PLM150 EngineeringChangeAndConfigurationManagement

SCM200 Überblick Supply Chain
Planung
SCM200
Release 640 04/06/2006

0
SCM200 Überblick Supply Chain Planung
SCM200
Supply Chain Planning Overview
THE BEST-RUN E-BUSINESSES RUN SAP
 SAP AG©2003
SAP AG 2003
 Software Components: SAP R/3 ERP, SAP APO 3.1

 2003/Q3
 Material number: 50063056
0.2
0.3SCM200-Supply Chain Planning Overview

0.4
Copyright
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.
 SAP AG 2004
 Some software products marketed by SAP AG and its distributors contain proprietary software components of
other software vendors.
 Microsoft, Windows, Outlook, and PowerPoint 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, and Informix are
trademarks or registered trademarks of IBM Corporation in the United States 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, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or
registered trademarks of Citrix Systems, Inc.
 HTML, XML, XHTML and W3C 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.
 MaxDB is a trademark of MySQL AB, Sweden.
 SAP, R/3, mySAP, mySAP.com, xApps, xApp, 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 the trademarks of their respective
companies. Data contained in this document serves informational purposes only. National product specifications
may vary.
 These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated
companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and
SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP
Group products and services are those that are set forth in the express warranty statements accompanying such
products and services, if any. Nothing herein should be construed as constituting an additional warranty.
0.5
Target Group and Prerequisites
Target Group
 The target audience of this course is project team members
and key users who are responsible for the introduction of
Supply Chain Planning using mySAP SCM.
Prerequisite
 SAPSCM (mySAP SCM Overview)

 Recommended: PLM100 (Lifecycle Data Management)
 SAP AG 2003
1
Course Overview
Contents:
 Course Goals
 Course Objectives
 Course Content
 Course Overview Diagram
 Main Business Scenario
 mySAP Supply Chain Management (mySAP SCM)
 Key Functional Area Planning
 SAP AG 2003
(C) SAP AG SCM200 1

1.2
Course Goals
This course will prepare you to
 Gain a basic understanding of SAP functions in the

area of Supply Chain Planning
 Describe the possibilities of Supply Chain Planning
in the mySAP components R/3 and APO
 Understand the interplay of SAP R/3 and SAP APO
in Supply Chain Planning
 Specify the advantages of the different possibilities
of Supply Chain Planning
 SAP AG 2003
(C) SAP AG SCM200 2

1.3
Course Objectives
At the conclusion of this course, you will be able to:
 Describe the role of the mySAP components R/3 and

APO in Supply Chain Planning
 Specify which master data and transaction data are
used in Supply Chain Planning
 Explain the integration of SAP R/3 and SAP APO
 Carry out fundamental planning functions: Demand
Planning, Demand Management, Supply Network
Planning, Material Requirements Planning.
 SAP AG 2002
(C) SAP AG SCM200 3

1.4
Course Content
Preface
Unit 5 Supply Network

Unit 1 Course Overview Planning
Unit 2 Master Data and Unit 6 Material Requirements
Transaction Data Planning
Unit 3 Demand Planning Unit 7 Production Planning/
Unit 4 Demand Management Detailed Scheduling
Unit 8 Conclusion
Appendix
 SAP AG 2002
(C) SAP AG SCM200 4

1.5
Overview Diagram (1)
Course Overview
Master Data and Transaction Data
Demand Planning
Demand
Management
Supply Network Planning
Material Requirements
Planning
Production Planning and Detailed
Scheduling
Conclusion
 SAP AG 2002
(C) SAP AG SCM200 5

1.6
Main Business Scenario
 You are a member of the project team responsible for

implementing Supply Chain Planning functions
 Taking the Precision Pump company as an example,
you familiarize yourself with the functions of Supply
Chain Planning. The Precision Pump Company offers
various high-tech standard pumps.
 Having predicted future requirements in Demand
Planning, you first of all plan your cross-plant
procurement network.
Finally, in the short-term horizon, you plan the
production in your production plants.
 SAP AG 2003
(C) SAP AG SCM200 6

1.7
Key Functional Areas of mySAP SCM
mySAP SCM
SC Exchange Sales Processes

(Collaboration) and Logistics Execution
SC Event and
Performance External Procurement
Management
Planning Manufacturing
Solution:
Key Functional Area
 SAP AG 2002
 Supply Chain Exchange (Collaboration): Supports central, Internet-enabled cross-enterprise e-business processes;
the exchange and update of data with partners via a Web browser, using current Internet security standards. Supply
Chain Event Management and Supply Chain Performance Management: Monitor all procurement, delivery,
production, storage, and transport processes based on exception messages (alerts), status reports and on real-time
measurements of total output and total effectivity.
 Planning: Forecasts market developments; promotion planning; planning of invoiced sales and requirements by
taking past figures into account; planning of requirements coverage of different sources of supply; permanent
updating and synchronisation of supply plans; derivation of production requirements along the complete
procurement network for producers and notification of production progress to partners; multilevel planning,
lifecycle management, causal and capacity analyses, quota arrangements, product allocations and availability
checks are also integrated.
 Production: Supports discrete production (order-based or period-based) and process manufacturing from planning
to realization; creates feasible machine scheduling plans by taking the availability of materials, capacity and
production resources and tools into account.
 External procurement: Covers the complete procurement process from purchase requisition via sourcing, purchase
order, goods receipt and invoice verification to inventory management; supports Internet-based direct procurement;
makes use of e-marketplaces, catalogs and rules-based procurement strategies for automated procurement.
 Sales and Distribution processes and logistic execution: Manages sales orders using offer creation, determination of
delivery date, Global Available-to-Promise, picking, assignment of invoices; transport management using transport
planning and vehicle scheduling; tracking of deliveries.
(C) SAP AG SCM200 7

1.8
Key Functional Area Planning - SAP Components
Enterprise Portal: Consistent access to all components
... SAP SAP Core

Interface
SAP
BW R/3 APO
Plug-In
 Reporting  Administration of customer  Prediction of demand
demand  Supply Network
 Production Planning in plant Planning
 Quantity and capacity
 Production processing requirements planning
...  Optimization
...
 SAP AG 2002
 The SCM key functional area planning primarily uses the following mySAP components: SAP R/3, SAP
APO (Advanced Planner and Optimizer), SAP BW (Business Information Warehouse)
 The interfaces which are responsible for the integration of SAP R/3 with BW or SAP APO are made
available via a corresponding Plug-In. The interface between SAP R/3 and SAP APO is called the Core
Interface (CIF).
(C) SAP AG SCM200 8

1.9
Supply Chain Planning Scenario
Delivery time
Customers
Pull
DCs
Plants
Lead time
Push
Suppliers
Supply Chain
 SAP AG 2002
 The fundamental problem of Supply Chain Planning is that the delivery time of products to customers is
supposed to be substantially shorter than production time or lead-time. To reach this target, stocks, or
rather safety stocks usually have to be created on component level or finished product level in plants or
distribution centers (DC).
 You use postponement strategies to define how far the sales order links with the supply chain; in other
words, at which point the decoupling of make-to-stock production (push strategies), and make-to-order
production (pull strategies), takes place.
(C) SAP AG SCM200 9

1.10
Supply Chain Planning at a Glance
R/3 APO
R/3 APO
LIS BW
Flexible Planning Demand Planning
Standard SOP (DP)
Sales Global Available-to-

Demand Promise
Management
Supply Network
Material Requirements Planning (SNP)
Planning (MRP)
Production
Capacity Planning/Detailed
Requirements Scheduling (PP/DS)
Planning (CRP)
Transportation
Planning & Vehicle
SC Manufacturing / Procurement Scheduling (TP/VS)
 SAP AG 2002
 Generally speaking, Supply Chain Planning can be divided into many steps. To execute these steps,
different SAP R/3 and SAP APO components are available. It is therefore possible and sensible to utilize
both systems in an integrated connection for planning. Integration between the systems takes place using
the Core Interface (CIF).
 Demand Planning, where past sales figures are used to derive a future demand program, can be executed
within the framework of flexible planning in SAP R/3 (with the exception of standard Sales &
Operations Planning (SOP)), or within Demand Planning (DP) in SAP APO.
 Demand Management in its true sense takes place in SAP R/3. It is also possible however to derive
planned independent requirements from SAP APO DP.
 In principle, sales orders are created in the SAP R/3 System. The ATP check of a sales order can take
place globally in SAP APO (integration with PP/DS is also possible).
 Cross-plant planning is possible using Supply Network Planning in SAP APO.
 Material Requirements Planning can be executed in SAP R/3 or SAP APO. Whereas in SAP R/3
capacity requirements planning is executed separately in a second step, in SAP APO PP/DS (Production
Planning/ Detailed Scheduling), quantities and capacities can be planned simultaneously.
 Execution of production, in other words, the processing of production orders (production or process
orders) takes place in the area of Supply Chain Manufacturing.
(C) SAP AG SCM200 10

1.11
Demand Planning (1)
Functions of Demand Planning
 Interenterprise Demand
Planning (Internet-based)
 Consistent and consolidated
plans
 Statistical and causal
forecasting techniques
 Lifecycle planning
 Promotion planning
Supply Chain
 SAP AG 2003
 Demand Planning is a complex, powerful, and flexible tool that supports your enterprise's demand
planning process. The result of the forecast is typically reflected in the form of demand forecasts on
distribution center level or directly in production plants.
 User-specific planning layouts of planning books enable you to include different departments or even
other enterprises in the forecasting process. With APO Demand Planning you can use statistical
forecasting methods and advanced macro techniques to do the following: - Create forecasts from sales
history, based on many different causal factors; - Test predefined, and user-defined forecast models, and
forecast results; - And use a consensus-based approach to consolidate the demand plans of different
departments. You can use forecast overrides and promotions to add marketing intelligence and
management adjustments.

1.12
Demand Planning (2)
Flexible Planning (R/3 SOP) and Demand Planning (APO

DP)
Planning levels,
Aggregated historical for example: Future demand forecast
data
 Location
 Product hierarchy
 Sold-to party
 Region
 Incoming orders  Statistical forecasting

Quantities SAP BW  Collaborative forecasting
Values SAP R/3  Promotions
 Billing document Excel
Quantities Non-SAP system
Values
 SAP AG 2002
 Demand Planning can be executed in SAP R/3 within the framework of flexible planning (Sales &
Operations Planning) or in SAP APO using the component Demand Planning (DP).
 In Demand Planning, a forecast based on aggregated historical data is executed. This historical data can
stem from the SAP R/3 Logistics Information System (SAP R/3 LIS) or from the SAP Business
Warehouse (SAP BW). The structure and processing of planning data can be defined extremely flexibly
using the respective data structures of SAP R/3 LIS or SAP BW - as a rule, these are based on the usage
of so-called characteristics (for example, location and sold-to-party) according to which key
performance indicators (for example, invoiced sales quantity) can be itemized.

1.13
Demand Management
Planned independent requirements and sales orders
Warehouse Customer
requirements requirements
Forecast
Plnd. indep. Sales Sales
reqmts. orders
Demand program
Material Requirements Planning

Coverage of requirements through
 In-house production
 External procurement
 Stock transfer in own network
 SAP AG 2002
 Demand Management pertains to the administration of so-called independent requirements. The way in
which independent requirements behave in Material Requirements Planning (for example, if they affect
requirements, if they consume other requirements) can be determined by their requirement type or their
planning strategy.
 Planned independent requirements are warehouse requirements that can be derived from a forecast of the
future requirement situation. In make-to-stock production, you want to initiate the procurement of the
materials concerned, without having to wait for concrete sales orders. Using such a procedure, delivery
times can be shortened on the one hand, and on the other hand, it is possible, through foresighted
planning, to debit one's own production resources as evenly as possible.
 Sales orders (customer independent requirements) are created by sales and distribution. Customer
requirements can be received directly in Material Requirements Planning, independently of their defined
requirements type. This is desired when customer-specific planning takes place.
 Sales orders can serve as exclusive requirements sources, for which procurement is then specifically
triggered (make-to-order production), or, together with planned independent requirements, they can
create the total demand. Consumption is also possible with planned independent requirements.

1.14
Supply Network Planning (SNP)
 Planning of material flow along

the supply chain
 Planning of the mid- to long-term
horizon
 Finite Supply Network Planning,
bucket-oriented
 Prioritization of demands; supply
optimization
 Result: Feasible plans
Supply Chain
 SAP AG 2002
 Supply Network Planning, which you can carry out using the component SAP APO SNP, usually takes
place in the mid- to long-term horizon, that is, outside of the production horizon. This is based on the
requirements that you have determined for the distribution centers in Demand Planning. These
requirements should be covered by the distribution centers, production plants and suppliers in your
network.
 Planning can be executed finitely. In this way, the production, warehouse or transport resources of your
network can already be taken into account in rough-cut planning. In principle, planning in SNP takes
place based on so-called time buckets, that is, on the basis of freely defined time bucket profiles (the
smallest unit in SNP is one day). In terms of performance, this kind of bucket-oriented planning is much
better than Detailed Scheduling in SAP APO PP/DS, so that planning of more complex networks is also
possible.
 Network planning within SNP takes place in two steps: During the first step, in the actual planning,
stock transfers are created to optimally distribute and meet the requirements in the network. This means,
for example, that the demands of a distribution center are partially met through stock transfer from two
production plants. After production has taken place in the production plants, a second step is carried out:
Execution of planning within deployment. In deployment, SNP planned orders are converted into
deployment orders, based on the quantities actually produced, and stock transfers are then triggered.
 In SAP APO SNP, different planning and optimization methods are available.

1.15
Transition from Medium to Short-Term Planning
Plnd. Ind. Sales Plnd. Ind. Sales

Reqmts Orders Reqmts Orders
Planned orders SNP planned

Purch. requis. orders
Stock transfers Purch. requis.
Stock transfers
Production Planning/Detailed
Scheduling Supply Network Planning
 Production BOM and routing  SNP BOM and routing
 Finite, detailed planning per plant  Finite cross-plant planning
 Sequences and setup times  Distribution and procurement
 Continuous and order-related  Quantity-oriented and bucket-oriented
 Pegging  No pegging
Today PP/DS horizon Time

 SAP AG 2003
SNP production horizon
 Network planning within SAP APO SNP takes place outside of the SNP production horizon. In the
PP/DS horizon, however, Production Planning/Detailed Scheduling takes place, that is, detailed planning
of procurement in a plant. It is possible, and also makes sense that the two horizons overlap, and that the
PP/DS horizon is behind the SNP production horizon.
 SNP Planning is based on SNP bills of material and routings, most of which are usually simplified
production plans. SNP bills of material , for example, usually contain only the strategically important
components for which foresighted planning is necessary, whereas procurement of the remaining
components is only planned in plant-specific Detailed Scheduling. SNP planned orders that are based on
this simplified master data can be converted into planned orders in Detailed Scheduling.
 Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all
dependent orders can be adjusted automatically. This function is only available in Production Planning
and Detailed Scheduling. Supply Network Planning is based purely on quantities and buckets.

1.16
Material Requirements Planning in multilevel production
Bill of material Require

When will production ment
take place?
Planned order Finished product

Op. 10 Op. 20 Op. 30
Dependent
requirement When are the components
required?
Assembly 1
10 20 30 40
Order raw
material A
Today When does procurement need to begin? Time

 SAP AG 2002
 Material Requirements Planning is the first step of Production Planning/Detailed Scheduling, which, as a
rule, you carry out in the short-term horizon in the plant.
 In Material Requirements Planning, which you can execute in SAP R/3 (SAP R/3 MRP: Material
Requirements Planning) or in SAP APO (SAP APO PP/DS: Production Planning/Detailed Scheduling)
procurement dates for necessary assemblies and components are determined based on the requirements
dates for the finished product (a sales order, for example).
 Scheduling of procurement for products produced in-house is carried out on the basis of a routing. A
routing specifies which production operations need to be executed and how long the individual
operations last. At the beginning of production of the finished product, the assemblies (from the bill of
materials) that are needed for production must be available. Procurement of these assemblies must be
initiated earlier accordingly. In this way, assuming the dependent requirements date is the availability
date, the system determines the basic order dates of the components by means of backward scheduling
using the in-house production time or the planned delivery time.

1.17
Production Planning/Detailed Scheduling (PP/DS)
(1)
Functions of PP/DS
 To-the-minute planning of production,

external procurement, and stock
transfer within the production plant
 Capacity requirements planning (SAP
R/3 CRP) as a separate step or
simultaneous material and capacity
requirements planning (SAP APO
PP/DS) on operational level in the
short-term area
 Schedule optimization regarding
sequences and lead-times (SAP APO
Supply Chain PP/DS)
 SAP AG 2002
 To-the-minute Production Planning in the production plant can take place in SAP R/3 or SAP APO.
Planning in SAP APO PP/DS in particular offers extensive Production Planning/Detailed Scheduling
possibilities.
 Production Planning and Detailed Scheduling (SAP APO PP/DS) is used mainly for short-term to the
minute planning (both for in-house production and external procurement) in the production plant. PP/DS
schedules and plans all operations of an order that are relevant for planning at the different resources.
 In PP/DS, requirements are met by generating planned orders (to plan in-house production) as well as
purchase requisitions or schedule lines (to plan external procurement). Simultaneous material and
capacity requirements planning can be used to do this: You can define resources as “finite” resources
(planning-critical resources) in the resource master. Order operations are only created at these resources
if there is sufficient capacity for the order quantity on the corresponding date. If there is not enough
capacity available, the system searches for a new date, taking the capacity situation into account.
 Within the framework of SAP APO PP/DS, schedule optimization is possible: It may be that, during
planning, orders that do not have an optimal order sequence have been generated. You can change the
sequence and resource assignment of existing orders in the optimization run.
 PP/DS is a planning tool. Execution functions such as confirmations and goods receipts are created in
SAP R/3. You should therefore transfer planning results to SAP R/3 when planning in SAP APO.

1.18
Production Planning/Detailed Scheduling (PP/DS)
(2)
Simultaneous quantity and capacity requirements planning
(SAP APO PP/DS)
Sales order with
desired date and
Operations and resource load quantity
according to production process
model Confirmed
qty/date
30
Resource 3 (finite) 30
20 20
Resource 2 (infinite)
10 10
Resource 1 (finite)
Available 1st Loading Attempt

Today Time
Occupied Final Loading Attempt
 SAP AG 2002
 If a product is not available, the requirement (the sales order or dependent requirement, for example)
triggers production directly: If it triggers an order for in-house production, SAP APO creates a planned
order for the desired quantity in PP/DS. All operations of the production process model (PPM; SAP
APO master data record, which contains the bill of material and routing of SAP R/3) are scheduled at the
resources of the PPM, whereby the system can take capacity constraints into account (available capacity
and potentially orders that have already been scheduled).
 If a finitely planned resource is already exhausted on the desired date, the system searches for a new date
on which the planned order can be created. You use the so-called strategy profile to define how the
system is to schedule (search for a slot, infinite planning ...).

1.19
SAP APO Planning with SAP R/3 Integration
R/3 APO
Flexible planning Demand Planning (DP)
Demand Plnd. ind. reqmts Plnd. ind. reqmts

Management Consumption
Sales (SD) Sales order Sales order
Production Planning (PP) Supply Network Planning (SNP)

Production Planning (PP/DS)
Release, Planned order
confirmations Production order Planned order
Production order Conversion
Purchasing Purchase requisition

Purchase requisition
(MM) Purchase order
Purchase order
Stock transport requisition

Deploy
Stock transport order Stock transport requisition
-ment
Stock transport order
 SAP AG 2002
 The mySAP component SAP APO is a planning tool that cannot be utilized on its own. During planning,
SAP APO relies on data from SAP R/3 (stocks or sales orders, for example) on the one hand; on the
other hand, the execution of dates and quantities planned in SAP APO takes place in SAP R/3. The
planning process in SAP APO therefore is linked to a permanent exchange of data between SAP APO
and SAP R/3.
 Planned independent requirements, for example, can be the result of Demand Planning in SAP APO
itself. For further planning, these planned independent requirements can be released to SAP APO SNP or
transferred toR/3.
 Sales orders and planned independent requirements form the starting point for both Supply Network
Planning (SNP) and Production Planning and Detailed Scheduling (PP/DS) in SAP APO. Existing
storage location stock is also included in the planning. Sales orders are entered in SAP R/3 and are
transferred to SAP APO via the SAP R/3 APO interface (CIF: Core Interface).
 In Supply Network Planning (SNP) you plan for the short- or mid-term horizon for the entire supply
chain: you generate stock transport requisitions (for planning and stock transfer) between distribution
centers and plants, and can also generate planned orders (for in-house production planning) and purchase
requisitions (for external procurement planning) directly in the production plant for the longer term
horizon. In Production Planning and Detailed Scheduling however, you usually generate planned orders
and purchase requisitions directly in the production plant for the short-term horizon. Transaction data
generated in SAP APO is transferred to the SAP R/3 System for execution via the SAP R/3 APO
interface (CIF: Core Interface).
1.20
Course Overview: Unit Summary
 Supply Chain Planning, which in essence is realized

using the mySAP components SAP R/3 and SAP APO,
is a key functional area of mySAP SCM.
 Operative planning takes place on different levels
along the supply chain: Demand Planning for
requirement forecast on an aggregated level, Supply
Network Planning in rough time-buckets, to-the-minute
Production Planning and Detailed Scheduling in
production plants.
 SAP APO works as a planning tool together with SAP
R/3. The integration of both components is an
important element of the planning process.
 SAP AG 2002

2
Contents:
 SAP R/3 master data

 SAP APO master data
 Integration of master data
 CIF Interface
 Transaction data
 Planning and production
 SAP AG 2003
(C) SAP AG SCM200 1

2.2
Master and Transaction Data: Unit Objectives
At the conclusion of this unit, you will be able to:
 Specify which master data is used in Supply Chain

Planning in SAP R/3 and SAP APO
 Explain the integration of master data using the CIF
interface
 Describe the principal functions of the CIF interface
 Explain the transfer of transaction data between SAP
R/3 and SAP APO
 Explain the role of transaction data integration in
planning and production
 SAP AG 2003
(C) SAP AG SCM200 2

2.3
Course Overview Diagram (2)
Course Overview
Demand Planning
Demand Management
Production Planning and Detailed Scheduling
Conclusion
 SAP AG 2003
(C) SAP AG SCM200 3

2.4
Data Flow in Supply Chain Planning
R/3 APO
R/3 APO
Demand Planning
Flexible Planning
(DP)
Materials, Bills of
Material,
Routings, ...
Demand Management Promise (ATP)
Supply Network
Material Requirements Planned Orders, Planning (SNP)
Planning (MRP) Orders, Dates, ...
Production
Capacity Requirements Planning/Detailed
Planning (CRP) Scheduling (PP/DS)
Transportation
Planning & Vehicle
SC Manufacturing/Procurement Scheduling (TP/VS)
 SAP AG 2003
 Generally speaking, supply chain planning is divided into many steps, some of which can be executed by
components in SAP R/3 and others which can be executed in SAP APO. It is possible and advisable to
integrate these two systems and use both together when planning. It is then necessary to exchange a
large number of data objects between both systems: Master Data should be transferred from SAP R/3 to
SAP APO, Planning results should be transferred back (published) from SAP APO to SAP R/3 and so
on. Integration between the systems takes place through the APO Core Interface (CIF).
(C) SAP AG SCM200 4

2.5
Master Data Objects in the Supply Chain
Customers  Materials
 Resources
 Bills of material
DCs
Transportation  Routings
lanes ...
Plants
External Procurement
Relationships
Suppliers
 SAP AG 2003
 Supply chain master data objects are usually created in SAP R/3: Plants, distribution centers (DCs),
vendors, and customers. Supply chain planning concerns materials that are defined as material masters.
For plants that produce aswell as plan, you also have to create resources, bills of material (BOMs), and
routings in addition to the materials for planning. Between the individual locations of the Supply Chain
(that is plants, vendors and so on), transportation lanes are defined, and these define material flow
through the Supply Chain.
 Even when using an SAP APO system for supply chain planning, master data is generally created in a
connected SAP R/3 system and transferred to SAP APO from there. Only master data that exists purely
in SAP APO and has no counterpart in SAP R/3 is to be created in the SAP APO system.
 In SAP APO, transportation lanes are used to connect together a network of plants and DCs so that stock
transfers can be planned between these locations. Corresponding lanes can also be maintained in SAP
R/3 (in the form of special procurement keys, for example). At this point in time, it is not possible for
these keys to be transferred to SAP APO.
 The supply relationship between a vendor and a plant is created in SAP R/3 in the form of a purchasing
info record or outline agreement. When you transfer these external procurement relationships to SAP
APO, they are also displayed there as external procurement relationships. A corresponding
transportation lane is created at the same time.
(C) SAP AG SCM200 5

2.6
Plants and Distribution Centers
Definition of a DC
Plant Node type Name
1000 New York
 Is this plant a
2400 DC DC Milano
DC?
Definition of a plant
Plant 1000
 Planning
Name New York  Production
Street  External procurement
Broadway 691
 Requirements entry
Town 10001 New York
 Inventory management
Country US
...
USA ...
Storage locations in  Differentiation
plant of inventory
0001 1000
Material storage
within a plant
Finished goods
0002
warehouse
 SAP AG 2003
 A plant is an organisational unit that subdivides an enterprise into production, procurement, stockholding
or material planning. In a plant, materials can be produced or goods and services can be staged.
 You specify an address, a language, a country assignment and a factory calendar for a plant. If SAP APO
is to be used for Supply Chain Planning, the plants can be transferred from SAP R/3 to SAP APO.
 Distribution Centers (DCs) are predominantly plants, from which products are sold or which generally
serves merchandise distribution. They only differ functionally from plants via a corresponding entry in
SAP R/3 Customizing, that is, a plant also contains full sales and distribution functions, just as products
can be produced in a DC. Plants and DCs are represented by different symbols in the Supply Chain.
 One or more storage locations can be defined within a plant. A storage location specifies where a
material is stored. Storage locations thus enable a differentiation of material stocks within a plant.
(C) SAP AG SCM200 6

2.7
Customers and Suppliers
Definition of a customer
 Control of
Debtor K1000 Sales and
Name Becker Berlin Distribution
Processing
Street Calvinstr. 36
Town 13467 Berlin
...
Definition of a supplier
 Control of
Creditor L1000 Purchasing
Name C. E. B. Berlin Management
Street Kolpingstr. 1
Town 12001 Berlin
...
 SAP AG 2003
 Customers and suppliers are defined as business partners in the SAP R/3 System; they enable the control
of different sales, or rather purchasing processes.
 Sales and Distribution processing as such plays no role in SAP APO. Customer master records can be
transferred to SAP APO as coresponding locations to plan the transportation of a product to a customer,
 Source determination for external procurement can take place in SAP R/3 or SAP APO. Supplier master
records can be transferred to the SAP APO System for planning in SAP APO. Purchase order handling,
goods receipt and invoice verification takes place in SAP R/3.
(C) SAP AG SCM200 7

2.8
External Procurement Relationships
Transportation lanes APO

Transportation lane
Location 1000 -> 2400
PUMP Priority 0 1 to 1000 pieces ...
Truck Duration: 1 day Cost: EUR 8 ...
Purchasing info record

Supplier L1000
Material SCREWS
Plant 1000
Planned delivery time

7 days
External procurement Costs EUR 12/BOX
relationships
Or outline agreement
 SAP AG 2003
 To transfer products between two locations in the Supply Chain, from a production plant to a distribution
center, for example, a corresponding transportation lane has to exist. Transportation lanes are created in
SAP APO for this reason; the information that corresponds to a transportation lane, for example, a
special procurement key, can be created in SAP R/3, in the material master.
 Purchasing info records or outline agreements, with which you create price and supply agreements with
certain suppliers in SAP R/3, can be transferred to the SAP APO System as external procurement
relationships. In addition, a corresponding transportation lane is created.
 In principle, transportation lanes are product-specific. They can be effective for all products, however.
A transportation lane contains one or more means of transport that determine how the product can be
transported (for example, by truck or barge). Moreover, costs and durations can be determined. On the
basis of priorities, decisions can be made about stock transports.
(C) SAP AG SCM200 8

2.9
Materials (1)
Global and Location-Specific Data
Material PUMP
Global data
Data DC 2400
Data plant 1000
SAP AG 2003
 Planning of material flow along the Supply Chain takes place at material level. Materials are defined by
corresponding material masters. SAP R/3 material masters can be transferred to SAP APO as product
masters.
 A material master contains global data that is valid cross-location (for example, the information for this
material is the same in all production plants), and location-specific data, which contains different
settings for each relevant location (for example, a certain production plant). General data such as the
measurements or the weight of a material is set globally, whereas settings for planning are usually
predefined locally. This data, then, can differ depending on location.
(C) SAP AG SCM200 9

2.10
Materials (2)
Assignment of Data in Views

Material master PUMP
Basic Data Sales Purch. MRP Accounting ...
Weight 280 KG Buyer 002 Val. class 7920
Volume 0.8 M3 Purch.value Price EUR 300
... ... ...
Division 01 Proc. type E
Mat. grp. 001 Strategy 40
... ...
 All information on procurement, production, storage or sales
 Settings for Supply Chain Planning
 SAP AG 2003
 To provide a clear display, material master data is subdivided into views. In part, these views are
globally valid (basic data, for example) and partly also location-specific (material requirements
planning, for example).
 The material master is the data object that contains all information necessary for the business use of a
material, in particular, all settings for procurement, production, storage or sales. Not all settings in the
material master are relevant for Supply Chain Planning. The settings partly apply rather to evaluation
and sales management SAP R/3-specific functions.
 Supply Chain Planning-relevant settings are largely found in the Materials Planning views. Procurement
type or planning strategy, for example, is determined here. In different locations, these settings can be
maintained entirely differently.

