Download - sap-apo overview

SAP – APO OverviewBy

V K Agnihotri

The course will cover the following subject areas:

Advanced Supply Chain Planning overview

Demand Planning

Supply Network Planning

Core Interface

Course Goals

This course will prepare you to:

Gain a basic understanding of SAP functions in the area of advanced Supply Chain Planning

Describe the Supply Chain Planning options available with the SAP ECC and SAP SCM (APO) systems

Course Objectives

After completing this course, you will be able to:

Briefly Describe the role of both the SAP ECC and SAP SCM components in

Advanced Supply Chain Planning

Specify which master data and transaction data are used in advanced Supply Chain Planning

Explain the interplay and the integration of SAP ECC and SAP SCM (Core Interface)

Execute fundamental planning functions of Demand Planning and Supply Network Planning.

Contents

• SCM Overview

• APO Overview

• SAP R/3 Vs APO

SCM History

Roots in military logistics, in WW II: the first large, complex organizations getting the right supplies, the right labor, to the right place, at the right time

1991: The Gulf War is often called the largest supply chain success of the 20th century

Supply chain concepts and terminology formalized in the early 1980’s at a few major Universities

IT began supporting SCM concepts in the late 1980’s

Integrated supply chain systems appeared in 1991, driven by powerful PC’s, integration, networking

In 1998 ERP vendors entered supply chain market

Now SCM is being driven by internet & e-commerce

Supply Chain Planning

SupplyDemand

Companies do this by predicting customer demand and fulfilling it by the most efficient allocation of inventory and

production capacity.

• The right product

• At the right time and place

• Delivered to the right customer

• At the lowest total cost

• With the lowest asset investment

Supply Chain Planning is the process of balancing available supply against demand

SCM Planning and Execution

Supply Chain Management starts with a completed Business Plan:

Strategic Planning

Business Planning

Sales & Operations Planning

Financial Planning

Distribution Requirements

Planning

Demand Planning

Production Planning & Scheduling

Material Requirements

Planning

Execution

Functional Planning

• How are we going to increase the value of the company?• What businesses are we going to get in/out?• How are we going to accomplish? (acquisitions, mergers, joint ventures, divestiture, etc.)

• What are the financial implications of the strategic plan?• What are the financial resource requirements?• Which financial vehicles should be used in meeting these resource requirements?

• What will it take to make the business more profitable?• What events / trends are taking place in the markets served which may impact our business?• How are we going to respond to these events / trends?• What are the appropriate service and cost targets to gain competitive advantage?

• How does projected demand compare to projected supply?• What are the projected resource requirements to meet both service and cost targets?• What actions are required to insure the appropriate levels of resources are available when needed?

Customer Service Warehousing Transportation Manufacturing Procurement

Supply Chain Planning Benefits

Revenue

Costs

Working Capital

Fixed Capital

Supply Chain Impacts

• Improved customer service (greater market share, higher prices)

• Lower raw materials and finished goods inventory

• Shorter “order-to-cash” cycles

Shareholder Value

Profitability

Invested Capital

• Fewer physical assets (manufacturing plants, warehouses, material handling equipment, trucks, etc.)

• Lower cost of goods sold (including material, manufacturing, handling, warehousing, distribution, and general overhead costs)

10-30%transportcosts

10-20%inventory

10-30%assets

5-10% conversioncosts

Typical Benefits

2-5% sales

Contents

• SCM Overview

• APO Overview

• SAP R/3 Vs APO

SCM

APOAPOAPO

Execution – R/3Planning - APO

SCM SCM

APO

SCM Planning

APOAPOAPO

Planning - APO

SC SCM

APO

Demand Planning (DP)Supply Network Planning (SNP)Production Planning (PP/DS)Distribution Planning (Deployment)

Transportation Planning (TP/VS)

SCM Execution

Execution – R/3

SCM SCM

Materials Management (MM)Production Planning (PP)Warehouse Management (WM)Logistics Execution (LES)

SAP-APO Overview

Connectivity Layer

ERP CRM SCM PortalPrivateExchange

APO

liveCache

DemandPlanning

Detailed Scheduling

ProductionPlanning

SupplyNetworkPlanning

Global Available-

to- Promise

SC CockpitInfocubes SolversTransportation

Planning

BW

SAP-APO Planning and Capabilities

Supply Network Planning (SNP)

Demand Planning (DP)Yearly

Monthly

Daily

What is the expected impact of salesforce actions?

Will my inventory cover demand next month?

Weekly

MaterialPlanning

ProductionPlanning

InventoryPlanning

Demand Planning

Supplier Customer

SAP-APO Modules

SAP Advanced Planner & Optimizer

SAP application used to enable real time decision support, advanced constraint based planning and optimization

Covers the planning requirements (optimization, finite capacity, what-if simulation...) not covered by the R/3 system:

APO runs on an independent server from the R/3 one

SAP provides standard software to interface APO and R/3 (stocks, purchase orders, production orders,…)

DemandPlanning

(DP)

SupplyNetworkPlanning

(SNP)

Sales forecasting Advanced statistical methods Graphical views Alert monitoring

Network needs planning Delivery, Production and Purchase

Planning Approximate finite capacity Optimal solution for the entire

network based on configurable criteria

Supply Chain Planning Scenario

Demand Planning

Statistical Forecasting

Selection of advanced statistical tools (Univariable, Multilinear, Composite, etc.)

