APO Overview

Copyright
Copyright 2001 SAP AG. All rights reserved. No part of this publication may be reproducedor 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. All rights reserved.
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SAP Advanced Planner and Optimizer (APO)

Level 2 SAP R/3
LO050 5 days
Level 2 SAP APO
Level 3 SAP APO

AP210 5 days Demand Planning
PP - Planning and Execution for Discrete and Repetitive Manufacturing
AP010
2 days
AP215
3 days
SAP APO Overview AP205 2 days
Supply Network Planning AP220 3 days
Integration Master Data
Production Planning/ Detailed Scheduling AP230
LO060
5 days BC555
PP-PI Process Manufacturing
liveCache Administration
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The level 2 course AP010, the first in the series of SAP Advanced Planner and Optimizer courses, provides an overview of the individual SAP APO components and is a prerequisite for all of the level 3 SAP APO courses. The level 3 courses build on the knowledge gained during AP010 and broaden your working knowledge of the individual SAP APO components. The five level 3 courses give detailed information on the following areas: Demand Planning, Integration, Supply Network Planning, Production Planning and Detailed Scheduling, and Global Availability Check. System administrators can also attend course BC555 liveCache Administration, which is listed in the Basis Administation Training curriculum.
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Course Prerequisites Prerequisites

l None
Recommended
l General understanding of supply chain concepts
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Target group Target group

l
Project team members involved in the implementation of APO (Advanced Planner and Optimizer) in their company.
Duration
l 2 days
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Notes to the user
The training materials are not intended as self-study programs. They complement the course instructor's explanations. There is space for you to write down additional information on each page. There may not be enough time in the course to do all of the exercises. The exercises are additional examples that are done during the course. Participants can also use these examples to refresh or extend their knowledge after the course.
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Company Profile: Precision Pump Company Precision Pump Company

l The Precision Pump Company was launched in 1971 and is the market leader, selling a large variety of high-tech standard pumps. It has been listed in the New York stock index Nasdaq 100 since 1999.
Products
l
In the product catalog are turbomolecular, centrifugal, rotation and membrane pumps (for the manufacture of ultrahigh vacuums, for example).
Customers
l
From the electronics industry, semiconductor industries, chemical technology, pharmaceutical technology, and process technology up to and including vehicle manufacturers, and universities.
SAP AG 2001
The Precision Pump Company was launched in 1971 and is the market leader, selling a large variety of high-tech standard pumps. In the product catalog are turbomolecular, centrifugal, rotation and membrane pumps. Its customers come from the electronics industry, semiconductor industries, chemical technology, pharmaceutical technology and process technology up to and including vehicle manufacturers, and universities. The company recently became ISO certified and has been listed in the New York share index Nasdaq 100 since 1999. In the rapidly growing business area of turbomolecular pumps in particular, the company has shown a clear rise in revenue over the past business year: in the semiconductor industries countless steps, from wafer manufacture, to the final chip, can only be made under high vacuum conditions. In this area, there has to be ultimate pressure of < 10-10 mbar (i.e. ultrahigh vacuum). During the current fiscal year, the company is planning to enter the booming DVD growth market. DVDs are a form of rewritable optical memory media. They are distinguished from the CD by their large memory capacity. Coating equipment needed to create these rewritable DVDs also uses vacuum technology. Via intensive "co-engineering" with manufacturers, Precision Pump Company has optimized a large number of products to match these special requirements.
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Plants and Distribution Centers
3000 New York
2500 DC Rotterdam 1000 Hamburg (main plant and company headquarters) 2400 DC Milan
3800 Denver
2300 Barcelona
Plant
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BOM P-102
Pump Precision 102
P-102
(FERT, T-F2##) (1000, 0, _ )
Item 0010
Casing
0020
Fly wheel
0030
Shaft
0040
Pressure cover
0050
Document
0060
Screw
100-100
(HALB, T-B1##) (1000, 10, 2 )
102-200
(HALB, T-B?##) (1000, 10, 2 )
100-300 (HALB, T-B3##) (1000, 0, _ )
100-400
(HALB, T-B4##) (1000, 10, 2 )
P-100
(T-F1##) DRW, 000, 00
100-130
(ROH, 100-130) (1000, 10007, 2 )
Item 0010
Slug
0020
Flat gasket
0030
Screw
0010
Slug
0010
Slug
0010
Slug
100-110
(ROH, T-T1##) (1000, 1000, 2 ) 1003 Gusswerke (5300000866)
100-120
(ROH, T-T2##) (1000, 1000, 2 ) 1003 Gusswerke (5300000867) 1006 Blacks (5300000720) 1011 Kugelmeier (5300001081)
100-130
(ROH, T-T3##) (1000, 1000, 2 ) 1002 M (5300000790) 1022 Max Wholesale (5300000721)
100-210
(ROH, T-T0##) (1000, 1000, 2 ) 1003 Gusswerke (?) 1011 Kugelmeier (5300001106)
100-310
(ROH, T-T4##) (1000, 1000, 2 ) 1003 Gusswerke (?) 1011 Kugelmeier (5300001107)
100-410
(ROH, T-T5##) (1000, 1000, 2 ) 1003 Gusswerke (?)
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This slide shows the R/3 BOM for the product P-102 (T-F2##). This BOM was transferred via CIF as a PP/DS BOM with the screw 100-130 only being planned in R/3. An SNP BOM was then generated from the PP/DS BOM. During automatic conversion it was defined that only the products P-102, 100-100, 100-110, 100-300 and 100-310 are SNP relevant. Legend: (Demo material number for SD, consulting) (training material type, training material number (xx = 00 - 20)) (plant, stock, single/collective requirements indicator)
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Only R/3
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APO Overview
Contents:
l l Introduction to Supply Chain Overview of APO Planning Applications
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Course Goals
This course will prepare you to: l l l List the fundamental planning scenarios of the Advanced Planner and Optimizer (APO) Explain the functions and interplay of the individual APO components Describe the integration with the execution system and information systems
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Unit Objectives
At the conclusion of this course, you will be able to l l l l Explain the concepts of Supply Chain Management List the advantages of APO Summarize the functions of the planning applications in APO Explain the interplay of the individual planning applications
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Course Content
Preface Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Course Overview Integration and Technology Modelling and Evaluation in APO Demand Planning Supply Network Planning Unit 9 Unit 10 Unit 6 Unit 7 Unit 8 Production Planning / Detailed Scheduling Transportation Planning / Vehicle Scheduling Global Available-to-Promise APO SCM Implementation
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Course Overview Diagram
1 1 Course Overview 1 2 Integration and Technology 3 Modelling and Evaluation in APO

4 Demand Planning 5 Planning
Supply Network Production Planning/Detailed
7 Transportation Scheduling Planning/Vehicle 8 Global Available-to-Promise 9 Conclusion
6 Scheduling
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Business Scenario
Precision Pump company would like to improve management of its supply chain, in order to recognize bottlenecks earlier, improve usage of resources and to reduce costs. Reduced lead times and the guarantee of material and resource availability improve Pump Precision's customer service.
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The Supply Chain: From Supplier to Consumer
Information flow
Transfer
Transfer
Transfer
Transfer
Supplier
Manufacturer
Distribution
Retail Outlet
Consumer
CASH FLOW
Supply Chain Optimization
Increase customer responsiveness at least cost
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Supply Chain Management includes the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. The co-ordination and integration of these flows within and across companies are critical in effective Supply Chain Management. Why manage the supply chain? Improve customer service Lower sourcing costs of finished goods and raw materials Dramatically lower inventory levels
Leverage all resources to bring substantial benefits to a company
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Why Have Supply Chain Management?

Innovation ? Companies today are being forced to adapt to changes in the marketplace in order to stay profitable.
Changing Consumer Buying Patterns More products Alternative ways to shop Collaborative Planning Sales Purchasing
Shortened Cycle Times Improved customer service Flexible reaction to service requests
More Effective Planning More accurate forecasting Feasible plans Lower inventory levels
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Increased Demand for Value-Added Programs Custom packs/displays
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Key Supply Chain Problems

l l
Customers
Postponement Bullwhip Effect

Delivery time
DCs
Lead time
Plants
Suppliers
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Supply Chain
The key supply chain problem is that the delivery time of products to the customer must be considerably shorter than the production or the lead time. In order to realize this and to guarantee a high delivery service, inventory and safety stock must be built up at component 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, where the decoupling of make-to-stock production (push strategies) (MTS), and make-to-order production (pull strategies) (MTO), takes place. The bullwhip effect refers to an increase in variability of a (constant) demand pattern - due to large fluctuations at the manufacturer or the supplier - as we move along the supply chain, triggered by lot size creation. Implementing an APS system (Advanced Planning System) does not in itself solve supply chain problems. It is also important that company bosses are prepared to consider making organizational changes to their companies, or at least looking into the possible benefits.
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Push
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Pull
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Comparison of MRP II with APS Systems
Aggregation Level
Demand Planning for anonymous demands Master Production Scheduling (MPS) MRP II Material Requirements Planning for Dependent Requirements (MRP) Lot Sizing
APO
Capacity Requirements Planning Scheduling
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APS (Advanced Planning Systems) is the description of the new generation of planning systems with simultaneous quantities and capacity requirements planning. The acceptances for the MRPII concept proved to be too restrictive: Material planning has highest priority Capacity requirements planning and scheduling are functions that are separate and subsequent to material planning and are executed successively Individual planning of separate products. The BOM demands are planned successively and are not linked to each other (no pegging) Evaluation and rescheduling of exception situations is feasible Cross-plant planning and distribution resource planning do not have to be reflected in the system Disadvantages of the MRPII concept: The sequential planning process lasts too long; exceptions cannot be replanned quickly Constraints and capacities are planned infinitely and require the plan to be postprocessed Individual planning of separate products is not given for lot sizes and manufacture of co-products Static safety and buffer times lead to long lead times and unrealistic capacity loads
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Planning Horizon
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Result: Feasible plans
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SAP's Total Supply Chain Solution

Strategic Application Level
Customer Relationship Management (CRM)
R/3
Core Business Application Level
Finance HR
Supply Chain Solutions (APO)
Integration
Strategic Enterprise Management (SEM)
Core level
Database structure Interfaces Development tools Communication
liveCache
Electronic Commerce B2B
Logistics
Sales
Client-Server
Materials Management
Production Planning
Scalability
Business Information Warehouse (BW)
Flexibility
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Non-R/3 Systems
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Advantages of APO
High performance using liveCache technology Global server: integrates multiple OLTP systems Collaborative planning via the internet Simultaneous material and finite capacity requirements planning Cross-plant optimization of the resource load Sequence and setup time optimization of orders Transportation optimization with route planning Evaluation and analysis of orders Seamless integration between APO and R/3
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Levels of Supply Chain Management

Planning
Strategy planning
Decision of direction for the company
Supply Chain Design Network Design (ND)
planning)
Operational detailed planning (operational

planning)
Aggregated sales and demand planning Demand Planning (DP) Supply Network Planning (SNP)
Ext. proc. planning PP/DS SNP
Production planning PP/DS SNP
Delivery planning ATP, TP/VS
External procurement for example, LES, MM
Production for example, PP
Outbound delivery for example, LES, MM, SD
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Execution
In Supply Chain Management, there is a planning level and an execution level. Within the planning level APS systems are used (APS = Advanced Planning Systems), and at the execution level, ERP systems (ERP = Enterprise Resource Planning) are used. The planning level is divided into different planning levels depending on the meaning of the decisions made: strategic, tactical and operational. The criterion for deciding what belongs to which planning level is not primarily the planning horizon but rather the scope of the planning. Each hierarchically superior level determines the ranges of the planning levels below it. Strategic level (strategy planning): Here, comparatively unstructured and simple planning tools such as portfolio techniques (product life cycle analysis, Boston Consulting Group portfolios, McKinsey portfolios, for example) are used to make decisions about the direction of the company (such as product diversification strategies, quality strategies, cost leadership). Tactical level (strategy realization and infrastructure planning): decisions about direction are realized at this level when the company is restructured based on the strategies. Tactical planning is decisive for operational planning and execution because they form the planning environment in the company (planning personnel, IT systems for planning, their selection, implementation and setting parameters, planning processes) as well as the part of the company that physically executes (such as factory planning, personnel planning, transportation planning, logistically-relevant IT system for execution). This links the operational planning level and the execution level. ...
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Partner
Customer
Tactical planning: strategy realization and infrastructure planning (plan infrastructure) Operational aggregated planning (tactical
Supply Chain Collaboration marketplace integration
Supply Chain Collaboration marketplace integration
Supplier Partner
... Operational level (operational aggregated and detailed planning): Structured, recurring planning based on tactical realization decisions such as strategies for settling sales orders and pre-planning, which are not questioned again in operational planning. Operational planning can also be long-term to bridge bottlenecks that will occur in the future, such as early planning for seasonal requirements or planning runs to determine components with longer replenishment times. Planning for further planning in the future is usually done aggregated objectively or based on time since planning data is uncertain. Aggregated planning also serves to redirect tactical planning if necessary, for example, additional shifts, additional capacity, outline agreements with suppliers. Detailed planning attempts to optimally use the logistic system within the limits set by tactical and aggregated planning and based on the most current data. Execution level: Along with the development of the product (production, stock transfer, sorting, receipt, delivery), administrative activities are also performed at the execution level. These activities are supported by execution systems, for example, when papers for production (production orders) are printed.
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APO Planning Components
Monitor
APO Product Map

Network Design Supply Network Planning Production Planning & Detailed Scheduling Distribution Planning & Deployment
Supply Chain Cockpit
Tactical
Agg. Planning
Sales Transportation Planning & Vehicle Scheduling Planning
Detailed Planning Purchasing
Scheduling
Global Available-to-Promise
BUY
MAKE
STORE
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Supply Chain Cockpit: A graphical tool for evaluating and controlling the supply chain. Network Design: Strategic planning for analyzing, optimizing and reorganizing the supply chain. Longterm sourcing, production and distribution decisions are supported here. Demand Planning (DP): aggregated and detailed demand planning with a variety of forecasting techniques based on aggregated sales figures. Supply Network Planning (SNP): Finite, cross-location, mid- to long-term production and procurement planning with simultaneous material planning and capacity scheduling. Deployment is used to plan short-term replenishment. Production Planning/Detailed Scheduling (PP/DS): Finite, detailed production planning. PP/DS uses simultaneous material planning and capacity scheduling, and optimization techniques to generate feasible plans that are in the optimum sequence with the optimum setup-times. Transportation Planning/Vehicle Scheduling (TP/VS): Optimizes use of transportation vehicles and selection of carriers. Generates deliveries and shipments. Global Available-to-Promise (ATP): Rules-based availability check that is integrated with production planning and product allocation.
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Network Design
Strategic Supply Chain Planning
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Network Design is a component used specifically for strategic planning. You can use this tool to make assignment decisions (relationships between individual locations and assignment of products to locations), as well as to make additional decisions regarding locations (location determination and location selection), taking account of demand and cost structures. Network Design can also be implemented for regular evaluation of the existing supply chain in order to discover any weaknesses and take any necessary measures. There are four methods available in Network Design for planning the supply chain network. These methods optimize either geographical distances or costs, in each case taking the demand structures into account.
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APO Planning Sequence with R/3 Integration

R/3 or non-SAP system
Flexible Planning Demand Planned ind.reqmts management Sales & Sales order Distribution (SD) Production Planning (PP)
Release, Confirmations
APO
Demand Planning (DP) Planned ind.reqmts
Consumption
Sales order Supply Network Planning (SNP) Prod. Plng & Det. Schedlng (PP/DS) Planned order Conversion Production order Purchase requisition Purchase order Stock transport requisition Stock transport order
Planned order Production order Purchase requisition Purchase order Stock transport requisition
Purchasing (MM)
Logistics Execution System (LES) Delivery Transfer order Execution

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In APO Demand Planning (DP) you base forecasts on aggregated historical data from the R/3 or Business Information Warehouse (BW) system (such as sales quantities from past sales orders). You use the "Administrator Workbench" in APO to upload aggregated historical data from the R/3 or BW system. In APO Demand Planning you generate planned independent requirements (release forecast to APO Demand Planning) that are used for make-to-stock planning. If you are not yet using APO Demand Planning, it is also possible to generate planned independent requirements in the R/3 system (either manually in R/3 Demand Management, or automatically in R/3 Demand Management using data from R/3 Flexible Planning, Sales and Operation Planning (R/3 SOP), or Sales and Profit Planning (R/3 CO/PA). If you do this, the planned independent requirements are transferred to APO through the R/3 APO interface (CIF).
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Transp. Plng & Veh. Schedlng (TP/VS) Planned delivery Delivery Planned shipment / Shipment
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Deploy -ment
Sales orders and planned independent requirements form the starting point for both Supply Network Planning (SNP) and Production Planning / Detailed Scheduling (PP/DS) in APO. Existing storage location stock is also included in the planning. Here, sales orders are entered in the R/3 system (sales module) but the availability check (or ATP check - Available to Promise) is done in APO. Sales orders then consume the planned independent requirements in APO depending on the APO "requirements strategy". 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.
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...
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... Transaction data generated in APO (such as planned orders) is transferred to the R/3 system through the R/3 APO interface (CIF: Core Interface). The APO demand plan is only transferred from APO to the R/3 system as planned independent requirements through mass processing from within APO Demand Planning (however, you only need to do this if Production Planning is being done in the R/3 system rather than in APO). It is however possible to automatically transfer planned independent requirements that have been maintained in R/3, to APO through the CIF. As soon as planned orders and purchase requisitions get closer to the today-line, the stock planner or buyer can collectively convert planned orders into production orders and purchase requisitions into purchase orders. You use the APO Deployment /TLB (Transport Load Builder) to convert stock transport requisitions into stock transport orders. APO is a planning tool: execution functions such as release, confirmation, material staging, or goods movement for production orders or purchase orders are performed in the R/3 system. Confirmation and other data is then transferred back to APO from the R/3 system. You create planned deliveries in Transportation Planning and Vehicle Scheduling (TP/VS). In APO TP/VS different deliveries can also be grouped together into one shipment. It is then possible to convert planned deliveries and planned shipments into real deliveries and shipments and transfer them to the R/3. The R/3 system then actions the above (such as printing documents and managing status).
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The Demand Planning Lever Effect
Demand Planning
Supply Network Planning Production Planning