2.11
Materials (3)
Settings for Supply Chain Planning

MRP 1 ... MRP 4
MRP type MRP Strategy group 40
Lot size EX Availability check

02
group
Procurement type E
Production versions
In-house prod. time 8 days
Safety stock 20 pc 0001 Normal production
 How should I plan material  Do I need to plan a safety stock?

requirements?
 How should I plan?
 How much needs to be
procured?  How does the ATP Check take
 Will the material be produced in- place?
house or procured externally?  What production procedure
should I use?
 SAP AG 2003
 The fundamental settings for Supply Chain Planning can be found in Material Planning views 1 to 4 of
the SAP R/3 material master.
 The MRP type specifies how a material should be planned (MRP, consumption-based planning, no
planning).
 The lot-sizing procedure determines the lot size of each of the procurement proposals. The procurement
type controls how a material is to be procured (in-house production or external procurement). The in-
house production time or rather the planned delivery time specifies how long procurement will last.
 A safety stock can be set.
 The behavior of planned independent requirements is controlled by the strategy group. Moreover,
control of the ATP check takes place on the basis of the availability check group.
 A production procedure can be defined by a production version. In a production version, routing and
BOM can be selected in particular.

2.12
Bills of Material (BOM) (1)
Pump P-100 BOM PUMP

Material P-100 Pump
0010 Plant 1000
0020 Usage 1 Production
Base quantity 1 pc
Item
0030
0010 100-100 Casing 1 pc
0020 100-200 Fly wheel 1 pc

0040
0030 100-300 Hollow shaft 1 pc
0040 100-400 Electronic turbo-drive 1 pc
0050 100-130 Hexagon head screw 8 pc
 Bills of material are single-level

 Items of a bill of material can themselves contain a further bill of material
SAP AG 2003
 The BOM contains the assemblies or components, that are to be included in the production of a material.
SAP R/3 BOMs can be transferred to SAP APO in the form of production process models (PPMs).
 BOMs are used in Material Requirements Planning, production, procurement and for product costing.
 A BOM consists of a BOM header and the BOM items. The base qauntity in the BOM header specifies
to which amount of the finished product the item quantities refer.
 Bills of material are single-level. An item of a BOM can itself also contain components. In this way,
multilevel production is described using the single-level BOMs of the finished product and those of the
assemblies and where required, using the BOMs of the assemblies of the assemblies and so on.
 A BOM can also contain documents or text items in addition to stock items that are required for the
finished product.

2.13
Bills of Material (BOM) (2)
BOM Structure
BOM PUMP Header

 Status
Material P-100
Plant 1000  Description
Usage 1  Validity
Base Quantity 1 pc  Lot size area
Item
0010 100-100 1 pc Items for example,
Stock item
0020 100-200 1 pc  Item category
Non-stock item
0030 100-300 1 pc  Descriptions Variable-size Item
 Quantities Document item
0040 100-400 1 pc
0050 100-130 8 pc
 Control data
 SAP AG 2003
 The settings that apply for the whole BOM can be found in the BOM header. BOM usage determines the
business applications for which a BOM can be used. The status of the BOM controls whether the BOM
is active for particular applications (MRP, for example).
 Multiple BOMs, which consist of multiple alternative BOMs, can also exist in addition to simple BOMs.
The different alternative BOMs can then be valid for each of the different lot-size areas, for example.
 Components necessary for the production of the finished product are entered as items of the BOM. The
item category specifies what kind of item you are dealing with: Stock items are executed in the
warehouse and are used in production. In contrast, non-stock items are directly assigned to a
manufacturing order (and not via the warehouse). Variable-size items contain variable-size data (a steel
sheet with a certain surface area, for example) and finally, document items contain a supplementary
document that describes production (a kind of design and construction diagram).
 Individual items themselves can also bear a multitude of further settings, which then only refer to the
respective item.

2.14
Work Centers (1)
Which work centers are available for production?
Final Assembly Work Center (Plant 1000)

Basic Data Default Value Capacities Scheduling Costing
 What time elements (standard values) should be considered in

planning?
 What capacities are used in this work center?
 What available capacity is staged?

 What capacity category is relevant to scheduling?
 How long do the individual steps (setup, processing, tear down)
take?
 What costs are incurred during processing?
 SAP AG 2003
 A work center is the place where an operation or an activity is carried out in a plant. It therefore specifies
where production ultimately takes place. Work places are used in routings (or also in networks,
inspection plans (Quality Management) or in maintenance task lists). SAP R/3 work centers can be
transferred to SAP APO as resources in the form of their capacities.
 A work center is generally a certain geographical place in the plant, for example a certain machine or
department of a plant.
 The data of a work center is arranged into different views according to topic. In particular, the available
capacity of the particular work center and the data needed to calculate the costing of work completed is
stored in the work center. Using default values, data that has to be transferred into the operation of the
routing or which serves as a reference, is stored.

2.15
Work Centers (2)
Work Center Capacities
Final Assembly Work Center
Capacities Available capacity

Factory calend. ID 01
Capacity cat. 001 Standard avail. cap. Always state:
Machine capacity Working times 7:00 to15:00
Resource utilization 100%  Working times
Formulas for
capacity No. indiv.capacities 3  Break times
requirements  Interval of avail. cap.
Available capacity  Shifts
Factory calend. ID 01
Capacity cat. 002
Standard avail. cap.
Labor capacity Working times 7:00 to15:00
Formulas for Resource utilization 100%
capacity
No. indiv.capacities 1
requirements
 SAP AG 2003
 The capacities that are available to a work center are explicitly specified in the work center. More than
one capacity per work center can thus be used. For example, a work center can be assigned a machine
capacity and a labor capacity.
 The capacities contain the working time that is available. Moreover, formulas specify how long the
capacities will be encumbered by a certain operation.
 Alongside standard available capacity, intervals of available capacity and work schedules are stored.
These specify exactly when a certain machine is available, for example.

2.16
Routings (1)
Production of Pump P-100

Routing PUMP
Material P-100 Pump
Task list group 50000222
Group counter 01 Work Work Work Work Work
center center center center center
Pump (standard process)
1310 1320 1906 1904 1905
Plant 1000
Work
Operatn. Description Times
center
0010 1310 Staging according to pick list 5 min. fixed
0020 1320 Press flywheel in casing 10 min. per 1 pc.
0030 1906 Paint casing 15 min. per 1 pc.
0040 1904 Mount shaft in casing 20 min. per 1 pc.
0050 1905 Final assembly pump 10 min. per 1 pc.
 SAP AG 2003
 Routings contain the steps that are necessary for production, that is, the corresponding operations, their
sequence and the work centers in which these operations are to be executed. SAP R/3 routings can be
transferred to SAP APO in the form of production process models (PPMs).
 An SAP R/3 routing can be defined using the routing group and the group counter. Moreover, the
routing contains reference to the material whose production it describes. A routing can contain parallel
or alternative sequences in addition to the standard sequence.
 Alongside the standard values, the routing also contains the time elements that are relevant for
scheduling operations. Therefore you need to make sure that each operation in the routing can contain its
own base quantity, to which these time elements can refer.

2.17
Routings (2)
Scheduling via Routing and Work Center
Routing PUMP
Operation 30 Paint Casing
Scheduling
Work center 1906
basis
Standard Cap. 001 002
value
Operation standard values
Setup 5 min.
implemented in the scheduling
Schedul.form
1. Setup formulas of the work center

result in:
Machine 15 min.
 Fixed time elements
HR (independent of lot size)
2. Processing  Variable time elements
ula
Variable1 (dependent on lot size)

... 3. Tear down
 SAP AG 2003
 A work center is assigned to an SAP R/3 operation. Using its standard value key, the work center
specifies which time elements (standard values) can be taken into consideration during planning (for
example, setup time, machine time, personnel time). The scheduling formulas stored in the work center
define the duration from the allowed time elements in the routing.
 Setup, processing and tear down of an SAP R/3 operation are each described using a corresponding
formula. The steps for which a formula is stored are executed (for example, tear down may not be
necessary).
 If several capacities are stored in a work center, the scheduling basis is used to determine which of these
capacities is relevant for scheduling.

2.18
Routing and Bill of Material
Component Assignment in Routing

Production version 0001
Routing BOM  Procurement and

consumption of components
occur at the beginning of the
Op. 10 Mat. PUMP
processes to which they are
assigned
Mat. A Manufacturing order PUMP
Op. 20
Op. 10 Op. 20 Op. 30
Mat. B
Op. 30
Mat. C
Mat. A Mat. B
Mat. C
Component assignment in
routing Time
 SAP AG 2003
 Production is described via a routing and a BOM. For this reason, BOM components can be assigned to
a certain operation. The procurement of these components is then planned at the beginning of the
particular operation.
 Component assignment is dealt with in the routing. BOM components that are not explicitly assigned are
considered as being assigned to the first operation.
 In addition to BOM components, production resources/tools can also be assigned in the routing.
Production resources/tools are operating facilities that are not location-bound, but that are necessary for
production, such as a measuring instrument or a support.

2.19
Master Data in Process Industries
Discrete manufacturing Process manufacturing
 BOM  BOM
 Routing  Master recipe
 Work center  Resource
 Production order  Process order
 SAP AG 2003
 As previously described, discrete manufacturing master data is used when the controlling of production
is mapped with production orders. A production order thus uses routings, work centers and BOMs.
 Other master data is required if production is to be mapped with process manufacturing (PP-PI). A
master recipe instead of the routing and resources instead of work centers are used for the process order.
 Discrete manufacturing master data can logically be transferred to the process industries' terminology.
The master recipe is actually a special routing that was enhanced with process industry-specific
functions. Moreover, in Production Planning-Process Industries (PP-PI), production versions are usually
used, so that the corresponding BOMs are assigned directly to a recipe. Maintenance of the BOMs can
thus take place directly from the recipe.
 The resource largely corresponds to the work center.
 All of the previously portrayed conections thus also remain valid in PP-PI. Material Requirements
Planning for example, is completely identical for PP and PP-PI.

2.20
Transaction Data Objects in the Supply Chain
Plnd ind. reqmts Stock transfers

 Sales orders  SNP stock transfers
 Plnd ind. reqmts  Stock transport releases
Production
 Planned orders
 Production orders
External procurement
 Purch. requisitions
 Purchase orders/schedule
lines
 SAP AG 2003
 Supply Chain Planning takes place based on master data (work centers, for example). The result of this
planning is transaction data, which is used to plan procurement.
 The planning process usually starts with independent requirements that are stored as planned
independent requirements or sales orders. These specify demands in a distribution center or sales center,
for example. However, independent requirements can also be created directly for an individual
production plant.
 You use the network to plan how to fulfill these independent requirements. They are fulfilled by either
stock transfers, in-house production, or external procurement.
 Stock transfers are modeled through SNP stock transfers, in-house production is modeled through
planned orders and production orders, and external procurement is modeled through purchase
requisitions and purchase orders (or scheduling agreement releases).

2.21
Sales Orders and Planned Independent
Requirements
Customer
Sales
K1000 Sales order  What product does the
customer require, on
Sold-to party K1000 Becker Berlin what date, and what
Supplying plant 2500 DC Rotterdam quantity?
 From which plant or DC
DC Material P-100 10 pc 20. 12. 2002 should the customer
2500 receive supplies?
Forecast
Planned ind. reqmnts  What quantities of the
product should be
Plant Planning table
produced?
1000
Plant 1000 New York
...
M 1.2003 M 2.2003 M 3.2003 M 4.2003
Material P-100 100 pc 110 pc 110 pc 120 pc
 SAP AG 2003
 Sales orders are created in Sales and Distribution (SAP R/3 SD). They portray an order made by a
customer, whereby a certain quantity of a product is required by a predetermined date. Sales orders
represent a requirement in the supplying plant.
 Make-to-stock planning is realized in a DC or a production plant via planned independent requirements.
Planned consumptions are thus forecast. Procurement takes place as a result of this planning and
forecast. Ideally, if concrete requirements subsequently exist (in the form of sales orders or dependent
requirements, for example), these can be met from the warehouse.

2.22
Stock Transfers
Coverage of Requirements via Stock Transport from Another

Location
Purchase requisition  In what quantity and
for what date is the
Plant (target location) 2500 material to be
Supplying procured?
DC Source of Supply 1000
plant
2500  Where will the
Material P-100 10 pc 20. 12. 2002 material be
procured?
3 day In procurement via
delivery stock transport from
own location
time
Stock Transport Release  When is the material
procured in the
Material P-100 10 pc 17. 12. 2002 source location?
Plant Plant
2400 1000
 Stock transports (for example, for
assemblies) can also be carried out
between two production plants.
 SAP AG 2003
 Requirements can be met by stock transports from other locations in the location network. For this
processing, a purchase requisition for procurement from the "supplying plant" is created in the location
making the request. In return, the supplying plant receives a requirement in the form of a stock transport
release.

2.23
Planned Orders and Production Orders
The material "Pump"

Planned Order
is produced in plant
1000 (procurement Material P-100 Plant 1000
type: in-house Order quantity 10 pc
production) Start End
10.12.2002 17.12.2002
...
Dep. req. 10 pc Casing
Convert
Production Order
Plant
1000 Material P-100 Plant 1000
Order quantity 10 pc
Start End
0010 0020 0030 0040
10.12.2002 17.12.2002
AR-RES 10 pc Casing
...
 SAP AG 2003
 Planned orders are used to plan the in-house production of a material. Planned orders already contain the
basic dates within which production should take place. Moreover, they contain, in the form of dependent
requirements, the component requirements for the components that are needed for production. Capacity
Requirements Planning can be executed based on planned orders.
 For the ultimate execution of production, the planned order is converted into a production order, that is, a
production order (PP) or a process order (PP-PI).

2.24
Purchase Requisitions and Purchase Orders
The material "screw" Planned order

is bought for plant
Material 100-130 Plant 1000
1000 (procurement
Order quantity 80 pc
type: external
procurement)
01.12.2002 08.12.2002
Plant 1000
Source of
Supply Supplier
Plant
1000 Material 100-130 80 pc 10. 12. 2002
Convert
Purchase order
Plant 1000
Source of
Supply L1000 C.E.B. Berlin
Material 100-130 80 pc 10. 12. 2002
 SAP AG 2003
 For externally procured materials, planning of procurement can take place by means of planned orders or
purchase requisitions. If planned orders are created at first, they have to be converted into purchase
requisitions. Planning is also directly possible with scheduling agreement releases.
 In purchasing, purchase requisitions are converted into purchase orders. No later than this step should a
source of supply (a supplier) assigned to purchase orders .

2.25
Supply Chain Planning in the SAP System Group
R/3 → APO APO → R/3

Master data Transaction data Planning Results
Plants, vendors, customers Sales orders Production orders
Materials Planned/production Order proposals
Work centers (capacities) orders Result of availability check
Task lists and bills of Purchase orders ...
material Stocks
... ...
APO
R/3 4.6C R/3 3.1I
BW
 SAP AG 2003
 For Supply Chain Planning, the SAP APO system is used in connection with the SAP R/3 system.
Linkage with SAP R/3 systems (one or more) takes place via the SAP APO Core Interface (CIF). A
mutual system connection has been set up in Customizing, in the form of RFC connections, which
makes it possible to transfer data relevant for the planning processes from the execution SAP R/3 system
into SAP APO, and also to return the planning results from SAP APO to SAP R/3 .
 The data transfer between SAP R/3 and SAP APO systems is defined and controlled using the SAP APO
Core Interface (CIF). The CIF is the central interface used to connect SAP APO to the SAP R/3 system
environment. The CIF interface is an add-on to the SAP R/3 system that you install using the relevant
plug-in.

2.26
Integration Model and SAP APO-Relevant Data
SAP APO-relevant master data/transaction data is selected in

the active integration models of the CIF
Integration model
Name PUMPS
Applic. MASTER DATA Materials are SAP

Material master APO-relevant APO
...
Relevant materials
Material A
Material Planning for
Material B these objects
Plant 1000
... Material C
...
takes place in
SAP APO
Integration models active
PUMPS MASTER DATA
PUMPS TRANSACT. DATA
...
 SAP AG 2003
 Objects that should be planned in SAP APO are selected in integration models in the CIF of SAP R/3.
When activating an integration model for the first time, initial data transfer occurs, that is, the selected
data is transferred to SAP APO for the first time. If a model is thus active, the data that has been selected
exists in SAP APO accordingly. This data is described as SAP APO-relevant.
 Integration models are defined in SAP R/3. When doing so, you predetermine the object types first of all
(material masters, plants, customers, production orders, for example) before you select the individual
objects (for example, via the material number). Integration only becomes active once you "Activate".
 Any changes you make to the master data in the SAP R/3 system that are SAP APO-relevant, must be
transferred into the SAP APO system too. An incremental data transfer assumes that an active
integration model is available for the relevant materials, and that the materials are SAP APO-relevant.

2.27
Supply Chain Master Data in SAP R/3 and SAP APO
Initial transfer
R/3 APO
Core
SAP R/3 master data Interface SAP APO master data
Plant (CIF)
Location (with location
Customer type)
Supplier
Material master Product master
Work center/capacity Resource
Routing and bill of material

Production process model
Incremental data transfer

 SAP AG 2003
 The SAP APO Core Interface concerns a real-time interface. Only the data objects needed in the data
structures reconciled in Supply Chain Planning in SAP APO for the particular planning and optimization
processes are transferred from the complex dataset in SAP R/3 to SAP APO.
 Both the initial data transfer (initial transfer) and the transfer of data changes within SAP APO take
place via the SAP APO Core Interface.
 The master data objects in SAP APO are not identical to those in SAP R/3. During master data transfer,
the relevant SAP R/3 master data is usually mapped onto corresponding SAP APO planning master data.
 The SAP R/3 system is always the dominant system for master data. Only specific SAP APO master
data that does not exist in SAP R/3 is created directly in SAP APO.

2.28
Master Data Changes
Changes to master At most, only SAP

APO settings are
data maintained in SAP
APO
R/3 APO
R/3 Incremental data
transfer
APO
Plant
Location (with location
Customer type)
Supplier
CIF
Material master Product master
Routing and bill of material

 SAP AG 2003
 The SAP R/3 system remains the dominant system for the master data. Maintenance of master data, that
is, the creation of new data or changes to existing data takes place in SAP R/3. New data as well as data
changes are then transferred from SAP R/3 to SAP APO via the SAP APO Core Interface.
 Within the framework of a data transfer from SAP R/3 to SAP APO, the changed data records (a
material master, for example) are, in principle, completely retransferred. For this reason, it does not
make sense to maintain the settings in SAP APO, that can be transferred from SAP R/3.
 Ideally, maintenance of master data takes place exclusively in SAP R/3. However, SAP APO master data
settings, that is, settings that have no counterpart in SAP R/3 need to have their data maintained directly
in SAP APO.

2.29
Supply Chain Transaction Data in SAP R/3 and SAP
APO
R/3 APO
R/3 APO
Initial data
R/3 transaction data APO transaction data
transfer
Order with category
Purchase orders Purchase order (PchOrd)
Purch. requisitions Purch. requis. (PurRqs)
Sales orders Sales order (SalesOrder)
Planned orders Change Planned order (PlOrd)
Planned ind. reqmts transfer Pld. ind. reqs. (FCreq)
Reservations Reservation (PrdRes)
Stocks Warehouse stock (Stock)
... ...
Real time
 SAP AG 2003
 The selection of transaction data to be transferred to SAP APO is specified in an integration model you
define in SAP R/3. All transaction data is mapped to orders in SAP APO, which are distinguished by
their ATP category. SAP APO transaction data is therefore not identical SAP R/3 transaction data.
Mapping of objects on top of one another takes place via the CIF Core Interface.
 An initial data transfer also occurs for transaction data. As a rule, the change transfer between SAP R/3
and SAP APO follows automatically for transaction data objects belonging to an active integration
model. New transaction data or changes to existing transaction data are transferred automatically.

2.30
Master and Transaction Data: Unit Summary (1)
 Supply Chain Planning takes place in the following

locations: Plant, distribution center, customer and
vendor.
 Supply Chain Planning takes place at material level.
Material masters contain general and location-
specific data.
 Material flow in the Supply Chain is specified via
external procurement relationships. For example, a
production plant can, via stock transport, procure for
a distribution center.
 Production of a material in a plant is described via
BOMs and routings. Individual steps are carried out
at work centers.
 SAP AG 2003

2.31
Master and Transaction Data: Unit Summary (2)
 Independent requirements in the form of planned

independent requirements or sales orders trigger
procurement in the network.
 Stock transport between locations of one's own
procurement network can be planned with the help of
stock transport requirements.
 In-house production is planned on the basis of
planned and production orders, external procurement
via purchase requisitions and purchase orders.
 When using SAP APO, all master data needed for
planning is transferred from SAP R/3 to SAP APO via
the CIF Interface: Transaction data is also exchanged
via the CIF Interface.
 SAP AG 2003

2.32Master and Transaction Data Exercises
Unit: Master Data and Transaction Data

Topic: SAP R/3 Master Data
At the end of these exercises, you will be able to:

• display the SAP R/3 master data that is necessary for the
production of a material in a plant.
Pumps with the material number T-F2## (## represents your

group number) are produced in Plant 1000. Production Planning
and Detailed Scheduling for pump T-F2## takes place in SAP
APO, whereas the master data is created in SAP R/3 and
transferred to SAP APO from there.
Using the master data in SAP R/3, you familiarize yourself with
the production planning process of Detailed Scheduling.
1-1 Display the material master of pump T-F2## in plant 1000. In the SAP R/3 System, use
the transaction to display material masters, which you call from the production master
data menu, for example.
1-1-1 Once you have accessed the transaction, enter Material T-F2##, on the
following screen select the views Basic Data 1, MRP 1 to MRP 4 and Work
Scheduling. Finally, enter Plant 1000 as the Organizational Level.
1-1-2 Display the Basic Data 1 view. What is the exact description of the material?
___________________________________________________
What material type does the material belong to?
___________________________________________________
1-1-3 Use Enter to get to the next selected views.
Is the material produced in-house or procured externally (view MRP2)?
___________________________________________________
1-1-4 Proceed to view MRP 4 (by choosing Enter twice, for example). Has a
production version been defined for the material?
___________________________________________________
Display the details for Production version 0001. What lot-size range can this
production version be used for?
___________________________________________________
A routing and a BOM have been defined in the production version. What is the
number of this routing?
Task list group: ___________________________
Group counter: _______
What BOM has been defined?
Use: _____________
Alternative: _____________
1-1-5 Exit the production version and display the view Work scheduling. What in-
house production time has been entered here?
____________________________________________________
Roughly how long does the production of 100 pumps thus take?
____________________________________________________
Does this time include the procurement of the necessary assembly groups and
components?
____________________________________________________
1-2 To find out which assemblies and components are necessary for the production of
Pump T-F2##, display the BOM that is used in the production version 0001 (see
above):
1-2-1 Display the material BOM for the Material T-F2##. You can find the
corresponding transaction in the production master data. Call up the transaction
and enter BOM usage 1 for the material, Plant 1000. You access the item
overview by choosing Enter. What components are needed for the production
of the pump (five materials, one document)?
____________________________________________________
____________________________________________________
____________________________________________________
1-2-2 Which ‘components’ are themselves made up of further components? (note the
Assembly indicator).
____________________________________________________
1-2-3 Double click on the Assembly indicator in the BOM item to enter the BOM of
the assembly. In doing so, note which components are contained in Assembly
T-B1##.
____________________________________________________
____________________________________________________
1-3 Finally, display the different steps that have to be carried out to produce Pump T-F2##.
To do this, refer to the routing that is contained in production version 0001 (see above):
1-3-1 Display the routing for Material T-F2##. You can find the corresponding
transaction in the production master data. Call up the transaction and enter the
material and Plant 1000. You access the header overview by choosing Enter.
Select the first plan in the overview (that is, the plan with Group counter 1, as

defined in the production version) and proceed to the Operation Overview for
this plan (simply double click on the corresponding lines in the header
overview.
Which operations are carried out at which work centers (note the operation
descriptions)?
0010: ________________________________________________
0020: ________________________________________________
0030: ________________________________________________
0040: ________________________________________________
0050: ________________________________________________
0060: ________________________________________________
1-3-2 Now enter the component overview (using Component allocation-generic).
Are components assigned to operations other than the first one?
____________________________________________________
Note: no explicit assignment means that components belong to the first
operation.