Collaborative Forecasting and Consensus Planning

Ability to conduct intra and cross-company Demand Planning collaboration via Internet

Flexible Multi Level Planning

Ability to plan at various levels of data hierarchy (product, region)

Promotion Planning

Planning, managing and evaluation of the impact of promotions on demand

Product Life Cycle

Ability to use phase-in and phase-out profiles and like modeling to manage new products and obsolescence

Planning by Exception

Use of Alerts to report exceptions

Simulation

Ability to use what-if scenario simulation

Integration with the Planning and Execution systems

Tight integration with other planning capability (Supply Planning, Production Planning, etc.) and the Execution system (R/3, etc.)

Capabilities

Demand Planning Architecture

Planning BooksGUI

APOOLAP

Processor

BusinessPlanningLibrary

StatisticalForecasting

Toolbox

Planning & AnalysisEngine

InfoCubes

TimeSeries

CatalogNotesData Mart

This is a logical view of Demand Planning, Planning Books, User Interface and Data Mart

Demand Planning Cycle

Create new Master Data

Generate new CVC’s/Propotional Factors

Info cube/Planning Area Design/Maintenance

Planning Book Design/Maintenance

Load new Master Data to planning area

Evaluate/UpdatePlanning Area/Planning Books

Forecast Profiles Design/Maintenance

Creation of Statistical Forecast

Creation of Promotions

Manual Adjustments

Reconciliation of Demand Plans

Release of Demand Plan

Historical Data Updates

Monitoring Forecast Accuracy

Business Process

Data Maintenance


Supply Chain Model Ability to model the entire supply network and all of its constraints such as

resource capacities, storage limits, transportation capacities, material availability, safety and target stock levels, etc.

Concurrent Planning Produces Distribution/Production/Inventory/Procurement plan concurrently

SNP Heuristic Performs requirements planning (infinite capacity) for the whole, or a subset

of the supply chain. Capacity leveling capability is used to balance resource loads.

SNP Optimizer It is a one step generation of an optimized finite capacity plan in which all

defined costs are minimized.

Capabilities



• Supply Network Planning (SNP) integrates purchasing, manufacturing, distribution,

and transportation to develop tactical planning and sourcing decisions to be

implemented on the basis of a single, global consistent model.

• SNP uses advanced optimization techniques, based on constraints and penalties, to

plan product flow along the supply chain.

• Starting from a sales plan, SNP determines a permissible short-to-medium term plan

to cover both the quantities that must be transported between two locations and the

quantities to be produced and procured.

SNP Process Flow

Set up master data, supplychain model and SNP configuration

Perform SNPHeuristics, Optimization

or CTM run

Finalize SNP plan (available to PP/DS)

Releasedemand

plan to SNP

Review plan/resolveproblems

Release constrained SNP plan to DP

Data Configuration

APO Master Data

Model 000 Model 1

Version 000 Version A Version B

Planning Area

Planning Books

Data Views

• APO Master Data is always assigned to Models. (OLTP Master data comes automatically to model 000)

• Versions are created for each model and these contain version specific master and movement data. Time series

are saved in planning area version.

• In planning book and data views, characteristics, key figures, time bucket profiles, planning horizons, macros are

defined.

APO Computational Solvers

APO Solvers

Distribution Planning

Deployment

A wide variety of computational solversapplied to specific planning functions with

industry-specific variations

ProductionPlanning &Scheduling

DemandPlanning

Heuristic Methods

Linear Programming /Mixed Integer Linear

Programming

Genetic Algorithms, Constraint-based Programming

Flow Algorithms

Branch & Bound Algorithm

Exponential SmoothingHolt WintersMultiple Linear Regression

SAP R/3 and APO Integration

Master Data Integration

Plant

Work Center

Material Master

Vendor

Bill of Material

Routing

Location

Product Master

Production Process Model

Resource

Planning (APO)Execution (SAP R/3)

Info Record Transportation Lane

APO Core Interface

• Add-on component to R/3 system

• Supply APO with planning and optimization relevant data from R/3

• Return APO planning results to R/3

• Initial and incremental data transfer (automatic switch)

Contents

• SCM Overview

• APO Overview

• SAP R/3 Vs APO

What Are They?

SAP R/3 is an Enterprise Resource Planning (ERP) system. It is a suite of modules designed to integrate an organization. Its main purpose is to integrate data throughout the organization and support the execution of business processes.

SAP’s Advanced Planner Optimizer (APO) is an Advanced Planning System (APS). An APS supports any form of planning activities to manage the supply chain and is a substitute to any planning modules found in a ERP or legacy system.

Advanced Planner and Optimizer

APO is:

o A planning toolo A decision support tool for managing

throughout, inventory, and order/demand management

o A modeling technology that enables the supply chain planning process by: Modeling “what if” scenarios to solve

problems Incorporating resource and capacity

constraints Optimizing plans and schedules around

those constraints

Advanced Planner and Optimizer

APO does not:

o Manage entire Bill of Materialso Replace financial functionso Maintain inventory movements and position o Operate as an execution system

APS Vs ERP

5 key enablers that distinguish the functionality and capabilities of an APS to those of an ERP system:

• Calculation Speed Memory Resident Architecture.~ 300 times faster than a typical MRPII/DRP system

Creates Capability for continuous process where replanning can be executed every time a change occurs

• Consider Supply Chain constraints concurrently MRPII is a sequential logic, checking one level in the supply chain at a time

APS can check impact on all constraints in the supply chain simultaneously

• Constraint Based Planning APS has the ability to consider ‘hard’ and ‘soft’ constraints, MRPII only manages soft constraints

• Upstream and Downstream propagation Using APS, the impact of a supply side constraint can be reflected in terms of downstream effects in the supply chain

MRPII propagates changes uni-directionally upstream only

• Problem Solving/Optimization features embedded in an Interactive Planning environment APS presents opportunities for sophisticated planning methods, such as profitability optimization, not available

through MRPII.

Thank You

?

Download - sap-apo overview

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