APO and R3

Bob FerrariSAP

SAP R/3 vs. SAP APO Evaluating Planning Capabilities

SAP AG 2004, SAP R/3 v SAP APO Part 1, Chris Foti / 2

Overview - planning and execution in SAP

Advanced planning

Demand Planning (DP) and forecasting

Inventory, supply, and production planning

Production Planning and Detailed Scheduling (PP/DS)

Transportation planning (TP)

Available to promise (ATP)

7 Key Points to Take Home

Q & A

What We’ll Cover …


Shades of Planning: SAP R/3, SAP APO, & SAP SCM

Execution(SAP R/3)

Planning(SAP R/3)

Advanced planning

(SAP APO)

Adaptive planning

(SAP SCM)(Non-SAP)

i.e. MRPMaterial

requirements needed for production

i.e. MRPMaterial

requirements needed for production

i.e. Supply PlanningRe-balance

production plans across the supply

network

i.e. Supply PlanningRe-balance

production plans across the supply

network

Event ManagementSense a delay in the delivery of a critical

material

Event ManagementSense a delay in the delivery of a critical

materiali.e. WarehuseManagement

Issue a pick order to fill a customer

shipment

i.e. WarehuseManagement

Issue a pick order to fill a customer

shipment

Execute a transaction

Unconstrained planning

Constrained planning• Optimization• Simulation• Supply network

planning

Sense and respond

Information integrationBusiness

intelligenceMaster data

managementSupplier

Scoreboard update

Information integrationBusiness

intelligenceMaster data

managementSupplier

Scoreboard update

Shipping, delivery, and billing

Shipping, delivery, and billing

PurchasingPurchasing

Inventory managementInventory

managementGoods receiptGoods receipt


Supply Chain Execution in SAP R/3

SAP R/3 supports SAP SCM execution processes and supporting transactions

! Logistics execution and transactions... (TMS, WMS)

! Example: Warehouse Management" WMS can execute:

# Direct an employee in putting away a product# Direct an employee to pick a product for shipment# Transact a movement of inventory from one location to

another location" WMS, however, cannot plan:

# Look ahead five months to assess warehouse capacity# Optimize the storage strategy for 10 regional warehouses

Warehouse Management

(WMS)


(WMS)

Execution(SAP R/3)

Transportation Management

(TMS)


(TMS)

Logistics Execution System (LES)

Materials Management

(MM)


(MM)

Sales & Distribution

(SD)


(SD)



(WMS)


(WMS)

Execution(SAP R/3)


(TMS)


(TMS)



(MM)


(MM)


(SD)


(SD)

Examples: SAP R/3 SCM Execution

I need to get that last batch put away in the

warehouse.

Can I tender that customer shipment to

my carrier?

What parts are in transit between my

plant and my regional DC?

How many parts do I have at each of my

regional warehouses?

Sure.

No problem.

I can do that.

I’ll tell you.


Planning in SAP R/3

Planning(SAP R/3)

Materials Requirements

Planning (MRP)


Planning (MRP)

SAP R/3 supports unconstrainedplanning.

! Ability to plan regardless of time, money, or other scarce materials/resources

! Example: Materials Requirements Planning (MRP)" MRP knows that:

# If each cookie needs 5 chips# And each box has 30 cookies# And I need to make 100 boxes# Then I need (5 x 30 x 100 =) 15,000 chips

" MRP is not concerned if you:# Only have 10,000 chips# Only have capacity to make 80 boxes

Distribution Requirements

Planning (DRP)


Planning (DRP)

Sales forecasting (flexible planning)


Production Planning

(PP)

Production Planning

(PP)

Sales & Operations Planning (S&OP)

! Unconstrained sources

! Large amounts of data

! Non-critical materials

! Feeds from legacy systems


Planning in SAP R/3 (cont.)

