Does IBP-IO supports components inventory optimization?

[Former Member]

Does IBP - Inventory Optimization (either IBP 5 or IBP 4)  supports component Inventory optimization and more specifically with multiple levels of BOM?

The release note for IBP 4 FP1 Patch 4 as well as SP02 mentions

• Time varying multi-component BOMs as well as time varying data from multi-sourced locations are now supported.

My understanding is that multi-components BOMs would still need to be on the same level. Can someone please confirm?

Thanks,

Srikant

[former_member185660 · Accepted solution]

Hi Srikant,

The answer is yes.  IBP for inventory can optimize component inventory from multiple sources given the definition of the ratio finished good to component.

But, what do you mean by "on the same level"?

Alexis Lozada

Co-Product Owner of IBP for inventory

[Former Member · Accepted solution]

Hi Alexis,

Thanks for the update. Please refer the attached screenshot. In the below case would the inventory optimization algorithm provide optimized inventory target for both the product as well for all components by location?

And while calculating the inventory target for Product 1, will the algorithm considered the entire BOM (Comp 1-4) or will it only consider the input parameter tagged to first level of BOM i.e. Comp 1 & Comp 2.

Thanks,

Srikant

[former_member185660 · Accepted solution]

Hi Srikant,

Yes, the optimization results of SAP IBP for inventory recommend inventory targets for both products and components at each location/node of the supply chain.  In your example, it will consider the entire BOM (Comp 1-4).  We require the definitions of the ratios product to component, for example, the ratio of Product 1 to Comp 1, and Comp 1 to Comp 3.

Alexis

[Former Member · Accepted solution]

Thank you Alexis for the clarification.

Best regards,

Srikant