inventory visibility and agility, and improve efficiencies across the entire supply chain.