LISLogistics Information

System

Repetitive manufacturing

CO-PALong-term revenue,

costs, and sales planning at an aggregate level

S&OPAggregate sales planning

at different levels: medium to long term, aggregate production planning

MPS/MRPPlanning of independent

and dependentrequirements at finished

product level

SFCSelf-regulating control cycles

(KANBAN)


Planning(SAP R/3)


Planning (MRP)


Planning (MRP)


Planning (DRP)


Planning (DRP)



Production Planning

(PP)

Production Planning

(PP)


Examples: SAP R/3 Planning

I would like to forecast demand by item by plant

for the next two years

I need to net inventory from demand at a single

plant.

In what sequence should I run my products on a

production line?

If I need 10,000 widgets, how many components

do I need to buy?

Sure.

No problem.

I can do that.

I’ll tell you.


Common Misconceptions about SAP APO

! SAP APO supports only very sophisticated planning needs, mostly driven by constraint-based optimization

! SAP APO does not integrate well with R/3 or other SAP applications

! SAP APO is not flexible to support my industry is unique planning needs

! SAP APO is too complex for us to ever implement, and for our planners to understand and effectively use


Planning in SAP R/3 vs. SAP APO – Outline of Topics


Advanced planning







Q & A


Advanced Planning with SAP APO

Execution(SAP R/3)

Planning(SAP R/3)

Advanced Planning

(SAP APO)

Execute a Transaction

Unconstrained Planning

Why advanced planning?

Most businesses have excess capacity, shortfalls, or both.

! Shortfalls in product availability lead to lost sales, which reduces profits.

! Assets cost money, so excess capacity means reduced profits.

! To maximize profits most businesses need to consider or factor key constraints

Demand Planning (DP)


Supply Planning (SNP)


Production Plng & Detailed Scheduling

(PP/DS)


(PP/DS)

Transportation Plng/ Vehicle Scheduling

(TP/VS)


(TP/VS)

Global Available to Promise

(GATP)


(GATP)

Advanced planning!Heuristics (sequential business rules)

" Create unconstrained replenishment plan" Constrain the plan based on capacity

!Optimization " Simultaneously optimize supply and

demand across the network leveraging genetic algorithms and linear programming

!Capable-to-Match" Match prioritized supply and demand

needs across the entire supply network

! Simulation

! Optimization

! Collaboration

! Advanced algorithms


Advanced Planning

(SAP APO)





Production Planning & Detailed Scheduling (PP/DS)

Production Planning & Detailed Scheduling (PP/DS)

Transportation Planning/Vehicle

Scheduling (TP/VS)


Scheduling (TP/VS)


(GATP)


(GATP)

Examples: SAP APO Planning

I need to collaboratively plan for customer demand across

my entire supply network

I would like to simulate the impact of a 30% “lift” in sales

in June and then pre-build inventory to support it.

Can I optimize my sequence and schedule for every line

simultaneously?

Sure.

No problem.

I can do that.

How do I select carriers and optimize my route?I’ll tell you.

Do I have inventory or capacity in my supply network to promise delivery of this

customer order?

I know.


Adaptive Planning with SAP SCM

Execution(SAP R/3)

Planning(SAP R/3)

Execute a Transaction

Unconstrained Planning

When does planning start to become adaptive?

Adaptive planning senses events beyond the four walls of the organization and responds with updated planning and execution.

! When a production plan is changed because a supplier will be late delivering a critical component/material

! When a procurement plan is changed due to the increasing of the demand forecast in reaction to a customer accepting a promotion

! When Adaptive Agents monitor patterns of events, and respond with suggested changes to plans

Adaptive Planning

(SAP SCM)

SAP Event Management

(SAP EM)


(SAP EM)

SAP Inventory Collaboration Hub

(SAP ICH)


(SAP ICH)

SAP Advanced Planning &

Optimization(SAP APO)



SENSE

RESPOND

EXECUTE

PLAN

LEARN

SAP has begun to pursue adaptive planning by bundling event management, advanced planning, and inventory collaboration together into the SAP SCM 4.0 solution.

SAP NetWeaver


Adaptive Planning

(SAP SCM)


(SAP EM)


(SAP EM)


(SAP ICH)


(SAP ICH)





Examples: What SAP SCM 4.0 Can Do

I need to know when critical supplier

deliveries will be delayed.

Can I enable my suppliers to perform

Web-based VMI in real-time?

