In a global economy where the majority of business executives expect demand – not supply – to drive production, can manufacturers effectively and predictably manage product variations that can number in the thousands and are produced in plants distributed across the globe? How can one company systemically address this challenge in an environment where lead times and demand fluctuations are often its top production execution challenges?

Market leaders meet this challenge by effectively transforming their network of internal and external plants, suppliers, outsourcers, and trading partners to act as a single, virtual, global plant floor. This shift to a unified virtual plant-floor model has the potential to deliver a reduction in lead time execution and drive increased profitability by simultaneously reducing stock-outs and optimising inventory. According to the AMR Research report "The Handbook for Becoming Demand Driven," the most advanced demand-sensing companies have 15% less inventory, 17% better perfect-order performance, and a 35% shorter cash-to-cash cycle time.

In today's global environment, a strategic IT challenge is to enable a single view across multiple companies with disparate systems – essentially, a unified, virtual shop floor – to minimise costs without negatively effecting customer service. SAP addresses this challenge by providing solutions and services for manufacturing network planning and execution.

SAP solutions help empower its customers by providing complete visibility into operational demand, supply, and production dynamics combined with integrated end-to-end processes to continuously update network-wide production planning and execution. These processes include:

• Consolidated network-wide production planning – Minimise lead times across multiple plants, products, and suppliers with detailed actionable production plans.
• Coordinated network execution – Reduce customer stock-outs, work in process, and finished goods or material inventory through on-time, on-demand production execution and associated material pull through to plan.
• Intelligent event monitoring and control – Instantly respond to unplanned events through complete visibility across the network and operational intelligence, enabling continuous update planning and execution.

SAP partners provide critical complementary solutions such as inventory optimisation and real-world awareness to further increase manufacturing responsiveness, while decreasing costs. Services from SAP and our partners include value assessment studies, detailed road maps, and implementation expertise.

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