Exercises

Topic: SAP APO Master Data

• display the SAP APO master data that is necessary for the
production of a material in a location.
This exercise is optional.

Production Planning and Detailed Scheduling for pump T-F2##
takes place in SAP APO, whereas the master data is created in
SAP R/3 and transferred to SAP APO from there.
Familiarize yourself with the master data in SAP APO.
2-1 The production of Pump T-F2## is planned in SAP APO. The master data that is
necessary for production was created in SAP R/3 and transferred from there to SAP
APO. Using the product master and the production process model as an example, look
at the result of the data transfer to SAP APO.
2-1-1 In SAP APO call up Produkt T-F2## in the master data. Display the data for
this product in Location 1000. Look at the procurement tab page. What
procurement type has been entered here?
____________________________________________________
Does the procurement type correspond to the setting in the SAP R/3 material
master that you looked at in the last set of exercises?
____________________________________________________
2-1-2 Display the Production process model (PPM) in the master data in SAP APO.
Select this by using Product number T-F2## and by entering Location 1000.
You enter the PPM using the Display function.
The SAP APO production process model is a result of the

transfer of the SAP R/3 routing and BOM. It is a
comparatively complex master record. Using the flowchart,
you can create an overview of the individual production
steps. They correspond to the process that you became
familiar with using the SAP R/3 routing.
You display the PPM using three different screen areas. You use the graphic in
the bottom left area of the screen, firstly by enlarging it onto a greater area of

the screen (by moving the dividing lines) and then by using the function fit to
objects. The structure of the PPM should now be clearly visible.
You can see the different operations 0010 to 0060 in the left part of the chart.
By placing the mouse cursor over any of the symbols, the operation
descriptions are made visible. Do the operations correspond to the operations in
SAP R/3, that you noted down previously?
____________________________________________________
In the SAP APO PPM, an operation is split up into several

activities. You can recognize these activities by the
Flywheel symbol to the right of the operations. The
operations are carried out one after the other. The process
can be recognized by the red arrow between the activities.
In the chart, view the components that are assigned to operation 0010 (or to be
more precise, the components that are assigned to the first activity of this
operation). Do the components correspond to the components in the SAP R/3
routing, that you noted down previously?
____________________________________________________
Explain the difference.
____________________________________________________
____________________________________________________
____________________________________________________

2.33Master and Transaction Data- Solutions

Topic: SAP R/3 Master Data
1-1 SAP R/3 menu path: Logistics → Production → Master Data → Material Master →
Material → Display → Display Current
1-1-1
1-1-2 Material description: Pump PRECISION 102
Material type: FERT (finished product)
1-1-3 Produced in-house or procured externally: The material is produced in-house.
(Procurement Type E).
1-1-4 Production version defined?: Yes, a production version has been defined.
The version indicator has been set.
Lot-size area of production version 0001: The production version can be used
for lot-sizes of 1 to 999,999 pieces.
Routing:
Task list group: varies, for example 50000492Group counter: 1
Bill of material:
Use: 1
Alternative: 1
1-1-5 In-house production time: A setup time of 0.07 days, a queue time of 0.71
days and a processing time of 15,48 days per 100 pieces has been entered.
Time taken to produce 100 pumps: The total of the above-mentioned time
elements gives the time needed to produce 100 pumps, that is, roughly 16
days.
Procurement of the necessary assemblies and components included?: No, this is
the time taken to produce the pumps only.
1-2 SAP R/3 menu path: Logistics → Production → Master Data → Bills of Material → Bill of
Material → Material BOM → Display
1-2-1 Components needed to produce the pumps: Materials T-B1##, T-B22##, T-

B3##, T-B4##, T-T3##, Document “Assembly drawing for pump”.
1-2-2 Components consisting of further components: The components T-B1##, T-
B22##, T-B3##, T-B4## are made up of further components.

1-2-3 Components belonging to Assembly T-B1##: Materials T-T1##, T-T2##, T-
T3##.
1-3 SAP R/3 menu path: Logistics → Production → Master Data → Routings → Routings →
Standard Routings → Display
1-3-1 Operations and work centers:
0010: Material staging by picking list, T-M##

0020: Press flywheel in casing, T-V##
0030: Paint casing RAL 1015 white, T-L##
0040: Insert hollow shaft in casing, T-E##
0050: Final Assembly of pump, T-F##
0060: Deliver to stock, T-P##
1-3-2 Components assigned to operations other than the first one: No, none of the
components are assigned explicitly.

Solutions

Topic: SAP APO Master Data
2-1 SAP APO menu path: APO Master Data → Product
2-1-1 Procurement type: Procurement type E for in-house production

Correspond to SAP R/3? Yes, the procurement type corresponds to the
setting in SAP R/3.
2-1-2 SAP APO menu path: APO Master Data → Production Process Model
Operations correspond to SAP R/3? Yes, the operations correspond to those
in SAP R/3.
Components correspond to those in SAP R/3? In SAP APO, the component
T-T3## and the document item are missing.
Explanation: Component T-T3## is not contained in any active integration
model, and is thus not planned in SAP APO (but in SAP R/3 instead). As a
rule, document items are not transferred to SAP APO.

3
Demand Planning
Contents:
 Demand Planning in SAP R/3 (SAP R/3 SOP)

 Demand Planning in SAP APO (APO DP)
 Advantages of SAP APO DP
 Integration between SAP R/3 and SAP APO
 Demand plans and planned independent requirements
 SAP AG 2003
(C) SAP AG SCM200 1

3.2
Demand Planning: Unit Objectives
 Describe the concept and functions of Demand

Planning
 Name the most important tools in Demand Planning
 Outline the differences of Demand Planning in SAP
R/3 and SAP APO
 Create a simple sales forecast, and release the
results to Production Planning.
 SAP AG 2003
(C) SAP AG SCM200 2

3.3
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2003
(C) SAP AG SCM200 3

3.4
Demand Planning Overview
R/3 APO
R/3 APO
LIS BW
(DP)
Standard SOP
Demand Management Supply Network

Planning (SNP)
Planning (MRP) Production
Planning/Detailed
Capacity Scheduling (PP/DS)
Requirements
Planning (CRP)
SC Manufacturing/Procurement
 SAP AG 2003
 Demand Planning can be carried out within flexible planning in SAP R/3 or in the form of Demand
Planning (DP) in SAP APO.
 Demand Planning is very flexible. Different past figures, such as those that are made available in the
SAP R/3 Logistic Information System (LIS) or the SAP Business Information Warehouse (BW) can be
used for forecasting. There are a multitude of algorithms that you can choose from to create the forecast
itself.
 Demand Planning is often used to create a production program. Demand Planning results are then
transferred to Demand Management as planned independent requirements. You can either continue using
the result of SAP APO Demand Planning in SAP APO or transfer them to SAP R/3.
(C) SAP AG SCM200 4

3.5
Demand Planning Planning Levels
Aug. Sept.
W32 W33 W34 W35 W36 W37 W38 W39 W40 W41
s
et
ck
Bu
Distribution centers (DC)
Sold-to party
Material
Regions Material hierarchy
 SAP AG 2003
 Demand Planning is a tool for forecasting future demands. You can create quantity-based as well as
value-based plans. You can freely choose your planning levels, that is, you can plan your future demands
for specific customers, regions or sales organizations. Time bucket profiles can also be freely defined
for planning.
 Planning levels are defined using characteristics in the system. Characteristic values are thus the objects
by which you aggregate, disaggregate and evaluate business data.
 Planning data is stored in the form of key figures. Key figures contain numerical values that signify
either a quantity or a value; for example projected sales value in euros or projected sales quantity in
pallets.
 Time characteristics define the buckets in which you view, plan and store data.
 The multidimensional nature of the data store allows for powerful data analysis capabilities using the
selection, drill-up and drill down functions of Demand Planning.
(C) SAP AG SCM200 5

3.6
The Demand Planning Concept
Aggregated historical Planning levels, for example Future demand forecast

data  Location
 Product hierarchy
 Sold-to party
 Sales organization
 Region
 Statistical forecasting
Sales Invoices Goods
orders issue  Collaborative forecasting
 Overrides
 Market intelligence
 SAP AG 2003
 The SAP APO DP library of statistical forecasting tools and advanced macro techniques allows you to
create forecasts based on sales history as well as any number of causal factors, and use a consensus-
based approach to consolidate the results.
 Marketing intelligence and management adjustments can be added using forecast overrides and
promotions.
 Aggregated actual data can be extracted from the SAP R/3 system in exactly the same way as it can be
imported from SAP BW, Excel, or legacy systems.
(C) SAP AG SCM200 6

3.7
The Demand Planning Process
Aggregated historical Future demand forecast

data
Update Release
Sales
orders Planned independent
requirements
Consumption
possible
 SAP AG 2003
 The slide shows the Demand Planning cycle: Past sales order quantities form a basis for the forecasting
of future demands. In addition, market intelligence or one-off events (such as trade fairs) can be included
in the forecast. As a result of the forecast, the demand plan is released as a planned independent
requirement. Planned independent requirements form a basis for procurement and production planning
and can, for example, consume the current sales orders.
(C) SAP AG SCM200 7

3.8
Consistent Planning
 Consistent planning (top

down, middle out,
bottom up)
 Drilldown and drill-up
functions
Demand Planning W 24 W 24 W 24
Total 200 210 420
P-102 50 50 100
Products P-103 50 60 120
P-104 50 50 100
P-105 50 50 100
Sold-to party
 SAP AG 2003
 Consistent planning means that planning data on all planning levels can be kept consistently (automatic
aggregation and disaggregation). Consistent planning in the whole enterprise enables detailed plans to be
automatically consolidated.
 Top down planning: An aggregated plan is automatically distributed down to detailed level (products,
customers, sales areas, and so on) according to proportional factors.
 Middle out planning: Medium level planning data is aggregated up for the overall plan and distributed
down to detailed level.
 Bottom up planning: Detailed data is automatically aggregated up to the overall plan.
 In the lower part of the slide, you can see how you can consistently change planned data on different
levels: First of all, planned sales for pump P-102 are increased from 50 to 60 pieces. This increases the
total of sales quantities for all pumps. The sales quantity for all pumps doubles and as a result, the
quantities of the individual pumps also double.
 This type of planning supports the simulation of multiple planning scenarios.
(C) SAP AG SCM200 8

3.9
Calculations in Demand Planning
APO - Product Total APO - Location Total

ID Object Text Design Graph Capacity Leveling
P-102 PUMP 2 Demand Planning W 24 W 25 W 26 W 27 W 28

P-103 PUMP 3 Actual Demand
P-104 PUMP 4 Forecast
P-105 PUMP 5 Correction
Selection Profile Internet Correction
User Demand Plan
Selection ID
 Calculate totals and differences

Planning Book  Calculate sales budgets
Data Views
 Define your own alerts
 Launch status queries
Macros
 Send e-mails
 SAP AG 2003
 Macros perform complex calculations quickly and accurately. The extreme flexibility of the macros
allows the planner to model a planning environment based on individual business tasks.
(C) SAP AG SCM200 9

3.10
Forecasting Techniques
Demand Planning W 24 W 25 W 26 W 27 W 28 W 29 W 30
Actual Demand 100 87 120 99
Forecast 101 103 105
Today
Forecasting Techniques
 Moving average
Future demand forecast
 Constant models
 Trend models
 Seasonal model
 Exponential smoothing
 SAP AG 2003
 You can choose any type of historical data for the forecast: Any key figures can be used. For example,
you can forecast material consumptions, incoming order quantities, invoiced quantities, or sales
revenues.
 The system uses different forecasting models to determine the future pattern of the key figure concerned.

3.11
Differences Between Demand Planning in SAP R/3
and SAP APO
R/3 APO
 Aggregated historical data via  Global server with a BW

LIS update infrastructure
 Planning on LIS info structures  Main memory-based planning
(database) with max. 9
characteristics  Integrated exception handling,
 Simple macros definition of own alerts, complex
macros
 Rough-cut capacity planning
 Integration with CO/PA  Integration with production
planning (SOP scenario)
 Fixed drill-down
 Standard forecasting techniques  Flexible navigation in the planning
 Events table, variable drill down, graphic
 Extensive forecasting technique
 Promotion planning and
evaluation, 'like' modeling
 Collaborative planning via the
Internet
 Sales bills of material (BOMs)
 SAP AG 2003
 The Business Information Warehouse (BW) infrastructure includes easy to use features for extracting all
the data from execution systems and analyzing it in the SAP BW Business Explorer.
 Macros can be used to perform complex calculations, and to define conditions and exception messages
(alerts). E-mails can be sent automatically, and status automatically queried.
 In the SOP scenario, the feasible production plan from SNP or PP/DS is compared with the original
demand plan. Deviations are identified automatically and reported to the planner.
 The following statistical procedures are all available for forecasting; Constant model, Trend model,
Seasonal model, Trend and Seasonal model, Croston method with exponential smoothing, Linear
regression, and Causal models with multiple linear regression. External forecasting procedures can also
be linked to this.
 "Like modeling" refers to the forecasting of new products using historical data from old products. Life
cycle definition is also covered in like modeling.
 You can make each planning book accessible to customers or suppliers over the internet in order to be
able to exchange data as soon as possible.

3.12
SAP R/3 Planning Components
LIS
 Sales organization
Demand plans SOP
 Division
 Sold-to party
 Material Production plans
 Plant
 Material Demand Management

 Plant
Planned ind. reqmts
APO
 Planned orders
MPS/MRP
 Purch. requisitions Quantities and dates
 BOM explosion
 Capacity requirements ...
for work centers
 SAP AG 2003
 Sales and Operations Planning (SOP) displays the planning tool within the Logistic Information System
(LIS).
 SOP is a flexible forecasting and planning instrument with which sales, production and further target
figures within the Supply Chain can be determined. Historical, current and/or estimated data for the
future creates a basis for this. Planning with SOP is generally medium to longterm. Furthermore,
resource planning is also possible. This is used to detemine work center capacities and other necessary
resources needed to realize pre-defined goals. SOP supports the planning of complex planning
hierarchies on a higher level as well as the detailed planning of finished products. SOP enables you to
plan "from top to bottom" (top down) or "from bottom to top" (bottom up).
 The architecture of the supply chain planning systems is based on the MRP II concept

3.13
Integration Between SAP APO and SAP BW
Demand Planning
Forecast Reporting
Sales history, BW
price, costs, ... Business
APO Information
Forecast Warehouse
Demand Planning Specific Data Central Data Pool
 Forecast & planning scenarios  Summarized data

 Causal factors  Order and shipment data
 Lifecycle patterns  Cost information
 Seasonal patterns  ...
 Promotional patterns
 SAP AG 2003
 A distinction is made between the Business Information Warehouse (BW) contained in SAP APO and
the separate mySAP component mySAP BW. As a rule, SAP APO Demand Planning is carried out
based on data from the internal BW.
 If you carry out extensive reporting, it is recommended that you implement a separate BW server and
only transfer data to SAP APO, that is relevant to planning.
 As the data structures in BW and SAP APO are technically identical, you can use the BW Explorer to
evaluate SAP APO data.

3.14
Interactive SAP APO Demand Planning
Selector
APO - Product Total APO - Location Total

ID Object Text Design Graph Capacity Leveling
P-102 PUMP 2 Demand Planning W 24 W 25 W 26 W 27 W 28

P-103 PUMP 3 Actual Demand
P-104 PUMP 4 Forecast
P-105 PUMP 5 Correction
Selection Profile Internet Correction
User Demand plan
Selection ID
Header information
Selected objects
Planning Book
Data Views Right mouse
button:
Standard selections
Additional settings
Macros
 SAP AG 2003
 The SAP APO module Demand Planning (SAP APO DP) and Supply Network Planning (SAP APO
SNP) use a uniform tool for planning. It consists of two components: The selection area and the work
area.
 The selection area is the window, in which you choose the InfoObjects you want to plan. In the selection
area you can save frequently used selections and load existing selections. To open the selection area,
choose the selection window icon.
 The selection profile displays all the selection IDs which have been assigned to the planner. The planner
can access commonly used selections quickly using the selection IDs.
 You choose the work area using your planning books and views. You can define a filter for available
planning books and views.

3.15
Further SAP APO Forecasting Techniques
 Univariate Forecasting
 Moving average
 Constant-, trend- and season
models (Holt-Winters, for example)
 Exponential smoothing
 Seasonal linear regression
 Croston's method (for sporadic
demand)
 Causal Analysis
 Multiple linear regression
 Composite Forecasting
 Weighted average of multiple
models
 SAP AG 2003
 A company's product spectrum covers a variety of products in different stages of their lifecycle and with
different demand types.
 APO Demand Planning offers a "toolbox" of proven forecasting methods. The system allows you to
choose the best method for a specific demand type.
 Composite forecasting extends the idea of pick-the-best; with this technique you combine two or more
methods.
 Croston's method allows you to model sporadic demand.
 The statistical forecasting toolbox provides all the features you require to efficiently create accurate
forecasts, including everything from data analysis via time series models through multiple linear
regression.

3.16
SAP APO Lifecycle Management
Actual Data of the Old Product
Time
Forecasting of the New Product

Sales
Like
Lifecycle
Time
 SAP AG 2003
 You use lifecycle planning and "Like" modeling to forecast the launch (phase-in) and discontinuation
(phase-out) of a product.
 A product's lifecycle consists of different phases: Launch, growth, maturity, and discontinuation. This
process models launch, growth, and discontinuation phases.
 For all characteristic value combinations, you can use either a "like" profile, a phase-in profile, or a
phase-out profile, or any combination of these.
 If the phase-out profile period is within the history horizon of the master forecast profile, the system
adjusts history input values, displays the adjusted values in the key figures original history and the
corrected history, and writes the adjusted values to the corrected history.
 If the phase-in profile period is within the future horizon of the specified master forecast profile, the
system adjusts baseline or original forecasts, and writes the adjusted values to the corrected forecast key
figure.

3.17
Release of Sales Quantities as Planned
Independent Requirements
APO APO
Demand Planning Production Planning
Key figure: Sales quantity Planned ind.reqmnts
Macros SNP
Alerts PP/DS
Key figure: Feasible Production quantities

sales quantity
 SAP AG 2003
 Once the various stakeholders in the forecast have reached a one-number, consensus plan, you release
the demand plan as a planned independent requirement.
 You release the demand plan from Demand Planning (DP) via either the demand planner or the SNP
planner.
 This process creates order objects or time series objects. These anonymous demands form the basis of
SNP, or PP/DS, where BOM explosion, capacity planning, and sourcing are carried out for the complete
supply network.
 After feasibility of the planned sales quantities in SNP or PP/DS has been checked, the results can be
transferred back to Demand Planning. Macros are used to analyze the differences between the demand
plan and feasible quantities and alerts are generated if large differences occur.

3.18
Demand Planning: Unit Summary
 You use Demand Planning to derive future sales

quantities from historical data.
 Demand Planning is carried out interactively from the
planning table. Mass processing is used for
forecasting and releasing planned independent
requirements.
 Demand Planning in APO DP can be structured more
easily than is possible within SAP R/3 SOP, as it is
based on the data structures of SAP BW.
 SAP AG 2003

3.19Demand Planning Exercises
Unit: Demand Planning

Topic: Interactive Planning

• Create a sales forecast including corrections
• Release the demand plan to Production Planning

group number) are planned in SAP APO. In the first step of
planning, a demand plan is created in SAP APO Demand
Planning. Using this plan, planned independent requirements
should be made available for Supply Network Planning (SAP
APO SNP). This plan is created using a statistic forecast based on
historical data. Moreover, regional sales and distribution
information should be taken into account.
1-1 Carry out interactive SAP APO Demand Planning for product T-F2##. To do this, use
consumption values from the past to create a future production plan. Planning for the
product takes place without reference to a location (production plant or distribution
center). You can observe how the forecast requirements for this product are distributed
over different locations in a second step.
1-1-1 From the SAP APO Demand Planning menu, call up the transaction
Interactive Demand Planning. You access the table of the planning book
SALES and data view, which is assigned to your user.
To edit the planning situation for product T-F2##, choose Selection Window in
the top left screen area. First of all, select “APO Product” (in the “Show”
field). Version 000 is already displayed automatically. In the next row, enter
APO -Product once again, and on the right-hand side enter your product T-
F2##. Adopt the selection.
Finally, load the data for your selection (that is, product T-F2##) in the
planning table, by double-clicking on the selection line.
The available planning data is displayed on the right-hand side of the screen.
You can see the sales figures from the previous year.
1-1-2 Procurement for pump T-F2## should be planned based on these past figures.
Carry out a forecast.
Select Stat to carry out a univariate forecast. On the next screen you can see the
forecast figures for the future, derived from historical values.

1-1-3 Analyze the result graphically by selecting Show/hide table: The results are
then displayed graphically. The seasonal pattern that occurred in the past has
been extrapolated into the future. Go back to the planning table.
1-1-4 Adjust the forecast by entering Adjustment of 100 pieces for the current
month + 3. If you click on enter, the new forecast figure is determined.
1-1-5 Have a look at how your forecast for product T-F2## is distributed to the
different locations (1000, 2400 and 2500). Use the function Header on/off and
set the header information accordingly.
In Header information settings choose the characteristic APO location and
adopt the setting. Select the Final forecast key figure selection using the
“magnifying glass” icon.
You can now influence the display of data in the header: Exit the total display
and enter the Details (all) display. You can now see from the table, how the
planned data is distributed to individual locations.
As an example, note the planning figures for the next three months in
distribution center 2400:
Current month + 1: ________________________
Current month +2: ________________________
Current month +3: ________________________
1-1-6 Finally save your demand planning.
1-2 Having created a demand plan for pump T-F2##, release the planning figures to
production planning, that is, create corresponding planned independent requirements.
1-2-1 From the demand planning menu, call up the transaction Release to Supply
Network Planning. To simplify your entry use the variant RELEASE, using
the suggestions it makes to check or change information in the following
places:
Planning area: SALES
Planning version (Source): 000
Key figure: FINFOR
Planning version (Target): 000
Category Leave blank (no entry)
Horizon from today to today + 3 months
Daily period split Delete (leave blank)
Product: T-F2##
Be sure the Log is checked in the lower left corner.
Do not specify a location! Which locations have had planned independent
requirements created for them?
________________________________________________
Execute the release.
Despite the fact that the release transaction is described as
“Release to Supply Network Planning”, the effect of planned
independent requirements is not restricted to planning in
SAP APO SNP. They are equally relevant for production
planning/detailed scheduling in SAP APO PP/DS.
1-2-2 Look at the results of the release using distribution center 2400 as an example:
From the production planning menu, call up Product view. In the initial
screen, enter the following data:
Planning version 000
Product: T-F2##
Location: 2400
and confirm using Enter.
Are planned independent requirements displayed? __________________
You will have noticed that the planned independent

requirements have been transferred as weekly amounts. This
is because, in interactive transfers, data is transferred with
the smallest time bucket profile from the planning area (if no
daily buckets profile is defined); In this case, the smallest
time buckets profile is weeks.
Compare the quantities with the values that you noted above. Do the quantities
match?
_________________________________________________

3.20Demand Planning Solutions
Unit: Demand Planning

1-1 SAP APO Menu path: Demand Planning→ Planning→ Interactive Demand
Planning
1-1-1
1-1-2
1-1-3
1-1-4
1-1-5 Planning figures for the next three months in distribution center 2400:
Current month + 1: Varies, for example 36 pc.
1-2 SAP APO menu path: Demand Planning→ Planning → Release to Supply Network
Planning
1-2-1 Planned independent requirements for locations: Planned independent requirements
are created for locations 1000, 2400 and 2500.
1-2-2 Menu path: APO Production Planning → Interactive Production Planning

→ Product View
Planned independent requirements displayed? Yes, planned independent
requirements are displayed.
Matching quantities? Yes, the quantities match if you add up the individual
week quantities to get month quantities. As the transfer period was
restricted to three months, only a part quantity is displayed for the last
month, if necessary.