I would like to simulate a delayed delivery of a critical

component.

I’ll tell you.

I can do that.

No problem.

SAP and Non-SAP Systems


SAP R/3 and SAP SCM Working Together

Execution(SAP R/3)

Planning(SAP R/3)

Advanced planning

(SAP APO)

Adaptive planning

(SAP SCM)

Materials requirements are

calculated for new production plan.

Materials requirements are

calculated for new production plan.

A new trade promotion is planned in SAP CRM.

A new trade promotion is planned in SAP CRM.

Customers update collaborative forecasts

based on the promotion.

Customers update collaborative forecasts

based on the promotion.

Purchase orders are issued to vendors.

Purchase orders are issued to vendors. Production and

replenishment are re-balanced based on

material and resource capacity

Production and replenishment are re-

balanced based on material and resource

capacity

A critical purchase order is noted to be

delayed at the vendor.

A critical purchase order is noted to be

delayed at the vendor.

Production of a less critical product is delayed to free up required material.

Production of a less critical product is delayed to free up required material.

The updated production plan is

scheduled.

The updated production plan is

scheduled.New production is received into inventory

New production is received into inventory

Customer order is picked/ packed/shipped/invoiced.

Customer order is picked/ packed/shipped/invoiced.

Network product demand is statistically forecasted in Demand

Planning

Network product demand is statistically forecasted in Demand

Planning

Information integration

Supplier Scoreboard update

Information integration

Supplier Scoreboard update




Advanced planning







Q & A


SAP APO Demand Planning

(DP)

Statistical forecastingStatistical

forecasting

Promotions planning

Promotions planning

Collaborative forecasting

Collaborative forecasting

Consensus forecasting

Consensus forecasting

Alert monitoring and reporting


What SAP APO Demand Planning Can Do

I’d like to forecast based on past orders, past shipments, and leading indicators like

price, retail outlets, etc.

I would like to adjust for the impact of multiple re-useable

promotions across many products/regions/etc.

Can I work with my key customers over the Internet on

a collaborative forecast?

Sure.

No problem.

I can do that.

How do I merge input from customers, sales, marketing,

and production?I’ll tell you.

Where are my forecasts out of tolerance? What is my

projected sales by brand? region? account?

I know.


Planning(SAP R/3)


Planning (MRP)


Planning (DRP)



Production Planning

(PP)


SAP R/3 and SAP APO: Forecasting

Advanced Planning

(SAP APO)




Production Planning and

Detailed Scheduling (PP/DS)


Scheduling (TP/VS)


(GATP)

Data storage•LIS based•Transparent table•Single hierarchy

•BW-LiveCache Based•Multi-Dimensional•Multiple Hierarchies

Forecasting techniques•Univariate algorithms •More univariate

algorithms•Outlier correction•Multiple linear regression

•Composite forecasting

•Drag and drop

Macros•Simple arithmetic•Row operations

•Complex arithmetic•Complex functions•Row, column, area operations

SAP APOSAP R/3


SAP R/3: Single Hierarchy

Planning hierarchy

1000

4711 4712

M-0001 M-0002 M-0001 M-0002

33.3%66.6% 25%75%

40%60%

Sales organization

Customer

Material

SAP

R/3

is li

mite

d to

nin

e ch

arac

teris

tics

SAP R/3 is practically limited to 150,000 characteristic combinations,i.e., Material M-0001/Customer 4711/Sales Org 1000 is one combination


SAP R/3: Univariate Forecasting

• Use of recognized, stable forecasting methods

" Exponential smoothing" Moving average

• Automatic model selection is possible

• Graphical checks as well as adjustment of historical data and forecast results

UsageUsage Actual dataActual data

ForecastForecast

PredictionPrediction

Used as planning dataUsed as planning dataUsed as planning data


SAP APO: Flexible Hierarchy

MaterialMaterial Distribution Center

Distribution Center

AccountAccountBrandBrand

Package sizePackage sizeAccount rep.Account rep.

RegionRegionChannelChannel

Classification (A-B-C)

Classification (A-B-C)

CountryCountry

etc.etc.

