IBM, SAP Team on Shelf-Level Planning Solution

IBM and SAP SE have teamed up to provide a co-innovated solution designed to help retailers and consumer packaged goods manufacturers increase profitability and improve the consumer experience.

The solution uses near real-time data to improve planning and execution in the physical store. Unique data sources, such as IBM’s Metro Pulse, flow through the SAP Cloud Platform to provide insights that can be acted upon almost immediately. The insights for better decision-making are fueled by live business, near real-time market-demand signals and a digital core that helps make the execution possible.

This is the first plan for an industry-focused solution resulting from the digital transformation partnership that SAP and IBM announced last year. It expands on the investment IBM made in retail and CPG customers with SAP S/4HANA-based industry solutions. The two partners also intend to collaborate on SAP Model Company services, a prepackaged, ready-to-use, end-to-end reference solution that can be customized to meet specific line-of-business and industry needs to accelerate the time to value.

IBM Metro Pulse uses the company’s cognitive services to provide hyper-local insights around weather, events, traffic and demographics and helps address key industry challenges such as on-shelf availability and demand forecasting accuracy. During trials conducted across roughly 100 stores in multiple U.S. markets, the solution improved forecasting accuracy of volatile, hard-to-predict products by 75%, according to the companies.

SAP will bring together various unique data sources in the cloud platform, including data feeds from IBM’s cognitive capabilities, allowing retailers to identify and take near-immediate action on the insights.

For example, a New York sales operation manager for a beverage company may try to forecast sales during the annual New York Marathon at one of her team’s stores along the running route. Using the new solution, she could incorporate information on traffic flows at different points along the route, as well as the impact the weather forecast has on demand. This would allow her to predict with much greater accuracy the spikes in demand at a store level.

"SAP S/4HANA, coupled with access to rich, hyper-local data understood and reasoned by IBM’s cognitive services, can provide consumer product and retail business users across the c-suite with the specific insights to gain a competitive advantage in major markets,” said Laurence Haziot, IBM's global managing director and general manager for consumer industries.

"Through this exciting collaboration, retailers and consumer products companies today can respond with speed, precision and confidence to locally relevant events,” said Lori Mitchell-Keller, global general manager, consumer industries at SAP.