4
Demand Management
Contents:
 Planned independent requirements

 Make-to-stock production and make-to-order production
 Requirements strategies
 Consumption
 Subassembly planning
 ATP check
 SAP AG 2002
(C) SAP AG SCM200 1

4.2
Demand Management: Unit Obejectives
 Explain the function of planned independent

requirements
 Describe make-to-stock production and make-to-
order production procedures
 Explain the role of requirements strategies
 Understand consumption between customer
requirements and planned independent requirements
 Explain the basic functions of the ATP check.
 SAP AG 2002
(C) SAP AG SCM200 2

4.3
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2002
(C) SAP AG SCM200 3

4.4
Demand Management Overview
R/3 APO
R/3 APO
Demand Planning
Flexible Planning
(DP)
Global Available-to-
Promise (ATP)
Sales
Supply Network
Demand Management CIF Planning (SNP)
Material Requirements Production
Planning (MRP) Planning/Detailed
Scheduling (PP/DS)
Capacity
Requirements
Planning (CRP)
 SAP AG 2002
 Demand programs for finished products are determined by independent requirements, that is, planned
independent requirements and customer independent requirements. Planned independent requirements
are managed in demand management.
 Planned independent requirements, that is, make-to-stock planned independent requirements, are usually
based on forecasts of demands to be expected in the future. These demand forecasts can take place in
Demand Planning, in SAP APO Demand Planning, for example. The corresponding key figure can then
either be transferred to SAP R/3 as planned independent requirements or used directly in SAP APO SNP
or SAP APO PP/DS.
 Planned independent requirements that are created in SAP R/3 can be transferred to SAP APO via the
CIF. In principle, sales orders are entered in SAP R/3 (it is even possible to enter them in CRM) and, if
necessary, transferred to SAP APO from there.
(C) SAP AG SCM200 4

4.5
Demand Programs in the Production Plant
Warehouse requirements
Forecast
Plnd. indep.
reqmts
Customer requirements
Sales
Sales
orders
Stock Transfer Requirements
Demand program

Coverage of requirements through
 External
procurement
 SAP AG 2002
 Demand Management pertains to the administration of independent requirements. Independent

requirements can be entered directly for a production plant. They can also be derived from demand
planning.
materials concerned, without having to wait for concrete sales orders. Sales orders (customer
independent requirements) are created by sales and distribution. Sales orders can enter the demand
program directly. This is desired when customer-specific planning takes place.
 Stock transfer requirements, that is, requirements from other locations of the Supply Chain (distribution
centers, for example) can, in addition to the independent requirements that have been entered in the
production plant, also enter the demand program.
(C) SAP AG SCM200 5

4.6
Planning Strategies
 Make-to-stock production
(Production due to make-to-stock planning, requirements covered by
warehouse stock)
 Subassembly planning
Make-to-stock production for assemblies)
 Make-to-Order production
(Finished products to individual customer stock using make-to-order
production, and where necessary, assemblies to stock using make-to-
stock)
 SAP AG 2002
 A multitude of possibilities are available for planning for production with the help of planned
independent requirements. The different mode of action of planned independent requirements is
controlled by the so-called planning strategy.
 If strategies are used for make-to-stock production, production usually takes place, without sales orders
already having to be present for the material concerned. If sales orders are then received, these can be
met by warehouse stock, so that shorter delivery times can be realized. Moreover, in make-to-stock
production, it is possible to realize as consistent a production process as possible, independent of current
demand.
 Make-to-stock production can also be executed for assemblies. In this case, the finished products
themselves are not produced to stock; rather the necessary assemblies are procured. A sales order for a
finished product can then usually be fulfilled quickly, as it is only final assembly that has to be executed
since the assemblies already exist.
 Sales-order based production does not deal with planning in its actual sense; rather a product is procured
for an existing sales order. Make-to-order production is often used in connection with subassembly
planning for components, to keep delivery times as short as possible.
(C) SAP AG SCM200 6

4.7
Make-to-Stock Production
 Planning takes place by means of planned independent

requirements
 Sales orders are covered by make-to-stock inventory.
Requirements strategy for make-to-stock R/3 APO

production
 Make-to-stock production 10 10
 Planning with final assembly 40 20
 Planning at assembly level 70 20*
* = additional indicator "Subassembly planning" set
 SAP AG 2002
 Using make-to-stock production strategies, production or procurement is planned; using planned

independent requirements that arise from the forecast of sales expected in the future. According to the
choice of strategy, sales orders can affect requirements, consume planned independent requirements, or
have no effect on planned independent requirements. In make-to-stock production, sales orders are
usually fulfilled by warehouse stock.
 The number used to indicate strategies in SAP R/3 and SAP APO is usually different, because an SAP
APO strategy can contain more than one SAP R/3 strategy.
 Make-to-stock production strategies are used, for example, in situations where demand and sales
fluctuate but where production may be kept at full capacity. Fluctuations in demand and sales are
smoothed by warehouse stock.
 Planning can also take place at assembly level. This makes sense, for example, when an assembly, that is
to be used in different finished products, has to be procured before the demands (sales orders) for these
finished products exist.
 Planning at assembly level is realized in SAP APO, by using the strategy planning with final assembly
and setting the subassembly planning indicator additionally in the SAP APO product master
(corresponds to strategy 70 using the mixed MRP indicator 1 in SAP R/3)
(C) SAP AG SCM200 7

4.8
The Make-to-Stock Production Process
Requirements strategy 10
Create planned
independent
1 requirements for the
Demand program
finished product
Planning
Reduction
Procurement
through production Warehouse stock
2
or external Finished product
procurement
Coverage of
Sales orders
3 requirements from
from warehouse
the warehouse
 SAP AG 2002
 In make-to-stock production, customer requirements are not included in the demand program. The
procurement quantities are planned exclusively as planned independent requirements (usually before the
sales orders arrive). Sales orders are not MRP-relevant, but are displayed for information purposes (the
sales orders are not pegging-relevant).
 Production takes place in warehouse stock. Sales orders (and other requirements for the product) are
covered from the warehouse. An availability check can be performed in the plant. Goods withdrawals for
a sales order reduce this sales order.
 Reduction of planned independent requirements takes place at goods issue for the delivery. The oldest
planned independent requirement is reduced first (FIFO rule). If no more planned independent
requirements exist in the past, planned independent requirements in the future can also be reduced,
provided a planned independent requirement reduction in the future is permitted by a corresponding
consumption interval (forwards).
(C) SAP AG SCM200 8

4.9
Planning with Final Assembly
R/3 APO
Strat. 40 Strat. 20
1. Planning at finished product level using plnd. ind. reqs.
2. Consumption of planning by sales orders
Planning Consumption Sales Order
Finished Product
Production
 SAP AG 2002
 In planning with final assembly (SAP R/3 strategy 40, SAP APO strategy 20), a flexible or fast reaction
to customer demand is prominent, whereby as smooth as possible a production process is also
simultaneously strived for. Sales orders affect requirements and consume planned independent
requirements.
 The procurement and production of all components and assemblies including their final assembly is
triggered by planned independent requirements before sales orders arrive.
 You plan the planned independent requirements for the finished product in demand management.
Incoming sales orders consume these planned independent requirements.
 If customer requirements exceed planned independent requirements, the system automatically creates a
planned order for the unplanned quantity in the next MRP run. (Sales orders thus affect requirements).
 You can check availability from a sales order using the ATP logic.
 The consumption of planned independent requirements by customer requirements depends on the
settings defined for the consumption mode and the consumption periods.
(C) SAP AG SCM200 9

4.10
Consumption
Planned ind. reqmts.
Backward consumption only Example: Within the
20 given period of time,
40 60 pieces are
20
Mode 1 produced for the

60 Time sales order and 20
pieces are produced
(anonymously) to
Customer Reqs. Backward consumption per. Bwd per. stock.
Forward consumption only
Mode 3 Time
Forward consumption period Fwd per.
Backward/forward consumption
1 2
Mode
2/4 Time
Bwd per. Fwd per.

 SAP AG 2002
 The consumption mode determines the direction on the time axis in which the arriving sales orders are to
consume the planned independent requirements.
 In backward consumption (consumption mode 1), the sales order consumes planned independent
requirements that lie before the customer requirement.
 In forward consumption (consumption mode 3), the sales order consumes planned independent
requirements that lie after the customer requirement.
 You can combine backward and forward consumption provided that you take the consumption periods
into account (consumption mode 2 or 4).
 You can define the consumption mode and the consumption periods either in the material master or for
each MRP group. If no values for either consumption mode or consumption period have been entered,
then the system uses the default setting with backward consumption for 999 days (Note: If a
consumption mode has been entered and the consumption period is left blank, only requirements on the
same day are consumed).

4.11
Planning at Assembly Level
R/3 APO
Strat. 70 Strat. 20
+ Subassembly
Planning Indicator
1. Planning at assembly level using plnd. indep. reqs.
2. Consumption by the dependent reqmts of the finished product
Finished product Sales order
Dep.Req. Consumption
Assembly 01 Assembly 02 Production
Planning
 SAP AG 2002
 Planning at assembly level (SAP R/3 strategy 70, SAP APO strategy 20 + subassembly planning
indicator) can be used when an assured demand forecast can be given for certain assembly groups sooner
than for the individual finished products, in which the assembly group is needed.
 In this planning strategy, the planned independent requirements for an assembly are planned separately.
They are created at assembly level and they trigger the production of the assembly.
 If sales orders for the finished products arrive, planned orders (or production orders) are created for the
finished product and the BOM is exploded, that is, dependent requirements (or reservations) are created
for the assembly. These consume the planned independent requirements of the assembly.
 If large sales order quantities at finished product level cause the dependent requirements or reservations
to exceed the planning requirements of the assembly, an additional planned order is created for the
assembly in the next planning run. Secondary requirements thus fully affect requirements.
 SAP R/3 strategy 70 must be entered in the strategy group of the material master and the mixed-MRP
indicator for subassembly planning must be set. (In SAP APO this corresponds to strategy 20 in
connection with the subassembly planning indicator).

4.12
Consumption in Subassembly Planning
Demand
Assembly planning Dependent requirement Assembly planning

quantities or order reservation quantities
Time
Backward Forward
Planning Consumption Period
 SAP AG 2002
 The consumption logic is defined by the consumption mode and the consumption periods backward and
forward as in strategy 40. These are defined in the material master of the assembly or via the MRP
group.
 Using this strategy, the consumption periods are calculated starting from the dependent requirements or
the reservations.

4.13
Production Based on Sales Orders
 Sales orders are planned on a customer-specific basis

 Planning is possible
R/3 APO
Requirements strategies for
production based on sales orders
 Make-to-order production 20 ‚_‘
 Planning without final assembly 50 30
 Planning with planning material 60 40
 SAP AG 2002
 When working with the strategies for make-to-order production, the sales order is the pegged
requirement.
 In addition to classic make-to-order production, planning without final assembly is also possible.
Moreover, different strategies for assembly processing exist in SAP R/3.
 To set the make-to-order production strategy (SAP R/3 strategy 20), it is not necessary to make an entry
in the proposed strategy of the SAP APO product master. In contrast to SAP R/3, SAP APO proposed
strategies pertain to planned independent requirements only. Sales orders cannot be entered in SAP
APO; they bring their settings with them from SAP R/3.

4.14
Make-to-Order Production
R/3 APO
Strat. 20 Strat. ‚_‘
Sales order 1 Sales order 2

Material A Material A

Delivery
Delivery
Production Production
Customer stock Customer stock

Finished product Finished product
 SAP AG 2002
 For make-to-order production (SAP R/3 strategy 20), each sales order is planned separately and
managed in its own section in the MRP list or the current stock/requirements list.
 The system does not perform a net requirements calculation between individual sales orders or with the
anonymous warehouse stock.
 In make-to-order production, the lot-for-lot order quantity is used as the default setting for the lot-sizing
procedure, regardless of the entry you have made in the material master record. Depending on the setting
of the lot-size indicator in the material master record, you can define a different lot size for make-to-
order production from the one used in make-to-stock production.
 Using the "individual/collective" indicator, you can allow make-to-order production at any level of the
BOM structure.
 You cannot switch the produced quantities from one sales order to another -the produced quantities are
managed directly for each individual sales order (in the individual customer stock).
 A goods issue to the sales order reduces the individual customer stock and the requirement. As soon as
the sales order is completed and the individual customer stock depleted, the individual customer segment
disappears from the current stock/requirements list or the MRP list.

4.15
Individual / Collective Indicator
To be set in the material master (can be overruled in the BOM)
Sales Sales
order A order B
Qty 10 Qty 12 Pump
Indiv./collect. Indiv./collect.
ind. = 1 MRP List: Pump ind. = 2
Date MRP Element Quantities Avail.
Shaft Spiral casing
Today Stock 0
Today Order A 0
MRP List: Shaft MRP List: Spiral casing
Date Planned order 123 10 10
Date MRP element Quantities Avail. Date Order A 10- 0 Date MRP element Quantities Avail.
Today Stock 0 Today Order B 0 Today Stock 5
Today Order A 0 Date Planned order 124 12 12 Date Planned order 127 17 22
Date Planned order 125 10 10 Date Order B 12- 0 Date Dep. reqmts pump 10- 12
Date Dep. reqmts pump 10- 0 Date Dep. reqmts pump 12- 0
Today Order B 0
Date Planned order 126 12 12
Date Dep. Reqmts Pump 12- 0
 SAP AG 2002
 The individual/collective indicator in the material master record determines whether a component is
procured for a special customer requirement in the individual segment.
 The indicator "1" for individual requirements means that the material is being specially manufactured or
procured for a sales order. A special individual segment is created for each requirement. An individual
requirement is only created if the higher-level material does not create a collective requirement.
 The indicator "2" for collective requirements means that the material is produced or procured for various
requirements. You can find these requirements in the net requirements segment.
 The indicator "blank" means that the component is to be planned in the same way as the higher-level
assembly.
 In the above example, two individual segments are created for the shaft for sales orders
A and B.
 If you want to control the material item individually for the respective BOM, use the "explosion control"
field in the component's item data (general data view). The setting in the BOM overrules the setting in
the material master record.

4.16
Availability Check
R/3
ATP (Available-To-Promise)
 Check per location (Plant)
Check against planned independent requirements only

 Check against consumption with planning only
Global Available-to-Promise APO

 Check for sales orders
 Product check and forecast check possible
 Cross-location and rules-based availability check possible
 Production start possible even when there is no
availability
 SAP AG 2002
 The ATP check has a large number of applications. Amongst others, it can be used in sales orders,
production orders or during goods movements. Therefore, when you create a sales order, the system
checks, within the framework of the ATP check, whether there is enough stock available in the
warehouse for the required material. The system can also check if receipts (for example, production
orders and planned orders) have already been planned by the requested date. If the reply is positive, the
sales order can be confirmed.
 In SAP R/3 you have the option of performing availability checks according to ATP or against planned
independent requirements.
 For sales orders, you can carry out the ATP check in SAP APO within the framework of Global
Available-to-Promise. For the materials concerned, you specify in the integration model that the ATP
check should be executed in the sales order in SAP APO. The possibilities of the Global Available-to-
Promise go beyond those of the SAP R/3 ATP check.

4.17
Availability Check Using ATP Logic
Production and planned orders
Stock (+)
Sales orders
(-)
Confirmed quantities ATP quantities
 SAP AG 2002
 When performing an availability check using ATP logic (Available-to-Promise), the system checks
whether all requirements are covered by existing receipts and whether the receipts' quantity proportions
are still available to cover newly received requirements. These open quantities, which have not yet been
assigned, are added together to give the ATP quantity.
 In the availability check using ATP logic, the system checks whether the requirement quantities are
covered by specially defined receipt and goods elements or by a specific stock. If you can confirm a
quantity for the requirement date, this quantity is flagged as confirmed in the requirement and the ATP
quantity of the material is reduced accordingly. In the next availability check, you can only confirm
requirements for the amount of the remaining ATP quantity.
 During a component availability check in a planned order or a production order, the system copies the
result of the component check to the order header as the confirmed quantity and the order confirmation
date.

4.18
ATP Check for Sales Orders in SAP APO
Sales order ATP Requests from Sales Orders
Confirmation
R/3 APO
ATP request
Sales (SD) ATP check
Save sales order
Optional if a product is not available Produce
Production
Sales order Planning/Detailed
Planned order Scheduling
Planned order (PP/DS)
Possible reaction if a product is not available
 SAP AG 2003
 In the SAP R/3 APO interface, you can specify in the integration model that the availability check (ATP
check) in the sales order is not to be performed in SAP R/3, but rather in SAP APO. If you create a sales
order in the SAP R/3 System, an ATP request will be sent to SAP APO. The system firstly checks
whether there is enough stock available for this product and whether receipts (for example, production
orders, planned orders) have already been planned by the requested date.
 For non-availability, you can set the ATP check so that the system performs an availability check for the
product in a different location or for an alternative product. Moreover, for non-availability of the
product, you can specify that the sales order directly triggers production: In this case, SAP APO creates
a planned order for the desired quantity in PP/DS. The system can then take capacity constraints
(available capacity and even receipts that have already been planned) into consideration. In addition,
component availability can be checked. If there are no longer any capacities available for the desired
date, the system searches for a new date for the planned order to be created. The availability date of the
newly created planned order (finish date) is passed back to the SAP R/3 sales order and copied as the
internal confirmation date.

4.19
Availability Check w. Plnd Ind. Reqmt Allocation
Plnd. indep. reqs
(FCreq)
(FCreq) Time
01.05. 01.06.
Sales order Check takes place

against planned
Sales Sales
independent
Time
Order Order requirements only.
Warehouse stock and
10.05. 20.05.
fixed receipts are not
taken into account.
Allocation
20.5.
(FCreq)
10.5.
Sales Sales Time
Order Order
fully partly
confirmed confirmed Rest cannot be
delivered until
01.06.
 SAP AG 2002
 In the check against planned independent requirements, the system only checks against the planned
independent requirements quantities, that is, no ATP quantities are included in the availability check.
 In this check, the system uses the consumption mode (in the above example, a backward consumption)
and the corresponding consumption periods.
 Generally, you can define the type of availability check to be carried out by the requirements class in the
strategy. In the SAP R/3 strategy 50 (planning without final assembly) you can only carry out the
availability check against planned independent requirements, for technical reasons. In the SAP R/3
strategy 60 (planning with planning material), you can check against the planned independent
requirements of the planning material, when processing the sales order.

4.20
Demand Management:Unit Summary (1)
 Planning takes place using planned independent

requirements
 A demand program consists of planned independent
requirements, sales orders and, if necessary, stock
transfer requirements.
 In make-to-stock production, production is triggered
and warehouse stock is created, based on planned
independent requirements. Demands are met by
warehouse stock.
 In sales order-based production, a material is
produced for a specific sales order. Subassembly
planning can take place irrespectively.
 SAP AG 2002

4.21
Demand Management: Unit Summary (2)
 The ATP check plays an important role in sales order

processing or in the execution of manufacturing
orders.
 An ATP check for sales orders can be executed in
SAP R/3 and in SAP APO.
 SAP AG 2002

4.22Demand Management Exercises
Unit: Demand Management

Topic: Planning with Final Assembly

• Create planned independent requirements
• Understand the consumption of planned independent
requirements and sales orders.
Pumps with the material number R-F1## (## represents your
group number) are produced in plant 1000. Demand management
and material requirements planning for these pumps takes place
in SAP R/3.
Planned independent requirements should be consumed by sales
orders so that the pumps can be planned using planning with final
assembly.
1-1 For pump R-F1##, it is important that incoming sales orders are supplied quickly.
Production of the pumps takes a certain amount of time and thus needs to be planned in
advance, that is, procurement of the pumps should take place before concrete sales
orders arrive. Production of pumps in plant 1000 should be planned using planning
with final assembly. First of all, change the material master of pump R-F1## in plant
1000 in the following way (to change the material master, call it up from the
production master data in SAP R/3):
1-1-1 Once you have accessed the transaction, enter Material R-F1##, on the
following screen select the views MRP 1 and MRP 3 and enter Plant 1000 as
the organizational level.
1-1-2 Have a look at view MRP 1. Make sure that the MRP type MRP and the lot-
size EX are set. What are the consequences of these settings?
___________________________________________________
What MRP controller is responsible for the planning of this material?
___________________________________________________
1-1-3 By choosing Enter, you access the next marked view, that is, view MRP 3.
Make sure that the following settings have been made: Strategy group 40,
consumption mode 2 and a time period of 30 days as consumption periods
backwards and forwards. Between which of the requirement elements that you
have set here, does consumption take place?
___________________________________________________

1-1-4 Exit the material master, using Save.
1-2 Create planned independent requirements for material R-F1##.

1-2-1 For the coming months, sales and distribution expects sales figures of the
following amounts:
Current month + 2 70 pc
Current month + 3 80 pc.
Create corresponding planned independent requirements. To do this, use the
transaction Create planned independent requirement, which you can call up
from the program planning menu. In the initial screen of the transaction, enter
material R-F1##, plant 1000 and version 00. Use months as the planning
period. By pressing Enter, you reach the planning table, in which you need to
enter the requirements quantities given above. Save the requirements.
1-2-2 In the current stock/requirements list that you call up from the material
requirements planning menu, look at the requirements that you have just
created. In the initial screen enter your material number and the plant and then
call the list up by pressing Enter.
Are the requirements displayed? ______________________
Are the requirements covered by procurement elements? Why (not)?

____________________________________________________
____________________________________________________
1-3 To cover the requirements you have just created with procurement elements, and to
achieve a balanced requirements/stock situation, you need to carry out multi-level
material requirements planning.
1-3-1 Call up single item, multi-level in the material requirements planning menu. In
the initial screen enter material number R-F1## and plant 1000. Start the
planning run by choosing Enter twice. The statistics are displayed at the end of
the planning run
How many materials were planned in the planning run (only one or more than
one)? Why?
____________________________________________________
____________________________________________________
1-3-2 Take another look at the current stock/requirements list (if the list is in another
mode, refresh it). Were procurement elements created? If yes, which ones?
____________________________________________________

What is the available quantity at the end of the list?
____________________________________________________
Is a balanced stock/requirements situation available for material R-F1##?
____________________________________________________
1-3-3 Material requirements planning results in planned orders. Would procurement
of pumps be initiated based on these planned orders, even without the existence
of concrete sales orders? Why (not)?
____________________________________________________
____________________________________________________
1-4 A customer orders 30 pumps for the current month + 3. To simplify matters, this sales
order should be created in the form of a corresponding customer requirement (we are
only interested in the impact of a sales order in MRP):
1-4-1 From the demand management menu, call up the transaction Create customer
requirement. In the initial screen, enter delivering plant 1000 and then
confirm this using Enter. In the following entry screen, enter the Req. deliv.
date as the fifteenth day of the current month + 3. Reconfirm using Enter
and create a customer requirements item containing the following data:
Material: R-F1##
Order quantity: 30 pc.
Confirm your entries using Enter.
The procurement type KSV (sales order with consumption)

is determined using the strategy group entered in the material
master.
Save the customer requirement.

1-4-2 Look at the current stock/requirements list (if the list is in another session,
refresh it). Is the customer requirement that you just created displayed?
____________________________________________________
1-4-3 Does the customer requirement have an influence on the MRP-available
quantity (does the MRP-available quantity change to the date of the customer
requirement)?
____________________________________________________
What is the available quantity at the end of the list?
____________________________________________________
1-4-4 You have just realized that the available quantity at the end of the list is still
zero. The customer requirement is relevant for requirements and has been added

to the planned independent requirements. How do you explain that all
requirements can still be covered in total?
____________________________________________________
____________________________________________________
1-5 Consumption has obviously occurred between the planned independent requirements
and the customer requirement. Analyze the consumption situation using the current
stock/requirements list:
1-5-1 From the current stock/requirements list of material R-F1## (plant 1000),
execute the function Environment→ Total reqmts display. The stock situation,
including consumption is displayed. Which planned independent requirement
(which month quantity; note the date and quantity) does the sales order
consume?
____________________________________________________
1-5-2 Return to the list and look at the month quantity (that is displayed for the first
workday of the month). What quantity is displayed?
____________________________________________________
Give a reason for the result:
____________________________________________________
____________________________________________________
Consumption of planned independent requirements by the

customer requirement causes changes to the requirements
situation to occur (the dates of the requirements are
rescheduled by the concrete customer requirements). A new
planning run would react to this new requirements situation
by creating new procurement suggestions. This step has not
yet been executed.

4.23Demand Management Solutions
Unit: Demand Management

Topic: Planning with Final Assembly
1-1 SAP R/3 menu path: Logistics → Production → Master Data → Bills of Material →
Bill of Material → Material BOM → Display
1-1-1
1-1-2 Consequence of settings: If you set MRP type PD, the material requirements
planning is set. Using the lot-size EX, shortage quantities are satisfied
exactly.
MRP controller: MRP controller 0## is responsible for planning.
1-1-3 Requirement elements with consumption: Customer requirements consume
planned independent requirements.
1-2
1-2-1 SAP R/3 menu path: Logistics → Production → Production Planning →
Demand Management → Planned Independent Requirements → Create
1-2-2 Menu path: R/3 Logistics→ Production→ MRP→ Evaluations→

Stock/requirements list
Are the requirements displayed? Yes, the requirements are displayed.
Requirements covered by procurement elements? No, the requirements are
not covered by the corresponding procurement elements, as an MRP run
has not yet been carried out.
1-3
1-3-1 SAP R/3 menu path: Logistics→ Production→ MRP→ Planning→ Single-
Item, Multi-Level
Materials in the planning run: 10 materials were planned. In multi-level
planning, in addition to the header material, all materials (planned using
MRP) in the BOM structure are planned.
1-3-2 SAP R/3 menu path: Logistics→ Production→ MRP→ Evaluations→
Procurement elements created? Yes, planned orders were created to cover
the requirements.
Available quantity at the end of the list: The available quantity at the end of
the list is zero pieces.
Balanced stock/requirements situation? Yes, the stock/requirements situation
has thus been balanced out: The amount of procurement elements equals
the amount of requirements.
1-3-3 Procurement of pumps already initiated? Yes, the procurement of the pumps would
be initiated, as planned orders can be converted into production orders. The aim
of planning with final assembly is to initiate procurement before concrete sales
orders arrive.
1-4
Demand Management → Customer Requirements → Create
1-4-2 SAP R/3 menu path: R/3 Logistics→ Production→ MRP→ Evaluations→
Customer requirements displayed? Yes, the customer requirement is
displayed with dates and quantities.
1-4-3 Influence on MRP-available quantity? Yes, customer requirements have an
effect on MRP.
Available quantity at the end of the list: The available quantity at the end of
the list is zero pieces.
1-4-4 Explanation: The planned independent requirements have been consumed
by the customer requirement.
1-5 SAP R/3 menu path: Logistics→ Production→ MRP→ Evaluations→

1-5-1 Month quantity with consumption: Consumption (assignment) takes place
with the month quantity of the current month + 3, the requirements
quantity amounts to 80 pieces.
1-5-2 Displayed quantity in the list? In the current stock/requirements list, a
planned independent requirements quantity of 50 pieces is displayed for
the first workday of the current month + 3.
Explanation: Only the non-consumed amount of the planned independent
requirement is displayed, as only this percentage is relevant to MRP. The
consumed amount is adopted by the customer requirement.