DENUSAJeff D.C-Store6345AMER1Beta32415

BERGERADirk R.Retail7668EMEA1Alpha87960

PARFRAAJean G.Mass2323EMEA2Alpha98765

NYCUSABob A.Retail5555AMER1Alpha12345

etc.etc.DCcountryA-B-Crep.channelaccountregionpkgsizebrandmaterial

Brand = AlphaBrand = Alpha

Channel = RetailChannel = Retail

TotalReconcile by:

• Fixed proportion• Forecast value• Dynamic value

• Historical sales• Store count• etc.

etc.etc.There is no fixed limit on the number of characteristicsThere is no fixed limit on the number of characteristics

Some SAP APO customers run over 1,000,000 combinationsSome SAP APO customers run over 1,000,000 combinations

12345 87960


SAP APO Advanced Planning: Univariate Forecasting

# Analysis of historical data! Outlier detection! Outlier correction

# Application of promotions to history

# Automatic model selection

# Automatic correction of forecast for:! Promotions! Lifecycle planning! Supersession (APO 4.0)

# Graphical monitoring and manipulation of both historical data and forecast

Correct historical data

Correct historical data

ForecastForecast

Correct forecastCorrect forecast

Used as planning figuresUsed as planning figures


Advanced Planning Statistical Algorithms

26 forecast algorithms with auto select feature

Custom algorithms can be used


Advanced Planning: Composite Forecasting

Forecast1

n

...Combine

and reconcile

Combine and

reconcile

Time series

MLR

Time seriesResultMLR

• Weighted average of multiple forecast methods• Simple average• Time phased composition


Advanced Planning: Causal FactorsU

nit s

ales

Feb. Mar. April May June July Aug. Sept.

$ 20

00

$ 10

00Advertising budget:

# Model fit analysis! R2 ! R2 adjusted ! Durbin-Watson! Durbin - h ! t - Test

# Model fit analysis! R2 ! R2 adjusted ! Durbin-Watson! Durbin - h ! t - Test

# Modeling options! Linear and nonlinear trends! Seasonal patterns! Dummy variables and time lags

# Modeling options! Linear and nonlinear trends! Seasonal patterns! Dummy variables and time lags


SAP R/3: Macros

Sales EventCorrected salesDifference in %

01/03 02/03 03/03

Region: USARegion: USA

KGKGKG%

Database Database Display onlyDisplay only

Additional key Additional key figurefigure

300 320 29070

39022

Special view on planning data

Dependency between key figures can be defined using macros

Macro Sales+ Event= Corrected sales


SAP APO Advanced Planning Macros

Operations on single fields, rows, columns, and areas

Conditional statements: (if, then, else)

Operators:(+,-,*,/,sqrt,trunc, sin, etc.)

Functions:(sum, avg, max, mad, var)

Alerts and emails

Drag and drop psuedocode

$Row%

$C

olum

n%

Cell AreaMacro triggers:•Always on•Button•Action


Summarized Features - SAP APO DP

! Helps you forecast and plan for future or anticipated product demand, either based on historical sales, or actual demand data

! Ability to forecast and plan on any level, and in any dimension

! Data is stored at the lowest level, allowing top-down, bottom-up, or middle-out forecasting and planning

! Built-in, sophisticated statistical forecasting with 26 forecast algorithms

! Information stored and viewed in highly configurable planning books, including out-of-the box, preconfigured planning books

! Integration to Microsoft Excel

! Front-end tool for collaborative replenishment processes such as VMI or CPFR

! Supports ability to collaborate with other internal groups, or external customers and suppliers with collaborative demand planning

! Currently available for license as standalone solution




Advanced planning







Q & A


SAP APO Supply Network Planning

(SNP)

HeuristicsHeuristics

OptimizationOptimization

Capable-to-MatchCapable-to-Match

Truck load buildingTruck load building



What SAP APO Supply Network Planning Can Do

I’d like to set up rules and quotas to decide where/

when/how to produce and distribute product.

Can I find a feasible global plan that minimizes the types

of costs that I want?

I need to balance different supply and demand priorities for a complex supply chain.