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Small changes made during Demand Planning cause large changes to be made during Production Planning. The aim of Demand Planning therefore is to create sales quantity forecasts that are as accurate as possible.
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Functions of Demand Planning
l l l
Retail outlet Suppliers Distribution centers
Cross-company Demand Planning (internet) Consistent, detailed and consolidated plans Statistical and causal forecasting techniques Lifecycle planning Promotion planning
l l
Production units
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Demand Planning is a complex, powerful, and flexible tool that supports your company's demand planning process. User-specific planning layouts and interactive planning books not only allow you to include different departments, you can also use them to include other companies in the forecast creation 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 consensusbased approach to consolidate the demand plans of different departments. You can use forecast overrides and promotions to add marketing intelligence and management adjustments. The seamless integration with APO Supply Network Planning supports an efficient Sales and Operations Planning (S&OP) process.
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Demand Planning Concept

Location Product hierarchy Sold-to party Sales organization Region
Aggregated actual data
Future demand forecast
Incoming order value

Quantities Values
BW R/3 Excel Non-SAP system
l l l
Statistical forecasting Collaborative forecasting Promotions
Invoice
Quantities Values
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The APO DP library of statistical forecasting 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 by using forecast overrides and promotions. Aggregated actual data can be extracted from the R/3 system in exactly the same way as it can be imported from BW, Excel, and legacy systems.
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Collaborative Planning in APO

Collaboration with Suppliers Collaboration with Customers
Supplier l l l l
Manufacturer Product requirements Production dates Procurement Delivery dates l l l l
Customer Demand plans Promotions Stock levels Delivery dates
Supply Chain Optimization
High efficiency, precise information and short lead times to improve delivery of service
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Supply Network Planning (SNP)
Screen Title
APO - Product
Supply Network Planning
ID
Object Object 1 Object 2 Object 3 Object 4
Text Text 1 Text 2 Text 3 Text 4
Des Gra ign ph Grid Title Key Figure 1 Key Figure 2 Key Figure 3 Key Figure 4
Tota l W 24 W 25
APO - Product Capacity Leveling W 26
Tota l W 27 W 28
Selection Profile
User Selection ID
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SNP Planning plans the mid- to long-term horizon. It creates a rough quantity-based, cross-location production and distribution plan with individual rough bills of material (BOM) and routings. The SNP BOM contains critical products that are produced on bottleneck resources and products with a long replenishment lead time. SNP ensures that the right quantity is available on the right day without critical resources being overloaded. The smallest unit used for scheduling is days.
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Planning Book
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Grid 2 Title W 24 W 25 Key Figure 1 Key Figure 2 Key Figure 3 Key Figure 4 Key Figure 5
Key Figure 5
W 26
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W 27 W 28
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Supply Network Planning Scenario
Demand Plan
Supplier
Plant
DC
Customer
l l l l
SNP plans the material flow along the supply chain Mid- to long-term, finite, cross-plant planning Result: Feasible plans Prioritization of demands; supply optimization
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The role of Supply Network Planning involves: Planning supply to meet demand
Integrating purchasing, production, and distribution in one consistent model in the entire supply network Synchronizing activities and planning material flow along the supply chain
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Comparison of Mid- and Short-Term Planning
Sales orders
Forecasts
Sales orders
Forecasts
Production Planning/Detailed Scheduling

l l l

l l l
PP/DS planned orders Purchase requisitions Stock transfers
SNP planned orders Purchase requisitions Stock transfers
l l l l l
PP/DS BOM and routing Finite, detailed planning per location Sequences and setup times Continuous and order-related Pegging
l l l l l
SNP BOM and routing
Cross-plant finite planning
Distribution and procurement Quantity and bucket-oriented No pegging
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Production horizon
SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of a single, global consistent model. SNP uses advanced optimization techniques, based on constraints and penalties, to plan product flow along the supply chain. The result is optimal purchasing, production, and distribution decisions, reduced order fulfillment times and inventory levels, and improved customer service. Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all dependent orders can be adjusted automatically.
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Production Planning / Detailed Scheduling (PP/DS)
Production Planning/ Detailed Scheduling
SAP AG 2001
Where Supply Network Planning (SNP) is usually used for rough mid- to long-term planning over the entire supply chain (in particular when there are several plants and distribution centers), Production Planning and Detailed Scheduling (PP/DS) is usually used for to-the-minute short-term planning in a production plant. In Supply Network Planning (SNP) demands are aggregated for a specified bucket ("day" for example). It is irrelevant here whether a requirement falls within an early or a late shift, as requirements are only planned roughly here - it does not include break times either. The sequence of orders is not an SNP time consideration. Cross-plant planning, and mid- to long-term planning in the production plant however do all play an important role in Supply Network Planning. Production Planning and Detailed Scheduling however, does schedule orders to-the-minute (meaning that shifts and breaks are included here), and does include order sequences (sequencing and optimization of sequences). In the short-term horizon, these functions are highly important for the production plant. As soon as a requirement (such as a sales order or planned independent requirement) falls within a specific horizon, it is no longer planned in the SNP planning run, but instead in the production planning run of PP/DS.
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Functions of Production Planning / Detailed Scheduling (PP/DS)

l Plans production, external procurement, and stock transfer within the production plant to-theminute Plans simultaneous material requirements and schedules finite capacity at operation level for the short-term horizon Takes order sequences into account Optimizes machine schedules (sequences, lead times)
Customer
Resource 2 Resource 1 Resource 3
l l

SAP AG 2001
30 20 10
Transfers the planning results to an execution system (such as the R/3 Shop Floor Control)
Time
Production Planning and Detailed Scheduling (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. PP/DS has the following functions: It generates planned orders (to plan in-house production), and purchase requisitions or scheduling agreement schedule lines (to plan external procurement) in the event of product shortage. It uses simultaneous material and capacity requirements planning 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. When there is no available capacity, the system searches for a date on which the order operation can be carried out, taking account of the capacity situation.
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Takes order sequences into account: when new in-house production orders are created, the setup times in the new order can be determined automatically from the setup status of the resources (depending on the preceding order). It is possible to display the orders in graphic format (in the detailed scheduling planning board), and to sequence from there. Alternatively you can use the optimizer to execute a sequencing. Machine scheduling optimization: during planning, it is possible for orders to be generated that do not have an optimum order sequence. Therefore, you can change the sequence and resource assignments of existing orders using the optimization run. PP/DS is a planning tool. Execution functions such as confirmations and goods receipts are performed in the execution system (for example, R/3). Therefore, the planning results are transferred to the execution system.
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Deployment
Deployment adjusts the stock transfers for short-term changes on both the supply and demand side (distribution detailed planning).
Fair Share
Proportional distribution Proportional target fulfillment Quota arrangements
Calgary Winnipeg
DC1
Push deployment
Push horizon
Plant
Customer
DC2
Chicago
SAP AG 2001
The deployment function in SNP determines how and when inventory and planned supplies should be deployed to distribution centers, customers, and vendor-managed inventory (VMI) accounts. It generates optimized replenishment plans that take into account short-term changes on the supply or demand side, as well as constraints, such as transportation and storage capabilities. A variety of deployment strategies are used depending on the current situation (e.g., fair share, push deployment, pull-push deployment).
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Transportation Management
APO TP/VS
(Planning)
l Is integrated with the APO components DP, SNP, PP/DS, and ATP l Evaluates the planning in BW l Plans for both short, and long term horizons
BW
(Monitoring)
LES (Execution)
TP/VS, LES, and BW provide an integrated solution for transportation management within the Supply Chain
SAP AG 2001
The TP/VS component has the following functions:
Transportation planning and transportation consolidation Transportation mode and carrier selection Multi-pick up and multi-drop functions Management by exception
Vehicle Scheduling and route determination in a dynamic environment
The APO system includes the tactical and operational planning area from the SAP Transport Management solution, which is complemented for transportation execution by the SAP component from Logistics Execution Systems (LES).
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Global Available-to-Promise (Global ATP)

Is it possible to deliver the product in the required quantity, and on the required date?
l l l
Event-driven Internet capabilities Rules-based ATP: Location substitution Product substitution
l
Rules
Integration with PP/DS Product allocations High performance (time series)
l l
SAP AG 2001
You use Global ATP (Available To Promise) to check product availability and capacities, to provide customers with reliable confirmation dates for their sales orders. ATP checks are triggered from the OLTP system (R/3 system, or non-SAP system) as an event (eventdriven). In the interface with APO you can specify that the ATP check is to be done in APO and not R/3. If you create a sales order in R/3, for example, the system first checks if there is enough of the requested product in stock. The system can also check if receipts (for example, production orders and planned orders) have already been planned by the requested date. Global ATP has the following functions: Rules-based ATP: When there is no availability, it is possible in APO to set it so that the system does an ATP check for the product at another location or else substitutes that product for an alternative one (location and product substitution). Integration with PP/DS: It is also possible to set it so that when a product is not available, the sales order directly triggers production. If it triggers an order for in-house production, APO creates a planned order for the required quantity in PP/DS. Product allocations: Product allocation allows you to manage the supply of scarce products to customers, so that each customer only receives an allocated amount. Time series: Planned orders and production orders are aggregated and represented in a time series, which can be used to evaluate the incoming requests from the sales orders. This improves performance of the ATP check.
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Optimization Solutions
APO optimization solutions

A complete range of optimization solutions adjusted to the planning tasks
Linear programming / mixed / whole number programming Genetic algorithm constraint-based programming
Supply Network Design + Planning
Tab. search
Transportation planning
SAP AG 2001
In APO, the following optimizers are available: optimizer for CTM, optimizer for PP/DS, optimizer for Network Design, optimizer for Sequence Planning, optimizer for Supply Network Planning, optimizer for Transportation Planning. In Supply Network Planning, optimization problems are usually of the nature that they can be solved with an "exact mathematical solution procedure" (which can be solved using linear equations). For this reason, linear programming is used for optimization in Supply Network Planning. Linear programming is able to calculate an "exact solution". In Production Planning and Detailed Scheduling (PP/DS) however, there are usually more complex optimization problems for which no "exact solutions" can be found. Therefore, linear programming is less suited for PP/DS. Instead, solutions are more able to approximate an "optimum or exact solution". Approximate optimization procedures are therefore more suited to be used in PP/DS (genetic algorithm/constraint-based programming). This allows the optimization system to find a suitable solution faster. The different optimizers can be installed on the same server on which the APO application, the liveCache, and the database are all installed (but you can also install them on different servers). The APO application server and the optimizer are linked via a TCP/IP connection. Here you specify whether the optimizer is to be called on the APO application server or on a different server (transaction sm59).
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APO Overview: Unit Summary
You are now able to

l l l l Explain the concepts of Supply Chain Management List the advantages of APO Summarize the functions of the planning applications in APO Explain the interplay of the individual planning applications
SAP AG 2001
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APO Integration and Technology
Contents:
l l l liveCache Technology Integration of the Online Transaction Processing (OLTP) System and APO Pegging
SAP AG 2001
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Unit Objectives
At the conclusion of this unit, you will be able to l l l Describe the advantages of liveCache Technology Outline the data exchange between R/3 (or other OLTP systems) and APO Explain the pegging tasks.
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Overview Diagram (1)
1 Course Overview 2 2 Integration and Technology 2 3 Modelling and Evaluation in APO 4 Demand Planning 5 Supply Network Planning 6 Scheduling
Production Planning/Detailed
7 Transportation 9 Conclusion
8 Global Available-to-Promise
Planning/Vehicle Scheduling
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Business Scenario
With high performance and pegging procedures, the liveCache technology allows quick, simultaneous material and finite capacity planning. Pump Precision uses the R/3 as an execution system and APO for planning. The Core Interface (CIF) provides a close integration of the systems, where order data is exchanged in real-time.
SAP AG 2001
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APO Application Architecture
OLTP (R/3) OLTP (R/3) LIS, CO-PA HR, FI Planned Indep. Requirements Customer orders Production Scheduling Inventory management Transportation processing
Global ATP
APO APO
Supply Chain Cockpit Demand Planning
Information Information Warehouse Warehouse (SAP BW) (SAP BW) Historical data
PP / DS
Deployment
Key Performance Key figures (KPIs)
Transportation Planning
SAP AG 2001
Aggregated actual data can be transferred to APO from OLTP, BW (Business Information Warehouse), Excel, and Legacy systems, and saved in InfoCubes. This data is the basis for forecasting. The demand plan is created as a result of the forecast. You release the demand plan to Production Planning, which creates planned independent requirements for Supply Network Planning (SNP), and PP/DS. You can also transfer the demand plan to the operating system (OLTP) as planned independent requirements. The seamless integration with Supply Network Planning (SNP), and PP/DS supports an efficient S&OP process.
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What is liveCache ?
l Main objective = higher performance:
Performance-critical routines (in C++) are running in address space of the liveCache management system => no heavy data transfer between application and data storage
Application
> 1 ms
Application
< 10
Data Storage
liveCache liveCache
Data Storage
SAP AG 2001
Access to data in the liveCache is approximately 100 times faster than it is in a database (10 microseconds as opposed to one millisecond). Display of complex data structures (nets, trees). The typical liveCache data structure is NOT a relational data table. Easy node access (grid access points, navigation). Simultaneous access is possible (read & write). Fast data recovery.
Little navigation needed within the networks. Applications run where the data is stored Further advantages for the user:
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"Shared data" for application and the application server (independent of the R/3 OLTP database). Higher performance (performance-critical routines run the stored operations and problem-specific data modeling
is therefore supported in the same address space as it is in data management. This is more efficient than relational data modeling).
Scalability via a number of processors. Scalability of the liveCache, because of an interlaced architecture.
Higher data security in a simple C program that saves all data. In case of a program termination (downtime), data will not be lost.
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liveCache Technology
l Avoid disk I/O through shared, buffered data Hold all application data in memory Save large datasets l Optimized data structures Support application-specific data structures (e.g. store BOM as a tree rather than a relational table) l Built-in business functionality Run application logic where the data is stored Aggregate OLTP database information in main memory
Application Server
ABAP-Application Program exec sql. Execute procedure "Schedule_order" (OUT : var1, IN : table1, IN : var2) endexec.
Optimized method coding Schedule_order
SAP AG 2001
A liveCache management system is in a non-ABAP environment. During the first liveCache upload (bring up), mass data (master data and transaction data) from the connected R/3 and legacy system(s) is either sent to the APO System, reduced (filter) or transformed into an APO presentation. Some of the data is then also sent to the liveCache. Changes from an OLTP are transmitted into APO in real-time and therefore into liveCache, if the OLTP system is an R/3 System. In case of non-R/3 Systems there is only one periodic upload of the changes. The APO server presents changes to be sent back from APO or liveCache into an OLTP system, in a special data structure (black board). From here, the OLTP system collects the relevant changes in regular intervals.
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Optimized data structures
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R/3 Plug-In Technology
BBP
CRM
BW
SEM
R/3
(from Release 3.1I)
R/3 Plug-in
CIF
APO
Information on R/3 Plug-in: SAPNet/R/3 Plug-in

SAP AG 2001
An R/3 interface is marked with an R/3 Plug-in to make it possible to integrate a mySAP.com component (for example, APO or BW) with one or several R/3 Systems. With R/3 Plug-ins, several mySAP.com components can be inserted at the same time. Most Plug-ins concern add-ons (R/3 standard software enhancements with additional functions). The data transfer between R/3 and APO Systems is defined and controlled using the APO Core Interface (CIF). The CIF is the central interface for connecting APO to the existing R/3 System environment. Plug-ins supply the components with transaction and master data. In this way, APO CIF does not only provide the SAP APO System with initial data records (initial supply), it also guarantees a step-by-step supply with all the relevant data changes. Only the object data relevant for the individual planning and optimization process in APO is transferred from the complex data records into R/3. The integration between R/3 and APO is possible as of R/3 release 3.1I (for the PM/SM area and production process models, integration is possible as of 4.5B).
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Global APO Server
APO
Company A Plant 1
APO
Company B liveCache Plant 2
Company C
SAP AG 2001
A multi-system environment is possible
Different layouts of enterprises and plants are possible
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APO Integration (2)
SAP R/3
SD HR LO
NonNonR/3 System R/3 System

BAPI BAPI
(Core Interface)
CIF
BAPIs
SAP APO BAPI SAP APO
SAP AG 2001
The APO Core Interface (CIF) is responsible for the data exchange between APO and R/3 Systems. The APO Core Interface is a real-time interface, linking APO with one or several R/3 Systems. Only the data objects needed in the data structures in APO for the different planning and optimization processes are transferred from the complex dataset of the R/3 into APO. The APO Core Interface guarantees both the initial data transfer (initial transfer) and also the transfer of data changes within APO. The outbound delivery from APO CIF takes place as an R/3 Plug-in. Technical integration of SAP APO with: an R/3 environment where Core Interfaces are used a non-R/3 environment where the official standard of Business Application Programming Interfaces (BAPIs) is used.
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APO Integration (3)
R/3
Sales order Planned order Production order Order ...
APO
CIF Real-time CIF
Order
live Cache
Production Procurement Replenishment
Plant, Customer,... Material master Capacity Routing and bill of material
SAP AG 2001
The planning in APO is based on its own master data that is usually transferred automatically from a R/3 System, but can also be created manually. The transfer of master data from the R/3 is displayed in the corresponding master data in APO. Only the master data relevant for planning in APO is transferred (firstly in the form of an initial transfer, and then later as transfers of data changes). The R/3 remains the execution system for the master data. Only the settings which cannot be transferred from the R/3 are maintained directly in APO. The transaction data relevant for planning, such as warehouse stock and sales or production orders is also transferred from the R/3 into APO via the CIF interface. And vice versa, the results of the planning in APO are returned to the R/3 via CIF and executed there. This integration of transaction data takes place in real-time.
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Master Data Objects of the CIF