5
Contents:
 Supply Network Planning (SNP)

 Integration between SAP R/3 and SAP APO
 Purposes and environment
 Master data
 Heuristic
 Capable-to-Match and optimization as further planning methods
 SAP AG 2002
(C) SAP AG SCM200 1

5.2
Supply Network Planning: Unit Objectives
 Describe the Supply Network Planning distribution

network
 Describe the Supply Network Planning process
flow
 Identify the master data that is required to run
 Describe and compare the planning methods used
in Supply Network Planning
 SAP AG 2002
(C) SAP AG SCM200 2

5.3
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2002
(C) SAP AG SCM200 3

5.4
Supply Network Planning Overview
R/3 APO
R/3 APO
Standard SOP (DP)
Demand Management CIF Supply Network

Planning (SNP)
Planning (MRP)
Production
Planning (CRP)
 SAP AG 2002
 Supply Network Planning within SAP APO SNP is used for cross-location planning of the supply and
procurement network.
 Supply Network Planning is based on demands that are predetermined in the form of sales orders or
planned independent requirements. These demands are fulfilled by in-house production, stock transfers
from other plants or by external procurement from external suppliers. It also takes into account capacity
constraints of the network.
 SNP is a medium-term planning tool that plans procurements roughly. The time bucket profiles
(buckets) that can be seen in SNP are at least one day long. Detailed Production Planning and Detailed
Scheduling using exact times then takes place in SAP APO PP/DS (or also in SAP R/3 MRP).
(C) SAP AG SCM200 4

5.5
Advantages of Supply Network Planning in SAP
APO
 Cross-plant mid-term rough-cut planning

 Simultaneous material planning and finite capacity planning of
production, storage, and transportation resources
 Simultaneous production planning and distribution resource
planning
 Planning of critical components on bottleneck resources
 Cross-plant optimization of the resource load
 Prioritization of demands and receipts
 Collaborative procurement planning over the Internet
 Detailed distribution planning (deployment)
 Collective conversion of stock transfer requisitions
 SAP AG 2002
(C) SAP AG SCM200 5

5.6
SNP Process Flow
Planning horizon
Demand Planning
(plans future demands for DCs)
Supply Network Planning (SNP)

(generates feasible receipts for
supply chain demands)
Production Planning/Detailed Scheduling

(plans in detail the production of a
plant)
Shop floor control (SFC)
 SAP AG 2002
 Demand Planning enables you to predict material requirements based on historical and statistical
forecasting techniques. Demand planning data is usually bucket-oriented and unconstrained. The
forecast data is then released to Supply Network Planning to create constrained and feasible production
and distribution plans.
 Supply Network Planning is usually a medium-term planning process.
 Production Planning and Detailed Scheduling is used for short term, order-based planning.
(C) SAP AG SCM200 6

5.7
Demand Program
Warehouse requirements
Forecast
Plnd. ind.
reqmts
Customer requirements
Sales
Sales
orders
Stock transfer requirements
Demand program

Coverage of requirements by
 SAP AG 2003
 Demand Management pertains to the administration of independent requirements. Independent

requirements can be entered directly for a production plant. They can also be derived from demand
planning.
materials concerned, without having to wait for concrete sales orders. Sales orders (customer
independent requirements) are created by sales and distribution. Sales orders can enter MRP directly.
This is desired when customer-specific planning takes place.
 Stock transfer requirements, that is, requirements from other locations of the Supply Chain (distribution
centers, for example) can, in addition to the independent requirements that have been entered in the
production plant, also enter the demand program.
(C) SAP AG SCM200 7

5.8
Planning Horizons in Supply Chain Planning
Demand Planning
(Plans the future demands for plants, DCs, and customers)
Manufacturing Production Supply Network Planning

Execution (Cross-plant planning
Planning/Detailed of supply chain receipts)
Scheduling
(Plans production of a
plant in detail)
Deployment
TLB
Today Planning time fence SNP production PP/DS horizon

Stock transfer horizon horizon Time

SAP AG 2003
 Demand Planning (DP) enables you to predict customer demand by forecasting historical consumption
data, for example. Demand Planning data is usually bucket-oriented and unconstrained. Forcast data is
then released as planned independent requirements.
 Supply Network Planning is a bucket-oriented, medium-term, cross-plant planning process that plans
production outside of the SNP production horizon, and procurement outside of the stock transfer
horizon.
 Production Planning and Detailed Scheduling is used for short-term, order-based planning according to
sequences and setup times within the PP/DS horizon. The planning run does not create any new orders
within the planning time fence. In this way, production is not disrupted.
 The planning time fences of SNP and PP/DS overlap if the SBNP production horizon is smaller that the
PP/DS horizon. In this horizon, SNP determines the receipts that have favourable sources of supply and
lot-sizes. PP/DS plans the receipts created by SNP in more detail.
 Deployment and Transport Load Builder (TLB) are part of the SNP module and are used for short-term
replenishment planning to adjust stock transfers according to short-term changes on both the
demand and the receipt side.
(C) SAP AG SCM200 8

5.9
Transition from Medium to Short-Term Planning
Plnd. ind. Sales Plnd. ind. Sales

reqmts orders reqmts orders
Planned orders SNP planned

Purch. requis. orders
Stock transfers Purch. requis.
Stock transfers
Production Planning/
Detailed Scheduling Supply Network Planning
 Production BOM and routing  SNP BOM and routing
 Finite, detailed planning per plant  Finite cross-plant planning
 Sequences and setup times  Distribution and procurement
 Continuous and order-related  Quantity-oriented and bucket-oriented
 Pegging  No pegging
Today PP/DS horizon Time

 SAP AG 2003
SNP production horizon
 Network planning within SAP APO SNP takes place outside of the SNP production horizon. In the
PP/DS horizon, however, Production Planning/Detailed Scheduling takes place, that is, detailed planning
of procurement in a plant. It is possible, and also makes sense that the two horizons overlap, and that the
PP/DS horizon is behind the SNP production horizon.
 SNP Planning is based on SNP bills of material and routings, most of which are usually simplified
production plans. SNP bills of material , for example, usually contain only the strategically important
components for which foresighted planning is necessary, whereas procurement of the remaining
components is only planned in plant-specific Detailed Scheduling. SNP planned orders that are based on
this simplified master data can be converted into planned orders in Detailed Scheduling.
 Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all
dependent orders can be adjusted automatically. This function is only available in Production Planning
and Detailed Scheduling. Supply Network Planning is based purely on quantities and buckets.
(C) SAP AG SCM200 9

5.10
Integration of SNP and PP/DS Orders
SNP
Start Date End Date

Operation 10 Operation 30
10 20 30 10 20 30
PP/DS
Today SNP prod. PP/DS Time

horizon horizon
 SAP AG 2003
 The PP/DS horizon and the SNP production horizon are both defined in calendar days from today's date
onwards. The PP/DS horizon can be defined globally in the definition of the planning version. You can
define both horizons for each product in the location-specific product master on the PP/DS tab page. The
settings in the product master override the global settings. Both horizons can overlap to define an area
where SNP may plan alongside PP/DS.
 SNP planned orders can only be created or changed in SNP; PP/DS planned orders in PP/DS only. The
SNP planning run only creates SNP planned orders that have an end date that is outside of the SNP
horizon. Automatic PP/DS planning only covers requirements within the PP/DS horizon.
 The PP planning run deletes all non-firmed SNP planned orders that have an end date within the PP/DS
horizon, and creates PP/DS planned orders for the requirements (planned independent requirements,
sales orders, releases for stock transfers and so on) within the PP/DS horizon.
 You can also find the settings 'Fix production' and 'Fix transports' in the product master. If these
indicators have not been set, SNP planned orders within the production horizon, or external procurement
within the stock transfer horizon are deleted by PP/DS.
 If for example, SNP planned order cover requirements outside of the PP/DS horizon, they are deleted in
the PP/DS planning run and no PP/DS planned orders are created. To prevent this, the SNP planned
orders must be converted into firmed PP/DS orders before the PP/DS planning run. You can trigger this
conversion interactively from the product view or periodically plan a background conversion in PP/DS.
During conversion, you can define whether firmed or unfirmed orders are created with or without a
conversion indicator. Moerover, you can set the lot-sizing procedure with which orders are to be created
and whether the SNP sources of supply are to be copied. The end date of the SNP planned order is used
in scheduling. You can find conversion under Production Planning -> Environment -> Conversion of
Supply Network Planning -> Production Planning in Background

5.11
Integration of SNP and SAP R/3
R/3 APO
R/3 APO
Plnd. indep. reqmts Demand Planning
Purchase
requisition
Supply Network
Stock transport
Planning (SNP)
requisitions
Planned orders Planned orders
Production
Production orders Planning/Detailed
Scheduling (PP/DS)
 SAP AG 2002
 Planned independent requirements come from SAP R/3 demand management or from SAP APO
Demand Planning.
 Sales orders come from the SAP R/3 Sales and Distribution module.
 SNP generates stock transfers and planned orders. These planned orders can either be converted into
production orders in SAP R/3, or planned in detail in SAP APO PP/DS and transferred to SAP R/3 as
production orders. Detailed Scheduling can thus take place in either SAP R/3 or SAP APO.

5.12
Purposes of Supply Network Planning
 Supply Network Planning takes place in the medium to long-

term horizon. It creates a rough quantity-based, cross-
location production and distribution plan with individual
rough-cut bills of material (BOM) and routings.
 The SNP BOM contains critical products that are to be
produced on bottleneck resources and products with a long
replenishment lead time.
 SNP ensures that the correct quantity is available on the
correct day without overloading critical resources. The
smallest unit used for scheduling is one day.
 SNP supports make-to-stock production only.
 SAP AG 2002
 The purpose of SNP is to match a feasible procurement plan to the demand plan (from SAP APO DP, for
example). To do this, it checks global and central procurement, stock transfer, and production
possibilities. It then creates a feasible solution based on this.
 Simulation scenarios enable you to create and compare alternative plans.
 Using make-to-stock production strategies, production or procurement is planned, using planned
independent requirements that arise from the forecast of expected future sales. According to the choice
of strategy, sales orders can affect requirements, consume planned independent requirements, or have no
effect on planned independent requirements. In make-to-stock production, sales orders are usually
fulfilled by warehouse stock. The identification number for strategies in SAP R/3 and SAP APO is
usually different, because an SAP APO strategy can contain more than one SAP R/3 strategy. SNP
supports the following SAP R/3 strategies: 10, make-to-stock production, and 40, planning with final
assembly.

5.13
Planning of the Complete Supply Chain
Production
process model
Production
plant Manufacturer
DC
Customer DC
Supplier plant
Supplier
warehouse
 SAP AG 2002
 Different planning methods can be used to create cross-location, feasible plans for material flow along
the supply chain, taking demand constraints and penalty costs into account. This results in optimized
purchasing, production and distribution decisions, reduced stock levels, and improved delivery
reliability.
 Possible demand constraints are material availability and free availability of work center capacities,
storage capacities, transportation capacities and handling capacities.

5.14
Locations in the Supply Network
 Locations are only differentiated

by location type symbols on the
map (exception: VMI) Supplier Plant DC Customer
 Products can be stored at any
location
 Demands can be fulfilled by any
location
 Any location can be assigned
storage, handling, supply, and
production capacities.
 Storage and purchase costs can
be defined per location for each
product.
Transportation MRP Stock transfer Carrier

zone area point
 SAP AG 2002
 Production, shipping, and storage calendars can be defined for each location.
 A handling and a storage resource can be assigned to a location to represent aggregated handling and
storage capacity.
 The geographical data is used to position the location on the geographical map of the Supply Chain
Engineer. Predefining it as a part of the location data forces the location to be positioned at a specific
point on the map. If you leave these fields blank, they are filled automatically when you place the
location on the map.
 The VMI customer tab page only applies to the location type '1010' (customer). The Crr. tab page is only
activated when you select the location type '1020' (Carrier).
 Input fields that are not available to other location types are activated for location type '1007' (MRP
area).
 For each location, you can defíne costs for storage, handling, procurement and production, and penalty
costs for non-delivery. Procurement costs are used to choose suppliers, and production costs to choose
production process models (PPMs). An integrated cost consideration is executed during the SNP
optimization run.

5.15
Transportation Lanes
Transportation lanes control the flow of material along

the supply chain
 Procurement
 Means of transport
 Products that can be
delivered by a means of
transport.
 Transportation capacity
by volume, weight,
pallets
 Transportation costs
per unit, product and
means of transport
 SAP AG 2002
 A transportation lane in SAP APO represents a business relationship between locations, which you can
use to transport goods. The lanes and the locations represent the supply chain network. Material flow is
defined by the direction of the transportation lane from start-location to destination-location. These
transportation lanes enable you to:
 Define the product procurement parameters such as lot sizes, cost functions, unit costs, and lane
priorities
 Define the means of transport (truck, ship, airplane, and so on) for each lane and the related
parameters such as transportation costs, distances, and times
 Assign product-specific means of transport
 Assign carriers to the lanes.
 You can view the lane-relevant data from the Supply Chain Engineer menu or on the map. You can, for
example, display a list of all products that are assigned to a certain transportation lane.

5.16
Resource Categories
Production Transportation
Storage Handling
 SAP AG 2002
 You use bucket resources for the bucket-oriented, medium and long-term planning of Supply Network
Planning. The smallest time unit that can be used in bucket resources is one day.
 You can define the capacity of a bucket resource as:
 Quantity (without time base) - by defining the transportation capacity of a truck or the storage
capacity of a warehouse, for example.
 Rate (quantity with time base) - this defines the consumption or production capacity of a resource, for
example; in other words, the quantity that is consumed or produced on a working day at the resource.
 You can use transportation bucket resources to model the capacity of transport fleets in order to avoid
overloading them.
 You can use storage bucket resources to model the capacity of storage locations in order to avoid
overloading them.
 You can use handling bucket resources to model the capacity of forklifts, conveyor belts, or pipelines in
order to avoid overloading them.

5.17
Structure of Plan and PPM
Plan (location-independent) PPM

Product, location,
Control costs lot-size area
Operations:
 Material staging Activities:

 Pre-assembly  Produce  Product In/Out
 Final assembly  Tear down  Relationship Sequence
 Inspection  Queue time  Resources
Resource consumption
 SAP AG 2002
 The detailed information required for producing a product is specified in the plan. Each plan includes
one or more operations. Each operation includes one or more activities, the components consumed by
the activity, the resources used and their sequence within the operation.
 The plans used for SNP are usually less detailed than those used for Production Planning and Detailed
Scheduling (PP/DS).

5.18
Options in Supply Network Planning
Medium to long-term planning strategies
Infinite  Heuristic: Resources and material availability are not

scheduling checked when creating planned orders and SNP stock
transfers.
Finite  Capable-to-Match (CTM) and optimizer: Simultaneous

scheduling quantity and capacity requirements planning, SNP
resources and material availability are checked when
creating orders.
Short-term replenishment planning (deployment)

 Heuristic and optimizer: Adapts stock transfers to the
current demand/receipt situation.
 Transport Load Builder (TLB):
Groups together stock transfers
 SAP AG 2002
 Supply Network Planning in SAP APO can be executed as finite or infinite planning.
 Capacities are not checked in infinite production planning. Receipts (planned orders and SNP stock
transfers) are created with appropriate dates, even when no remaining capacity is available. Even when
components cannot be procured on time, planned orders are still created. Capacity requirements planning
then takes place in a second step.
 During finite planning, when receipts are being created, the availability of capacities and components
needed for production is checked. Only when sufficient capacity is available can the planned order be
created. If there is no capacity remaining for the desired time, the planned order is created earlier or later
(when capacity is available) and this delay is indicated by a corresponding alert. CTM and the optimizer
create feasible medium term procurement, production, and distribution plans.
 Deployment distributes the stocks and available receipts from the plants to the DC and vendor managed
inventory customers (VMI). Stock transfers are adjusted to the current situation.
 The Transport Load Builder takes transportation capacities into account and groups together the
deployment stock transfers into TLB shipments.

5.19
SNP Process Flow
Set up master data and

supply chain model
Build shipments for Release demand plan

non-assigned
deployment orders
Perform SNP heuristic,
optimization, or CTM run
TLB run
Deployment
run
Check plan/
Release constraint- Solve problems
based SNP plan
to DP
Finalize SNP plan
(available to PP/DS)
 SAP AG 2002
 When the demand plan is released from Demand Planning, planned independent requirements are
created for SNP or PP/DS. Either the demand planner or the SNP planner can perform this step.
 Performing the SNP run using the SNP heuristic, SNP optimization, or Capable-to-Match results in a
medium term production and distribution plan.
 After the SNP run, check the exception messages (alerts) and solve any existing problems.
 The final SNP plan consists of SNP stock transfers, and SNP planned orders. SNP planned orders can be
automatically converted into PP/DS planned orders in the production horizon. Production Planning and
Detailed Scheduling (PP/DS) uses these PP/DS planned orders as a basis for removing detailed
bottlenecks and to create a feasible production plan.
 The final SNP plan can be returned to DP to compare the unconstrained demand plan with the
constrained SNP plan.
 Once production planning has been completed, the deployment run confirms the SNP stock transfers
based on current receipts and demands.
 The TLB run groups the confirmed deployment stock transfers resulting from the deployment run into
TLB shipments.

5.20
SNP Planning Using Heuristics
2 30
%
%
70
1. Demand
no stock
3. Explosion of PPM 2. Valid transportation
Create and schedule lanes, quota arrangements,
receipts priorities
 Quantity-based, rapid, cross-plant planning

 Planning against infinite capacities
 Time-based aggregation (on weekly bucket profiles, for example)
 SAP AG 2002
 The role of the heuristic is: To plan supply to cover demands, without taking demand constraints such as
available capacities and material availability into consideration (infinite planning); cross-plant bucket-
oriented planning of receipts for purchasing, production, and distribution in the complete delivery
network; and finally, the synchronization of activities and planning of material flow throughout the
whole supply chain.
 This graphic shows an example of the heuristic procedure.
 There is a demand in the distribution center. The net requirements calculation finds no stock. The
product is procured externally. The system analyzes possible transportation lanes. The demand is
distributed according to quota arrangements and passed on to the plants using stock transfers.
 There is no stock in the plants, the SNP plans (PPMs) are thus exploded, planned orders are created
for the finished product, and dependent requirements are created for the components. The planned
order with the higher quota arrangement in the plant is not feasible due to capacity reasons. An alert is
generated and the planner has to step in interactively.
 Procurement for components takes place over the possible transportation lanes according to quota
arrangements or priorities. The supplier with the highest priority cannot deliver enough. An alert is
generated and the planner has to step in.
 The heuristic can thus be implemented for rapid, cross-plant distribution and procurement planning, for
example, if demand constraints do not play a role.

5.21
Capacity Leveling
Time-based capacity leveling
Capacity load
BACKWARD FORWARD
100 %
Day 1 Day 2 Day 3 Day 4 Day 4
 SAP AG 2002
 The planner can use the following procedure to adjust the plan to the available capacities:
 Backward scheduling of the capacity load to satisfy demand with high priorities without due date
violations. This rescheduling does not create any orders in the production horizon, however. Forward
scheduling of the capacity load related to demand with lower priorities and minimization of due date
violations based on demand priorities.
 A combination of backward and forward scheduling of capacity load.
 If you choose time-based capacity leveling, you can select different priority rules. If you do not select a
priority rule, the priority is determined by the system and is completely random. If, for example, you
choose "Time-Based Capacity-Leveling by decreasing order quantity", the system levels the largest
order first, then the second largest and so on. If you choose "Time-Based Capacity-Leveling by
decreasing storage capacity", the system levels the order with the largest storage capacity, then the one
with the second largest and so on. If you choose "Time-Based Capacity-Leveling by decreasing product
priority", the system levels the order with the highest priority, then the one with the second largest
priority and so on.
 Product priority is maintained in the product location master record on the SNP2 tab page.

5.22
SNP Planning Using Capable-to-Match (CTM)
30 %
70 %
2
1
1. Demand
no stock
schedule receipts, check lanes, quota arrangements,
capacity requirements and priorities
component availability
 Order-based, cross-plant planning

 Planning against finite work center capacities
 Prioritization using rules
 Determination of the first feasible solution
 SAP AG 2002
 Capable-to-Match (CTM) is a rules-controlled, cross-plant planning procedure that takes demand

constraints such as available capacity and material availability into account in the planning run.
 The feasibility of receipts is successively checked according to priorities or capacities and the first
feasible solution is planned.
 Capable-to-Match (CTM) sequentially levels prioritized customer requirements and forecasts against
feasible receipts in the network, during which component availability and production capacities are
considered on a multi-level basis. CTM plans the first feasible solution. This is not necessarily the
optimal solution for subsequent demands.
 This slide shows an example of CTM:
 There is a demand at the distribution center. The net requirements calculation finds no stock. The
product is procured externally. The system analyzes possible transportation lanes. CTM checks the
procurement of the finished product and of the components from the plant with the higher quota
arrangement. The complete amount cannot be procured. Procurement is distributed according to
feasability and passed on to the plants as stock transfers.
for the finished product, and dependent requirements are created for the components. There is capacity
in the plants to fulfill the planned orders. The planner does not need to step in.
arrangements or priorities. The suppliers are able to supply enough. The planner does not need to step
in.
5.23
Results of CTM Planning
Categorized Prioritized demands

Stocks Capable-to-Match
1.
2.
3.
4.
5.
6.
7.
8.
9.
Multi-site capacity and 10.
transportation capability check 11.
 SAP AG 2002
 In the CTM planning run, prioritized demands are leveled against available stocks and receipts. The
receipts and demands are then leveled taking production capacities and transportation possibilities into
account.
 The execution of a CTM planning run in the SNP environment produces a medium term production and
distribution plan.
 CTM complements SNP's cross-plant supply chain planning strategies. Its purpose is to perform a quick
check of production capacities and transportation capabilities based on a set of categorized supplies and
prioritized demands.
 CTM takes the following into account: Individual requirements, production capacity, component
availability, location priority and requirement priority, Pegging, ATP rules for product substitution and
splitting production between several resources. However, it does not take handling, storage, or
transportation capacities into account.
 CTM is an order-based planning tool that uses pegging methods to track orders back to the individual
requirement. Strictly speaking, CTM is therefore not quite SNP planning, because it provides quantity
planning rather than order-based planning. Nevertheless, CTM is considered in this unit, because it deals
with a form of cross-plant planning. After the optimization run (or after the heuristic run), it is no longer
possible to assign planned production orders or stock transfers to the original customer order.

5.24
Supply Network Planning Using the Optimizer
1. Demand
no stock
schedule receipts, check lanes and costs
costs and component
availability
 Quantity-based, cross-plant planning

 Planning against finite work center capacities, storage capacities, and
transportation capacities
 Prioritization using control costs
 Determination of the first feasible and optimal solution
 SAP AG 2002
 The SNP optimizer is a cost-based, cross-plant planning procedure that takes demand constraints such as
available capacity and material availability into account in the planning run.
 The optimization run (like the heuristic run) is a quantity-based planning without pegging. It is not
possible to assign planned production orders or stock transfers to the original sales order.
 This slide shows an example of the optimizer:
 There is a demand in the distribution center. The net requirements calculation finds no stock. The
product is procured externally. The system analyzes the possible transportation lanes. The optimizer
globally checks the most cost-effective procurement of the finished product and of the components.
The complete amount cannot be procured in the most cost-effective plant. Procurement is distributed
according to feasability and costs and passed on to the plants as stock transfers.
for the finished product, and dependent requirements are created for the components. There is capacity
in the plants to fulfill the planned orders. The planner does not need to step in.
arrangements or priorities. The suppliers are able to supply enough. The planner does not need to step
in.
 The optimizer takes into account periodic total demands, production capacities, handling capacities,
storage capacities, and transportation capacities, component availability, receipt and demand priority
using control costs, and the splitting of production between several resources.

5.25
How the Optimizer Works
Location products
Horizons
Constraints:
 Product priority
Simultaneous product  Production capacity
and resource planning  Storage capacity
Optimizer
 Transportation capacity
 Lot sizes
 Safety stock
Feasible receipts: Planned orders, stock transfers and

Result:
purchase requisitions
 SAP AG 2002
 The optimizer uses linear programming to consider all relevant factors simultaneously. It compares
alternative solutions for the incurred costs and proposes the best feasible solution based on constraints
defined in the system. You also use the control costs to configure your priorities such as minimizing
delays or minimizing on-hand stock. The optimizer considers all constraints in the supply chain model
that were activated in the optimizer profile. As more constraints are activated, the optimization problem
becomes more complex and the time required to solve the problem increases.
 The feasibility of the receipts is checked globally and the most cost-effective, feasible solution is
planned. Prioritization is controlled using control costs, that are maintained in SAP APO (exception:
Procurement costs from purchasing info records, scheduling agreements or contracts). The optimizer
ignores quota arrangements. They can, however, be optimized and created in the planning run.
 The optimization run (like the heuristic run) is a quantity-based planning without pegging. It cannot
assign planned production orders or purchase requisitions to the original sales order.

5.26
Purposes of Optimization
What should be optimized?
Optimal costs Optimal service level
Prerequisite: Prerequisite:
"Real" variable costs or an adequate "Simplified" costs accepted (Control
good estimate costs)
Non-delivery costs = Non-delivery costs = high

sales price + surcharge for Storage costs = > 0, << ND
customer loss/dissatisfaction Other costs = << ND
 SAP AG 2002
 "Optimal service level" on this graphic shows the simpler configuration. You maintain high non-delivery
costs (NC) and storage costs for the finished products using mass maintenance. The high non-delivery
costs force the optimizer to exhaust all possible procurement and production capacities to satisfy the
demands. The storage costs make sure that procurement and production are carried out as late as
possible.
 "Optimal costs" on this graphic shows the more complex configuration. You maintain realistic costs for
procurement, production, transportation, and storage. You model lost sales and customer dissatisfaction
using delay and non-delivery costs. In this scenario the optimizer uses the costs to determine the most
cost-effective integrated solution.
 The result of the optimization run is an optimal solution (minimum costs or maximum profit) taking
account of planning-relevant transportation, production, storage, and handling constraints. In that sense,
the solution is feasible. However, the result might be that due-date constraints are violated or safety
stocks are not filled. Due-dates and safety stocks are considered to be soft constraints. There are costs
associated with such violations, so the optimizer only proposes this solution if, according to the costs
specified in the system, it is the most cost-effective solution.

5.27
Comparison of SNP Strategies (1)
Heuristic: Optimizer:
CTM: Demand at a location

Dependent demand at loc.
Process flow
 SAP AG 2002
 The heuristic is a rapid infinite planning method that generates alerts when there is a material shortfall or
resource overload.
 CTM is a rules-based method with extensive prioritization capabilities and finite, global planning of
production resources. CTM provides order-based planning, using pegging methods to track orders back
to the individual requirement.
 The optimizer considers material and resource availability simultaneously. It uses linear programming to
consider all relevant factors simultaneously as one problem. In other words, sequential processing is not
used to determine a solution. The optimizer considers transportation, production, storage, and handling
costs to propose a minimum cost solution that meets the respective constraints.
 The lack of pegging of orders back to the individual requirement has the following repercussions: No
order-based planning takes place in Supply Network Planning. After the optimization run (or after the
heuristic run), no information relating to connections between particular planned production orders and
original sales orders can be determined (however, CTM can provide such information through order
tracking).