Sure.

No problem.

I can do that.

How do I best aggregate my shipments into trucks,

containers, etc.?I’ll tell you.

Where do I have too much/little inventory? Where will I be

exceeding capacity?I know.

Can I do all of this for VMI and CPFR customers too?Yes.Collaborative

supply planningCollaborative

supply planning


SAPAPO

SAPR/3Planning

(SAP R/3)


Planning (MRP)


Planning (DRP)



Production Planning

(PP)


SAP R/3 and SAP APO: Supply Planning

Advanced Planning

(SAP APO)







Scheduling (TP/VS)


(GATP)

Solution techniques• Rules based• (MRP and DRP)• No simulation• Bills of material• Sequential solve• Static sourcing map

•Rules-based and optimization

•Multiple simulations•BOMs and routings•Simultaneous solve•Dynamic sourcing

Ease of Use•No macros•Table-based views•Master data from SAP R/3

•Real time inventory and order updates

•Sophisticated macros•Graphics and table•Master data from SAP R/3

•Real time inventory and order updates

Planning with constraints•Infinite capacity•Infinite materials

•Constrained capacity•Constrained materials•Bottleneck resources


SAP R/3: Supply Planning

Static quotas determine how demand is aggregated

Simple netting logic is used to determine production requirements.! Lead time from source to destination is a single static amount.! Demand is assigned regardless of exceeding capacities.

Plant 1

RDC1 RDC2

DC1 DC2 DC3 DC4

Plant 240%

60%

Demand = 300Inventory = 200Net Demand = 100



Net Demand = 200 + (40% x 500) = 450




Net Demand = (60% x 500) = 300


SAP APO SNP Heuristic

Demands

Storage locations

Plants

Stock transfer orders Production orders

Suppliers

"Calculates supply requirements taking quota arrangements, lead times, calendars, and lot-sizing rules into account

"Execute a capacity check, or enable capacity leveling

"Calculates supply requirements taking quota arrangements, lead times, calendars, and lot-sizing rules into account

"Execute a capacity check, or enable capacity leveling


Minimierung der KostenMaximierung des Profits

SAP APO SNP Optimization

Forecastssales ordersForecasts

sales orders

Sourcing Product mix

Production andprocurement plan

Inventory strategies

Sourcing Product mix

Production andprocurement plan

Inventory strategies

APO

Liste

Flexible constraint definition# Capacities# Material availability# Market constraints# Costs of opportunity

Optimization

Supply chain modelSupply chain model

Linear and mixed integer programmingLinear and mixed integer programming

Cost minimizationProfit maximization

Constraint-based feasible solutionConstraint-based feasible solution


Capable-to-Match: Matching of Demand/Supplies

Categorizedsupplies

Prioritizeddemands

1.

2.3.

4.

5.6.

7.

8.

9.10.

11.

Multi-site capacity check and check of transportation capabilities

Capable-to-MatchCapable-to-Match

"Matches a set of prioritized customer demands (forecast and orders) to a set of categorized supplies

"Supports multi-stage production networks

"Matches a set of prioritized customer demands (forecast and orders) to a set of categorized supplies

"Supports multi-stage production networks


Summarized Features - SAP APO SNP

! Allows you to efficiently plan available supply, contrasted to projected demand, across your entire supply chain network

! Ability to create feasible plans for procurement, manufacturing,inventory, and transportation needs

! Three different alternatives to efficiently plan supply:" Heuristics and capacity leveling" Optimization" Capable-to-match (CTM)

! Fully supported distribution and safety stock planning, as well as dynamically rebalance and optimize your distribution network

! Ability to plan based on different production strategy needs:" Make-to-stock" Assemble-to-order (with or without final assembly)" Configure-to-order

! You can include other internal or external groups in planning with built-in collaborative supply planning




Advanced planning







Q & A


Planning(SAP R/3)


Planning (MRP)


Planning (DRP)



Production Planning

(PP)


SAP R/3 & SAP APO: Production Planning & Scheduling

Advanced Planning

(SAP APO)





(PP/DS)


(TP/VS)


(GATP)