Initial transfer
R/3
R/3 master data
Plant Customer Vendor Material master Capacity Routing and bill of material
APO
APO master data
Location Product Resource Production process model
SAP AG 2001
Incremental data transfer
The APO Core Interface concerns a real-time interface. Only the data objects needed in the data structures reconciled in the planning in APO for the particular planning and optimization processes are transferred from the complex dataset in R/3 into APO. Both the initial data transfer (initial transfer) and the transfer of data changes within APO take place via the APO Core Interface. The master data objects in APO are not identical with those in R/3. For the master data transfer it is in fact the relevant R/3 master data that is mapped onto the corresponding planning master data in APO. The R/3 System remains the dominant system for the master data. Only specific APO master data that does not exist in R/3 is maintained directly in APO.
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Transaction Data Objects of the CIF
R/3
R/3 transaction data
Orders Purchase requisitions Sales orders Planned orders Planned ind. reqmts Reservations Supplies ...
APO
Initial data transfer
APO transaction data
Order with category BF (PchOrd) AG (PurRqs) BM (SalesOrder) AI (PlOrd.) FA (FC req.) AM (PrdRes) CC (Stock) ...
Change transfer Realtime
SAP AG 2001
The initial data transfer of transaction data takes place first, via the APO Core Interface. The change transfer between R/3 and APO usually automatically follows for transaction data objects that belong to an active integration model. New transaction data or changes to existing transaction data is automatically transferred. (For transaction data of the APO component SNP, you can define in Customizing whether a real-time or periodic publication is to be performed.) The transaction data objects in APO are not identical to those in R/3. All transaction data in R/3 is transferred to APO as orders that can be distinguished by ATP category. In the standard system, planned independent requirements can only be transferred from the R/3 into APO. The retransfer of the planned independent requirements that you may require if you only perform Demand Planning in APO, must be triggered from Demand Planning in APO with a specific transaction. For planned orders and purchase requisitions, you can specify in APO that they are only transferred from APO to the R/3 System if the conversion indicator has been set.
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Transfer of Data to APO
1. Generate integration model

Determine name and APO target system Select master and transaction data
Name Target system Sales orders Production orders Storage location stock
...
2. Activate integration model

Integration model is active
Start
Data is transferred for the first time, a continuous real-time incremental transfer of transaction data follows
SAP AG 2001
You define the integration model that controls the transfer of master and transaction data in the R/3 System. You can find the menu option Core Interface Advanced Planner and Optimizer (the CIF menu) under Logistics -> Central Functions -> Supply Chain Planning Interface. The integration model distinguishes between master data and transaction data. We recommend selecting these two types of data in separate integration models and then also transferring them separately. In the integration model, you select the master and transaction data you want to transfer. You specify the following in the integration model: The APO target system for the data transfer The data objects you want to transfer You can delete integration models that you no longer need. Note that you must first deactivate these integration models. For any transaction data that is contained in an active integration model, a continuous real-time incremental data transfer is performed between the R/3 System and APO.
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liveCache Integration with R/3
BW extractors
DP
Forecast
liveCache
APO
Planned indep. requirement
Sales order
Storage location stock Intransit receipts Purchase requisition Order
Purchase requisition Stock transfer
Planned order Production order
CIF
SD
MM
SAP AG 2001
The historical data from Demand Planning (DP) is transferred into APO with the help of the extractors from the Business Information Warehouse (BW). You can release the Demand Planning forecast to the liveCache and therefore create planned independent requirements. Alternatively, you can transfer planned independent requirements from the execution system. The orders, supplies and planned independent requirements of the execution systems are transferred via the CIF interface into APO. The planning results of APO, the purchase requisitions, stock transport requisitions, stock transport orders and planned independent requirements, are also distributed via the CIF interface into the execution systems. Planned orders can also create direct production orders in the OLTP system.
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APO - OLTP Integration
APO
Demand Planning (DP)
OLTP
Planned independent requirements Planned orders Purchase requisitions Stock transport requisitions Planned orders Production orders Purchase requisitions Stock transport requisitions
Production Planning (PP)
Detailed Scheduling (DS)
Deployment
Transport Load Builder (TLB)

SAP AG 2001
This slide shows the exchange of movement data between APO and the connected OLTP systems. You can transfer the results of Demand Planning as planned independent requirements to the OLTP systems, similar to the transfer from Flexible Planning or Sales and Operations Planning (R/3) to demand management. You can transfer the SNP planning results as planned orders, purchase requisitions and stock transport requisitions to the OLTP system. You can also transfer the PP/DS planning results as planned orders, purchase requisitions and stock transport requisitions to the OLTP system. If you convert SNP planned orders into PP/DS planned orders, the planned orders are adjusted in the OLTP system. You can only transfer planned orders as production orders to the OLTP system from PP/DS. Deployment and the TLB confirm the OLTP stock transport requisitions and can convert them into stock transport orders or VMI sales orders. Via Customizing -> APO -> Supply Chain Planning -> Supply Network Planning (SNP) -> Basic Settings -> Configure Transfer to OLTP Systems you can configure how transfer should take place.
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Adjustment of stock transport requisitions
Grouping of stock transport orders
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Pegging
l
Demand
The pegging network

assigns receipts to requirements
50
Output node 50 30
50
20
propagates the requirements through the BOM is cross-location Input node finds unassigned order quantities
80
20
Order
Pegging
SAP AG 2001
Pegging describes the assignment of quotation and requirement. It links each input node from requirements or receipts with output nodes from receipts. The material flow between requirements, stock transfers, purchase requisitions, planned orders and storage location stock is therefore defined in the system. Pegging allows the bi-directional planning of components to the end product and of the end product to the components. There are two types of pegging: Dynamic Pegging: The pegging relationship is re-calculated each time, with regard to quantity and date changes, when a product receipt or issue takes place. Static Pegging: All relationships are fixed. Only the user or an external program can change these relationships.
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Supply Chain Pegging
Sales order
10 10 30 20 20 100 10 10 40 40 50 60 (-10)
Transfer order
30 30 50 20 50 50 50 100 30 (+20)
Shortage Surplus
Production order
50 50 80 30 80 20 (+10) 50 50 50
Order
SAP AG 2001
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Conclusion
You are now able to

l l l Describe the advantages of liveCache Technology Outline the data exchange between R/3 (or other OLTP systems) and APO Explain the pegging tasks.
SAP AG 2001
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Modelling and Evaluation in APO
Contents:
l l l l l Models and version in APO Supply Chain Cockpit Supply Chain Engineer Alert Monitor Evaluations using the BW explorer
SAP AG 2001
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Unit Objectives
At the conclusion of this unit, you will be able to l l l l l Explain the functions of models and versions in APO Describe the modelling of the Supply Chain network Analyze master and transactional data in the Supply Chain Cockpit Call alerts from the Supply Chain Cockpit Evaluate aggregated historical data
SAP AG 2001
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1 Course Overview 2 Integration and Technology Modelling and Evaluation 3 in APO 3 4 Demand Planning 5 Supply Network Planning
7 Transportation Scheduling Planning/Vehicle 8

Global Available-to-Promise
6 Scheduling
9 Conclusion
SAP AG 2001
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Business Scenario
Precision Pump company uses the Supply Chain Cockpit for multi-site analysis and documentation of planning results. In the Alert Monitor, every planner can find his current planning problems and exception messages. Key Performance Indicators (KPIs) provide benchmarks for defining the goals of the company. After each planning cycle, Precision Pump company uses KPIs to analyze the performance of its supply chain.
SAP AG 2001
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Models and Planning Versions
Legacy
R/3
OLTP Master Data
APO Master Data (model independent)
Active Model 1Model

PPMs Products Locations Transportation lanes
Simulation Models
Active Version 000

version dependent master data and movement data
SAP AG 2001
Planning Version 1
The network model represents the supply chain and consists of individual nodes and relationships. In APO it is possible to create and maintain different versions of a model for simulation purposes. There is only one active model (000) with an active version. The active planning version is 000. All APO planning functions are based on the supply chain model. The model covers the entire supply chain network. It is modeled in the Supply Chain Engineer and contains details like locations, resources, products, transportation lanes and production process models (PPMs). You also have the option of creating several models, each with different versions for simulation purposes. Master data like locations, products, resources and plans that are transferred from OLTP systems are automatically assigned to model 000. You must assign master data that you create in APO explicitly to the model.
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APO Maintenance and Analysis Tools
Engineer
Cockpit
Alert Monitor
Information Warning Error Ignore
Modeling the Network

SAP AG 2001
Analysis of the Planning Situation
The Supply Chain Engineer enables you to maintain the model of your supply chain. You can use this component to create or change supply chain network models. The network model represents a supply chain and consists of individual node points and links. A model can have different planning versions. You also have the option of creating several models, each with different versions for simulation purposes. The Supply Chain Engineer is a fully integrated APO component used for creating models. The model is the basis for all APO planning functions. It covers all areas of the network chain, from the supplier's supplier to the customer's customer. The relevant data objects are imported here from the source system to APO. The Supply Chain Cockpit allows planners to make an integrated analysis of transactional data in the supply chain. It also allows data to be broken down into planner-specific subsets, such as by indvidual region or product line. The Alert Monitor gathers messages regarding problems within your plan.
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Evaluation of the Exception Messages
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Work Areas
Access to frequently used objects l l l Used for queries Serve as filters Configured for users
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The complete supply chain view can be unclear. You can limit the view to the objects on which you want to concentrate when you are defining work areas. The work area is used exclusively as a filter for displaying objects in the Cockpit and Engineer. The pre-defined work area is the basis for the queries which you can use to gain information about all aspects of your supply chain from the APO system. The transportation lanes in your work area are defined using the model in which you are working. In the work area of the supply chain you can select: Locations (plant, DC, supplier, customer) Products PPMs (production process models) Resources, production, storage, processing, transportation
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Objects in the Supply Chain Network l Locations

Supplier Plant DC Customer Transport. MRP Stock transfer Carrier zone area point
l Transportation lanes
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In APO, a location can represent a distribution center, manufacturing plant, supplier location, a customer, a carrier, transportation zones, MRP areas, for example. The material flow between locations is modeled via transportation lanes. You map your supply chain via locations and transportation lanes. A transportation zone can be used to group together customers, for example, in the form of a location hierarchy. The transportation zone is used in the TLB and in transportation planning. Carriers and stock transfer points are only used in transportation planning. An MRP area is planned in SNP like a production plant. Product master records, resources and PPMs (production process models) are assigned to the locations. You can map production, storage, transportation and handling capacities via resources. DP, SNP and PP/DS PPMs (production process models) are available to allow you to define BOMs and routings.
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Supply Chain Cockpit Navigation

Work Work areas areas Cockpit controls Cockpit controls Overview map Overview map
Planning Planning objects objects Network map Network map
Control panel Control panel

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Alert Alert monitoring monitoring
Use this navigational component of the Supply Chain Cockpit to: Retain a complete overview of your supply chain model Retrieve information from the APO system through queries Measure performance with KPIs (Key Performance Indicators) Display location, product, resource, PPM and lane data Keep track of alert situations The three main business tools available from the Supply Chain Cockpit include: Queries that facilitate the planning function Key Performance Indicators that provide feedback on actual performance The Alert Monitor that provides notification of exception messages
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Application toolbar Application toolbar
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Information Retrieval
Fixed Network Information
- Transportation network - Production network
Business Information Warehouse

Key Performance Indicators - Service level - Supply chain costs
Planning Results
- Production - Demand - Stock - Transportation - Capacity load
Alert Monitor
APO Applications
- Supply Network Planning - Production Planning - ATP - Demand Planning

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Queries facilitate the planning function.
Key Performance Indicators provide feedback on actual performance.
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APO Master Data
Products Resources Locations Transportation lanes Production process model
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Purpose of Key Performance Indicators

What was the total profit made from Gel 250 delivered to customer X from DC Milan?
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The APO key performance indicators (KPIs) express abstract supply chain objectives in financial or physical units for comparative purposes. Data pertaining to the various planning and execution processes such as demand planning or product planning is collected, measured, and transformed into physical or financial information that can be used to compare results and thus measure performance. For example, a KPI could tell you what percentage of your products were damaged during production. Based on that information, you could set a goal to reduce the percentage of damaged goods by 5%. After implementing the steps necessary to reach the goal, you would again launch a KPI query to check your progress.
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Standard KPIs (Selection)

l Planning
l Order quantities/values l Days' supply l Stock levels l Material consumption l Resource load
Purchasing
l Purchase order quantities l Delivery time l Service level l Vendor evaluation l Days' supply
Production
l Lead times l Date variances l Scrap l Delays
Service
l Credit memos l Deliveries l Returns l Billing documents
SAP AG 2001
The slide shows some of the standard KPIs provided by SAP. In addition, you have the option to define specific KPIs - tailor-made to your company - in the Business Information Warehouse and to assign them to the Supply Chain Cockpit.
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Key Performance Indicators

0. Identify key performance indicators (KPIs) Measure performance using KPIs 5. Identify gaps and improve 1. APO: Plan & Optimize
4. Compare results of KPIs
3. Measure performance using KPIs
SAP AG 2001
The graphic above depicts the three steps to improving supply chain performance using APO KPIs: Plan and optimize in APO Benchmark in BW Execute decisions in an execution system (R/3) The KPI function allows you to track and measure your supply chain performance by retrieving information stored in the Business Information Warehouse (BW) pertaining to your business. Performance measurement is a way to determine if your business has improved or not. The use of metrics to measure performance is a complex business process that requires careful planning, analysis and a thorough knowledge of the supply chain. For more information on measuring supply chain performance, refer to the SCC1_E.doc, Appendix 1: The SCOR Model.
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Alert Monitor Definition

Exception Window for Details
Alert
Alert Notification
l l
Exceptions are calculated using macros and displayed in the Alert Monitor There are standard macros and the option to define your own alerts
SAP AG 2001
The role of the Alert Monitor is to inform you of exception cases that occur in your plan. Every situation that has to be adjusted in planning is an exception. In Supply Network Planning you have the option to display either database or dynamic alerts. The database alerts show the planning situation as it was at the time of the planning run, while the dynamic alerts reflect the current planning situation. The Alert Monitor in Supply Network Planning enables you to display and remove alerts for resources and location products. Typical alerts are: When the resource is too overloaded (over 100% utilization of capacity), when the resource is not sufficiently loaded (less than 50% utilization), backlog, shortfall in safety stock, target days' supply excess/shortfall, customer-specific alerts. You retain constant control over your supply chain network because of the alerts you defined and because you have the option to send these by mail. As planner or manager you will be prepared for any problems that occur. You will be informed in time so that you can take the necessary precautions.
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Alert Monitor Integration
PP/DS PP/DS
Cockpit
DP DP
Problem resolution
Example: Production Planning / Detailed Scheduling
SNP
APO Alert Repository
ATP
Alert Monitor
SAP AG 2001
The Alert Monitor in Supply Network Planning enables you to display and remove alerts for resources and location products. Typical alerts are: When the resource is too overloaded (over 100% utilization of capacity), when the resource is not sufficiently loaded (less than 50% utilization), backlog, shortfall in safety stock, target days' supply excess/shortfall, customer-specific alerts. You retain constant control over your supply chain network because of the alerts you defined and because you have the option to send these by mail. As planner or manager you will be prepared for any problems that occur. You will be informed in time so that you can take the necessary precautions. You can call the Alert Monitor from the Supply Chain Cockpit, from the menu or directly from interactive planning. Right-click on the alert to go directly to the problem resolution screen.
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Alert Types
Demand Planning Supply Network Planning Production Planning/ Detailed Scheduling ATP
DP macro status alerts
Resource load (SNP) Violation of due dates Resource load (PP/DS)
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APO's monitoring component comes equipped with a selection of 20 alert types ranging from product shortage to various capacity overloads. The alert types must be prioritized and assigned to the various APO applications. For example, some alerts apply only to SNP, but others can be assigned to DP and PP/DS as well. The Alert Monitor differentiates between alerts in a specific planning version and alerts in general. For example, capacity overload pertains to a specific planning version while Demand Planning alerts are general. Both types of alerts, however, are displayed in the Monitor. If you want to show an alert in the SCC, you can assign the alert type to the application. This ensures that the traffic lights in the monitoring slot in the control panel go on. Lights indicate that at least one alert of that priority type exists. Since some alert types cannot always be clearly assigned, it can happen that the same alerts may appear under more than one priority light. Each alert type can be assigned to any number of applications.
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Evaluations in APO
l Using the BW Business Explorer you can evaluate:
Order data from the liveCache Aggregated data in InfoCubes
Extraction structure RemoteCube
Planning area
Business Explorer
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DP InfoCube
You can also evaluate data from APO using the BW frontend.
It is not only the aggregated actual data from the InfoCubes that are evaluated, but also all of the order and time series objects from the liveCache. The prerequisites for 'liveReporting' orders and time series are as follows: a planning area in APO; an extraction structure for the planning area; an infosource, and an SAP RemoteCube that reflects the liveCache data.
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Conclusion
You are now able to l l l l l Explain the functions of models and versions in APO Describe the modelling of the Supply Chain network Analyze master and transactional data in the Supply Chain Cockpit Call alerts from the Supply Chain Cockpit Evaluate aggregated historical data
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Exercises
Unit: Supply Chain Cockpit Topic: Display and Query
At the conclusion of this unit, you will be able to Maintain the user settings for the Supply Chain Cockpit Execute queries in the Supply Chain Cockpit and with the Business Information Explorer
Precision Pump companys supply chain planner can procure all necessary information about the products, locations and resources for which he/she is responsible via the Cockpit.
The group number ## that you need for the following exercises is on your monitor.
1-1
Open the Supply Chain Cockpit with the following entries:
w
1-2 1-3
Planning version For model
Work area
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Change to the logical view PUMP and analyze the supply chain. Which distribution centers supply the plants 1000 and 2300?
Display the global master data for the product T-F225 and the master data for the product T-F225 in the distribution center 2400 in the Supply Chain Cockpit. Query the stock/requirements list for product T-F225 at location 2400.
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1-4
Query the transportation lanes permitted for the product T-F225.
1-5
Open your user settings profile directly from the Cockpit. Enter the SDP alert profile PUMP. Save the profile, go back to the Cockpit and refresh the alert situation. Are alerts displayed? How can you process the alerts?
1-6
Evaluate the aggregated historical data for the product T-F2##. Log on to the APO system using the Business Information Warehouse (BW) Analyzer and open the query SALES DATA for the SALES InfoCube. Find out the extent that Product T-F2##, with Sold-to party 1000, and in Sales Organization 1000, contributed to sales in the past few months.
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Solutions
Unit: Supply Chain Cockpit Topic: Display and Query
At the conclusion of this unit, you will be able to Maintain the user settings for the Supply Chain Cockpit Execute queries in the Supply Chain Cockpit and with the Business Information Explorer
Precision Pump companys supply chain planner can procure all necessary information about the products, locations and resources for which he/she is responsible via the Cockpit.
The group number ## that you need for the following exercises is on your monitor.
1-1
Open the Supply Chain Cockpit with the following entries: Planning version For model 000 000
Work area
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Change to the logical view PUMP and analyze the supply chain. Which distribution centers supply the plants 1000 and 2300? Supply Chain Monitoring Supply Chain Cockpit Enter the input data and select Use. Select the Fit to objects button on the left above the graphic to adjust the objects. Enter the logical view PUMP and select Logical view. If you want to restrict the area further, you can define the zoom area using the left mouse button. The transportation lanes show you that the plants 1000 and 2300 supply the distribution centers 2400 and 2500.
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1-2
Display the global master data for the product T-F225 and the master data for the product T-F225 in the distribution center 2400 in the Supply Chain Cockpit. Choose the Products tab Right-click on product T-F225 and display the master data for this product: Display Product Select the location 2400 in the graphic and the product T-F225 in the Products tab and display the location product by right-clicking on the product: Display Product at location
1-3
Query the stock/requirements list for product T-F225 at location 2400. Select the location 2400 on the map Select product T-F225 in the Products tab and right-click to call up the context menu: Call up planning applications PP/DS Stock/Requirements List
Check that Product and Plant have green lights in the selection options screen and check which product is selected by clicking on the Display button Execute the query by clicking on the Execute button 1-4
Query the transportation lanes permitted for the product T-F225. Choose T-F225 in the Products tab
Right-click to call up the context menu: Query: Master data Transport net - map 1-5 Open your user settings profile directly from the Cockpit. Enter the SDP alert profile PUMP. Save the profile, go back to the Cockpit and refresh the alert situation. Are alerts displayed? How can you process the alerts?
Settings User profile
Enter the SDP alert profile PUMP in the Alert Monitor tab. Save the profile and use the green arrow to go back to the Cockpit. Press the Refresh alerts button and the exception messages are shown in red. Double-click here to go directly to the Alert Monitor and right-click to process the alerts.
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1-6
Evaluate the aggregated historical data for the product T-F2##. Log on to the APO system using the Business Information Warehouse (BW) Analyzer and open the query SALES DATA for the SALES InfoCube. Find out the extent that Product T-F2##, with Sold-to party 1000, and in Sales Organization 1000, contributed to sales in the past few months. Call up the BW Analyzer, activate the macros, and press the Open icon in the Business Explorer. Log on to your APO system. Expand the SALES PLANNING info area and the SALES infocube. Select the SALES DATA query and press OK. You are given an aggregated view of the invoiced sales quantity and invoiced sales value of the three sales organizations. Right-click on the field next to APO product to restrict the evaluation for your product T-F2## via Select filter value. By right-clicking on sales organization you can drilldown the evaluation according to sold-to parties by choosing Add Drilldown According to sold-to parties. By right-clicking on the SALES key figure, you can drilldown the evaluation according to months by choosing Filter and drilldown according to cal.year/month.
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Contents:
l l l l l Demand Planning Tasks and Functions Integration with the Business Information Warehouse (BW) Forecast Toolbox Lifecycle Planning Promotions
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Unit Objectives
At the conclusion of this unit, you will be able to: l l l l Explain how the Business Information Warehouse is integrated with Demand Planning, Describe the tasks of Demand Planning, Define various forecasting strategies, Create a simple sales forecast, and release the results to Production Planning.
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning 4 5 Planning
6 Scheduling
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Business Scenario
The Precision Pump company will implement APO Demand Planning and use it to execute their monthly finished product forecasting. Consistent planning allows you to enter the forecast data on different planning levels and automatically consolidate the data in the master forecast.
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Demand Planning is a complex, powerful, and flexible tool that supports your company's demand planning process. User-specific planning layouts and interactive planning books not only allow you to include different departments, you can also use them to include other companies in the forecast creation 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 consensusbased approach to consolidate the demand plans of different departments. You can use forecast overrides and promotions to add marketing intelligence and management adjustments. The seamless integration with APO Supply Network Planning supports an efficient Sales and Operations Planning (S&OP) process.
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Demand Planning is the application component in the Advanced Planner and Optimizer (APO) that allows you to forecast market demand for your company's products. The result of APO Demand Planning is the demand plan.
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Advantages of Demand Planning in APO
Global server with a BW infrastructure Integrated exception handling, creation of user defined alerts Integration with Production Planning (S&OP scenario) Main memory based planning Flexible navigation in the planning table, variable drill down Extensive forecasting technique Promotion planning and evaluation, 'like' modeling Collaborative planning via the internet Sales Bills of Material (BOMs)
SAP AG 2001
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). Mails can be sent automatically, and status automatically queried. In the S&OP 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 multilinear 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.
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Influencing Factors in Demand Planning