5.28
Comparison of SNP Strategies (2)
Heuristic Optimizer CTM
Speed + - 
Quality - + 
Prod. resources 2. Step, local global + global +
Other resources - global + -
Multi-level + + +
Costs - + -
Priorities - Product/location Location / prod.+
Quota arrangements + creates +
 SAP AG 2002
 The performance of the three planning methods can be approximated as follows: The heuristic is the
fastest method, CTM is the second fastest and the optimizer is the most complex and the slowest
method. This statement is only a rough guideline: If you plan a lot of orders per period and location
product, the performance of CTM and the optimizer is comparable since planning in CTM is order-
based.
 The quality of the planning results will be worst using the heuristic (infinite planning), the next best
result should be reached using CTM and finally, the best result is expected when using the optimizer, as
this algorithm weighs up all possibilities.
 The optimizer and CTM consider resources globally and finitely, while the infinite planning result of the
heuristic must be postprocessed interactively.
 The optimizer can consider transportation, storage and handling resources can be considered globally
and finitely, while the infinite planning result of CTM and the heuristic can be postprocessed
interactively.
 Costs are only relevant to the optimizer.
 CTM planning is controlled using priorities. There are product, location, order and due date,
procurement and stock transfer priorities. You set priorities for the optimizer using penalty costs for late
delivery and non-delivery.
 Quota arrangements are used by the heuristic and CTM. They can be optimized using the optimizer.

5.29
Supply Network Planning: Unit Summary
 You can display the distribution network of Supply

Network Planning using the Supply Chain Engineer.
The distribution network is made up of locations and
their reciprocal supply relationships.
 Supply Network Planning is a rough-cut planning tool
in the medium to long-term time horizon.
Production Planning/Detailed Scheduling then follows
on in the production horizon.
 Supply Network Planning can be executed using three
planning methods: Heuristic, CTM, and the optimizer.
 Supply Network Planning results in feasible
production and procurement plans.
 SAP AG 2002

5.30Supply Network Planning Exercises
Unit: Supply Network Planning


• Call up interactive planning in SNP
• Execute the heuristic run
• Evaluate the capacity situation for a resource
group number) are planned in SAP APO. In the first step of
planning, a demand plan is created in SAP APO Demand
Planning and then released to Supply Network Planning (APO
SNP) Using the SNP Heuristic, a rough production and
distribution plan is created in SNP, and checked in the production
plants for capacity overloads.
1-1 Carry out interactive SNP planning for product T-F2## in distribution center 2400. In
doing so, plan the requirements that were released from SAP APO demand planning.
1-1-1 Call up the transaction Interactive Supply Network Planning from the SNP
menu. To edit the planning situation for product T-F2## in location 2400,
choose Selection Window in the top left screen area. First of all, select “APO
Location Product” (in the “Show” field). Version 000 is already displayed
automatically. In the next row, enter APO –Location Product once again, and
on the right-hand side enter your product T-F2##. Copy the selection.
Finally, load the data for location 2400 (that is, product T-F2##) in the
planning table, by double-clicking on the corresponding selection line.
The planning data that previously existed (total demands) is displayed on the
right-hand side of the screen: Here you can see the forecasted sales figures for
location 2400.
1-1-2 Check whether the planned independent requirements that you released are also
displayed for distribution center 2500 and plant 1000. (Load the data by double-
clicking on the corresponding selection line in the selection screen). Make sure
that no receipts exist yet.
1-1-3 In which key figure are the planned independent requirements shown? (To
answer this question, double-click on the field “total demand”).
__________________________________________________
1-1-4 Make sure that no distributed demands and production orders exist for
production plants 1000 and 2300.

1-2 Plan the procurement network:
1-2-1 Proceed to the Change mode and run the Heuristic (network), by choosing the
corresponding button in the above right area of the screen. Note the message
that is displayed at the end of planning. How many location products were
planned?
_________________________________________________
1-2-2 Check the situation for product T-F2## for distribution center 2400 (Save your
planning if the system prompts you to). Were receipt elements created?
_________________________________________________
Which plants supply the receipts? (Look at the details of a cell using a right
mouse click for the key figure (planned) distribution receipts).
_________________________________________________
1-3 Check the capacity situation for resource T-L## in plant 1000 in the Capacity View:
1-3-1 Change the data view, by double-clicking on Planning book/data view
CAPACITY CHECK in the bottom right area of the screen.
Open the selection window and, under Show, select APO Resource. Version
000 is displayed automatically. In the next line, add APO resource again and
enter Ressource WT-L##_1000_001. Load the data for the resource into the
planning table. Are available capacity and capacity consumption displayed for
this resource?
_________________________________________________
Are there any capacity overloads?
_________________________________________________
1-3-2 If there are any capacity overloads, run Capacity Leveling in the change mode,
by choosing the corresponding button. First of all, choose Capacity Leveling
by forward scheduling and finally Time-based capacity leveling without
priority rule. The maximum load should be 100% and result quantities
should not be fixed. Save the result and select again.
Do capacity overloads still occur on resource WT-L##_1000_001?
_________________________________________________
If so, when do the violations occur?____________________
_________________________________________________

5.31Supply Network Planning Solutions
Unit: Supply Network Planning

1-1 SAP APO menu path: Supply Network Planning→ Planning→ Interactive Supply
Network Planning
1-1-1
1-1-2
1-1-3 Planned independent requirements key figure: Planned independent
requirements are displayed in the key figure “Forecast”.
1-2
1-2-1 Number of planned location products: 4 location products were planned:
Produkt T-F2## in locations 1000, 2300, 2400 and 2500.
1-2-2 Receipt elements created? Yes, receipt elements were created, these being
“Distribution receipts (planned)”.
Which plants deliver the receipts? The receipts are delivered from
production plants 1000 and 2300.
1-3
1-3-1 Available capacity and capacity consumption displayed? Yes, both available
capacity and capacity consumption are displayed.
Capacity overloads? Varies. As a rule, capacity overloads occur at the
beginning of the SNP planning period.
1-3-2 Further capacity overloads? Varies. As a rule, no further overloads occur.
If yes, when do capacity violations occur? It varies.

6
Contents:
 Material Requirements Planning (SAP R/3 MRP)

 Consumption-Based Planning and Materials Requirements
Planning
 Multilevel Requirements Planning
 Internal and External Procurement
 Scheduling and BOM Explosion
 MRP Evaluations
 MRP and Capacity Planning
 SAP AG 2003
(C) SAP AG SCM200 1

6.2
Material Requirements Planning: Unit Objectives
 Describe the functions of SAP R/3 Material

Requirements Planning
 Execute and evaluate multilevel requirements
planning
 Explain scheduling for in-house production and
external procurement
 Explain the connection between MRP and Capacity
Planning
 SAP AG 2003
(C) SAP AG SCM200 2

6.3
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2003
(C) SAP AG SCM200 3

6.4
Material Requirements Planning Overview
R/3 APO
R/3 APO
Demand Planning
Flexible Planning
(DP)
Standard SOP

Demand Management Promise (ATP)
Supply Network
Material Requirements Planning (SNP)
Planning (MRP) CIF
Production
Planning/Detailed
Capacity Requirements Scheduling (PP/DS)
Planning (CRP)
 SAP AG 2003
 SAP R/3 Material Requirements Planning (MRP) can be executed as consumption-based planning or as
material requirements planning.
 MRP takes place based on independent requirements for the finished product (or for an assembly): The
independent requirements are created as planned independent requirements or sales orders (customer
independent requirements) in demand management, that is, in sales and distribution and are included in
MRP.
 In multilevel requirements planning, the entire BOM structure is planned using "dependent
requirements" that are based on independent requirements. In this way, material availability in
multilevel production is ensured.
 Capacity planning can follow on from MRP (which in SAP R/3, takes place based on infinite capacities)
as an additional step.
 It is also possible to transfer SNP planned orders from SAP APO to SAP R/3. A MRP is then executed
for the assemblies and components of these planned orders in SAP R/3.
 For PP/DS planned or production orders a MRP also takes place in SAP R/3 for those components, that
are not planned in SAP APO.
(C) SAP AG SCM200 4

6.5
MRP Procedures
How should I plan material requirements in SAP R/3?

Material master
MRP1
MRP Type ...
Consumption-Based Planning
PD Material
Requirements
... Planning VB Reorder-Point Planning
Based on independent VV Forecast-Based Planning

requirements
R1 Time-Phased Planning
Further control via
requirements strategies ...
(MRP3)
Based on consumption in the
past
 SAP AG 2003
 The basic planning type is defined per material using the MRP type, that is entered in the MRP 1 view of
the material master. Planning of a material can be MRP or consumption-based. A material can also be
excluded from MRP using the corresponding MRP type.
 Material requirements planning takes current and future sales as its reference point and is executed for
the whole BOM structure. The planned requirements quantity (in the form of planned independent
requirements or sales orders) triggers requirements calculation.
 Consumption-based planning is based on consumption values in the past and uses forecast or statistical
procedures to determine future requirements. Consumption-based planning is characterized by its
simplicity and is mainly used for "B and C parts", or in other words, those with low values.
 If MRP for a material takes place in SAP APO, you need to define the SAP R/3 MRP type, so that the
material doesn't take part in the planning in SAP R/3.
(C) SAP AG SCM200 5

6.6
Consumption-Based Planning
Using reorder point planning as an example
Stock Lot Size
Reorder
stock
Safety
stock
Reorder point Delivery time-spot

Time
Replenishment
lead time
 SAP AG 2003
 Manual reorder point planning is a typical process in consumption-based planning. It is characterized by

its simplicity.
 You control the planning using a manually entered reorder point (for example, 50 pieces). During the
planning run, the system checks only whether stock has fallen below this reorder point or not (that is,
whether there are less than 50 pieces in stock). If that is the case, the system triggers procurement to the
amount of the lot size (a fixed lot size of 500 pieces for example).
 If schedule lines are created directly by the planning run, for example, for materials procured externally,
the administrative work for this sort of planning is minimal.
 Reorder point planning is appropriate only for materials with demand that stays relatively consistent.
Real-time inventory management is also necessary.
(C) SAP AG SCM200 6

6.7
Net Requirements Calculation
in Material Requirements Planning
Procurement proposal
lot-size Material
Reqmts
shortage
(Sales orders,
Firmed receipts planned independent
Purchase orders, for example
Within the requirements,
rescheduling secondary
horizon Firmed planned orders requirements,
Firmed purchase reservations, and so
requisitions on)
Stock Safety stock
 SAP AG 2003
 In MRP, a net requirements calculation is also executed in the planning run to determine whether a
material shortage exists for a certain material. In addition, stock and fixed receipts that currently exist
(purchase orders, production orders, fixed purchase requisitions and planned orders...) are compared
with the safety stock and requirements. The result of this comparison is the quantity available for
planning.
 If the quantity available for planning is lower than zero, a material shortage exists. MRP reacts to
material shortages by creating new procurement proposals, that is, by creating purchase requisitions or
planned orders, independently of their procurement type. The suggested procurement quantity results
from the lot-sizing procedure, that is set in the material master.
(C) SAP AG SCM200 7

6.8
Procurement Types
Material master
E In-house production
MRP 2
F External procurement
Procurement type ...
Special procurement ... X Both procurement types
Further determination of procurement types

via special procurement types (needs to be
defined in Customizing)
In-house production External procurement

Production in own Stock transfer
plant
40 from own plant
80 Production in
another plant
30 Subcontracting
…
 SAP AG 2003
 The procurement type defines whether a material is produced in-house or whether it is procured
externally.
 The procurement type is predefined by the material type in Customizing for the Material Master and is
defined in the material master record (MRP data screen 1, procurement type field).
 If the procurement type allows both in-house production and external procurement, the system always
uses in-house production.
 A different type of procurement to in-house production or external procurement can be set using the
special procurement key in the material master. Special procurement types are defined in Customizing
(Customizing step Define special procurement type); Special procurement types are thus assigned a
procurement type, defining the procurement type more precisely.
 In this unit, we will concentrate on in-house production.
(C) SAP AG SCM200 8

6.9
MRP Run
Planning
Planning of all materials
Total planning of one or several plants
Online
As background job
Planning of a material's
Ind. planning Multilevel BOM
Ind. planning Single-level Planning of a material
Ind. planning Interactive Interactive single-level

planning
 SAP AG 2003
 You can carry out the planning run on two levels: as total planning for a plant or for an individual
material. It is thus possible to execute a total planning run for several plants and/or MRP areas.
 You can execute a single-item planning run either for a specific material only (single level) or for all
BOM levels (multi level). Interactive planning of a material is also possible.
 A total planning run can be executed online or as a background job.
 Total planning for a plant encompasses all materials relevant to MRP for this plant and includes the
BOM explosion for materials with BOMs.
 From the MRP menu, you can execute total planning "Online" or "As background job". In order to
execute the total planning run as a background job, you select a report variant limiting it to the
corresponding plant and plan the job.
 A user exit enables you to limit the total planning run specifically to those materials which fulfill freely
definable criteria. You can use this, for example, to select all the materials belonging to a particular MRP
controller.
(C) SAP AG SCM200 9

6.10
Scope of the Planning Run
Processing key NEUPL Regenerative planning
 Planning of all MRP-relevant materials
Processing key NETCH Net change for total horizon
 Planning all materials which have undergone

a change relevant to the planning run
Net change for planning

Processing key NETPL
horizon
 Planning all materials for which MRP-relevant changes
have been made in the planning horizon
 Planning within the planning horizon only
 SAP AG 2003
 During regenerative planning, the system plans all materials of a plant. This is practical when carrying
out the planning run for the first time and on rare occasions when, due to technical errors, the
consistency of the data cannot be guaranteed.
 In a working plant, it usually makes sense (especially when you are using many materials) to only carry
out MRP for those materials that have undergone MRP-relevant changes (through goods issues, new
sales orders, changes to the BOM struscture, for example). Due to its short run-time, net change
planning - which is used to plan these materials only - enables you to carry out the planning run in short
time intervals, so that you can always work with the current planning result.
 During net change planning in the planning horizon, the system only takes changes within the planning
horizon into account. The system plans only those materials that have been subject to an MRP-change
within the planning horizon. The materials are planned within this horizon only.
 You set the planning horizon in Customizing for MRP as a plant or MRP group parameter. The planning
horizon should at least span the time period in which sales orders are received, and, furthermore, contain
the delivery and total lead times for the material.
 You specify the type of planning run via the "processing key" field in the initial screen for planning. In
single-item planning, you are only able to differentiate whether "net change planning" (NETCH) or "net
change planning in the planning horizon" (NETPL) is to be performed. In total planning, you also have
the option of using the key NEUPL, with which all materials in the planning file are planned.

6.11
Control Parameters for MRP
NEUPL
NETCH
Processing key NETPL
MRP Group
1
2 in the opening period for
Create purch. requisition 3 planned orders
1 in the opening period for

2 planned orders
Schedule lines 3
1 always
2 only for exception messages
Create MRP list 3 never
1 Adjust data
2 New BOM and routing
Planning mode 3 Delete planning data
 SAP AG 2003
 The following control parameters for MRP are required for the planning run:
 Processing key: You define the planning type as regenerative planning or net change planning over the
whole period or restricted to the planning horizon.
 The indicators "Create purchase requisition" and "Schedule lines" are only relevant for materals that are
procured externally. You can determine whether or in which period purchase requisitions and schedule
lines are required as the result of the planning run.
 You can determine further whether the planning run is to generate MRP lists. It is also possible to have
the system generate MRP lists only when certain exception messages have appeared for a material (the
exception messages that should trigger an MRP list to be generated can be defined in the Customizing
IMG activity "Define and group exception messages").
 The planning mode defines whether the existing planning data should simply be adjusted, whether
BOMs and routings should also be re-exploded or whether the planning should be started from the very
beginning again.
 You can also set the creation indicator for purchase requisitions, schedule lines and MRP lists in the
MRP group. The materials that are assigned to this MRP group are then planned accordingly in the total
planning run.

6.12
Material Requirements Planning: Results
In-house MRP External procurement

production Material A
Planned order
Directly possible for
externally procured
materials only
Convert
Production Purchase Schedule

order requisition lines
Process order
Purchase order
 SAP AG 2003
 If MRP discovers shortage quantities, procurement proposals are generated: purchase requisitions and
planned orders are internal planning elements which can be changed, rescheduled or deleted at any time.
 In the case of in-house production, the system creates planned orders for the planning of production
quantities. When planning is complete, plannned orders can be converted into production orders.
 In the case of external procurement, the system creates either a planned order, or directly creates a
purchase requisition, or a schedule line for a pre-existing scheduling agreement for planning the external
purchase order quantity. When planning is complete, planned orders can be converted into purchase
requisitions and, at a later date, the purchase requisitions can be converted into purchase orders.
 You control whether the system immediately creates purchase requisitions or firstly creates planned
orders for externally procured materials in the initial screen of the planning run using the "creation"
indicator for purchase requisitions.
 If a scheduling agreement exists for a material and is relevant to MRP in the source list, then you can
also create schedule lines directly in MRP. You control this using the creation indicator for schedule
lines in the initial screen of the planning run.

6.13
Multilevel Material Requirements Planning
Single-item, MRP Sales Order, Single-item,

multilevel Finished Product FCreq. single-level
planning planning
Planned Order
Dep.req. Dep.req.
MRP MRP
Assembly 1 Assembly 2
Planned order Purch. requis.

Dep.req.
MRP
Component 1
...
 SAP AG 2003
 MRP can be executed as total planning for all materials or as individual planning.
 The task of individual planning is to plan a material separately (for example, interactively), whereas
multilevel individual planning takes place over all BOM levels of this material. In single-level planning
it is only the header material that is planned. In multilevel planning, dependent requirements are thus
also planned.
 Secondary requirements that arise from the planning of a finished product's BOM components, are set
via secondary requirements, that arise from the explosion of a material's BOM. Dependent requirements
depend on respective planned orders. Materials (assemblies) are needed to realize these planned orders.
 If a planned order is converted into a production order, the dependent requirements are transferred to
order reservations.

6.14
Mutilevel Backward Scheduling
Reqmts date
Finished
product
Finished product
Assembly 1
Assembly 2
Component 1
Today Planned order Time

 SAP AG 2003
 MRP uses backward scheduling - the system calculates the necessary start dates based on a predefined
end date.
 MRP reacts to the requirements needed for the finished product (a sales order, for example) Procurement
proposals are created for the finished product and dependent requirements for the components are
calculated via the BOM explosion. The dependent requirements date arises from the start date of the
planned order that caused the requirements.
 MRP reacts to the requirements needed for the finished product (a sales order, for example) Procurement
proposals are created for the finished product and dependent requirements for the components are
calculated via the BOM explosion. The dependent requirements date arises from the start date of the
planned order that caused the requirements.

6.15
Backward Scheduling for In-House Production
Planned order
Opening period In-house prod. time Goods receipt
processing time
Time
Opening Order start Order finish Availability
date date date date
 SAP AG 2003
 With materials planned using MRP, future requirements dates are known. Backward scheduling is used
for these materials.
 With backward scheduling, the system determines the order finish date by calculating the goods receipt
processing time backwards from the requirements date. This specifies the number of workdays that are
required after the receipt of the goods for checking the material and placing it in storage. You define this
in the MRP data 2 screen of the material master.
 The system calculates starting from the order finish date backwards by the in-house production time to
determine the order start date. The in-house production time comprises the lead time and floats. You can
maintain the in-house production time either in the material master as a value independent of the lot size
or as a value dependent on the lot (work scheduling).
 With the in-house production time independent of the lot, the system determines the basic dates
independent of the order quantity. With in-house production time dependent on the lot, the system
determines the time depending on the order lot size. Setup time and queue time, that are included in the
in-house production time, are independent of the lot.
 The opening period is then subtracted from the order start date. This calculates the opening date.
 The opening period reflects the processing time that the MRP controller requires to convert planned
orders. The opening time is defined as a float of the scheduling margin key.

6.16
Forward Scheduling for In-House Production
Happens automatically, if order start date is in the past during

backward scheduling
Today
Planned order
In-house prod. time Goods receipt
processing time
Time
Order start Order finish Availability
date date date
 SAP AG 2003
 If during backward scheduling of materials planned using MRP, the system determines an order start
date that is in the past, the system automatically switches to forward scheduling.
 With forward scheduling, the system sets the current date as the order start date. The in-house
production time is added to the current date, which in turn determines the order finish date. The goods
receipt processing time is added to the order finish date in order to determine the availability date.
 In Customizing for MRP, in the IMG activity "Parameters for determining the basic dates", you can
define for each plant that the system is not to automatically switch to forward scheduling when
determining the basic dates if the order start date is in the past. If the indicator is set, backward
scheduling is always used to determine the basic dates even if the start date is in the past.

6.17
Scheduling for External Procurement
Order start Order finish

date date
In-house prod. time
... Processing time

for purchasing
Planned delivery
time
...
Release date Delivery date Time
 SAP AG 2003
 Scheduling for externally-procured materials takes place at the same time as for materials that are
produced in-house: The element in-house production time is replaced with the sum of purchasing
department processing time and planned delivery time.
 You define the purchasing department processing time in Customizing as a plant parameter in workdays.
 The planned delivery time is in calendar days. It can be determined on a non-vendor-specific or vendor-
specific basis.
 You maintain the non-vendor-specific planned delivery time in the material master (view "MRP 2").
You enter a vendor-specific planned delivery time in the purchasing info record or in the outline
agreement. It is used in the planning run, if the indicator "Scheduling info record/agreement" in
Customizing is maintained as a plant parameter or MRP group parameter and if, in the area of automatic
source determination, an individual vendor can be assigned.

6.18
Stock/Requirements List and MRP List
General structure Current

stock/reqmts.list
Variable header  Planned orders
 Purch. requisitions
Current  Production orders
Elements  Purchase orders
 ...
Material tree
 Plant stock/
 Storage location stock
MRP Planning
 Sales orders
run
elements  Plnd. ind. requirements
 ...
MRP list
 SAP AG 2003
 The current stock / requirements list contains up-to-date information on the current status of stocks,
requirements and receipts. You are able to view any changes immediately. This can be done as soon as
the current stock / requirements list is called up or, upon displaying the current
stock / requirements list, the elements are re-read from the database using the "Refresh" function.
 The MRP list depicts the result of the latest planning run and is therefore static: Changes that are made
after the planning run cannot be seen. You can control whether or not an MRP list is generated during
the planning run.
 The basic structure of both lists is the same:
 Links are in the form of a tree for the worklist of the MRP controller.
 Above the list is the header with the material number. You can display additional data in the header
details.
 The list itself contains the individual MRP elements and the corresponding available quantities.
 User-specific settings enable you to adapt the lists to personal requirements - these apply to both lists
(see the corresponding Customizing documentation in the evaluations for MRP "Configure MRP list /
stock/requirements list"). You can display additional data, which can then be accessed using a function
key, over a customer exit (see Customizing, "Customer-Exit: Program additional columns")

6.19
Functions of the Current Stock/Requirements List
Processing Header data

 Material memo  Material master data
 Search  Stocks
 Stock statistics  Consumption values
 ... Variable header
user-specific
Actions for MRP
Planning segments elements
Display  Display
Receipts  Change
 Period totals
 Reqmts grouping  Convert
Reqmts  Pegged requirements
 Variable date display
 ...
Go to  Order Report
User-specific
User-specific
Capacity
check
 SAP AG 2003
 The current stock/requirements list, like the MRP list offers several display options: You can display
different dates (the availability date or the goods receipt date, with/without safety time). You can work
with display filters and selection rules, you can work in the period totals display and so on. You can
define the display accordingly in your personal settings.
 "Period totals" is a display function in the MRP list and stock/requirements list evaluations which groups
the planning results into periodic buckets (for example, weekly or monthly buckets). In the Customizing
IMG activity "Define period display for period totals", you define which periods are to be depicted when
you display the period totals. The periods selected here are displayed on various tab pages in the period
totals display.
 You can analyze the capacity situation from the stock/requirements list. For this, the system displays the
available capacity, and the total capacity requirements of this material are displayed for each work center
and capacity category. Overload situations are highlighted in color. You should note that planned orders
that have not been scheduled using detailed scheduling do not create capacity requirements.
 The functions in the MRP list are, for example, those related to the processing of MRP elements or are
display options. To a large extent, these functions are identical to those in the stock/requirements list.
Selection rules, however, are only used in the stock/requirements list. In contrast to the
stock/requirements list, you can set a processing indicator for the MRP list. This indicator serves to
highlight lists that have already been processed (that is, managed) by the MRP controller.

6.20
Special Functions: Filter and Navigation Profile
MRP list MRP list

Current Current
stock/reqmts.list stock/reqmts.list
Display -
filter
List Navigation profile
... Transaction calls

Context-
sensitive
 SAP AG 2003
 You can influence the display in the lists using filters. You define if selection rules and display filters are
to be used when accessing the list. This is done by choosing the indicator "With filter" in the initial
screen, or in the list itself by choosing the icon "Filter on", or in the user-specific settings.
 There are two types of filters, the display filters and selection rules. Selection rules apply to the
stock/requirements list only. You define which MRP elements are displayed and which of these elements
are used in the calculation of the available quantity. They enable the analysis in the stock/requirements
list of various planning situations that are different with regard to the MRP elements that are taken into
account. Selection rules have no influence on the calculation of requirements! You define these in the
Customizing IMG activity "Define selection rules".
 Display filters are used in the stock/requirements list and in the MRP list. Display filters have no
influence on the MRP elements that are used in the calculation of the available quantity. You define
display filters in the Customizing IMG activity "Define display filter".
 A navigation profile contains transaction calls for transactions that are accessed directly from the
stock/requirements list or the MRP list. The transactions are either general, (meaning actions at material
level), or they refer to a particular MRP element. Only the transaction calls that are valid in the current
context are displayed.