Planning with constraints•Infinite capacity•Infinite materials

• Constrained capacity• Constrained materials• Bottleneck resources

Solution techniques• Single plant• Due date driven• Backwards

scheduling• Manual leveling• Simulation only for

long term

• Multi-plant• Priority and cost driven• Forward and backward

scheduling• Auto and manual level• Real-time simulation• Industry specific

solvers

Visualization• Product planning

table• Graphical planning

table• Map-based cockpit• BI-based reporting• Alert monitoring

SAPAPO

SAPR/3


Linear vs Integrated Planning Process

SAP APO PP/DS! Plans for both material and capacity

constraints In one planning process

! Constraint driven optimization of planning

! Sequencing and changeover

! Date determination based on actual capacity load- increased planning accuracy

! Automatic solve constraint resources alternate resource, capacity variant

! Detailed capacity planning

! Visibility on material flow (pegging)

! Simulation capabilities

! Alert capabilities

! Improved analytics and reporting tools

SAP R/3 PP! Linear process – traditional backward

scheduling MRP Logic

! Run MPS and MRP- no consideration of capacities in planning run

! Explode BOM, create planned purchases, production orders, calculate net requirements and lot size

! Run rough-cut capacity planning

! No flexible and user-defined heuristics

! Optional material and capacity check

! Changes are only taken into account for the next MRP run

! Capacity leveling over and under

! Limited interactive planning


online

Online Integration into Execution

Execution with SAP R/3 Planning with SAP APO

Change of work center

Re-scheduling manual/automatic

Visualization

Optimization

Product order

Purchase order

Customer requirementCustomer order

Forecast requirement Creation

Creation

Planned order

Purchase request

Change of work center

Status change

Confirmation

Goods receipt

planned order Production planning

Order conversion

Consumption

Product order

Purchase order

...

Planned order

Purchase request

...

online

online

online


# Planner works interactively # Visualization of resources, order

network, and material flows

# Planner works interactively # Visualization of resources, order

network, and material flowsManual

reschedulingManual

rescheduling

Automatic planning

Automatic planning

OptimizationOptimization

SAP APO PP/DS Planning

# ‘State of the art’ optimization algorithms

# Optimization with several criteria# All constraints on all levels

# ‘State of the art’ optimization algorithms

# Optimization with several criteria# All constraints on all levels

ALERTS

ALERTS

# Multi-level material and capacity planning

# Creation of order network # Quick identification of constraint

violations

# Multi-level material and capacity planning

# Creation of order network # Quick identification of constraint

violations


Constraints in SAP APO PP/DS

! Due dates/deadlines

! Material availability

! Planned delivery times, transport capacity

! Routing/recipe

! Standard times, sequences, relationships between production activities

! Alternative resources (alternative technologies)

! Limited machine and personnel capacities

! Setup times/costs (dynamic)

! ...


Setup Optimization in SAP APO PP/DS

B ACSetup Setup

Customer orders C BA A

A

Setup times inpaint shopProd. A B C

A 0 10 20B 30 0 10C 40 30 0

Setup time inminutes

Product A: white colorProduct B: yellow colorProduct C: blue color

time20 30 30

Optimal plan for setup

Set-up BA CA Set-

up

10 10

Set-up B ACA SetupSet-

up

10 10 40Optimal plan for setup and due dates

Setup


Order networkOrder network

Component viewsComponent views

StrategiesStrategiesOptimizationOptimization

Alert monitorAlert monitor

Graphical Planning Table

Stock viewsStock views

Capacity viewsCapacity views


Summarized Features - SAP APO PP/DS

! With PP/DS, companies can generate optimized schedules, and execute production plans:! Perform forward and backward scheduling on multiple levels! Perform detailed capacity and material planning! Synchronize schedules and scheduling changes at multiple levels! Support sequencing and scheduling needs! Perform interactive scheduling using a graphical planning board ! Use the optimizer to determine most feasible plans, based on

defined constraints! Exchange master data with SAP R/3 in real-time

! The PP/DS capabilities support both discrete and process manufacturing needs

! Supports customer order promising and fulfillment needs in capable-to-match (CTP), in conjunction with APO GATP