Company 1
Central Store Promotion Promotion Sales Force Sales Force Price Price Advertisement Advertisement l l Understanding demand in a dynamic business environment Price Price Weather Weather Regional D/C
Company 2
Central Store Regional Store D/C Promotion Promotion
Customer
Season Season
Multiple sources of demand plan data such as: internally created forecasts based on history, forecasts from customers, or point of sale (POS) data direct from retailers Managing all significant factors that influence demand Tracking and management of product lifecycles
l l
SAP AG 2001
The complexity and competitive nature of today's business environment requires organizations to consider many variables when developing a sales and operations plan. Multiple sources of demand plan data (e.g. manufacturer forecast is based on a distributors sales history, and/or point of sales direct from retailer.) Factors influencing demand (sales force size, R&D expenditures, advertising expenditures, price, promotions, seasonality.) Demand data can be exchanged with sales organizations, customers, and suppliers over the Internet (Collaborative Demand Planning).
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APO Integration - Business Warehouse

Demand Planning
Forecast Reporting
APO Data Mart
Sales history, Price, Costs, ... Forecast
Demand Planning specific data l l l l l Forecast & planning scenarios Causal factors Lifecycle patterns Seasonal patterns Promotional patterns
Central Data Pool l l l l l Summarized data POS, order, and shipment data Syndicated POS data Cost information ...
SAP AG 2001
SAP's Business Information Warehouse (SAP BW) is contained in the APO scope of supply and is completely integrated with it. If you are going to execute extensive reporting, it is a good idea to set up an independent BW server, and only transfer the data that is relevant for planning to the APO system. As data structures in BW and APO are identical, you can also evaluate APO data with the BW frontend.
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Demand Planning Concept

Incoming order value

Quantities Values
l l l
Statistical forecasting Collaborative forecasting Promotions
Invoice
Quantities Values
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Planning & Reporting
Consistent planning (top down, middle out, bottom up) Slice & dice Drill downs & ups Multiple demand plans to be simulated Standard forecast accuracy analysis
Aug.
W32 W33 W 34 W35 W36 W37
Sept.
W38 W39 W40 W41
time sequence
Customer
l l l l
Pe rio d
203 124
Regions Material
Product Groups
SAP AG 2001
Planning supports online simulation in multiple planning scenarios, consistent planning throughout your enterprise (top down, middle out, or bottom up), drilling up and down, aggregation and disaggregation, and slice-and-dice techniques. Consistent planning means that planning data on all planning levels can be consistently held (automatic aggregation and disaggregation).
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The Planning Table
Selection
APO - Product ID Object Object 1 Object 2 Object 3 Object 4 Text Text 1 Text 2 Text 3 Text 4
Design Graph
Total W 24 W 25
APO - Location
Capacity Leveling
Total W 27 W 28
Title view Key figure 1 Key figure 2 Key figure 3 Key figure 4 Key figure 5
W 26
Selection profile
User Selection ID
Header information Selected objects Standard selections
Planning book Data views Macros
SAP AG 2001
The APO modules Demand Planning and Supply Network Planning have a standard user interface. It consists of two significant components: the selection range and the work area. The selection range (Shuffler) is the window, where you choose the InfoObjects to be planned. In the Shuffler, you can save commonly used selections, and load existing selections. To open the Shuffler, choose the symbol selection window. The selection profile displays all the selection IDs which have been assigned for the planner. The planner can access commonly used selections quickly using the selection IDs. In the data view area, you choose your planning books, and views. You can define a filter for available planning books and views.
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Right mouse button: additional settings
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Calculations in Demand Planning
You can use macros to: l l l l l l Calculate deviations Make automatic corrections Calculate sales budgets Define your own exceptional situations Launch status queries Send mails
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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.
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Statistical Toolbox
l Univariate Forecasting
Moving average Models (constant, seasonal trend, seasonal) Exponential smoothing Seasonal linear regression Holt-Winters Croston's method (for sporadic demand)
l l
Causal Analysis
Multiple linear regression
Composite forecasting
Weighted average of multiple models
SAP AG 2001
The product portfolio of a company 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 "lumpy" (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.
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Lifecycle Management & Like Modeling
Actual data of the old product
Sales Like
Forecasting of the new product
Lifecycle
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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 (phase-in), growth, maturity, and discontinuation (phase-out). 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 original history and corrected history key figures, and writes the adjusted values in the corrected history. If the phase-in profile period is within the future horizon of the specified master forecast profile, the system adjusts baseline (original) forecasts, and writes the adjusted values in the corrected forecast key figure.
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Time
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Promotion Planning
Forecast simulation Sales Total sales:
Profit
Total profit:
Promotion 1
Promotion patterns ?5 ?6
-10%
Price
Planner Planner
?7
Quantity
SAP AG 2001
Promotions can have a major impact on consumer behavior.
In APO Demand Planning, you can plan promotions or other special events independently of the rest of your forecast. Use Promotion Planning to record either one-time events, such as the millennium, or repeated events such as quarterly advertising campaigns. Other examples of promotions are trade fairs, coupons, freestanding inserts, competitors' activities, market intelligence. Examples of events that also have an impact on consumer behavior are upward/downward economic trends, and acts of nature, such as hurricanes, and tornadoes. Promotional uplifts can be defined in units or percentages by common promotion patterns. The effect of a promotion pattern that occurred in the past can be automatically detected using sales history or estimated by the planner. A promotion pattern can be archived in a promotion catalog; it can therefore be reused if a promotion of the same type is repeated. A copy function in the promotion catalog also supports "like" modeling of "like products," "like regions", and so on. There are several techniques available to determine the impact of a historical promotion. One such technique is multiple linear regression with or without a trend or seasonality.
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Release of Sales Quantities as Planned Independent Requirements
Demand Planning
Production Planning
Key figure: sales quantity
Planned independent requirements
Macros Alerts
SNP PP/DS
Key figure: feasible sales quantity
SAP AG 2001
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 release causes planned independent requirements to be created in the order liveCache. 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.
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Demand Planning: Unit Summary
You are now able to:

l l l l Explain how the Business Information Warehouse is integrated with Demand Planning Describe the tasks of Demand Planning Define various forecasting strategies Create a simple sales forecast, and release the results to Production Planning.
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Exercises
Unit: Demand Planning Topic: Interactive Planning
At the conclusion of this exercise, you will be able to: Evaluate historical data Create a sales forecast including corrections Release the demand plan to Production Planning The Precision Pump company is creating a demand plan to provide planned independent requirements for Supply Network Planning. This plan uses a statistical forecast based on historical data, and includes input from regional sales managers.
1-1
Go to Demand Planning. Open the selection window and, under Show, select APO PRODUCT. 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##. Load the data for the product into the planning table.
1-2
Perform a univariate forecast and analyze the graphic results. The seasonal pattern that occurred in the past has been extrapolated into the future. Go back to the planning table.
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1-3
For three months from now enter a manual correction of 100 pumps. Check that the correction is automatically added to the demand plan. Save your plan.
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1-4
Release your demand plan to Production Planning. Use the RELEASE variant, and enter your product T-F2## and the horizon. Which locations have had planned independent requirements created for them?
Field Name Planning area Planning version Key figure Planning version Category Horizon Daily buckets profile Product Input Data SALES 000 FINFOR 000 FA The next 3 months 90 days T-F2##
1-5
Make sure that planned independent requirements have been created in the LiveCache. Go to PP/DS product view for version 000, product T-F2##, and location 2400.
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Solutions
Unit: Demand Planning Topic: Interactive Planning
1-1
Go to Demand Planning. Open the selection window and, under Show, select APO PRODUCT. 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##. Load the data for the product into the planning table. Demand Planning Planning Interactive Demand Planning
The selection window is the second icon in the top left. Open the selection window and, under Show, select APO PRODUCT. Version 000 is already displayed automatically. In the next row, enter APO - Product once again, and on the righthand side enter your product T-F2##. Select Adopt, and your selection will be adopted by the selection window. Double click on your product T-F2##. Entries can now be made for this selection in the planning table rows.
1-2
Perform a univariate forecast and analyze the graphic results. The seasonal pattern that occurred in the past has been extrapolated into the future. Go back to the planning table.
w
1-3
Click on the STAT symbol and the forecast is calculated automatically. Select the Switch table/graphic button, and the forecast results plus historical data will be displayed graphically. To get back to the original table, click on the green back arrow.
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For three months from now enter a manual correction of 100 pumps. Check that the correction is automatically added to the demand plan. Save your plan. In the Correction key figure, type in 100. The total from the Forecast plus Correction key figures is displayed in the Demand Plan key figure. Save your plan and exit the table.
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1-4
Release your demand plan to Production Planning. Use the RELEASE variant, and enter your product T-F2## and the horizon. Which locations have had planned independent requirements created for them? Demand Planning Planning Release to Supply Network Planning Select the Get variant... button and choose the RELEASE variant. Enter your product T-F2##, and choose Execute.
Field Name Planning area Planning version Key figure Planning version Category Horizon Daily buckets profile Product Input Data SALES 000 FINFOR 000 FA The next 3 months 90 days T-F2##
Planned independent requirements are created for Distribution Centers 2400, and Plant 1000.
1-5
Make sure that planned independent requirements have been created in the LiveCache. Go to PP/DS product view for version 000, product T-F2##, and location 2400. Production Planning Interactive Production Planning Product View
Enter version 000, product T-F2##, and location 2400. Continue. Your monthly planned sales quantities have been transferred here and distributed over days.
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Contents:
l l l Distribution Network and Process Flow Master Data Requirements Planning Methods
SNP Heuristic SNP Optimizer Capable-to-Match
Deployment (distribution detailed planning)
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Unit Objectives
At the conclusion of this unit, you will be able to l l l l l Describe the Supply Network Planning distribution network Explain the Supply Network Planning process flow Identify master data that is required to run Supply Network Planning Describe and compare Supply Network Planning planning methods Explain the function of deployment
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning
Supply Network 5 Planning 5
6 Scheduling
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Business Scenario
The Precision Pump Company is implementing Supply Network Planning (SNP) to plan, in the midto long-term, the material flow of critical materials through the entire supply chain. Production and storage resources should be considered finitely and simultaneously. This planning is used to guarantee the procurement of parts with long delivery time and the effective use of resources, in order to improve customer service and to minimize inventory and lead times.
l l
Precision Pump company uses deployment to match stock transports to supply and demand when there are short-term changes.
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Benefits of Supply Network Planning in APO
Multi-site 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 demand and supply Collaborative procurement planning via the internet Distribution detailed planning (deployment) Collective conversion of stock transport requisitions
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APO Planning Sequence
Planning Horizon
Deployment
Transportation Planning (TP/VS) / TLB

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The tasks of the individual APO modules can be summarized as follows: DP is used for long-term unconstrained planning of the future demand plan SNP is used for mid-term planning of feasible cross-plant procurement and production PP/DS optimizes production in the plant in the next few weeks according to sequences and setup times Deployment and the TLB (Transport Load Builder) are functions of the SNP module for short-term replenishment planning. Deployment and the TLB adjust stock transfers according to short-term changes on the demand or supply side. In Transportation Planning, routes and vehicle utilization are optimized.
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Aims of SNP Planning
SNP Planning plans the mid- to long-term horizon. It creates a rough quantity-based, cross-location production and distribution plan with individual rough bills of material (BOM) and routings. The SNP BOM contains critical products that are produced on bottleneck resources and products with a long replenishment lead time. SNP ensures that the right quantity is available on the right day without critical resources being overloaded. The smallest unit used for scheduling is days.
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Beyond Traditional Planning
Production process model
Production plant Manufacturer DC Customer DC Supplier plant
Supplier WH
SAP AG 2001
SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of a single, global consistent model. The stock and previously-planned receipts for finished products and components of all connected OLTP systems are known by SNP. Various planning methods can be used to create cross-location, feasible plans for the material flow along the supply chain, taking account of constraints and penalties. The result is optimal purchasing, production, and distribution decisions, reduced inventory levels, and improved customer service. Possible constraints are, for example, material availability and unrestricted availability of work center, storage, transportation and handling capacities.
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Locations in the Supply Network

l Locations are only differentiated by the location type that controls the symbol on the map (exception VMI) Products can be stored at every location Demands can be fulfilled from each location You can maintain storage, handling, transportation and production capacities for each location Storage cost per unit for each product Purchasing cost per unit for each product
l l l
Supplier
Plant
DC
Customer
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Transportation MRP zone area

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Production, shipping and storage calendars can be defined for each location. A handling and a storage resource can be associated with a location to represent aggregate 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 only applies to the location type '1010 customer'. The carrier tab 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 define costs for storage, handling, procurement and production as well as penalties for non-delivery. Procurement costs are used to select suppliers and production costs for selecting PPMs. An integrated examination of the costs is carried out during the SNP optimization run.
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Stock transfer point
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Carrier
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Transportation Lanes Transportation lanes control the material flow along the supply chain
l l l l l
Procurement Transportation method Products that can be carried by a transportation method Transportation capacity by volume, weight, pallets Transportation costs per unit, product and transportation method
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A transportation lane in APO represents a business relationship between the locations that you can use to transport goods. The relationships and the locations represent the supply chain network. The direction of the transportation lane from source to target location defines the material flow. These transportation lanes enable you to: Define the product procurement parameters like lot sizes, cost functions, unit costs and lane priorities Define the transportation methods (truck, ship, airplane, etc) for each lane and the related parameters like transportation costs, distances and times Assign product-specific transportation methods Assign carriers to the lanes You can query the lane relevant data via the Supply Chain Engineer menu or on the map. For example, you can display a list of all products that are assigned to a specific lane.
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Resource Categories
Production
Transportation
Storage
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You can model additional bottlenecks in your supply chain using bucket resources. For period-oriented short- and mid-term planning in Supply Network Planning you use bucket resources that you plan in detail based on days. You can define the capacity of a bucket resource as Quantity (without time base) - this defines 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 transport 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.
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Structure of Plan and PPM
Plan (location independent) $

l l l l Control costs
PPM: Product, location, lot size area
Operations:
Material staging Pre-assembly Final assembly Inspection
Activities:
l l l
Produce Tear down Queue time
l l l
Product Relationship Resources
In / Out Sequence
Resource consumption
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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 Supply Network Planning (SNP) are usually rougher than those used for Production Planning/Detailed Scheduling (PP/DS). They contain: The variable costs contain all production costs.
Activity type: P (system always considers operations as production) Consumption mode: S (system always considers consumption at start of activity) Resources: Unit of measure must be the same unit as in the resource itself Fixed duration for scheduling: 1 day means that the activity lasts one day, for example. Variable resource consumption: Time to produce one base quantity of material. PPMs that determine the location, lot size, and time interval for which the plan is valid are assigned to the plan. A consistency check can be performed manually but is always executed when saving the PPM. If there are inconsistencies, the PPM cannot be activated.
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SNP Planning Sequence