6.21
Personal Settings
for the current stock/reqmts list and the MRP list
Settings for user TEMPLATE
Display Date General settings

 Header details  Reqmts/avail.date  Unit of measure
 Overview tree  Safety time  Checking rule
 Individual segments  Complete  Navigation profile
replenishment lead
 Requirements time
grouping + Own favorites
Buckets Filter
 Single line - display  Access with filter
 Period totals display  Display filter
 Selection rule
 SAP AG 2003
 The screen for the stock/requirements list and the MRP list offers a number of options that can be set on
a user-specific basis.
 Your personal settings (as well as your "Own favorites") determine the screen that appears when
accessing the lists. From the lists, you can change the various user-specific default settings at any time -
for example, you can show or hide the overview tree.

6.22
Collective Access of MRP Lists
Selection according to: Materials overview Processing
 MRP controller  Select materials

 Product group  Utilities:
 Traffic lights
Restrict further using: MRP
MRP list
list
 Processing indicator
 New exceptions
 MRP date
 Sort
 Processing date
 Search
 Ranges of coverage  in the overview
 Exception groups  in individual lists
 Processing indicator
 Material data
 SAP AG 2003
 There is a collective display for the stock/requirements list as well as for the MRP list. In this way, the
selection criteria for MRP lists differ from those of the current stock/requirements list. For example, for
MRP lists, you have the MRP date, the processing date or even the processing indicator for the selection.
For both list types, you can, for example, display all lists for which you are responsible as MRP
controller.
 The system then displays a material overview with all the materials selected. Traffic lights (you can
define the criteria for the display), various search functions in the overview and in the individual lists
and sort functions (also for individual customer segments by date or number) are available as orientation
help. It is also possible to use the search function to select materials by certain exception messages.
 You access the individual lists from the overview and can process the materials there. If, for example,
you have selected several lists for processing over the search function, you can jump from one list
directly into the next list selected.

6.23
Exception Messages
Stock/requirements list - MRP list

Date Element EM Quantity ...
1.2.2003 PlOrd 05 50 pc
... Opening date in the past
Newly generated procurement proposal?

Dates in the past (start, finish or opening date)?
Problems with BOM explosion?
Problems with scheduling?
Rescheduling situation?
Adjustable in Customizing:
 Priority (maximum of 2 exception messages per element)
 Assignment to exception groups (select in the MRP lists)
 SAP AG 2003
 The MRP results are monitored with the help of exception messages. Exception messages alert you to
situations that require further processing such as start date in the past, stocks falling below the safety
level and so on. Using exception messages to highlight planning situations problems, the MRP controller
can select those materials from the planning results that require additional processing.
 In the Customizing IMG activity "Define and group together exception messages", you can specify the
characteristics of the exception messages.
 If there are several exception messages that apply for one MRP element, the priority that has been
assigned to these messages decides which messages will be displayed. The system displays a maximum
of two exception messages per MRP element.
 While not all exception messages will be displayed in the stock/requirements list, in the case of
scheduling problems, the system displays both a corresponding exception message in the
stock/requirements list as well as in the MRP list. A rescheduling proposal is also displayed. If this
proposal is to be accepted, you must adjust the dates for the receipt element manually. The automatic
adjustment of these dates is possible in the planning result display or evaluation (for example, in
interactive planning or when the indicator "Display result" has been selected in the initial screen of the
planning run): The rescheduling proposal can be accepted here using the function "Reschedule order
proposal".

6.24
MRP with Lead-Time Scheduling
Scheduling ind. = 2, capacity requirements are calculated
1 Planned order
OS OF
Float before
production Operations (from the routing)
Safety time
2 10 20 30
OS OF
Order start Production Production Order finish
date start date finish date date
 SAP AG 2003
 You can set lead time scheduling for the planning run by using the scheduling indicator "2" (lead time
scheduling and capacity planning).
 During the planning run with the scheduling indicator 2, the order start and order finish date are
determined for each basic scheduling. This is then followed by lead time scheduling.
 In lead time scheduling, the precise production times (that is, production start and finish dates) are
defined for material produced in-house and at the same time the capacity requirements are created. The
materials staging date for the components is also determined.
 Lead time scheduling is carried out using the times from the routing. This takes place as backward or
forward scheduling according to the setting in the Customizing IMG activity "Define scheduling
parameters for planned orders". The following times are taken into account:
 Floats (float before and after production) that are assigned to the material using the scheduling margin
key,
 Individual times from the routing: Queue time, setup time, labor and machine time.
 In backward scheduling, the system first calculates back from the order finish date to determine the float
after production, which in turn calculates the production finish date. The individual operations of the
routing are scheduled backward starting from the production finish date. The start date of the first
operation becomes the production start date.

6.25
MRP and Capacity Planning
Step 1: MRP When should production take Reqmt

place?
 Takes place on the basis of
"infinite capacities" Planned order
Finished product
 Capacity requirements are
Op. 10 Op. 20 Op. 30
created for work centers
Step 2: Capacity Planning

Capacity free,
 Availability of capacities for scheduling
possible
production dates is checked
 Operations are scheduled at Occupied Op. 20 Occupied
their work center
Work center paint shop Time
 SAP AG 2003
 In MRP, capacity requirements that result from planned orders can be calculated using the routing. MRP
itself creates the requirements only. A check to ensure whether a work center is still available for the
respective dates does not take place first of all (SAP R/3 MRP).
 In a second step you should check whether planning can be realized, whether work centers are available
for the required dates, therefore. This takes place in Capacity Planning.
 As a rule, Capacity Planning is work center-related. The goal of Capacity Planning is to schedule all
operations of planned and production orders, so that the production plan can be filled.

6.26
Material Requirements Planning: Unit Summary (1)
 Within the framework of Material Requirements

Planning, material availability should be ensured. If
material shortages exist, the corresponding
procurement elements are produced.
 The materials can be produced in-house or procured
externally. Stock transfers from other locations are
also possible.
 For materials that are produced in-house, multilevel
requirements planning is executed. The availability of
the components that are needed for production is
ensured via dependent requirements.
 SAP AG 2003

6.27
Material Requirements Planning: Unit Summary (2)
 The results of Materials Requirements Planning can

be checked and evaluated using the current
stock/requirements list and the MRP list. A multitude
of functions are available in both lists to process
MRP elements.
 Subsequent to MRP, capacity planning takes place.
This ensures that the work centers required for
production are available.
 SAP AG 2003

6.28Material Requirements Planning Exercises
Unit: Material Requirements Planning

Topic: MRP Run

• Execute MRP as single-item, multilevel planning.
Pumps with the material number R-F1## (## represents your

group number) are produced in plant 1000. Demand management
and material requirements planning for these pumps takes place
in SAP R/3.
You have already created planned independent requirements and
customer requirements for this material. These requirements
should be covered by MRP.
1-1 Firstly, get an overview of the stock/requirements list for the pump:
1-1-1 Access the stock/requirements list for material T-F1## in plant 1000.
Requirements (planned independent requirements and customer requirements)
and procurement elements should already exist. Are you dealing with a
balanced stock/requirements situation? Why (not)?
____________________________________________________
____________________________________________________
1-1-2 20 produced pumps enter the warehouse from production. Post a corresponding
goods receipt. (To simplify matters, you should avoid referring to the
production order at this stage).
From the inventory management menu, call up the transaction Goods receipt
other. In the initial screen, enter the following data:
Movement type: 501 (GI receipt w/o PO)
Plant: 1000
Storage location: 0002
Confirm your entries using Enter and create the following goods receipt
element:
Material: R-F1##
Quantity: 20 pc.
Confirm your entries using Enter and post the receipt.

1-1-3 Access the stock/requirements list for material T-F1## in plant 1000 again (or
refresh it). What is the available quantity at the end of the list? Why?
_________________________________________________
_________________________________________________
1-2 Use MRP to deal with the new stock/requirements situation. As you want to observe the
effects on all materials in the BOM structure, carry out single-item, multilevel planning:
1-2-1 Call up Single-item, multilevel from the MRP menu and enter the following
data in the initial screen:
Material: R-F1##
Plant: 1000
Processing key: NETCH
Create MRP list 1
Planning mode 1
Scheduling: 1
Also plan unchanged components: Select
Before you start the planning, save your settings (via Settings→ Save).
Confirm with Enter.
Start MRP by choosing Enter twice.
1-2-2 Call up the current stock/requirements situation (or refresh it). What is the
available quantity at the end of the list now?
____________________________________________________
Has a suitable planned order been created for the date of the customer
requirement?
____________________________________________________
1-2-3 From the current stock/requirements list change the planned order with the
earliest date (select it and choose the Change element icon). The planned
order as it appears on the screen contains no production dates (tab page
“Header”). From the planned order, you need to thus choose the function
Edit→ Scheduling: The routing is then read and the production dates are
calculated and added to the planned order.
Return to the “Header” tab page and fix the order by setting the corresponding
indicator. Save the order and refresh the current stock/requirements list.
Had you executed the planning run using scheduling

indicator 2 (lead time scheduling), then the planned orders
would have already been supplied with detailed scheduling
data. You have just explicitly carried out this lead time
scheduling step for an order.

Is the planned order now displayed differently in the list?
____________________________________________________
1-2-4 To finally initiate production, convert the fixed planned order from the list into
a production order. To do this choose Additional data for element and then
Convert planned order into production order. Save the production order,
return to the list and refresh it. The production order is then displayed.
Converting a planned order into a production order is the last

step in the planning process of Supply Chain Planning.
Execution of the order (Printing of order documents,
confirmations and so on) then follows.

Exercises

Topic: Evaluating planning using the MRP list

• Evaluate the planning result using the MRP list
Once you have carried out planning for pump R-F1## and its
components, evaluate the planning result using the collective
display of MRP lists.
2-1 Starting from the MRP menu, access the MRP list - Collective display.
2-1-1 On the initial screen, select the lists in plant 1000 for MRP controller 0##
(leave the remaining selection windows empty). After carrying out the selection
using Enter, an overview of the materials that were selected appears.
How many materials were selected?
____________________________________________________
Have exception messages occurs for some of these materials?
____________________________________________________
2-1-2 Check the MRP for finished product R-F1##. Call up this list, by double-
clicking on the corresponding line in the material overview, for example. Do
exception messages exist for this material?
____________________________________________________
What, for example, does the last exception message displayed in the list mean?
____________________________________________________
2-1-3 In the preceding exercise, you converted the planned order with the earliest date
into a production order. However, this production order is not displayed in the
MRP list. What is the reason for this?
____________________________________________________
____________________________________________________
2-1-4 Expand the Header details for this MRP list. Proceed to the tab page
“Stocks/coverage”. How big is the day’s supply for material R-F1##?
____________________________________________________
What time period is specified?
____________________________________________________
2-2 Optional: Exit the collective display of MRP lists, and execute single-item, multilevel
planning for material R-F1## in plant 1000 and call up the MRP list for the pump again (in
individual display, or collective display as above).
2-2-1 Is the production order displayed now? Why (not)?

____________________________________________________
2-2-2 Expand the Header details for this MRP list again and proceed to the tab page
“Stocks/coverage”. How big is the first receipt days’supply for material R-
F1##?
____________________________________________________
What time period is specified here? How can you explain the difference to the
stock day’s supply?
____________________________________________________
____________________________________________________
____________________________________________________

6.29Material Requirements Planning Solutions

Topic: MRP Run
1-1

Stock/Requirements List
Balanced stock/requirements list? No, the stock/requirements situation is not
balanced. In total, the correct quantities are procured, procurement for the
sales order (30 pc.) occurs, but, as originally scheduled in planned
independent requirements, right at the beginning of the month and thus
too early.
1-1-2 SAP R/3 menu path: Logistics→ Materials Management→ Inventory
Management→ Goods Movement→ Goods Receipt→ Other
1-1-3 Available quantity at the end of the list: At the end of the list (and also for the
individual dates in the list) 20 pieces are available. This is the result of the
goods receipt.
1-2
1-2-1 Menu path: Logistics→ Production→ MRP→ Planning→ Single-Item,

Multi-Level
Available quantity at the end of the list: At the end of the list, zero pieces are
available, the situation is balanced.
Planned order for customer requirement: Yes, a planned order with
appropriate dates was created for the customer requirement.
1-2-3 Planned order displayed differently? Yes, the plan is fixed, and thus marked
with a star.

Solutions

Topic: Evaluating planning using the MRP list
2-1 SAP R/3 menu path: Logistics→ Production→ MRP→ Evaluations→ Stock/Requirements
List
2-1-1 Number of materials selected: Varies. As a rule, 36 materials are selected.
Exception messages: Varies. As a rule, exception messages occur.

2-1-2 Exception messages: Varies. As a rule, exception messages occur for this
material.
Last exception message: Varies. Exception message 01 appears as “newly
created”.
2-1-3 Production order not displayed: The production order is not yet displayed
because it was created after the last planning run. The consequence is that
only the result of the last planning can be seen.
2-1-4 Stock days’supply: Varies, for example 28.3 (workdays).
Time period: This specifies how long the requirements can still be covered
by the existing stock, in this example 28 days. The decimal places show
what amount of the requirement, that leads to shortages, can still be
covered (in this example, 30 percent).
2-2
2-2-1 Production order now displayed? The production order is now displayed,
because it has been accounted for in the planning run.
2-2-2 1. Receipt days’supply: Varies, for example 48.0 (workdays).
Time period: This specifies how long the requirements can still be covered
by existing stock and fixed receipts. The production order thus accounts
for the difference here.

7
Production Planning and Detailed Scheduling
Contents:
 Production Planning and Detailed Scheduling

 SAP APO master data
 Simultaneous quantity and capacity requirements planning
 Planning results in SAP APO and execution in SAP R/3
 Optimization
 SAP AG 2002
(C) SAP AG SCM200 1

7.2
Production Planning and Detailed Scheduling: Unit
Objectives
 Explain the functions and benefits of PP/DS

 Specify which SAP APO master data is used in PP/DS
 Explain simultaneous quantity and capacity
requirements planning
 Display and review planning results in SAP APO
 Explain the procedure used to execute planning
results
 SAP AG 2002
(C) SAP AG SCM200 2

7.3
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2002
(C) SAP AG SCM200 3

7.4
PP/DS Overview
R/3 APO
R/3 APO
Demand Planning
Flexible Planning (DP)
Standard SOP
Sales
Supply Network
Demand Management Planning (SNP)
Material Requirements CIF

Planning (MRP)
Production
Planning (CRP)
 SAP AG 2002
 Independent requirements are the starting point for production planning in SAP APO PP/DS: Sales
orders are generally created in SAP R/3 and transferred from there to SAP APO for planning. Planned
independent requirements can be created in SAP R/3 (demand management). It is also possible,
however, to derive them from SAP APO DP.
 Stock transfer requirements can be derived from supply network planning within SAP APO SNP, which
can then be covered using PP/DS. It is also possible to directly convert SNP planned orders into PP/DS
planned orders.
 Whereas in SAP R/3, capacity requirements planning is executed separately in a second step, in SAP
APO PP/DS, quantities and capacities can be planned simultaneously.
 Execution of production, in other words, the processing of manufacturing orders (production or process
orders) takes place in the area of Supply Chain Manufacturing. Supply Chain Manufacturing takes place
predominantly in SAP R/3.
(C) SAP AG SCM200 4

7.5
Transition from SNP Orders to PP/DS Planned
Orders
Planning
SNP prod. horizon PP/DS
in SNP horizon Create
100
Today
Planning in PP/DS SNP prod. horizon PP/DS

horizon
100
Today
Delete
10 20 30
Today
Create using PP/DS PPM
 Alternative: Copy SNP planned orders directly by converting them into

PP/DS orders
 SAP AG 2003
 Supply Network Planning is used for medium-term to long-term planning across the whole supply chain
(especially if several plants and distribution centers are available). As such, requirements for a set bucket
(day, for example) are aggregated. When exactly the requirement is accumulated in the respective bucket
does not yet play a role. Order sequences do not play a role in SNP either..
 In the above example, an order is being created in SNP with the help of the SNP production process
model. SNP orders are thus aggregated for each defined bucket. SNP takes place outside of the SNP
horizon. PP/DS orders are valid as firmed receipts in SNP and are taken into consideration during
planning.
 Once the start date of an SNP order enters the PP/DS horizon, it is subject to PP/DS. It is thus deleted in
PP/DS planning and replaced by a PP/DS order, which is created based on PP/DS master data.
 If SNP orders are to be directly transferred to planning in PP/DS, they must be converted into PP/DS
orders in good time, that is, before the PP/DS horizon is reached. To allow you to do this, background
conversion is available in the PP/DS menu, which can also be scheduled periodically. As a result of the
conversion, the order is created again in PP/DS using the production process model defined there.
 The PP/DS horizon specifies a number of days on which PP/DS is used for planning. The PP/DS horizon
can be defined in the Customizing for Supply Chain Planning. You may also define a PP/DS horizon,
per location, for each of the products in the product master.
(C) SAP AG SCM200 5

7.6
Purposes of PP/DS in SAP APO
 To-the-minute planning of production

and external procurement
 Capacity Requirements Planning
(separately or simultaneously) on
operation level in the short-term
horizon
 Machine Scheduling Optimization
Supply Chain
 SAP AG 2002
 Above all, the purpose of production planning is short-term to-the-minute planning (both for in-house
production and external procurement) in the production plant.
 In PP/DS, requirements are met by generating planned orders (to plan in-house production) as well as
purchase requisitions or scheduling agreement schedule lines (to plan external procurement).
 In contrast to mid-term planning in SAP APO SNP, production planning in the plant is detailed and uses
exact times. Exact production times for the production of materials are thus determined.
(C) SAP AG SCM200 6

7.7
Benefits of PP/DS in SAP APO
 PP/DS with simultaneous Quantity and Capacity

Requirements Planning
 To-the-minute Material Requirements Planning (hours,
minutes) for dependent requirements also
 Multilevel material and capacity availability check possible
(pegging)
 Multilevel ATP check possible
 Optimization procedures within PP/DS (minimize setup times,
setup costs, scheduling delays, alternative resource
selection, ..)
 Dynamic exception messages (alerts)
 Capacity categories: Time, activity, volume, piece
 SAP AG 2003
 Simultaneous material and capacity requirements planning: You can define resources as finite resources
in the resource master. Order operations are only created at these resources if there is sufficient capacity
for the order quantity on the corresponding date. If there is not enough capacity available, the system
searches for a new date, taking the capacity situation into account.
 Automatic planning immediately: If you set this indicator for a product, the system starts a single-level
planning run for this product for each change made that is relevant to planning (for example, a new sales
order).
 Planning with exact times: Dependent requirements and orders are created with a time.
 Machine Scheduling Optimization: During planning, it may be that orders were generated whose order
sequence is not optimum. Therefore, you can change the sequence and resource assignment of existing
orders in the optimization run.
(C) SAP AG SCM200 7

7.8
Usage of PP/DS in SAP APO
 Planning critical products (for example, products which have

long replenishment lead times or products that are produced
on bottleneck resources)
 Planning in the short-term horizon, or, where necessary,
using simultaneous capacity requirements planning
 Optimization of the production plan
 Reduced lead times
 Increased throughput of products based on a better
coordination of resources
 Reduced stock costs based on more exact production
planning
 SAP AG 2002
 Not necessarily all the materials of a plant have to be planned in SAP APO. Advanced Planning
functions that are available in SAP APO are not necessary for all materials. You would typically plan
critical products (that are produced on bottleneck resources, perhaps) in SAP APO.
 You should be aware that the choice of materials to be planned in SAP APO has to be defined sensibly:
For example, you should plan all products in SAP APO that are planned on certain resources, as sensible
capacity requirements planning would not be possible without all materials in SAP APO.
 Planning in SAP APO creates a wide range of benefits. By optimizing order sequences, lead times can
be reduced, more precise planning enables you to reduce stocks, and, at the same time, you can achieve
improved on-time delivery performance, and so on.
(C) SAP AG SCM200 8

7.9
SAP APO PP/DS and SAP R/3 MRP
 SAP APO PP/DS carries out production planning only;

Execution (confirmations, goods receipt and so on) is carried
out in SAP R/3
 Products that are planned in SAP APO PP/DS should be
excluded from planning using a corresponding MRP type in
SAP R/3
 Planning results are transferred from SAP APO to SAP R/3 for
execution If required, planning is completed in R/3 (for example,
if all of the products of a BOM structure are not planned in
APO).
Planning of a BOM
Incorrect Correct Key
structure in SAP APO
Planned in SAP APO
and SAP R/3
Planned in SAP R/3
 SAP AG 2003
 In principle, production planning/detailed scheduling can be executed in SAP APO PP/DS or in SAP R/3
MRP. Planning in SAP APO offers several functional benfits.
 In general, not all materials are planned in SAP APO. Rather, planning in SAP APO is limited to
important materials, whereas planning for less critical parts is completed in SAP R/3. Materials that are
planned in SAP APO should be excluded from planning using a corresponding MRP type in SAP R/3
(C) SAP AG SCM200 9

7.10
MRP Type "X0"
R/3
R/3 Material master D
Material master C
Material master B
MRP Type X0 Integration model
Material master A
MRP Procedure X
 Which materials
Without MRP (in SAP R/3), Mat. A should be planned
with BOM explosion
X0 in SAP APO?
 Which master and

Mat. B Mat. C Mat. D transaction data
X0 X0 VB should be
exchanged?
APO
APO Product C
Product B
Product A
 SAP AG 2003
 Planning is not necessarily executed for all materials in SAP APO. Planning for critical materials can
take place in SAP APO, while less critical materials (such as consumption-controlled purchasing
materials) can be planned in SAP R/3.
 Materials that have been planned in SAP APO may not be planned again in SAP R/3 - the planning
results from SAP APO are transferred directly to SAP R/3 as planned orders . Nevertheless, dependent
requirements must be determined for materials that have a BOM in R/3 (normally as a result of material
requirements planning). You assign these materials a special MRP type with the MRP procedure, "X"
("without MRP, with BOM explosion").
 It is also possible to use the MRP type XO to select materials relevant for SAP APO in the integration
model.
 In general, you should be careful about separating SAP APO-relevant materials from those that are not
SAP APO-relevant: For effective planning in SAP APO, you must be sure that all materials important
for the planning process can actually be planned in SAP APO. (For example, with capacity planning, if
the capacities in SAP APO are to be planned for the different resources, all materials whose production
uses these resources must be planned in SAP APO.)

7.11
Primary Processes in SAP APO PP/DS
Make-to-stock  Production planning with finite or infinite

production capacity requirements planning
 Optimization of the production plan
 CTP scenario possible for sales orders in the

PP/DS horizon (Capable-to-Promise)
Make-to-order production  Planning for individual sales orders with finite

or infinite capacity requirements planning
 CTP scenario possible on single or multilevel
 Optimization of the production plan
External procurement  Source determination
 Scheduling agreement processing and

subcontracting possible
 SAP AG 2002
 The production of a product can be planned in make-to-stock production. Various planning strategies are
available. The production program is determined in make-to-stock production using planning
requirements, and if necessary, using sales orders that already exist.
 Requirements can be covered using finite or infinite planning. Different optimization procedures can be
used within capacity requirements planning.
 Sales orders can also be planned in make-to-stock production within a CTP check. When a sales order is
created, an ATP check is carried out to see if the necessary procurement elements exist, and, if
necessary, a new procurement element is created and scheduled according to capacity. Possible delays
(because of capacity overloads, for example) are directly reported to the sales order. In make-to-stock
production, a CTP check is only possible within the PP/DS horizon.
 In make-to-order production, each sales order is planned in a separate segment. Planning can be finite or
infinite. As the PP/DS horizon plays no role in make-to-order production, the CTP check can be carried
out without any time restrictions.
 In addition to in-house production, external procurement can be planned in SAP APO. Automatic
source determination (based on costs, for example) can also take place. Scheduling agreement
processing and subcontracting can also be depicted.

7.12
SAP APO Master Data for In-house Production
R/3 APO
R/3 APO
SAP R/3 master SAP APO master
data data
Plant
Customer Location
Vendor
Material master Product
Production version
 Routing (PPM)
 BOM
 SAP AG 2002
 In SAP APO, resources and production process models are used to plan in-house production. This data is
transferred from SAP R/3 to SAP APO. SAP R/3 work center capacities are mapped onto SAP APO
resources and SAP R/3 routings and BOMs are mapped onto a SAP APO production process model.
 For routings and BOMs to be transferred from SAP R/3, a corresponding production version must be
present in the SAP R/3 material master. The production version determines a manufacturing process by
specifying a routing and a bill of material.
 In the SAP R/3 material master, several production versions can be defined (for different lot size
intervals, for example). Each of these production versions is transferred to SAP APO as an individual
PPM.
 The PPMs that are transferred from SAP R/3 have usage "P": They can be used in SAP APO for
Production Planning and Detailed Scheduling (PP/DS). If the plans are to be used for Supply Network
Planning (SNP) as well, they need to be copied as PPMs with usage "S". There is a special report for this
available in SAP APO.

7.13
Resources in SAP APO
 Single-activity resources (PP/DS)

 Time-continuous
 Available capacity for one activity
 Multiactivity resources (PP/DS)
 Time-continuous
 Available capacity for multiple
activities
 Bucket resources (SNP)
 Time intervals
 Available capacity per time interval
 Mixed resources (PP/DS and SNP)
 SAP AG 2002
 Resources are SAP APO master data, in which capacities and working times of machines, personnel,
vehicles and warehouses are defined. They can be created in SAP APO when SAP R/3 work centers are
transferred via the CIF.
 Resources can be defined as single-activity resources, multi-activity resources or bucket resources.
Single- and multi-activity resources can be used for continuous and exact time planning in PP/DS,
bucket resources are used for mid- and long-term planning in Supply Network Planning (SNP). The time
periods (buckets) for bucket resources are at least one day long.
 Mixed resources can be used in both SNP (bucket-oriented scheduling) and in PP/DS (time-continuous
scheduling).

7.14
Work Center and Resources
An APO resource for each SAP R/3 work center capacity
If necessary, define
capacity variants
R/3 APO and shifts
Plant 1000 Resource
Work Center 1904 2 multi mixed
Resource Cat. Location

Capacities
Capacity cat. 001 Machine W1904_1000_001 P 1000
Capacity cat. 002 Person W1904_1000_002 P 1000
 SAP AG 2002
 During the transfer of an SAP R/3 work center to SAP APO, each capacity category is mapped in its
own resource. The transfer takes place according to the following naming convention: The name of the
work center will start with a "W", then comes the plant from which the work center stems, and then the
capacity category comes at the end.
 SAP R/3 work center capacities are normally transferred as "production" type multi or single-activity
resources. If you want mixed resources, which can be used in PP/DS and SNP (bucket resources) to be
created during the transfer using the CIF, then you should use a corresponding customer exit.