Advanced planning







Q & A


SAP R/3 and SAP APO: Transportation Planning

Advanced Planning

(SAP APO)







Scheduling (TP/VS)


(GATP)

Load building• Rules-based order

consolidation• Predefined routes

• Optimization• Item combinations• Delivery date/time • Equipment

• Capacity• Availability• Compatibility

• Costs (late, early)• Dock hours

Tendering• Transactional

• EDI• Internet• Fax

• Collaborative• EDI• Internet• Fax• Capacity Info

Carrier selection• Manual • Optimization

• Cost• Priority• Business shareWarehouse

Management (WMS)


(WMS)

Execution(SAP R/3)


(TMS)


(TMS)



(MM)


(MM)


(SD)


(SD)

SAPAPO

SAPR/3


SAP APO TP-VS vs. SAP R/3 LES Transportation

& Constraint-based#Optimized vs. Predefined routes#Optimized vs. Rules based or manual order consolidation#Uses real orders instead of deliveries#Considers costs and penalties#More precise planning time frame – minute:sec vs. day

& Creates and supports many types of shipments#Multiple modes such as truckload, airfreight, intermodal...#Mode combinations – (i.e. rail to sea)#Multiple stop, pickup, and delivery

& Factor hard and soft constraints#Open/closed dock hours#Equipment capacity, availability, and compatibility#Product combination restrictions#Requested delivery date and time#Transportation, late, and early delivery costs


Summarized Features - SAP APO TP/VS

! Allows you to plan for the best use of available capacity for freight vehicles, trucks, railcars, ships, and airplanes

! Anticipated load capacities can be consolidated and planned, allowing more efficient use of available transportation resources

! Out-of-box integration to SAP R/3 transportation execution and freight costing enables automatic release of orders, and more consistent information pass-through




Advanced planning







Q & A


SAP R/3 and SAP APO: Available to Promise

Advanced Planning

(SAP APO)







Scheduling (TP/VS)


(GATP)


(WMS)


(WMS)

Execution(SAP R/3)


(TMS)


(TMS)



(MM)


(MM)


(SD)


(SD)

Promise Against• Inventory (one

location)• Scheduled production

(one location)

• Global inventory• Finite scheduling• Global

constrained capacity

• Available components

Solutions• Available to promise• Backorder processing• Product allocation

• Available to promise• Backorder

processing• Product allocation• Capable to promise

Technology• Real time check at

order entry• Real time check at

order entry• Rules-based• Multi-level check

SAPAPO

SAPR/3


SAP APO Global Available-to-Promise

Rules-based, multi-level ATP! Alternative locations! Alternative products

Integrated with Production Planning

! Checks against actual production plan

! Considering capacity constraints

Integration with demand planning/forecasting

! Product allocation

ATP request

Confirmation

Sales

It is better/faster/more functional than the ATP check in R/3


Rules-based ATP

Alternative location(s)Alte

rnative

product(s)

Customer Order end item

PPM

exp

losi

onProblem:Not enough items in stock

Solution policy:Step 1: Alternative productStep 2: Procure from different locationStep 3: Finally produce (PPM explosion)


Multi-level ATP/CTP Comparison

YesNoBlock planning

Fixed/min./max.Lot-for-lot order quantityLot size

Detailed schedulingSimple lead time schedulingScheduling of components

Finite scheduling on resources

Daily production rate (represented by product allocation)

Capacity restrictions

‘Worse’‘Better’Performance

Separate planning logIntegrated in ATP result overviewDisplay of the check results

PP/DS planned ordersATP tree structuresResult

Based on secondsCumulated in daysScheduling of finished product

YesNoCDP

Check using the pegging functionality

Product availability check/check against forecastScope of check, shortage checks, and checking horizons are taken into accountRules-based ATP is supported

Availability check on component level

CTPMATP




Advanced planning







Q & A


Summary - SAP R/3 Planning

! Planning process support for:! MRP, DRP, PP (single instance LIS based)! Non-constrained, sequential based planning! Simple netting logic