Set up master data and supply chain model Build loads for non-assigned transport orders TLB run
Release demand plan
Perform SNP Heuristic, Optimization, or CTM run
Deployment run Release constraintbased SNP plan to DP
Finalize SNP plan (available to PP / DS)
SAP AG 2001
Planned independent requirements are generated for SNP or PP/DS when the demand plan is released from Demand Planning. This step can either be carried out using the demand planner or the SNP planner. Performing the SNP run using the SNP Heuristic, SNP optimization, or Capable-to-Match (CTM) results in a mid-term production and distribution plan. After the SNP run, check the exception messages (alerts) and resolve any problems that occur. The final SNP plan consists of purchase requisitions, stock transport requisitions and SNP planned orders. You can automatically convert the SNP planned orders into PP/DS planned orders in the production horizon. Production Planning and Detailed Scheduling (PP/DS) then starts with these PP/DS planned orders to remove detailed constraints and bottlenecks and to create a feasible production plan. The final SNP plan can be released back to DP for comparison of the unconstrained demand plan with the feasible SNP plan. If the differences between these two plans are too great, you can use a macro to trigger alerts so that the demand planner plans his forecasts again. After production planning has been completed, the deployment run confirms the stock transport requisitions based on current supplies and demands. The TLB run groups the stock transport requisitions resulting from the deployment run into stock transport orders. You can build stock transport orders manually for stock transport requisitions that could not be taken into account during the TLB run due to specified threshold values.
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Check plan/ solve problems
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SNP Planning Functionality
Mid- to Long-Term Planning Methods

Heuristic Capable-to-Match (CTM) Optimization Propagation
Deployment (short-term Replenishment Planning)

Heuristic Optimization
Transport Load Builder

Grouping of Stock Transfers
SAP AG 2001
The following planning scenarios are supported by Supply Network Planning: Supply Network Planning creates feasible mid-term procurement, production and distribution plans. Deployment distributes stock and available receipts to distribution centers and vendor-managed inventory (VMI) customers. Transport Load Builder converts the stock transport requisitions used by deployment into stock transport orders, taking account of transportation capabilities.
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Heuristic Scenario
2. Demand no stock
1. Demand no stock
4. Valid transportation lanes, quota arrangements, priorities
3. Explosion of plan Creation and scheduling of receipts
l l l
Quantity-based, rapid, multi-site planning MRP II concept (planning against infinite capacity) Time-based aggregation to weekly splits, for example
SAP AG 2001
The role of the Heuristic involves:
Planning supply to meet demand
Integrating purchasing, production, and distribution in one consistent model Modeling the entire delivery network
Synchronizing activities and planning material flow throughout the supply chain
The slide shows an example of the Heuristic:
There is a demand in the customer location. The net requirements calculation does not find any stock. The product is procured externally. The system analyzes the possible transportation lanes. There is also no stock in the distribution center so the Heuristic checks the possible transportation lanes in the plant. There is no stock in the plant, so the SNP plan is exploded and a planned order is created for the finished product and dependent demands for the components. Procurement for the components then occurs via the possible transportation lanes and quota arrangements or priorities.
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Capacity Leveling
Time-Based Capacity Leveling

Capacity load BACKWARD FORWARD
100 %
1. Day
2. Day
3. Day
SAP AG 2001
The planner can use the following methods to adjust the plan:
Backward shift of capacity load to satisfy demand with high priorities without due date violations. However, rescheduling does not create any orders in the production horizon. Forward shift of capacity load related to demand with lower priorities and minimization of due date violations based on demand priorities. A combination of backward and forward shift of capacity load. If you choose a time-based capacity leveling option, you can select various priority rules: If you do not select a priority rule, the priority is determined by the system and is completely random. If you choose Time-Based Capacity Leveling by decreasing order quantity, the system first adjusts the largest order, then the second largest, and so on. If you choose Time-Based Capacity Leveling by increasing order quantity, the system adjusts the smallest order first, then the second smallest, and so on. If you choose Time-Based Capacity Leveling by decreasing stock range of coverage, the system first adjusts the order with the largest stock range of coverage, then the one with the second largest range, and so on. If you choose Time-Based Capacity Leveling by increasing stock range of coverage, the system adjusts the order with the smallest range of coverage first, then the one with the second smallest range, and so on. If you choose Time-Based Capacity Leveling by decreasing product priority, the system first adjusts the order with the highest priority, then the one with the second highest priority, and so on. If you choose Time-Based Capacity Leveling by increasing product priority, the system adjusts the order
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with the lowest priority first, then the one with the second lowest, and so on. The product priority is maintained in the product location master record on the SNP2 tab.
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CTM Scenario
4. Strategy: Search for surplus stock Result: Stock 5. Stock transfer created 1. Demand with highest priority, no stock 2. Transp. lane highest priority
3. Strategy: Search for surplus stock Result: No stock ATP rule: Substitution product Result: No stock Production: Search for available capacity Result: No resource available
SAP AG 2001
This slide shows the determination of feasible receipts for the demand with highest priority. CTM gradually checks the feasible receipts, whereby you can define the sequence of checks via rules. CTM takes the first feasible solution. CTM considers: Prioritized single requirements
Production capacity and not handling, storage or transport capacities Splitting production between resources Component availability CTM is order-based planning that uses pegging methods to trace orders back to the individual requirement. In Supply Network Planning no order-based planning takes place; rather, quantity planning takes place. 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.
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Demand Prioritization
Priority 1 2 3 Order KAUF KAUF forecast Date 1.3. 2001 1.4. 2001 1.2. 2001 Customer Baker Baker DC1 Product P-102 P-102 P-102
The sort can be carried out according to:

Customer (location) priority Product priority Order type Due date
Prioritized Demands
1. 2. 3. 4. 5. 6.
Demands
Demand selection
CTM work area
SAP AG 2001
CTM prioritizes current demands based on order category (for example, sales order (KAUF) and demand planning forecasts), due date and the defined priorities. The sequence of the priority criteria is of great importance for processing demands in the CTM run. Note: If no priorities are set, prioritization occurs on a first come, first-served basis by due date. You can simulate demand prioritization and check the results. Below is a list of possible prioritization criteria: Maximum number of partial deliveries allowed per item, stock / receipt / demand / forecast categories, confirmed quantity, ATP, BOP: confirmation share, CTM quantity, order / MRP element number, order / MRP element item, date on which the record was added, delivery group (items are delivered together), location, ATP, BOP: delivery date, delivery priority, location, location product number priority, product priority, material staging date, item type sales document, ATP, BOP: user exit priority, sales document type, requested quantity. The sort within a prioritization criterion can be descending, ascending or user-defined. Define your demand selection in the CTM profile. (Multilevel Supply & Demand Matching > Planning > Planning CTM > Demands tab) or (Multilevel Supply & Demand Matching > Environment > Current Settings > Demand Prioritization > Sort Profile)
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CTM Results
Categorized Supplies
Capable-to-Match
Prioritized Demands
1. 2. 3. 4. 5. 6. 7. 8. 9.
Multi-site capacity and transportation capability check
10. 11.
SAP AG 2001
The CTM planning run is powered by the CTM engine, which matches the prioritized demands to the available stock and receipts. Then it matches receipts and demands, taking account of production capacities and transportation capabilities. Performing the CTM planning run in the SNP environment generates a mid-term production and distribution plan. CTM complements SNP's multi-site supply chain planning strategies. Its purpose is to perform a quick check of production capacities and transportation capabilities based on a preprocessed set of categorized supplies and prioritized demands.
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The Principle of the Optimizer

Product requirements priorities, resources, horizons
Constraints:
l Customer priority l Product priority l Production capacity
Simultaneous product and resource planning
Optimizer
l Storage capacity l Transportation capacity l Lot sizes l Safety stock
Result:
SAP AG 2001
Feasible receipts: planned orders, stock transfers and purchase requisitions
The Optimizer uses linear programming to consider all relevant factors simultaneously as one problem. The Optimizer compares alternative solutions for the incurred costs and proposes the best feasible solution based on constraints defined in the system. You use the control costs to also 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 this problem increases.
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Aims of Optimization
What should be optimized
Costs - optimal
Prerequisite: "real" variable costs or adequate estimate Non-delivery costs := Sales price + surcharge for customer loss/dissatisfaction
Service level - optimal

Prerequisite: "simplified" costs accepted Non-delivery costs (NC) Storage costs Other costs
(Control costs)
SAP AG 2001
Service level - optimal on this slide shows the simpler configuration made by the Optimizer. You maintain high non-delivery costs (NC) and storage costs for the finished products via 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. Costs - optimal on this slide shows the more complex configuration made by the Optimizer. You maintain realistic costs for procurement, production, transportation and storage. You model lost sales and customer dissatisfaction via 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 least costly solution.
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Optimizer Decisions
l l l Where will procurement take place? Where will production take place? When will production take place? What will be produced? Where will transportation take place? When will transportation take place?
30
Costs Penalty costs for late delivery
l l l l
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The essence of optimization is finding the best feasible solution. For example, is it less costly to deliver two days late or to produce three weeks early? The challenge with optimization is to properly define the relevant costs (for example, cost of late delivery). You can fine-tune the relative importance of different cost types via the cost profile.
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Where will the product be stored? How long will the product be stored?
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SNP Strategies: Comparison (1)
Heuristic:
Optimizer:
CTM:
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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 is order-based planning that uses pegging methods to trace 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, there is no sequential processing in the determination of 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: In Supply Network Planning no order-based planning takes place. 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 (CTM can, however, provide such information via order tracing).
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Demand at a location
Dependent demand at loc. Processing flow
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SNP Strategies: Comparison (2)
Heuristic
Speed Quality Prod. resources Other resources Multi-level Costs Priority Quota arrangements + 2. Step, local 2. Step, local + +
Optimizer
+ global + global + + + Product/location creates
CTM
global + + -
SAP AG 2001
The performance of the three planning methods can be divided up roughly as follows: The Heuristic is the fastest method, CTM is in the middle and the Optimizer is the most complex and the slowest method. This is just a rule of thumb. If you plan a lot of orders per period and location product, the performance of CTM and the Optimizer can be compared since planning in CTM is order-based. The quality of the heuristic planning result is poorest (infinite!), next comes CTM (rules), and you should expect the best result from the Optimizer that weighs up all possibilities of this algorithm. Production resources are considered globally and finitely by the Optimizer and CTM, while the infinite planning result of the Heuristic must be postprocessed interactively. Transportation, storage and handling resources can be considered globally and finitely by the Optimizer, while the infinite planning result of CTM and the Heuristic can be postprocessed interactively. All methods can plan all BOM levels automatically. Costs are only relevant to the Optimizer. Priorities control CTM. There are product, location, order and due date, procurement and stock transport priorities. You set priorities for the Optimizer via the penalty costs for late delivery and non-delivery of the location products. Quota arrangements are used by the Heuristic and CTM. They can be optimized using the Optimizer.
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Planning Process
Planning Horizon Demand Planning Supply Network Planning Production Planning / Detailed Scheduling
Firmed stock transport requisitions
Forecast
Recommended stock transport requisitions
Planned orders
Deployment

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Deployment determines which demands can be fulfilled by the existing supplies. If the produced and procured quantities as well as the demands match SNP planning, the result of deployment is a confirmation of the SNP plan. If the available quantities are not sufficient to meet the demand, the system makes the necessary adjustments according to whether you are executing the deployment heuristic or deployment optimization. The Transport Load Builder (TLB) then groups these confirmed quantities together into stock transport orders. Deployment and the TLB confirm the OLTP stock transport requisitions and can convert them into stock transport orders or VMI sales orders. Via Customizing -> APO -> Supply Chain Planning -> Supply Network Planning (SNP) -> Basic Settings -> Configure Transfer to OLTP Systems you can configure if transfer should take place using deployment or the TLB. Deployment and TLB are simply used to confirm stock transfers. Everything beyond this, such as route planning, selection of carriers and generation of deliveries and transportations in the OLTP system, is planned in TP/VS (Transportation Planning and Vehicle Scheduling).
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Deployment: Heuristic versus Optimization
Heuristic
Started for one plant Product by product
Heuristic
Optimization
Focus on network Product by product Coverage maximization Cost-based optimization Optimization
SAP AG 2001
The deployment function in SNP determines how and when inventory should be deployed to distribution centers, customers, and vendor-managed inventory (VMI) accounts. It produces optimized distribution plans based on constraints (such as transportation capacities) and business rules (such as minimum cost approach, or replenishment strategies). A variety of deployment strategies are used depending on the current situation (e.g., fair share, push deployment, pull-push deployment, and minimum cost flow optimization). The Heuristic has a hierarchical view of the supply chain network: Deployment is always carried out from one delivery location to the receiving locations (DCs or customers). The deployment heuristic calculates a replenishment plan for a product in a delivery location. If the available quantities are not sufficient to fulfill the demand, the system determines the distribution plan based on fair share rules. If on the other hand supply exceeds demand, the system uses push rules to determine the distribution plan. Fair share and push rules are defined in the deployment profile. Deployment optimization has the integrated view of the receipt situation of all delivery locations and the demand situation of the receiving locations. The deployment optimization run calculates a replenishment plan for a product in all locations within the network. If the available quantities are not sufficient to fulfill the demand or supply exceeds demand, the system uses minimum cost flow optimization to determine an optimum distribution plan for the whole network at once. Deployment optimization works like SNP optimization except that the production and procurement quantities are not changed.
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Deployment
Deployment adjusts the stock transfers for short-term changes on both the supply and demand side (distribution detailed planning). l Fair Share
Proportional allocation according to demands Proportional allocation according to target stock level Quota arrangements Plant DC1
DC2
Push deployment
Based on future demands Quota arrangements
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There are several deployment and allocation strategies: fair share, push deployment, pull-push deployment, and minimum cost flow optimization. If demand exceeds supply, use a fair share allocation. If demand is less than supply or excess inventory exists, use a push strategy to be able to transfer stock as early as possible. When excess inventory exists, surplus stock can be distributed according to push logic. For pull/push deployment rules, the demand horizon restricts the future demands that can be delivered early. Set the pull horizon on the demand profile; set the push horizon on the supply profile.
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Deployment Result: Fair Share Rule A
Date:
ATD Quantity: 1000 900 400

Supply
Requirements: 100 (DC1) 500 (DC2) 800 (DC1+2)

Demand
Today
05.01.2001 06.01.2001 07.01.2001
Detailed requirements per DC: DC1 DC2 200 600
Deployment Results 05.01.2001 06.01.2001 07.01.2001 07.01.2001

SAP AG 2001
Plant to DC1 Plant to DC 2 Plant to DC 1 Plant to DC 2
The slide shows the result of a deployment heuristic using the fair share rule A that is issued after planning in the background: Today, 1000 units are available in the plant for distribution. The stock transfer for the current demand from DC1 can be confirmed. The stock transfer for tomorrow can also be confirmed. The day after tomorrow, the demand exceeds the remaining quantity in the plant, so the 400 units are distributed using the defined fair share rule A. You use the ATD (Available to deploy) quantity to describe the quantity that is determined in the delivering plant for distribution and according to ATP rules. You configure the category groups in Customizing and assign them to the locations. Receipts (ATR) are, for instance, stock, production orders, purchase orders, etc. Issues (ATI) are reservations, etc.
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Collective conversion of stock transport requisitions into stock transport orders in R/3
Objective:
Grouped according to
Products (transportation planner) Time (pull-in horizon) Transportation zones
Ensures that minimum requirements are met for:

Volume Weight Number of pallets
SAP AG 2001
The primary purpose of the Transport Load Builder (TLB) is to use the results of the deployment run (single product transport recommendations) to create multi-product transport orders in a time period for a transportation zone. It should be ensured that: The transportation methods are filled to maximum capacity No transportation method is dispatched that is not filled to minimum capacity For stock transport orders that could not be satisfied during the TLB run due to specified constraints, you can build transport orders manually You can create transportation zones for the TLB or transfer them from R/3. You can thereby consolidate your transportation capabilities (for example, use one truck to deliver orders to several locations). You can group several locations together using transportation zones (and thereby create a zone). TLB orders for several locations are regarded as one order for a large location, although individual purchase orders do actually exist for separate locations. If you want to use transportation zones, you create a location as a transportation zone in the location master. (From the APO Easy Access menu choose Master Data -> Location. Use the input help (F4) in the Loc.type field of the location master and choose 1005 - transportation zone). You then assign the relevant locations in the hierarchy master to this transportation zone (choose Master Data -> Hierarchy). You can display these location hierarchies in the TLB interactive planning shuffler.
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Building Consolidated Loads
Full truck (best price) Half-full truck
Minimum capacity
1
SAP AG 2001
In the Interactive Planning table for the TLB, you can view transport orders generated automatically by TLB for a specific day. If the load does not meet the minimum capacity requirements specified for a full transport load within the specified pull-in horizon, you can manually create transport orders that are planned for later shipment and ship them early in order to build a full truck load.
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Supply Network Planning: Unit Summary
You are now able to

l l l l l Describe the Supply Network Planning distribution network Explain the Supply Network Planning process flow Identify master data that is required to run Supply Network Planning Describe and compare Supply Network Planning planning methods Explain the function of deployment
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Exercises
Unit: Supply Network Planning Topic: Interactive Planning
At the conclusion of this exercise, you will be able to: Open interactive planning in SNP, run the heuristic and view the capacity situation for a resource
Once a forecast has been generated at Precision Pump Company, the Logistics Planner uses the SNP heuristic to create a rough distribution plan and checks for capacity overloads at the production plants.
1-1
Open interactive planning of Supply Network Planning. Open the selection window and, under Show, select APO Location product. 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##. Load the data for the product at location 2400 into the planning table.
1-2
Look at the future periods and check if the planned independent requirements you released for the distribution centers 2400 and 2500 and the plant 1000 are displayed. Analyze in which key figure the planned independent requirements are shown. Make sure that no distributed demands and production orders exist for the production plants 1000 and 2300.
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1-3
Run the network heuristic and check the situation for your product T-F2## for the distribution center 2400. Verify that there are now values in the Total receipts row. Which plants are supplying the receipts?_______________
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1-4
Check the capacity situation for resources WT-L##_1000_001 and WT-L##_2300_001 in the Capacity View. Switch data views by dragging the grey bar upwards on the left and double-clicking on data view SNP94(2) CAPACITY CHECK. Open the selection window and, under Show, select APO Resource. Version 000 is already displayed automatically. In the next row, enter APO Resource once again, and on the right-hand side enter your resources WT-L##*. Load the data for a resource into the planning table sequentially. If there are any capacity overloads, run Capacity Leveling. Is there any capacity overload for these resources?_________ If so, when do the violations occur?____________________
1-5
Run optimization for your product T-F2## at all locations. Load all location products with product T-F2## into the planning table. Start the Optimizer with the optimizer profile DISCRETE and the cost profile MASTER. Check the capacity situation again.
1-6
Check if the receipts have been transferred to the connected R/3 System. Log on to the R/3 System and call the stock/requirements list for your product T_F2## in plant 1000.
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Unit:
Topic: Deployment
At the conclusion of this optional exercise, you will be able to: Describe deployments functionality and how it is used in APO
Precision Pumps products are distributed to their distribution centers and customers on a daily basis. Deployment checks the quantity that is available in the next few days for distribution and confirms stock transports that can be made.
1-1*
Run deployment for the location 1000 for the next 100 days using mass processing. Reduce SNP transport orders. Write down the result of the deployment run: _______________________________________________________________ _______________________________________________________________ Field Name Version Input Data 000 9ASNP94 SNP94(1) 1000 T-F2## 100
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Deployment horizon in days
If you select Orders: Do not change the system will not change the SNP transport orders. The horizons in the training system are not realistic. In practice, deployment is used to confirm stock transports for the next few days. But in the course we cannot wait until the orders reach the short-term horizon.
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Solutions
Unit: Supply Network Planning Topic: Interactive Planning
1-1
Open interactive planning of Supply Network Planning. Open the selection window and, under Show, select APO Location product. 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##. Load the data for the product at location 2400 into the planning table. Supply Network Planning Planning Interactive Supply Network Planning
The selection window is the second icon in the top left. Open the selection window and, under Show, select APO Location product. 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##. Select Adopt, and your selection will be adopted by the selection window. Double-click on your product T-F2## for the distribution center 2400. The data for this selection is now displayed in the planning table.
1-2
Look at the future periods and check if the planned independent requirements you released for the distribution centers 2400 and 2500 and the plant 1000 are displayed. Analyze in which key figure the planned independent requirements are shown. Make sure that no distributed demands and production orders exist for the production plants 1000 and 2300. Display the weeks in the next month and you will see the quantities in the key figure Total demand. Only forecasts outside of the forecast horizon contribute to the total demand. Double-click on the Total demand row. The released data is displayed in the key figure "Forecast". All six key figures (forecast, sales order, dependent demand, distributed demands) contribute to the total demand. Double-click on your product T-F2## for the distribution center 2500. Ensure that demand is displayed. Double-click on your product T-F2## for the plant 1000. Forecasts are displayed but no production quantities and distributed demand.
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1-3
Run the network heuristic and check the situation for your product T-F2## for the distribution center 2400. Verify that there are now values in the Total receipts row. Which plants are supplying the receipts?_______________ Click on the Heuristic (network) button to run the heuristic. Double-click on your product T-F2## for the distribution center 2400. Double-click on the Total receipts row. The stock transports created by the heuristic are displayed in the key figure DistrReceipt (Planned). Right-click on this key figure and select Display details to display the receipts from the plants in the lower window. The production plants 1000 and 2300 supply the distribution center 2400 according to the quota arrangement for the product T-F2##.
1-4
Check the capacity situation for resources WT-L##_1000_001 and WT-L##_2300_001 in the Capacity View. Switch data views by dragging the grey bar upwards on the left and double-clicking on data view SNP94(2) CAPACITY CHECK. Open the selection window and, under Show, select APO Resource. Version 000 is already displayed automatically. In the next row, enter APO Resource once again, and on the right-hand side enter your resources WT-L##*. Load the data for a resource into the planning table sequentially. If there are any capacity overloads, run Capacity Leveling. Is there any capacity overload for these resources?_________
If so, when do the violations occur?____________________ Double-click on the data view SNP94(2) CAPACITY CHECK. Double-click on your resource in the selection window to load data for the resource into the planning table. The aggregated available resource is calculated from the available capacity per workday. If capacity overloads occur, select Capacity leveling; Capacity leveling by backward scheduling; Time-based capacity leveling w/o priority rule; Maximum load as a % :100%, Ignore firmed quantity. Save the result and select again.
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1-5
Run optimization for your product T-F2## at all locations. Load all location products with product T-F2## into the planning table. Start the Optimizer with the optimizer profile DISCRETE and the cost profile MASTER. Check the capacity situation again. Double-click on the data view SNP94(1) SNP PLAN. Open the selection window and, under Show, select APO Location product. 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##. Select Adopt, and your selection will be adopted by the selection window. Press the Select all symbol above the selection window and load the data by pressing the Load data symbol. Start the optimization run by pressing the Optimizer symbol. Enter DISCRETE for the optimizer profile and MASTER for the cost profile and press Execute. When the Optimizer has finished the calculation, the resulting costs are displayed. When you have analyzed the costs, select the green arrow BACK to return to the planning table. Now you can check the resource loads again.
1-6
Check if the receipts have been transferred to the connected R/3 System. Log on to the R/3 System and call the stock/requirements list for your product T_F2## in plant 1000. SAP standard menu Logistics Production MRP Evaluations Stock/Reqmts List Enter your product T-F2## and the plant 1000, for example, and confirm. The SNP planned orders and releases for the stock transport requisitions are in R/3. The planned independent requirements are not transferred back via CIF but via mass processing in Demand Planning.
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Unit:
Topic: Deployment
1-1*
Run deployment for the location 1000 for the next 100 days using mass processing. Reduce SNP transport orders. Write down the result of the deployment run: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Supply Network Planning Planning SNP in the Background Deployment Field Name Version Planning book Data view Location Product Input Data 000
9ASNP94 SNP94(1)
Select Orders: Reduce, and Log.
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100
1000
T-F2##
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If you select Orders: Do not change the system will not change the SNP transport orders. The horizons in the training system are not realistic. In practice, deployment is used to confirm stock transports for the next few days. But in the course we cannot wait until the orders reach the short-term horizon.
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Production Planning / Detailed Scheduling (PP/DS)
Contents:
l Consumption of planning by sales orders for forecastcontrolled products in make-to-stock and make-to-order production Simultaneous material and capacity requirements planning at operation level in the production plant Tools for production planning and production scheduling Schedule optimization in PP/DS Transfer of planning results to the execution system
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Course Objectives
At the conclusion of this course, you will be able to l l l l l Describe how sales orders consume planning in make-to-stock and make-to-order production Use simultaneous material and capacity requirements planning at operation level Use the production planning and production scheduling tools Describe schedule optimization in PP/DS Transfer the planning results to the execution system
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning 5 Supply Network Planning 6 Scheduling 6 7 Transportation Planning 9 Conclusion
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Business Scenario
In Demand Planning, a demand planning forecast was generated and transferred to the distribution center as planned independent requirements. After SNP has transferred the requirements via the stock transfer to the production plant, the production quantities and capacities must be planned in the production plant.
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Production Planning & Detailed Scheduling in APO: Advantages

Simultaneous material and capacity requirements planning for in-house production, external procurement, and stock transfers in a production plant at operation level: Fast generation of feasible plans Immediate and automatic planning (for example, to trigger production from the plant) - close integration with plant Planning with exact times, even for dependent requirements (for example, a prerequisite for material staging by shift) Dynamic exception messages in real-time and based on order linking (pegging) across the whole supply chain Multi-level capacity requirements planning possible: automatic, multi-level, bidirectional propagation of order changes Planning of alternative resources Available capacity: time, volumn, length ...
Consideration of restrictions in planning (for example, supplier capacity) Schedule optimization (order sequencing, lead time, etc.)
SAP AG 2001
Simultaneous material and capacity requirements planning: You can define resources as finite resources in the resource master (resources critical for planning). At these resources, operations of orders are only created if there is enough capacity available for the order quantity on the order 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 (PP/DS tab in the product master), 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). At the same time (immediately) a multi-level ATP check is performed for the product and for the assembly/components for which automatic planning immediately is defined. Planning with exact times: Dependent requirements and orders are created with a time. Bi-directional propagation of order changes: If you make time-related changes to orders at, for example, finished-product level, you can specify that the system is to automatically move the assembly orders. If, however, there is not enough capacity at that time for the assembly orders, an exception message can be generated or the order is not moved at finished product level. In the other direction, moving assembly orders can have an effect on finished product orders. Planning alternative resources: If not enough capacity is available at a resource, the operation can be rescheduled at alternative resources (maintained in the PPM). Schedule 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.
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Interaction Between SNP and PP/DS

PP/DS
Create, change Receipts Create, change
SNP
Create, change Create, change
Order 4712
Today 50 Mo Reqmts in plant
Order 4713
100
Order 4714
40
Order 4715
210 Tu
Order 4716
160 We
Order 4717
35 Th
Time
Production horizon (per product) l l l Capacities and material are planned based on exact times (to the second) Consideration of order sequences Optimizer: Can optimize the sequence of existing orders and operations l l l Capacities are planned in time bucket profiles in an aggregated manner Order sequences not considered Optimizer: Optimizes lot sizes, determines source of supply
SAP AG 2001
If you decide to plan using both Supply Network Planning (SNP) and Production Planning and Detailed Scheduling (PP/DS), the production horizon is used to separate the areas of responsibility for these two planning functions: Supply Network Planning is used for medium-term to long-term planning across the whole logistics chain (especially if several plants and distribution centers are available). Requirements for a defined bucket (for example, day) are aggregated. In this case, it is irrelevant whether a requirement is in an early shift or late shift since the requirements are only roughly planned, and even the time positions of breaks are not taken into account. Furthermore, you are not only able to perform time aggregated planning in SNP, but also period aggregated planning (if desired). You can define bucket resources to be used for SNP which can represent, for example, the available capacity of a whole warehouse. Since you create separate PPMs for SNP (which are usually copied from PP/DS-PPMs), you can describe production at these bucket resources. Order sequences play no role in the time area of SNP planning.
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PP/DS is used for short-term planning in which orders must be scheduled to the minute and order sequences must be taken into account (sequence planning and optimization). As soon as a requirement is within the production horizon, it is no longer planned in the SNP planning run, but rather in the production planning run in PP/DS. Orders can be manually created or changed in PP/DS across the complete time axis, irrespective of the production horizon. During automatic planning (the production planning run) in PP/DS, only orders within the production horizon are created. In SNP, however, orders cannot be created or changed in the production horizon. Orders that are in the production horizon and thus planned by PP/DS are still displayed in SNP as aggregated requirements for the defined bucket.
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Interaction Between SNP and PP/DS (2)

SNP
Production horizon 100 Today Create Scheduling according to the PPM for SNP
Production horizon 100 Today
PP/DS
Delete Production horizon 100
Today
PP/DS
SAP AG 2001
In this graphic, an order is created in Supply Network Planning using the production process model defined in SNP. Production process models are created (the SNP-PPM can be copied from PP/DS-PPM, which is generated via the R/3-APO interface from the R/3 routing/BOM). Bucket resources (used only in SNP) or mixed resources (which can be used both in PP/DS and SNP-PPM) are planned in Supply Network Planning. Orders are aggregated for each defined bucket. As soon as the start date of the order enters the production horizon, the SNP order is no longer planned by SNP. The SNP order must be converted into a PP/DS order so it can be planned by PP/DS. To do this, background conversion is available in the PP/DS menu, which can be used to schedule periodically. The conversion creates the order again in PP/DS using the production process model defined there. Before the conversion, the aggregated requirements are displayed in SNP as planned production. After the conversion in PP/DS, the orders are still displayed as aggregated requirements in SNP. The production horizon is defined as a number of days from the current day into the future in which PP/DS is to be used to plan. The production horizon can be defined in Customizing for Supply Chain Planning, in the IMG activity, Display Global Parameters and Default Values. You may also define a production horizon for each product per location in the product master. This definition takes priority over the Customizing definition.
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Create again
Scheduling according to the PPM for PP/DS
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Requirements Strategies
Requirements strategies Quantity 100 Date 05/10

SD Planned indep. reqmts Sales order
Quantity Date
? ?
Production / Purchasing
l
SAP AG 2001
How does SAP process independent requirements?
A requirement is the quantity of a material required at a certain time in a plant. Independent requirements do not refer to the requirements of other materials. Planned independent requirements and sales orders are independent requirements. A requirements strategy specifies a possible procedure for material planning. Some requirements strategies support make-to-stock production. You could, for example, plan production or purchasing based on a forecast and then cover the sales orders from the stock. Some requirements strategies support make-to-order production. In this case, you may not start production or purchasing, for example, until a sales order has been received. Some requirements strategies support a combination of make-to-stock and make-to-order production. You could produce the subordinate assembly, for example, based on a forecast. You would not start the final assembly until a sales order is received.
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Requirements Strategies
l l
Make-to-stock production of the finished product by planning at the finished product level Sales order-related final assembly: Make-to-stock production of assemblies by planning at assembly level, final assembly in make-to-stock or make-toorder production when sales orders are received. Make-to-stock production of assemblies by planning at finished product level, but final assembly is not triggered until the sales order is received. Final assembly in make-to-stock or make-to-order production.
Make-to-order production only, without planning
SAP AG 2001
Requirements strategies represent the business procedure for planning production quantities and dates. A wide variety of requirements strategies are available offering a number of different possibilities for planning, ranging from make-to-order production to make-to-stock production. Depending on the strategy you select, you have the following options: Make-to-stock production based on sales orders and/or planned independent requirements at finished product level Planning specifically for the assembly, if you can plan more easily at component level. Final assembly takes place in make-to-stock or make-to-order production. Stocking up of assemblies by planning at finished product level, but final assembly is not triggered until the sales order is received. Final assembly takes place in make-to-stock or make-to-order production. Make-to-order production only, without planning the finished product or the components Furthermore, you can combine requirements strategies. This allows you to plan a finished product with a requirements strategy for make-to-stock production as well as plan an important assembly that is also sold as a spare part. The planning strategies available for a material can be found in APO Customizing for Master Data (in step Determine Requirements Strategies). You can assign a requirements strategy to a material in the Requirements strategy field. Each requirements strategy contains important control parameters for the consumption of sales orders (or dependent requirements) and planning.
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Overview of the Complete Production Planning Run Process

Planning
Dependent requirements
Product planning run
Sales orders, Planned ind. reqmts
Planned order Convert Production order Process order In-house production

SAP AG 2001
Purchase requisition Convert Plnd order for repetitive man.
Sched. agree. del. schedule
Material requirements planning deals with current and future requirements. The planned requirements quantities trigger planning (in consumption-based planning, for example, planning is triggered when the reorder point is not reached). Requirements elements for material requirements planning are, for example, sales orders, planned independent requirements, dependent requirements. If the production planning run 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 order for planning production quantities. When planning is complete, planned orders are converted to production orders. Dependent requirements for the planned order are converted to reservations for the production order. In external procurement, the system generates a purchase requisition for planning external procurement quantities. When planning is complete, the purchase requisition is converted to an order. If a material exists for a scheduling agreement, scheduling agreement delivery schedules can also be generated directly during the production planning run. When planning is complete, in-house production or external procurement must be triggered. For this, Planned orders are converted to production orders if you are working with discrete manufacturing (order-based production) Planned orders are converted to process orders if you are working with process manufacturing Planned orders are used as a basis for production if you are working with repetitive manufacturing (period-based instead of order-based) Purchase requisitions are converted to purchase orders
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External procurement Execution
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Time Elements in Scheduling
Operations Start date
Availability date End date
Finished product Stock transfer to a different plant Assembly of a different plant

10 GI processing time
10
20
30 GR processing time
GR processing time
10 20 10 GR processing time GR processing time
Time
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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 dependent requirement dates of the planned orders are moved to the dates of the assigned operations (PPM). A material order appropriate for the operation is then possible. The system assumes material staging according to component assignments in the PPM to the operations in the PPM. The dependent requirement dates of the BOM components are moved to the production start dates of the operations to which they are assigned.
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Production Planning Run Overview: Simultaneous Material and Capacity Requirements Planning
Resource availability Available Occupied 1st Loading attempt Final loading
Uninterruptible operation, according to PPM
Sales order with desired date and quantity Confirmed qty/date
Resource 3 (finite) Resource 2 (infinite)

10 20
30 30 20
Resource 1 (finite)
10
Today
Raw material
SAP AG 2001
Delivery time Delivery time
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, APO creates a planned order for the desired quantity in PP/DS. All of the operations of the PPM are scheduled at the resources of the PPM, and the system takes the capacity restrictions into account (available capacity and orders that may have already been scheduled). If the capacities are already exhausted on the desired date, the system uses simultaneous material and capacity requirements planning to find a 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 ...). Prerequisite: Maintain resources critical to planning as finite resources in the resource master. At these resources, operations of orders are only created if there is enough capacity available for the order quantity on the order date. Maintain the strategy profile with which you want to trigger the scheduling of planned orders in planning under Global Settings in Customizing for PP/DS, in the Strategy profile field. The default strategy profile in the delivery system is SAP002 (search for a slot backward).
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Possible ALERTS:
Resource Overload Supplier-supplier time violated Supplier-resource overload
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Detailed Scheduling Planning Board

