Life sciences · Inventory planning & finance

Global Inventory Projection in Quantity and Value

How will inventory develop in quantity and value? PROVADIT supports a global inventory projection with logistical and financial views. The solution also accounts for goods in transit, subcontracting and triangulation, making complex inventory movements part of a consistent outlook.

Explore the case
Industry
Life sciences · Inventory planning & finance
Our role
Solution specification and ongoing solution engineering
Focus & technology
SAP APO liveCache · Kinaxis · OMP OPR
Scope
Global, cross-business capability · In operation and evolving

Client anonymized.

The starting point

Where will inventory go, and what is driving the change?

A global life-sciences group relied on divisional and site-specific inventory projections. Local logic differed, inputs were prepared manually, and no single view connected historical stock, physical inventory, financial ownership, planned orders and goods in transit. The result was repeated preparation work and projections that were difficult to compare across plants, legal entities and businesses.

Inventory physically held, inventory financially owned and inventory represented in the planning system are not always the same. Intercompany movements and goods in transit can create apparent jumps if those views are mixed. A group-wide projection needed to keep the differences visible while applying a consistent method.

Our contribution

PROVADIT’s contribution

PROVADIT specifies and engineers the solution’s continued development, translating business requirements into projection rules, treatment of exceptions and usable analysis views. PROVADIT also built a liveCache emulator to integrate planning elements from Kinaxis and OMP OPR with the existing projection logic. The work connects supply planning, inventory control and finance alongside the client’s planning and data teams.

  1. Define a common projection basis

    The solution connects actual inventory from central inventory and financial reporting with planning data from SAP Advanced Planning and Optimization (APO), Kinaxis and OMP OPR. It projects end-of-month stock at material and plant level for up to 36 months, alongside twelve months of historical actuals. Results aggregate to legal entities, materials, brands, businesses, planning responsibilities and regional hierarchies.

  2. Connect planning systems through a liveCache emulator

    PROVADIT built an emulator that transforms planning elements from Kinaxis and OMP OPR into the structure and representation that SAP APO liveCache would provide. Missing fields or planning elements were simulated or reconstructed using additional sources such as SAP ECC and S/4HANA. This gives the existing inventory-projection logic a consistent form of planning data across the different source systems.

  3. Engineer the planning rules and exceptions

    The solution accommodates the rules needed across different businesses: receipts from production campaigns spanning multiple months are split by calendar days; decoupling rules exclude specified order-category and planning-strategy combinations with defined precedence. Stock already at a location but not yet usable is tracked separately in quantity and value and included in held and owned stock. External sales also have separate volume and value figures.

  4. Support comparison and ongoing improvement

    The product retains monthly projection snapshots and dedicated versions aligned with planning freezes. Defined retention supports comparisons with earlier projections and later actuals. Its continuing requirements cycle covers projection scope, valuation, historical detail, planning rules and accuracy measurement, so new needs become extensions of a maintained product.

Inside the work

Five design choices make the outlook explainable.

The solution combines a shared calculation method with explicit treatment of ownership, transport, valuation and incomplete planning data.

  1. Three inventory baselines

    The projection starts from logistical stock, financial ownership and the planning-system representation in parallel. It provides both a logistical and a financial view, with differences between the baselines remaining visible. This keeps physical stock and financial ownership distinguishable when interpreting transfers and goods in transit.

  2. Goods in transit, subcontracting and triangulation

    Defined order categories, shipping and receiving periods, locations and legal entities identify goods in transit. Receipt lead times and factory calendars adjust the dates. Transit stock remains a separate measure in the logistical and financial projections rather than distorting receipt and issue totals. The solution also correctly represents subcontracting and triangulation in both inventory views.

  3. Traceable drivers of change

    A control-table mapping groups order categories into stock movements, planned and confirmed receipts and issues, sales, forecast demand and expiry effects. Driver analysis identifies the largest contributions for a selected period, with volume and value differences, deviation thresholds and top-N selection at the required aggregation level.

  4. Quantity and value, with a clear price basis

    Projected quantities convert to value using valuation accounts and the latest available prices. Analyses can select local or consolidated prices and actual or plan/budget rates. Fixed valuation applies one price across historical and future periods, separating volume-driven changes from price effects.

  5. A defined response to weak planning data

    Each material-plant combination is classified using stock history, planning-system activity and configuration, and future receipts and issues. Reliable data supports the standard projection. Insufficient data can trigger flatlining, carrying current stock forward; out-of-scope combinations receive no projection. Additional controls cover outliers, unit conversion and default exclusion of batches carrying a finance-defined write-down flag.

The outlook, its evolution and its reliability.

Retained projection snapshots give planners and controllers three complementary ways to assess the inventory position.

  1. The current outlook

    The latest planning data produces expected month-end stock in quantity and value. Users move from material and plant detail to the legal entity, business or regional level needed for the decision.

  2. What changed between forecasts

    Monthly and planning-freeze snapshots make successive outlooks comparable. Users can see how the forecast moved, examine its drivers and compare earlier expectations with actual inventory.

  3. How accurate the projection was

    A monthly accuracy measure compares projected stock with actual month-end inventory at material and plant level over a defined horizon. This creates feedback for the planning process alongside visibility into future stock.

Deliverables

The work delivered. The decisions it supports.

The group operates an automated projection capability that replaces fragmented local calculations with a common method. It connects the current inventory position with future development, explains the main drivers and measures projections against actual outcomes. PROVADIT’s contribution supports the specification and continued engineering of that capability.

  • A consistent specification of inventory baselines, projection methods, valuation rules and business exceptions.
  • Continued solution engineering for an automated projection capability built on existing planning and reporting systems.
  • A liveCache emulator for Kinaxis and OMP OPR planning elements, with missing information simulated or reconstructed from sources including SAP ECC and S/4HANA.
  • Analysis views that connect the latest outlook with its drivers, earlier forecasts and measured projection accuracy.

Engagement context

PROVADIT provides specification and solution engineering; the client’s data teams implement the business-warehouse components. PROVADIT also developed the liveCache emulator described in this case. Planned extensions are separate from the functions described here as in use.

What this illustrates

A defensible inventory outlook needs more than a future stock number. Physical stock, financial ownership and planning assumptions must remain distinguishable, and changes must be traceable. A common method on existing systems makes the projection comparable across the group and checkable against actual results.

An intermodal freight terminal with container rows, railway tracks and cranes.

A related engagement

Inventory Modeling and Scenario Planning

Projecting how stock will develop and modeling the inventory implied by planning parameters answer different questions. A separate case explores PROVADIT’s inventory model and scenario-planning work.

Read case study: Inventory Modeling and Scenario Planning

Related expertise

Explore all project examples

What would you like to clarify?

Discuss your business question, current systems and the decision ahead with our team.

Discuss your project