! Linear planning process - traditional MPS/MRP logic

! Sequential batch programs make for a longer planning cycle

! Single hierarchy

! Limited forecasting tools - univariate algorithms

! Limited what-if simulations

! Limited interactive planning


Summary - SAP APO Planning

! Planning process support for:! Complex or global demand and supply network planning! All planning processes (strategic, tactical, operational)

! Constraint-based, producing most feasible plan given reality of multiple material, capacity, production, and transportation needs

! Extensive and deep planning and forecasting tools

! More flexibility - deeper planning tools to support simultaneous advanced planning and execution

! Integrated master data with SAP R/3 connector

! Real-time

! Broader, more flexible specific business process support (VMI, CPFR, S&OP, DRP )

! Enhanced for specific industry planning needs (discrete, process, distribution )


Good Strategies for Getting Started with APO

! Prepare … prepare! First, ensure that all master data is clean and accurate, for all

network participants! Ensure that your planning processes and planning models are

clearly documented and understood by your planners and the business

! Get solid APO training for all participants! Change management is a significant consideration for any advanced

planning process implementation

! Start your APO journey in manageable implementation steps! Start small … chew fast ! If you desire to engage an implementation partner, ensure that it has

demonstrated experience! Research best practices and successful implementation models! Take advantage of new SCM Safeguarding Services offered by SAP

Services


Resources

! APO 4.0 detailed information:" http://help.sap.com/ > SAP Cross-Industry Solutions > SAP Supply

Chain Management > SAP Advanced Planning and Optimization

! Supply Chain Planning Business Process Support Maps:" http://www.sap.com/solutions/businessmaps/ > Solution Maps

Cross-Industry Business Maps > Supply Chain Management > Supply Chain Planning

! SCM 4.0 integration and technology:" http://service.sap.com/scm > mySAP SCM Technology > SCM 4.0

Integration and Technology

! Best practices for mySAP SCM Solution Management:" http://service.sap.com/scm > Best Practices for Solution Management

mySAP SCM

! SAP Planning: Best Practices in Implementation by George W. Andersen, Pearson Education, April 2003

" Highest rated SAP-related book on BarnesandNoble.com

SAP R/3 vs. SAP APOEvaluating Planning Capabilities

Your Turn for Questions !

How to contact me: robert.ferrari @sap.com, Telephone: 781-522-5209


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! JAVA® is a registered trademark of Sun Microsystems, Inc.

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! MarketSet and Enterprise Buyer are jointly owned trademarks of SAP AG and Commerce One.

! SAP, SAP Logo, R/2, R/3, mySAP, mySAP.com and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are trademarks of their respective companies.

Copyright 2004 SAP AG. All Rights Reserved


! No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.

! Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.

! Microsoft®, WINDOWS®, NT®, EXCEL®, Word®, PowerPoint® and SQL Server® are registered trademarks of Microsoft Corporation.

! IBM®, DB2®, DB2 Universal Database, OS/2®, Parallel Sysplex®, MVS/ESA, AIX®, S/390®, AS/400®, OS/390®, OS/400®, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere®, Netfinity®, Tivoli®, Informix and Informix® Dynamic ServerTM are trademarks of IBM Corporation in USA and/or other countries.

! ORACLE® is a registered trademark of ORACLE Corporation.

! UNIX®, X/Open®, OSF/1®, and Motif® are registered trademarks of the Open Group.

! Citrix®, the Citrix logo, ICA®, Program Neighborhood®, MetaFrame®, WinFrame®, VideoFrame®, MultiWin® and other Citrix product names referenced herein are trademarks of Citrix Systems, Inc.

! HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C®, World Wide Web Consortium, Massachusetts Institute of Technology.

! JAVA® is a registered trademark of Sun Microsystems, Inc.

! JAVASCRIPT® is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape.

! MarketSet and Enterprise Buyer are jointly owned trademarks of SAP AG and Commerce One.

! SAP, SAP Logo, R/2, R/3, mySAP, mySAP.com and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are trademarks of their respective companies.

Copyright 2003 SAP AG. All Rights Reserved

APO and R3

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Transcript of APO and R3