Table area Column heading Lines
Resource chart
Diagram area
Res. Res01 Res02 Res03
Res. type P P P
Short 03/15/1999 descrip22 00 02 04 06 08 10 12 14 16 18 tion
20
22
03/16/1999 00 02 04 06
08
Loc 01 Loc 01 Loc 02
Order Chart
Chart objects
OrderNo 000001294 000001335 000001357
Products
22
03/15/1999 00 02 04 06
08
10
12
14
16 18
20
22
03/16/1999 00 02 04 06
08
P P P
Product histogram
Product Product 01
Order No: 000001294 300 200 100 22 03/15/1999 00 02 04 06 08 10 12 14
Message bar
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Graphical object (operation, order)
Schedules are displayed graphically in the planning board.
The planning board is used for interactive planning, for example, for interactive processing and dealing with Alerts. You can call the planning board directly from the Production Planning/Detailed Scheduling menu or from order processing. You can define the layout of the planning board, for example: The different charts (such as a resource chart and an order chart): The field selection and sorting for the columns in the table section of a chart The format of the rows in the table section The objects displayed in the diagram section of a chart, for example: Operations or orders (graphical objects) Histograms (product stock curves or resource load curves) Network views of operations and orders that display the time and pegging relationships between operations and orders The layout of operations and orders in the diagram section.
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Optimization Concept in PP/DS

l Optimization: Change of production dates/sequences and resource assignments of existing operations/activities with regard to the following criteria (no creation or deletion of orders):
W1* Total lead time + + + + +

Objective function =
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W2* Sum of setup times W3* Sum of setup costs W4* Maximum delay costs W5* Sum of delay costs MINIMUM W6* Sum of mode costs
Use: Optimization allows you to optimize the production dates/sequences and the resource assignment of existing operations/activities which were generated by the production planning run or manual planning. The optimizer does not create or delete orders. The purpose of optimization is to generate feasible production plans and increase the efficiency of production. Several optimization parameters (such as setup times, due date violations) can be weighted in such a way that the optimized schedule comes as close to the desired results (for example, minimum setup times) as possible. The following parameters can be taken into account in optimization: Total lead time (from the start of the first operation to the end of the last operation in a schedule within the optimization horizon). The total lead time makes a statement about the compactness of the orders within the optimization horizon. Sum of setup times Sum of setup costs Maximum delay costs (maximum delay of an order compared to its requirements or due date). Sum of delay costs (delay compared to requirements or due dates) Sum of mode costs
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Optimization Window: Time and Resources

Start
Earliest start for optimized schedule
End
Resource A
Resource B
Resource C
Resource D
Resource E
Non-working times Fixed operations Operations, that may be rescheduled Relationships Transferred resources: B, C, D Optimization range
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When you call up optimization you set the optimization horizon (start and end) and the start date for the optimized schedule. The optimization function reschedules orders and operations that are: Completely within the optimization horizon (defined by a start and an end date) Not fixed At resources which were transferred to optimization If you have selected resources in the planning board, only these selected resources are transferred to the optimizer. If you have not selected any resources in the planning board, the system transfers the resources that you specified in the work area for the planning board and the optimizer. In particular, the system can only reschedule an activity to alternative resources during optimization when these resources are included in the resource selection for optimization. The relationships of the fixed orders and operations to the non-fixed orders and operations determine if and by how much these orders and operations can be shifted during optimization. The optimized schedule is, therefore, adjusted to accommodate the fixed orders and operations. The system does not change planning outside of the optimization window during planning. Activities outside of the optimization window are fixed during optimization. However, the fixed activities determine by their relationships to the non-fixed activities in the optimization range, whether and how far these activities can be rescheduled during optimization. The optimized schedule is, therefore, adjusted to accommodate the fixed activities. Earliest start date for the optimized schedule: Before the optimization, you specify the earliest date on which the optimization function can schedule the activities. You cannot enter an earliest start date that lies in the past.
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Optimization: Sum of Setup Times/Setup Costs

Setup times at paint shop Prod. A B C A 0 30 30
A
Setup times in minutes
B 10 0 25 C
Setup time
20 Product B: yellow color 15 Product C: blue color 0

Requirements time
B A
Product A: white color
Setup time
Setup time
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 time Setup time
Optimization result (with light weighting of delays)
A
O p tim u m s e tu p tim e
Setup time
Setup time
Optimization result (without weighting of delays)
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Use: 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). Prerequisites: You have modeled the single resources and the operations that are processed at these resources exactly as with the setup time adjustment (see the unit Simultaneous Material and Capacity Requirements Planning). You strongly weighted the setup times or the setup costs in the objective function. Scope of function: In the objective function, the system interprets the values for the setup times and setup costs from the setup matrix as follows: You enter the setup time in a unit of your choice (for example, hours or minutes) in the setup matrix. The system uses the setup duration in seconds in the objective function. If you enter, for example, a setup duration of 10 minutes in the setup matrix, the system uses the value of 600 (seconds) in the objective function. You enter the setup costs without unit of measurement in the setup matrix. In the objective function, the system directly uses the value entered in the setup matrix. If you enter, for example, the value 10 for the setup costs in the setup matrix, the system uses the value of 10 to calculate in the objective function. Important: In the objective function, the setup costs with a value of 10 correspond to a setup duration of 10 seconds. You must consider this relationship between setup times and setup costs when defining the objective function, that is, when specifying the weighting for the setup times and the setup costs.
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Conversion to Fixed Procurement Elements
Individual conversion Individual conversion
Planned order
Production order
Purchase requisition
Order
Collective conversion Collective conversion Planned orders Production orders
Purchase requisitions
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You can trigger the conversion of planned orders and purchase requisitions to production orders or orders directly in APO. You set the conversion indicator in APO for the orders you want to convert. The orders are transferred to the OLTP system and converted automatically. The converted orders are sent back to the APO System with a different ATP category (purchase requisition to purchase order). If a planned order is converted to a production order, the dependent requirements of the components are converted to reservations. You can convert planned orders and purchase requistions in one of the following two ways: Individually in interactive planning: In the product view and the product planning table, you can select orders to be converted and then choose Set conversion indicator. When you save the planning results, the orders to be converted are transferred to the R/3 System, where the conversion will be automatically triggered. The converted orders are sent back to the APO System with a new ATP category. Using mass conversion and selection criteria (Choose Production Planning -> Manufacturing Execution -> Conversion of Orders/Purchase Requisitions): You can set the conversion indicators for a large number of orders or for several products. You can restrict the selection of orders to be converted by entering the product, location, production planner and the offset for the opening period. The opening period, which is defined in the product master on the PP/DS tab, controls which orders are to be converted. The opening period is a number of workdays starting from the current date. The APO System only sets the conversion indicators for orders whose order start dates are within this period. The opening period is used both for in-house production orders and external procurement orders. Prerequisites: On the PP/DS tab in the product master, you have maintained an opening period for each product at the location level.
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Mass Conversion - Time-Based

Offset time
Purchase requisition
Opening period
Planned order
Planning
Production finish
Creation date
Production start
Planned orders and purchase requisitions Today x days later Time
Production orders/ process orders
Order header
Operations
Orders
Material components
Prod uction resour ce/tool
Costs
PlanK P lnd Actual
100 20 50
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In-house production
APO orders contain three dates: production start, production finish, creation date. The creation date is the date on which a planned order is to be converted to a production order or a purchase requisition to an order. This date is based on the opening period defined in the R3 material master (SchedMargin key field). The opening period from the SchedMargin key of the R/3 material master is transferred to the APO product master in the R/3 APO interface (Opening field in the Horizons group box). As soon as the creation date of a planned order is passed on to a time horizon selected in mass conversion, it can be converted in mass conversion. The time interval (offset time) entered in mass conversion is always valid as of today's date. Planned orders whose creation dates are in the past are automatically selected too. Planned orders are usually converted to production orders (in-house production), purchase requisitions to purchase orders (external procurement). In in-house production, the order type in R/3 determines whether it is a production order or a process order. The order type is taken (in the sequence of highest priority) from the production scheduling profile in the R/3 material master, the MRP group in the R/3 material master, and the plant parameters in R/3-Customizing. The R/3 System decides whether a production order or a process order is to be generated for the product. When the planned order is converted to a production order or process order, the planned order is deleted. The related dependent requirements (material components) and any capacity requirements are redirected to the newly created production order. The dependent requirements become reservations.
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Production Planning / Detailed Scheduling (PP/DS): Unit Summary
You are now able to

l l l l l Describe how sales orders consume planning in maketo-stock and make-to-order production Use simultaneous material and capacity requirements planning at operation level Use the tools for production planning and production scheduling Describe schedule optimization in PP/DS Transfer the planning results to the execution system
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Exercises
Unit: Production Planning and Detailed Scheduling
At the conclusion of these exercises, you will be able to: Explain the production planning run method in PP/DS (simultaneous material requirements planning and capacity planning)
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1-1
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In Demand Planning, a demand planning forecast was generated and transferred to the distribution centers in Milan and Rotterdam as planned independent requirements. After SNP has transferred the requirements via the stock transfer to the production plant, the production quantities and capacities must be planned in the production plant. In addition, customers in Germany in your company are not supplied via the distribution centers. Rather, they receive supplies directly via the plant 1000 in Hamburg. Therefore, planned independent requirements have also been generated in Demand Planning directly for the plant 1000 (without a detour via the distribution centers). These planned independent requirements preplan the demand expected for the customers in Germany.
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Your task is to plan material availability in plant 1000 in Hamburg. Start a production planning run to plan material and capacity simultaneously in the plant.
In the Product View in APO, look at the planned independent requirements for pump T-F2## at location 1000 (production plant Hamburg) . 1-1-1 Why have no planned orders been created, in the near future, for the planned independent requirements? _____________________________________________________ To return to the display of the stock/requirements situation, select the Elements tab.
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1-2
Execute a production planning run to schedule the production of the pumps. In this example, planning should not be triggered from the product view; rather, the production planning run should be used. 1-2-1 Exit the product view and follow the menu path for the production planning run. In the production planning run, in plant 1000, you plan all products for which you have planned the production planner. In the production planning menu, select the following variant: SAP_MRP_001. After making this selection, choose Selection criteria. Now select the following values: Field Product Location Production planner Planning file entry created Choose Execute. 1000 0## X Values
1-3
In the Product View in APO, look at the planning result for the APO product T-F2## at location 1000 (production plant Hamburg). 1-3-1 Look at the situations of the planned order for product T-F2## and check the requirements/receipt situation for all components. Were all requirements planned in planning?
1-3-2 Now check the planned order details: Look at the component list of the latest planned order within the production horizon: Double-click on the latest planned order within the production horizon to go to the planned order. After double-clicking, you can see the detailed data (header data) of the planned order on the right, and the complete structure of the planned order on the left. On the left you can recognize the receipts, components (requirements) and operations of the planned order. When are the start and end dates of the planned order for the final assembly of pump T-F2##? _____________________________________________________
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How many operations have been scheduled in the planned order on the various resources? _____________________________________________________ Which assemblies (and also dependent requirements) are contained in the planned order for the pump T-F2##? _____________________________________________________
Have the components T-B1## (casing), T-B22## (fly wheel), T-B3## (hollow shaft) and T-B4## (electronic turbo-drive) also been planned? To find this out, double-click on the corresponding product number in the component list of the planned order and look at the requirements/stock situation for the corresponding assembly on the right of the screen. Are there any alerts for the components of the planned order?
_____________________________________________________
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Optional exercise (not part of the standard course can be used by the course participants after the course)
Unit:
Production Planning and Detailed Scheduling(Machine Schedulers Tools)
At the conclusion of this exercise, you will be able to: Visualize and process orders in the detailed scheduling planning board
After you have executed the planning run for your plant 1000 in Hamburg, you must then reschedule the sequence of the existing orders.
1-4
Until now, we have only created requirements and orders for pump T-F2## (white pump). Now, create some more planned independent requirements for pump T-F4## in plant 1000. To demonstrate that planned independent requirements can be created not only using APO Demand Planning, but also using R/3 Program Planning, create the planned independent requirements manually in R/3. Note: Creation of planned independent requirements in R/3 is useful if you are performing demand planning in R/3, or are not performing demand planning and wish to maintain the planned independent requirements manually. 1-4-1 Enter the independent requirements for material T-F4## in plant 1000 in the R/3 program planning. In the initial screen of the transaction, enter T (day format) in the planning period field, to select day schedule lines as the period schedule line. In the planning table, select the first row of the table and choose the delivery schedule tab. Enter the following independent requirements for pump T-F4## in plant 1000: Friday in a week 5 Save your entries. Friday in two weeks 5 Friday in three weeks 5 Friday in four weeks 5
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1-5
Check the sequence of the planned orders for both product pump T-F2## (white pump) and T-F4## (blue pump). To do this, use the detailed scheduling planning board. 1-5-1 Call up the variable view of the Detailed Scheduling Planning Board. Choose the Pump ## overall profile and confirm using Enter. You see that the work area Pump ## was selected automatically when you selected the overall profile Pump ##. This includes all resources for the final assembly of the pumps. Enter the detailed scheduling planning board using the selection criteria specified above and then navigate in the planning board. 1-5-2 Look for the first orders for products T-F2## (white pump), and T-F4## (blue pump) by selecting the respective product numbers one after the other in the Product chart and then right-click to select "begin with first graphical object".
Look in the Resources chart to see which resources the pumps occupy. To find out which capacity loads belong to which order in the resources chart, select the first planned order for the product T-F2## and then right-click to select Mark objects for the same order. All capacity requirements belonging to the order are then shown in color. 1-5-3 In the Detailed Scheduling Planning Board, you can now manually reschedule orders/operations using Drag & Drop, or you can start the Optimizer for automatic sequence planning. However, only observe the planning result here, and then exit the Detailed Scheduling Planning Board without saving.
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Solutions
Unit: Production Planning and Detailed Scheduling
1-1
APO menu path: Production Planning Interactive Production Planning Product View 1-1-1 Why have no planned orders been created, in the near future, for the planned independent requirements? For product T-F2##, a production horizon of a certain number of days has been maintained in the product master, on the SNP2 tab. Requirements outside this production horizon are covered by the SNP planning run. Requirements within the production horizon are covered by the PP/DS planning run. As only an SNP planning run was executed in the last exercise, but not a PP/DS planning run, no planned orders are available for any requirements within the production horizon.
1-2
APO menu path: Production Planning Automated Production Planning and Optimization Production Planning Run APO menu path: Production Planning Interactive Production Planning Product View 1-3-1 Look at the situations of the planned order for product T-F2## and check the requirements/receipt situation for all components. Were all requirements planned in planning? After the production planning run, all the planned independent requirements were planned. 1-3-2 When are the start and end dates of the planned order for the final assembly of pump T-F2##? Take the dates from the planning order header. How many operations have been scheduled in the planned order on the various resources? In total, the six different PPM operations have been scheduled in the planned order. Which assemblies (and also dependent requirements) are contained in the planned order for the pump T-F2##? The components T-B1##, T-B22##, T-B3## and T-B4## are contained in the planned order for the pump.
1-3
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Are the components T-B1## (casing), T-B22## (fly wheel), T-B3## (hollow shaft) and T-B4## (electronic turbo-drive) also planned automatically and immediately? Are there any alerts for the components of the planned order? Only the dependent requirements of the hollow shaft are planned immediately; the other dependent requirements were not planned. However, these are partially covered by storage location stock. Solutions
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Optional exercise (not part of the standard course can be used by the course participants after the course)
Unit:
Production Planning and Detailed Scheduling (Machine Schedulers Tools)
1-4 1-4-1 R/3 menu path: Logistics Production Planning Program Planning Planned Independent Requirement Create
1-5
1-5-1 APO menu path: Production Planning Interactive Production Planning Detailed Scheduling Planning Board 1-5-2 1-5-3
Transportation Planning & Vehicle Scheduling (TP/VS)
Contents:
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Route optimization Carrier selection
Transportation consolidation Shipment tendering
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Unit Objectives
At the conclusion of this unit, you will be able to: l l Describe the tasks of Transportation Planning & Vehicle Scheduling, and how it is applied in APO State the differences between the Transport Load Builder, and Transportation Planning & Vehicle Scheduling.
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning 5 Planning
7 7 Transportation 7 Planning/Vehicle Scheduling

8 Global Available-to-Promise 9 Conclusion
6 Scheduling
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Business Scenario
The Precision Pump Company is using Transportation Planning & Vehicle Scheduling to make optimum usage of available capacities in trucks, trains, ships, and aircraft . Their aim is to plan more efficiently and reduce costs. During optimization, both optimum routes, and optimum vehicles will be identified (using R/3 freight costs, for example).
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The Precision Pump Company is using Transportation Planning to make optimum usage of available capacities in trucks, trains, ships, and aircraft . Their aim is to perform planning more efficiently and reduce costs. They are using Vehicle Scheduling to analyze and modify the plan that was generated during Transportation Planning. For example using carrier selection manually to fix planning results, and transfer them to the OLTP system for transportation execution (LES).
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Transportation Management
APO TP/VS
(Planning)
l Is integrated with the APO components DP, SNP, PP/DS, and ATP l Evaluates the planning in BW l Plans for both short, and long term horizons
BW
(Monitoring)
LES (Execution)
TP/VS, LES, and BW provide an integrated solution for transportation management within the Supply Chain
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The TP/VS component has the following functions:
Transportation planning and transportation consolidation Transportation mode and carrier selection Multi-pick up and multi-drop functions Management by exception
Vehicle Scheduling and route determination in a dynamic environment
The APO system includes the tactical and operational planning area from the SAP Transport Management solution, which is complemented for transportation execution by the SAP component from Logistics Execution Systems (LES).
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APO Planning Process

Demand Planning
Unconstrained Aggregated planning
Forecast
Planned orders Stock transfers
Constrained Mid-term planning
PP/DS
Constrained Detailed planning
Deployment
Constrained Route planning and transportation consolidation
Planned deliveries
TP/VS
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Supply Network Planning is used for long-term and mid-term planning. A big advantage of this component is the sourcing which determines where and how a product will be procured. Sourcing is optimized by functions such as the Transport Load Builder (TLB). Bucket capacities are used in Supply Network Planning to plan products. These bucket capacities show the most detailed level of daily planning. Vehicle Scheduling (VS) is a short-term planning component. You can define planning horizons for both the Supply Network Planning component and the VS component here. These horizons are all independent of one another and have to be planned as such. In Vehicle Scheduling, resources and transportation processes are maintained in detail, so that planning will be performed as precisely as possible. When orders from Supply Network Planning become VS orders, the following happens: the orders are received in a specific sequence the exact transportation time is specified information and processes that were still outstanding are added (data and processes that are not necessary for Supply Network Planning, but are for Vehicle Scheduling such as loading and delivery activities)
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TP/VS Supply Chain Modeling

Outbound
Transportation zones
Replenishment
Inbound
Created transportation lane Generated transportation lane
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Customers or suppliers can be grouped into transportation zones to reduce the complexity of TP/VS problems. The unbroken line is modeled and the broken lines are generated by the optimizer. If a transportation zone is loaded with customers from the R/3, an associated hierarchy is generated automatically.
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Transportation planning & Vehicle Scheduling (TP/VS)