7.15
Production Process Model (PPM) (1)
SAP R/3 prod. version 0001

R/3
Standard routing 500077
APO Group counter 01
Plan N500077010001
PPM Product A Operation 10 Activity: Setup

Assembly
Components
Relationships
Activity: Production
Relationships
Operation 20
Checks
...
 SAP AG 2002
 The Production Process Model (PPM) in SAP APO contains the information required for manufacturing
a product. It represents the combination of routing and bill of material for a master data object.
 The plan number in SAP APO is derived from original data during the transfer of an SAP R/3
production version. It is made up of the routing number, group counter and the production version
number.
 A PPM contains one or more operations. Each operation includes at least one activity. (These activities
may be "produce", "setup", "tear down" or "wait"). The components consumed (or produced) by the
activity are assigned to the activities. The sequence of activities within the operation is defined by
relationships.

7.16
Production Process Model (PPM) (2)
Activities and resources
PPM Product A Selection of mode

is dynamic for
scheduling
Operation 10
Mode 1
Primary resource W1904_1000_001
Secondary resource W1904_1000_002
Mode 2
Primary resource W1905_1000_001
Secondary resource W1905_1000_002
 SAP AG 2002
 The resource and the capacity requirement needed to execute an activity are determined by the mode. As
well as the primary resource that is relevant for scheduling, one or more secondary resources can also be
entered in a mode. The system also determines capacity requirements for secondary resources during
scheduling.
 Several modes can be assigned to one activity, that is, several alternative resources can be assigned at
which the activity can be processed. During scheduling in PP/DS, the system automatically selects a
mode. The mode selected is the mode that starts latest if you take the available capacity into
consideration.
 In optimization in PP/DS, it is possible to give preference to particular modes. The modes can therefore
be given different priorities.

7.17
Demand Programs in the Production Plant
 Planned independent reqmts
 Sales orders
 Stock transfer requirements
Demand program
APO
PP/DS in the plant
 SAP AG 2002
 The demand program that has to be covered by PP/DS in the plant, is determined using planned
independent requirements, sales orders and stock transfer requirements.
 Planned independent requirements can come from SAP R/3 demand management or from SAP APO DP,
sales orders are created in sales (SAP R/3 SD), stock transfer requirements can be derived from SAP
APO SNP or from SAP R/3.

7.18
PP/DS Planned Orders
Planned order 4711 (In-house production)

Receipts What will be
Pump P-100 10 pc. produced? When will
it be ready?
Reqmts
100-100 Casing 10 pc Which components are
needed? For which
100-300 Shaft 10 pc dates?
...
Operations Which steps are carried out
0010 Staging in production? When are
0020 Pressing they carried out? On which
resources?
...
 SAP AG 2002
 Procurement of a product in in-house production is planned using SAP APO planned orders.
 An SAP APO planned order is usually scheduled using detailed scheduling, that is, it contains all
operation dates. Procurement of necessary components is also planned specifically for each operation.
 If a strategy that envisages finite planning is used in the planning of a planned order, simultaneous
quantity and capacity requirements planning takes place at planned order level. The availability of the
capacities that are needed for production is then guaranteed. During infinite planning, capacity
requirements planning takes place in a downstream step.

7.19
Multilevel Backward Scheduling in PP/DS
Availability date
Start date End date
Operation 10 Operation 30
Finished
product 10 20 30
Assembly 1 10 20 30
Requirements
Assembly 2 10 20 date
Raw mat.1 Purchase requisition
Time
 SAP AG 2002
 If there are not enough stock or receipt quantities to cover a requirement, the production planning run
generates a planned order. The PPM is exploded and dependent requirements are created for the
assemblies. Planning in the next BOM level takes place in the same way. If there are not enough stock or
receipt quantities, planned orders are created here also, which, in turn, can have dependent requirements,
and so on.
 When the lot size of the planned order has been determined and the PPM has been exploded, the
production planning run calculates the dates of the planned orders. The operation times in the PPM, as
well as any goods receipt processing times maintained in the product master, are taken into account.
 The dependent requirements dates are moved to the dates of operations belonging to the PPM. Purchase
orders for materials can thus be operation-specific and made on schedule.
 The system starts with material staging according to the assignment of components to operations in the
PPM. The dependent requirements date of the BOM components is placed on the production start date of
the operations to which they are assigned.

7.20
Possibilities of Production Planning in PP/DS
Finite scheduling  Simultaneous quantity and capacity

requirements planning: All (finite)
resources are checked when a planned
order is created. The planned order is only
created if capacities are available.
 Downstream optimization of the plan is
possible.
Infinite scheduling  Resources are not checked when a planned

order is created. A planned order is created
even if there is a capacity overload.
 Downstream DS heuristics (capacity

requirements planning) produce a feasible
production plan.
 Final optimization of the plan is possible.
 SAP AG 2002
 Production planning in SAP APO PP/DS can be executed as finite or infinite planning. The
corresponding basic settings are made using the strategy profile in PP/DS Customizing.
 When a planned order is created during finite planning, the availability of the capacities and components
that are needed for production is checked. Only when sufficient capacity is available can the planned
order be created. If no capacity remains for the desired time, the planned order is created later, if
necessary, (when capacity is available) and this delay is indicated by a corresponding alert.
 A production plan that has been created in finite production planning can be processed in downstream
optimization. The goal of this optimization could be the reduction in the number of delays that result
from the original planning.
 Capacities are not checked in infinite production planning. Planned orders are created with appropriate
dates, even when no remaining capacity remains. Capacity requirements planning takes place in a second
step using special DS heuristics. During this procedure, planning can also be enhanced by final
optimization.

7.21
Simultaneous Quantity and Capacity Requirements
Planning
Requirement
(Sales orders,
dependent
Operations and resource load requirements, and so
according to production process on)
model 10 20 30 Alert,
if necessary
30
Resource 3 (finite) 30
20 20
Resource 2 (infinite)
10 10
Resource 1 (finite)
Available 1st loading attempt

Today Time
Occupied Final loading attempt
 SAP AG 2002
 If a product is not available, the requirement (the sales order or dependent requirement, for example)
triggers productionProduction Planning and Detailed Scheduling: If it triggers an order for in-house
production, SAP APO creates a planned order for the desired quantity in PP/DS. All operations of the
production process model (PPM; SAP APO master data record, which contains the SAP R/3 bill of
material and routing) are scheduled at the resources of the PPM and the system takes capacity
constraints into account (available capacity and, possibly orders that have already been scheduled).
 If a finitely planned resource is already exhausted on the desired date, the system searches for a new date
on which the planned order can be created. You use the strategy profile to define how the system is to
schedule (search for a slot, infinite planning ...).
 A finitely planned resource is defined in the resource master using the indicator “Finite Scheduling". O
perations of orders are only created on these resources if there is enough capacity available for the order
quantity on the order date.
 A strategy profile is maintained in SAP APO Customizing. In the global settings of PP/DS, you define
which profile should be used for the scheduling of planned orders. The default strategy profile in the
delivery system is SAP002 (search for a slot backward).

7.22
Heuristics Used in Production Planning
Production planning run

Global settings ...
Processing step Heuristic
Selection of products ...
SAP_MRP_001  Production planning run according to low-
level code
 Possible shortage on component level is
displayed using alerts
 The procedure is very fast
SAP_MRP_002  The production planning run also takes

place according to low-level code, but
components with "automatic planning
immediately" are planned directly
 Scheduling delays on component level are
propagated to the finished product
 Date/time alerts usually occur at finished
product level
 SAP AG 2002
 Two main heuristics are available for the production planning run in SAP APO PP/DS: Product Planning
(components according to low-level planning) (SAP_MRP_001) and plan components immediately
(SAP_MRP_002).
 Using the heuristic SAP_MRP_001, products are planned in order of their low-level coding. If a
dependent requirement at component level cannot be covered in time, the delayed procurement element
is created and provided with an alert. This delay is not automatically passed on to subsequent affected
orders.
 If infinite planning takes place, the heuristic SAP_MRP_001 process corresponds functionally to the
MRP run in SAP R/3 MRP. This process is very fast and is thus particularly suitable for mass
applications.
 The heuristic SAP_MRP_002 differs from the heuristic SAP_MRP_001 with regards to the components
that can be found in the product master under the Automatic planning immediately indicator: These
components are planned immediately if a dependent requirement was created for them in the planning of
the superior product. If this dependent requirement cannot be covered on time, the superior planned
order is also moved and provided with an alert. Date/time alerts typically occur at finished product level
with this kind of planning. Forward propagation of delays can also take place at several low-level codes.

7.23
Product View
Evaluating the planning result:
Product view PUMP  Display and edit

individual procurement
Product PUMP
elements
Location 1000  Quick display of
adjoining information
Elements Product Forecast ... (product master, ATP,
forecast and so on).
Overview tree
 Interactive planning
 Alerts; Possible to jump
MRP to the alert monitor
elements  Adjustable user-
specific settings
 SAP AG 2002
 The planning situation for a certain location product can be evaluated using the SAP APO product view.
 The product view is a versatile and flexible tool that you can use to execute a range of functions: You
can display and change individual MRP elements, you can plan interactively, you can jump to the alert
monitor and so on.
 The top part of the product view contains a header with a product number, on the left (optional) there is
an overview tree and in the lower part, the list itself with the individual MRP elements and the
corresponding available elements. Further tab pages contain accompanying information. User-specific
settings enable you to adjust the display to your personal needs.
 The product view is a dynamic list. Interactive planning can be executed, for example, and as soon as
you have saved the result, the current situation is then displayed. It is also possible to refresh the list, if,
after some time has elapsed, you need to display the current planning status.

7.24
Product Planning Table as a Further Tool
Product Planning Table

Resource View: Periodic
Resource View: Periodic 22.06.02 24.06.02 25.06.02 26.06.02 27.06.02 28.06.02 01.07.02 02.07.02
Planner WT-L00_1000_001 / Utilizations....% 20,710 100 100 100 100 100 100 100
H.Miller Requirement H 1,450 7,000 7,000 7,000 7,000 7,000 7,000 7,000
WT-F00_1000_002
Available H 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000
WT-M##_1000_002
WT-M00_1000_002 / Utilization.. % 24,641 50 50 50
WT-L00_1000_001
WT-L00_1000_001 / Utilization %
WT-M##_1000_002
WT-M##_1000_002
WT-M##_1000_002
Navigation tree Product view: periodic

T-F200##
22.06.02 24.06.02 25.06.02 26.06.02 27.06.02 28.06.02 01.07.02 02.07.02
Available quantity pc. 200- 200- 200- 200- 200- 200- 200- 200-
Days' supply Day 9- 12- 13- 14- 15- 16- 19 20
FCReq / 20 / PLanning wuth final assembly
pc.
PlOrd / T-F200 pc.
Total requirements/conf. pc.
Product view: periodic
Charts
Shown
Resource per product -periodic planning
Product view: periodic
Product View: Quantity Planning
Hidden
Alert Monitor
Product view: Quantity graphic

Chart selection
 SAP AG 2002
 The product planning table is a powerful tool, and it can be used to execute and evaluate planning in
PP/DS. A range of displayable charts are available. Depending on your choice of charts, the product
planning table can be tailored to different tasks.
 The navigation tree on the top left edge of the screen displays the workscope of the product planning
table. Using the navigation tree, you can define which objects can be seen in the individual views. You
can group the navigation tree according to different categories (planner, product group, location,
resource, for example).
 On the bottom left edge of the screen, you determine which charts (for example, product view: periodic,
resource view: periodic, alert monitor, quantity graphic) you want to display. Capacity requirements
planning can be executed in the product planning table using corresponding charts.
 In the resource view: periodic, the requirement of resources is displayed and their utilization of capacity
is shown as a percentage.
 In the product view: periodic, products, the order quantities that have to be produced in each bucket as
well as detailed information about dates and quantities also appear in addition to resources.

7.25
Optimization Using Setup Times as an Example
Objective: To Setup times at resource Setup times in

minimize setup paint shop minutes
Prod. A B C
times ("objective Product A:
A 0 10 20 Product B:
function") B 30 0 15 Product C:
C 30 25 0
A C Requirements time B A
Setup Setup Setup

C time A time B time A
Operations of products A to C at paint shop according to schedule (starting situation for
optimization): Planned orders for A were created first, then for B and C
Setup Setup
C time A A time B
Optimization result (with light weighting of delays)
Setup Setup
A A time B time C
Optimization result (without weighting of delays) Time
 SAP AG 2003
 Subsequent to capacity requirements planning, the production plan can be optimized. You can optimize
the schedule for single resources based on the sum of the setup times and sum of the setup costs. The
system determines sequence dependent setup times and setup costs from the setup matrix (which can
only be maintained for single resources).
 You can determine the objective of optimization using the objective function. Different objective
functions are possible (minimization of costs and delays, for example). In the example depicted above,
the objective function is the sum of setup times, where the setup times (or the setup costs) flow from the
setup matrix into the objective function: The setup matrix contains the setup time in a time unit of your
choice (hours or minutes, for example) while the sytem uses the setup duration in seconds in the
objective function. If, for example, you enter a setup duration of 10 minutes in the setup matrix, the
system uses the value of 600 (seconds) in the objective function.
 Setup costs can also be entered in the setup matrix. Setup costs have no unit. In the objective function,
the system directly uses the value that has been entered in the setup matrix.

7.26
Converting Planned Orders in SAP APO
SAP APO planned order CIF SAP R/3 planned order

P-100
Product Master Source 1000 Material P-100 Plant 1000
Receipt quantity 10 pc Order quantity 10 pc
Start End
Conversion indicator
Start End
10.12.2002 17.12.2002
0010 0020 0030
10.12.2002 17.12.2002
SAP APO prod. order CIF SAP R/3 production order

P-100
Product Master Source 1000 SAP R/3 execution functions
Receipt quantity 10 pc
Material P-100 Plant 1000
Conversion indicator Order quantity 10 pc
Start End Start End
0010 0020 0030 0010 0020 0030
10.12.2002 17.12.2002 10.12.2002 17.12.2002
 SAP AG 2003
 Planned orders are used to plan the in-house production of a material. SAP APO planned orders thus
already contain all production dates.
 SAP APO planned orders can be transferred to SAP R/3. The corresponding SAP R/3 planned orders,
however, contain no operation dates, but rather basic dates within which production should take place.
Moreover, they contain the dependent requirements, for both SAP APO and non SAP APO components.
The procurement of these components can be planned in SAP R/3 based on these dependent
requirements.
 You need to convert the planned orders from SAP APO into production orders, if production planning is
to take place in SAP APO PP/DS. A SAP APO production order differs from a SAP APO planned order
by its conversion indicator only. If the conversion indicator has been set in SAP APO, a corresponding
SAP R/3 production order is created in SAP R/3. This order assumes the production dates, that have
been determined in SAP APO. Moreover, like every SAP R/3 production order, it contains all the
functions needed to execute production (printing of order documents, confirmations, and so on).

7.27
Execution of SAP APO Planning in SAP R/3
R/3 APO
Flexible planning Demand Planning (DP)
Demand Plnd. ind.reqmts

management Plnd. ind.reqmts
Consumption
Sales (SD) Sales order Sales order
Production Planning (PP) Supply Network Planning (SNP)

Production Planning (PP/DS)
Release, Planned order
confirmations Production order Planned order
Production order Conversion
Purchasing
Purchase requisition order
(MM) Purchase requisition order Purchase order
Purchase order
Stock transport requisition
Stock transport requisition Deploy
-ment
 SAP AG 2002
 The mySAP component SAP APO is a planning tool that cannot be used on its own. On the one hand,
SAP APO relies on data from SAP R/3 (stocks or sales orders, for example) during planning; on the
other hand, the execution of dates and quantities planned in SAP APO takes place in SAP R/3. The
planning process in SAP APO therefore is linked to a permanent exchange of data between SAP APO
and SAP R/3.
 In Supply Network Planning (SNP) you plan for the short- or mid-term horizon for the entire supply
chain: You generate stock transport requisitions (for planning and stock transfer) between distribution
centers and plants, and can also generate planned orders (for in-house production planning) and purchase
requisitions (for external procurement planning) directly in the production plant for the longer term
horizon. In Production Planning and Detailed Scheduling however, you usually generate planned orders
and purchase requisitions directly in the production plant for the short-term horizon. Transaction data
generated in SAP APO is transferred to SAP R/3 for execution via the SAP R/3 APO interface (CIF:
Core Interface).
 As soon as planned orders and purchase requisitions approach today's date, the collective conversion of
planned orders into production orders as well as the conversion of purchase requisitions into purchase
orders is triggered. The system can convert stock transport requisitions into stock transport orders in
SAP APO Deployment. These documents are also transferred to SAP R/3 for execution. Execution
functions such as release, confirmation, material staging, or goods movement for production orders or
purchase orders are performed in SAP R/3. Confirmation and other data is then transferred back to SAP
APO from SAP R/3.
7.28
Production Planning/Detailed Scheduling: Unit
Summary
 To-the-minute production and procurement planning

can be carried out in SAP APO PP/DS. A wide range of
other functions, which go beyond the possibilities of
SAP R/3 MRP, are available.
 Production Planning in SAP APO can be carried out
for make-to-stock or make-to-production.
 Planning can be finite or infinite. In finite planning,
quantity and capacity requirements planning takes
place simultaneously.
 The production plan can be optimized within capacity
requirements planning.
 The conversion of planned orders into manufacturing
orders takes place in SAP APO.
 SAP AG 2002

7.29Production Planning/Detailed Scheduling Exercises
Unit: Production Planning and Detailed Scheduling

(PP/DS)
Topic: Interactive planning and product view
• Use the product view
• Execute interactive planning from the product view

group number) are planned in SAP APO. After requirements have
been planned outside the production horizon, PP/DS should be
carried out on the short-term area.
1-1 In the SAP APO product view, look at the planning situation for material T-F2## in
plant 1000:
1-1-1 From the PP/DS menu, call up the product view for product T-F2## in plant
1000:
Planning Version: 000
Product: T-F2##
Location: 1000
Confirm current messages using Enter and enter the product view. Current
planning elements are displayed on the “Elements” tab page.
1-1-2 You can see the PP/DS horizon in the list. Do requirements exist within this
horizon?
____________________________________________________
If yes, where do these requirements come from?
____________________________________________________
Are the requirements covered by receipt elements in the PP/DS horizon?
____________________________________________________
How high is the warehouse stock for the product?
____________________________________________________
1-1-3 You have just ascertained that planned independent requirements exist in the
PP/DS horizon. Which requirements strategy do these planned independent
requirements belong to? (To answer this question, look at the tab pages
“Forecast” and “Product master”.)

____________________________________________________
1-2 In the product view, carry out interactive planning for your product.
1-2-1 Return to the “Elements” tab page and proceed to the Change mode of the
product view. If necessary, choose the propagation range SAPALL.
1-2-2 Carry out planning for your product, using the Product heuristic tab. Confirm
the dialog box that appears using Enter.
Were new procurement elements created?
____________________________________________________
Note down the number of the first planned order that was newly created:
____________________________________________________
Save the planning.
1-2-3 Refresh the list and look at the number of the first planned order. What is
striking?
____________________________________________________
____________________________________________________
1-3 A customer orders 2 pumps for the current date + 7 days. Create this order in SAP R/3
in the form of a corresponding customer requirement:
Sales orders cannot be created in the SAP APO System.

They are transferred from SAP R/3 to SAP APO via the CIF
interface.
1-3-1 From the SAP R/3 Program Planning menu, call up the transaction Create
customer requirement. In the initial screen, enter distribution plant 1000
and then confirm this using Enter. In the following entry screen, enter the
Desired delivery date as the current date + 7 days. Reconfirm using Enter
and create a customer requirements item containing the following data:
Material: T-F2##
Order quantity: 2 pc.
Confirm your entries using Enter and save the sales order.
1-3-2 Refresh the SAP APO product view Is the sales order displayed?
____________________________________________________
1-3-3 Have the planned independent requirements been consumed by the customer
requirements quantity? (Look at the “Forecast” tab page).
____________________________________________________

1-4 To initiate production, convert the first planned order into a production order.
If PP/DS takes place in SAP APO, planned orders from SAP

APO have to be converted into production orders. In SAP
APO, a planned order differs from a production order by its
conversion indicator only.
1-4-1 Convert the planned order with the earliest date in the product view into a
production order. Proceed from the tab page “Elements” to the Change mode,
select the first planned order and carry out the function Set conversion
indicator: Save the planning.
1-4-2 Refresh the product view until a production order is displayed.
As a production order is being created in the background in

SAP R/3, it can take a few moments before you see a
production order in the product view.
1-4-3 Proceed to the Current stock/requirements list of the SAP R/3 System: Call up
the list from the SAP R/3 MRP menu. In the initial screen enter your material
number T-F2## and plant 1000 and then call up the list by choosing Enter.
Is the production order displayed?
____________________________________________________
Display the order from the list by selecting it and choosing the Display element
function. Proceed to the Operation overview. Have a look at the system status
of the individual operations. Have these operations been dispatched within
capacity planning?
____________________________________________________

7.30Production Planning and Detailed Scheduling Solutions
Unit: Production Planning and Detailed Scheduling

(PP/DS)
Topic: Interactive planning and product view
1-1 SAP APO menu path: Production Planning → Interactive Production Planning → Product
View
1-1-1
1-1-2 Requirements present? Yes, requirements exist in the PP/DS horizon.
Reason: The requirements come from the forecast transfer from Demand
Planning (FCReq.) Moreover, stock transfer requirements from Supply
Network Planning (PreqRel).
Requirements covered in the PP/DS horizon? No, the requirements are not
yet covered by receipts in the production horizon. PP/DS planning has not
yet taken place.
Warehouse stock: Warehouse stock in location 1000 is zero pieces
(warehouse stock is not displayed.
1-1-3 Requirements strategy of the planned independent requirements: The
requirements belong to requirements strategy 20, planning with final
assembly.
1-2
1-2-1
1-2-2 New procurement elements? Yes, new procurement elements (planned
orders) were created.
Number of the first newly-created planned order: Varies, for example 11799.
1-2-3 What is striking? The number of the planned order changes (to 30176, for
example). This new number comes from SAP R/3: The planned order was
transferred to SAP R/3 in the background, given a number there according
to SAP R/3 number ranges, and this number was then transferred back to
SAP APO.
1-3
Demand Management → Customer Requirements → Create
1-3-2 Customer requirement shown? Yes, the customer requirement is displayed.

1-3-3 Consumption? Yes, consumption takes place.

1-4
1-4-1
1-4-2
Production order displayed? Yes, the customer requirement is displayed.
Receipts planned according to capacity? Yes, the receipts are planned
according to capacity (Status DSPT).

8
Conclusion
Course Overview
Demand Planning
Demand
Management
Planning
Scheduling
Conclusion
 SAP AG 2002
(C) SAP AG SCM200 1

8.2
Course Summary
You are now able to:
 Describe the role of the mySAP components R/3

and APO in Supply Chain Planning
 Specify which master data and transaction data is
used in Supply Chain Planning
 Explain the integration of SAP R/3 and SAP APO
 Carry out fundamental planning functions:
Demand Planning, Demand Management, Supply
Network Planning, Material Requirements
Planning.
 SAP AG 2002
(C) SAP AG SCM200 2

8.3
Recommended Follow-Up Courses
In terms of content, the following overview course follows on directly

from this overview course:
 SCM300 Overview Supply Chain Manufacturing
Follow-up courses in Supply Chain Planning are:
 SCM220 Demand Planning

 SCM230 Supply Network Planning
 SCM240 Production Planning Part 1
 SCM242 Production Planning Part 2 (SAP APO PP/DS)
 SCM244 Production Planning Part 2 (SAP R/3 MRP)
 SAP AG 2002
(C) SAP AG SCM200 3

8.4
Recommended Follow-Up Activities
 Go through the exercises using IDES data or your own data

 Read online documentation
 Read IMG documentation
 Read release notes
 SAP AG 2002
(C) SAP AG SCM200 4

PLM150 EngineeringChangeAndConfigurationManagement

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

PLM150 EngineeringChangeAndConfigurationManagement

Загружено:

Авторское право:

Доступные форматы

SCM200 Überblick Supply Chain

Release 640 04/06/2006

THE BEST-RUN E-BUSINESSES RUN SAP

 Software Components: SAP R/3 ERP, SAP APO 3.1

0.3SCM200-Supply Chain Planning Overview

Copyright 2004 SAP AG. All rights reserved.

 SAPSCM (mySAP SCM Overview)

(C) SAP AG SCM200 1

This course will prepare you to

 Gain a basic understanding of SAP functions in the

(C) SAP AG SCM200 2

At the conclusion of this course, you will be able to:

 Describe the role of the mySAP components R/3 and

(C) SAP AG SCM200 3

Unit 5 Supply Network

(C) SAP AG SCM200 4

Master Data and Transaction Data

Supply Network Planning

(C) SAP AG SCM200 5

 You are a member of the project team responsible for

(C) SAP AG SCM200 6

SC Exchange Sales Processes

Key Functional Area

(C) SAP AG SCM200 7

Enterprise Portal: Consistent access to all components

... SAP SAP Core

(C) SAP AG SCM200 8

(C) SAP AG SCM200 9

Sales Global Available-to-

(C) SAP AG SCM200 10

Functions of Demand Planning

(C) SAP AG SCM200 11

Flexible Planning (R/3 SOP) and Demand Planning (APO

 Incoming orders  Statistical forecasting

(C) SAP AG SCM200 12

Planned independent requirements and sales orders

Material Requirements Planning

(C) SAP AG SCM200 13

Supply Network Planning (SNP)

 Planning of material flow along

(C) SAP AG SCM200 14

Plnd. Ind. Sales Plnd. Ind. Sales

Planned orders SNP planned

Today PP/DS horizon Time

(C) SAP AG SCM200 15

Material Requirements Planning in multilevel production

Bill of material Require

Planned order Finished product

Today When does procurement need to begin? Time

(C) SAP AG SCM200 16

 To-the-minute planning of production,

(C) SAP AG SCM200 17

Available 1st Loading Attempt

(C) SAP AG SCM200 18

Demand Plnd. ind. reqmts Plnd. ind. reqmts

Sales (SD) Sales order Sales order

Production Planning (PP) Supply Network Planning (SNP)

Purchasing Purchase requisition

Stock transport requisition

 Supply Chain Planning, which in essence is realized

(C) SAP AG SCM200 20

 SAP R/3 master data

(C) SAP AG SCM200 1