Sales orders, stock transfers, forecasts
Objective:
Deliveries and transportation orders in R/3
Simultaneous route planning and transportation consolidation
Optimizer
Selection of transportation provider

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Optimization in TP/VS is for optimizing transportation schedules with the assignment of vehicle resources to orders. It takes into account the following: Travel from and back to the depot Loading and unloading time Order consolidation
Reduce transportation time costs Reduce distance costs
Costs for being too early/delayed Costs for non-delivery Transportation fixed costs Optimization can be simulated or used in the active planning version 000. You can use transportation allocation to define the maximum transportation capacity of a carrier per day and per transportation lane fix a specific minimum service acceptance to define the minimum of shipments that must be made. Transportation allocations are maintained as time-dependent The capacity utilization (in percentage terms) of a carrier, plays an important role, and should be computable (also refer to the Business Share Strategy used in carrier assignment).
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TLB orders Express orders
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It is a particularly good idea to use carrier transportation capacities if you are working with priorities for various carriers.
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The Vehicle Scheduling Procedure
Configuration
Master data
Modeling
(Route planning and transportation consolidation)
Optimization
Create/transfer shipments Create/transfer deliveries
Backorder processing
Select carrier
Shipment tendering
Publication of deliveries
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You use interactive planning in Vehicle Scheduling to:
perform transportation planning manually or automatically display, change, confirm, or reject optimization results execute carrier selection manually
fix planning results and transfer them to the OLTP system for transportation execution
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TP/VS Tendering
EDI
Business scenario: Business scenario: Internet tendering Internet tendering
Create deliveries Publish
Business scenario: Business scenario: Internet tendering Internet tendering

XML
Transportation planner Transportation planner Release for execution HTML Accept / Refuse
Service agent Service agent
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Unit Summary

l l Describe the tasks of Transportation Planning & Vehicle Scheduling, and how it is applied in APO State the differences between the Transport Load Builder, and Transportation Planning & Vehicle Scheduling
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Global Available-to-Promise (Global ATP)
Contents:
l l l l Global ATP and Integration with OLTP Integration with PP/DS Rules-based ATP Product Allocations
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Unit Objectives
At the conclusion of this unit, you will be able to l Describe how Global Available-to-Promise (ATP) integrates with OLTP and APO applications Define the features and functionality of Global Available-to-Promise Identify benefits of using Global Available-to-Promise
l l
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning 5 Supply Network Planning 6 Scheduling
7 Transportation 9 Conclusion
8 Global Available-to-Promise 8
Planning/Vehicle Scheduling8
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Business Scenario
Precision Pump company intends to use rulesbased ATP to be able to carry out a multi-plant search for products requested by its customers. If the pumps are not available, the feasible delivery date can be determined, taking account of resource availability.
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AP0 Application Architecture and Global Availableto-Promise (ATP)

R/3 APO
Supply Chain Cockpit
BW
LIS, CO/PA HR, FI Sales orders Shop floor control Inventory management Transportation processing
Global ATP
Demand Planning
Historical Historical data data
Production Planning and Detailed Scheduling Deployment
Key performance indicators (KPIs)
Transportation Planning
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In the R/3 APO interface you can define that the ATP check of products (ATP check, ATP = Availableto-Promise) should not be carried out in R/3 but in APO, as soon as a sales order is created. Sales orders created in the OLTP system (for example, R/3 System) automatically trigger the availability check in APO in this case. Depending on the system settings, a check can be carried out against inventory, production plans and distribution plans. Planned orders that are created via ATP integration with PP/DS can be sent back directly to the OLTP systems.
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Global Availability Check in APO: Benefits

Rules-based availability check (multi-step availability check): check of multiple locations and products Better integration between sales and distribution and production: triggering of production when there is no availability (integration PP/DS) Multilevel component and capacity check (real-time operation) Check against aggregated, memory-resident data
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Rules-based ATP (multi-step availability check): When there is no availability, you can configure in APO that the system should carry out the availability check for the product in another location or else for an alternative product. Integration between sales and distribution and production: You can also define that the sales order triggers production directly if a product is not available. If it triggers an order for in-house production, APO creates a planned order for the desired quantity in PP/DS (Production Planning & Detailed Scheduling). In addition, component availability can be checked (multi-level components and capacity check). Check against aggregated data: Planned orders and production orders are aggregrated and represented in a time series, which can be used to evaluate the incoming requests from the sales orders. This means that better system performance is then available.
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Global ATP
R/3
Article structure Customer l l
APO
Global ATP: multi-site, real-time Rules-based, multi-level ATP Alternative locations Alternative products Alternative PPMs l Integrated with Production Planning Checks against actual production plan Consideration of capacity constraints l Integration of legacy systems
40 pieces
ATP request
Sales orders
Confirmation
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Global ATP is embedded in Supply Chain Management (SCM) processes for any kind of order processing. Availability checks are triggered as events in the OLTP system - either R/3 or legacy systems - and an ATP request for product availability is sent over to APO. An Available-To-Promise (ATP) check is an online search to verify the company's ability to provide the requested product, in the requested quantity, and on the date requested by the customer. In many OLTP systems, ATP functionality is limited or not possible at all. In older versions of R/3, an ATP check searched local inventories only for available products and assumed infinite capacity when a product had to be produced. For this reason, ATP checks are carried out in APO on the basis of time series, either in real-time or in simulation mode. When it comes to production, ATP makes use of PP/DS (Production Planning and Detailed Scheduling) functionality to check against the actual order network including all constraints. Applying rules-based ATP is the basis for checks of alternative products in alternative locations as well as for production.
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Issues & Receipts
Receipts
Production Purchase requisition order Planned order
Stock
Further salesrelated requirements
Time
Reservation
Issues
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In accordance with ATP settings in APO, you can take into account various stock, requirements and receipts in the availability check. You can define which requirements and receipts to use as a basis for a sales order confirmation that you want to give the customer. The scope of check is configured in APO Customizing.
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Aggregation of Time Series
Aggregate each receipt (issue) per:

Category Time unit
High performance because

Cumulative quantities are checked, not individual goods movements
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The data sent from the OLTP system is aggregated and represented in a time series consisting of the corresponding ATP objects that are then used to evaluate the incoming ATP requests. The time series display (see picture above) shows the receipt elements above the line. The issue elements are below the line. If the stock is zero or negative, a new order can only be confirmed for a later date. To differentiate between the various levels of probability with which a specific product will be in stock in the future, there is a time series for each type of ATP category. Examples of ATP categories: firm planned order, consignment stock, released production order. To improve your system performance, ATP gives you the option to aggregate orders by reorganizing time series'. All receipts and issues within one period are cumulated. The ATP check checks against these aggregated quantities. ATP performance is reduced if you process incoming orders in individual checks.
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Rules-based ATP: Example

End item of sales order
Problem:
Insufficient number of pieces in stock
PPM explosion
Possible solution:
Step 1: Alternative product Step 2: Procurement from another location Step 3: Production (PPM explosion)
Alternative location(s)
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Rules-based availability checking is an iterative process. The rules stored in the system determine the next checking step in each case. Possible next steps are as follows: Sourcing Substitution (alternative product)
Capable-To-Promise (triggering production = creating an order) All of these span the three-dimensional space shown in the picture. The search stops when an acceptable result is provided by the check (if any number of substitution steps is permitted). In the rule strategy settings, however, only one substitution can be selected. In this case the system completes the rule evaluation. Without customer-specific coding (= customer exit) the system chooses the first result that covers the requirement completely. By activating the customer exit you can decide which selection is appropriate and if a dialog should be displayed. Only one result is permitted. The rule strategy forms the actual rule-base for a specific check. In the simplest case, this search strategy defines the sequence in which the system reads the individual rules. Each access of this sequence is performed using a combination of characteristics. When an order is to be checked, the characteristics of the order are passed over to APO from the OLTP system. You can thereby define, for example, that sales orders for different sales organizations, sold-to parties, and so on, are checked using different ATP rules. Depending on these values, the corresponding rule is evaluated.
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A pr lter od na uc tiv t(s e )
Availability Check (ATP Check) in Sales Orders

Sales order
R/3
Confirmation ATP request
APO
ATP check ATP
For non-availability Produce
Sales (SD) Sales order Planned order

MRP
Save sales order
Planned order
Production Planning/ Production Detailed Scheduling Detailed
Update time series
SAP AG 2001
In the 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 R/3, but rather in APO (Availability check indicator). If you create a sales order in the R/3 System, the system first checks whether there is enough stock available for this product. It can also check whether receipts (such as production orders or planned orders) are scheduled before the desired date. For non-availability, you can specify in APO that the system is to perform an availability check for the product in a different location or for an alternative product. Furthermore, if a product is not available, you can define that the sales order can trigger production directly. In this case, it triggers an order for inhouse production and APO creates a planned order for the desired quantity in PP/DS. All of the operations of the PPM are scheduled at the resources of the PPM, and the system takes the capacity restrictions into account (available capacity and orders that may have already been scheduled). In addition, the availability of the components can be checked (Automatic planning indicator in the product master of the components). If the capacities are already exhausted on the desired date, the system uses simultaneous material and capacity requirements planning to find a date on which the planned order can be created. The availability date of the newly created planned order (finish date) is passed back to the R/3 sales order and copied as the internal confirmation date. Delivery scheduling is used to determine the date in the sales order on which the customer can receive the product. The sales employee can find this delivery date in the R/3 sales order. When you confirm this proposed date in the sales order and save it, the APO planned order, which was only simulated, is transferred back to R/3 and is visible there.
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Integration of Availability Check and Sales Order Production

Resource availability Available Occupied 1st Loading attempt Final loading
Sales order
Desired date and quantity Confirmed qty/date
Resource 3 (finite) Resource 2 (finite) Resource 1 (finite)

10 20
30 20
30
10
Today
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If a product is not available, the sales order can trigger production directly: If it triggers an order for inhouse production, APO creates a planned order for the desired quantity in PP/DS. All of the operations of the PPM are scheduled at the resources of the PPM, and the system takes the capacity restrictions into account (available capacity and orders that may have already been scheduled). If the capacities are already exhausted on the desired date, the system uses simultaneous material and capacity requirements planning to find a 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 ...). Prerequisite: In the "rules-based availability check", define that production is to be triggered directly for nonavailability (this function can be used in connection with all requirements strategies in planning). Maintain the strategy profile with which you want to trigger the scheduling of planned orders from the ATP integration and maintain them under Global Settings in Customizing for PP/DS, in the Strategy profile for ATP integration field. The default strategy profile in the delivery system is SAP001 (search for a slot backward). You define in APO how the availability of a sales order is checked in APO (for example, checking against stock, checking against forecasting, checking against allocation, or checking using rules-based ATP (also checking against alternative products/locations or triggering production from the sales order). Here, depending on the R/3 requirements class and the business event (for example, A = sales order, AE = make-to-order sales order, B = delivery), you can define which check if any should be performed (check against stock, against forecasting, against allocation or rules-based ATP). If you use rules-based ATP, the corresponding rules are selected according to material, sales organization, soldto party, plant, etc (condition technique).
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Product Allocation Managing demand against constrained supply
Demand
Jan Feb
Mar
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Product allocation functionality allows you to manage the supply of scarce products to customers, so that each customer receives an allocated amount. Product allocations are applied to a product allocation object. The product allocation object is the reason for allocating quantities. It could be any one of the following: A product (personal computer) or a product group A component (processor) A production line The reason for product allocations may vary in different phases of the product life cycle. A season (summer, winter)
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Backorder Processing
Sales order confirmations Before
June
July
Aug.
Sept.
Time
Sales order confirmations - by priority
June Stock Sales order Planned order

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July
Aug.
Backorder processing is one of the new availability check tools that enables you to analyze and edit backorders and to overwrite confirmed quantities as the result of the previous ATP check. You can redistribute the confirmed quantities of one or more products via selected customer requirements. Backorder processing can be executed In interactive mode
In batch mode (including simulation) As a combination of both
The orders to be processed are determined via a filter that is to be defined. This filter definition can be configured by the user or you can use the standard filters provided by SAP, which filter according to locations in which the planning situation has changed (netchange filter). They must be taken into account again within backorder processing. After the orders have been selected once via the filter, they can be sorted via specific configurable criteria. The orders whose delivery date now lies in the past can be scheduled in the future, if desired.
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Global Available-to-Promise: Unit Summary
You are now able to

l l l l Describe how Global Available-to-Promise (ATP) integrates with OLTP and APO applications Define the features and functionality of Global Available-to-Promise Perform a simulation of rules-based using Global Available-to-Promise Identify benefits of using Global Available-to-Promise
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Exercises
Unit: Global Available-to-Promise (Global ATP)
At the conclusion of this exercise, you will be able to: Create a sales order in R/3 Run the ATP check Understand why you got this specific ATP check result
The Precision Pump Company receives a customer inquiry for the product T-F2##. The customer Jashanmal Trading, Dubai wants a confirmation regarding when Precision Pump Company is able to deliver the product.
1-1
Create a sales order in R/3 and perform the ATP check.
Field Name Order type
Sales organization
Distribution channel Division
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In the sales order screen you enter the following data: Field Name Sold-to party Purch. order no. Material Order quantity Input Data 2402 Group ## T-F2## 5
You get a dialog box with the ATP check result.

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How many units of the products can be delivered? ___________________________________________ ___________________________________________ Save the order. The order is transferred directly to APO after saving in R/3. In the APO system, check the planning situation for the product T-F2## (pump) in the locations 2400 (Milan), 2500 (Rotterdam) and 2300 (Barcelona).
Field Name Planning version Product Location
Input Data 000 T-F2## 2400
Then check the planning situation in locations 2500 and 2300.
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Solutions
Unit: Global Available-to-Promise (Global ATP)
1-1
Create a sales order in R/3 and perform the ATP check. Logistics Sales and Distribution Sales Order Create Field Name Order type Sales organization Distribution channel Division Press Enter Input Data OR 2400 10 00
In the sales order screen you enter the following data: Field Name Input Data 2402
Sold-to party
Purch. order no. Material
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Group ## T-F2##
Order quantity
You get a dialog box with the ATP check result. How many units of the products can be delivered? ___________________________________________ ___________________________________________ Save the order. The order is transferred directly to APO after saving in R/3.
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In the APO system, check the planning situation for the product T-F2## (pump) in the locations 2400 (Milan), 2500 (Rotterdam) and 2300 (Barcelona). Production Planning Interactive Production Planning Product View Field Name Planning version Product Location Input Data 000 T-F2## 2400
Then check the planning situation in the locations 2500 and 2300.
APO SCM Implementation
Contents:
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ASAP SCM Methodology
Objectives Tools Deliverables
ASAP SCM Implementation Philosophy
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ASAP for APO
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Unit Objectives
At the conclusion of this unit, you will be able to: l l l Explain the philosophy behind the ASAP SCM implementation methodology, List the various phases of the ASAP SCM methodology, Describe the objectives, deliverables, and the use of tools of each phase of the ASAP SCM methodology.
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1 Course Overview 2 Integration and Technology 3 Modelling and Evaluation in APO 4 Demand Planning 5 Supply Network Planning 6 Scheduling
7 Transportation Planning 8 Global Available-to-Promise 9 APO SCM Implementation 9 10 Conclusion

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The SAP Supply Chain Implementation Philosophy:
A supply-chain diagnostics approach that will enable SAP to evaluate a customer's supply chain, identify significant issues, estimate benefits that APO could deliver, and develop a tailored implementation plan that enables customers to realize these benefits in a short period of time
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The Supply Chain Implementation Tool Kit

l Built-in tools, templates & techniques
Models Templates Questionnaires
Project plans
Novem ber I D Task Nam e 1 Nov Decem ber Dec
Case studies
M ay Ma y Ju n e J un
Sample Schedule
I D T a sk Name 1
S amp leSche dule P roject reparation P
No vemb e r ecem b r Ja n Mar y F eb ru ry M arch ay Jan D Febe u ar Apr a M Nov Dec Ja n F eb Ma r
Januar y
Febr uar y
M ar ch
Apr i l
M ay
Ap ri l Jun A pr
June
Supply Chain case studies Analytical tools
Project Preparation 2
Business 3Blueprint B usiness l ue print B

4 Simulation S i mulation
Validation5 V ali dat ion Final Preparation P re parati on F inal

6
GoLive Go Live & Support & S upport

8 9 10
8 9 10
APO process flows APO activity matrix Questionnaires & surveys R/3 Value analysis
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ASAP SCM Methodology Phases
Project preparation
Business blueprint
Realization
Final preparation
Go live and support
P1 P1 D3
AC M E Tai w an
P1
P2
P3
P4
P2
P4
P2
D 2
Sem conduct or i M anuf acur er t
S1
D2
Sem conduct or i D i t r but r s i o
S1
ACM E Lapt p o Pr oduct i n o ( SanJose)
M4
A CM E Lapt op Pr oduct i n o ( SanJ ose )
D 1
ACM E L apt p o Di t r i ut i n s b o ( SanJose)
S1
D1
Lapt op Di sr i ut or t b
S1
D1
Lapt p o R et i er al
S uppl i r e
Cust om r e s
ACME
C ust m er o s
Cust om er
S AP B usiness I nformati on Warehouse

P eo p le L earni ng O ppo rtuni ties P ro cesses
S AP Advanced Planner & Optimizer

I nn ovati on Strategy
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N on-R /3
P rodu cts I ndu stry P ractice s I mpl eme ntati on s
R/3
N on R/3
R/3
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Phase 1: Project Preparation - Objectives
l l l
Organize the ASAP SCM Implementation Project Set customer and SAP team expectations Establish a technical infrastructure
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Phase 2: Business Blueprint - Objectives
l l l l l
Identify specific ways of improving the supply chain management and strategies of the customer Benchmark the Supply Chain Align SAP and 3rd party solutions to realize these opportunities Develop business solution design and implementation plans APO process blueprint
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Phase 2: Business Blueprint - Tools
APO for ASAP

Strategic blueprint Case studies Question & Answer database (QAdb) Process description Questionnaires Roadmap / project plan
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Phase 3: Realization - Objectives
l l l l l l l l
Develop plans for model specification Configure and validate baseline and final models Perform and resolve functional gap analysis Conduct configuration workshops Develop conversion and interface programs Develop reports and enhancements Final integration testing Prepare end user documentation and training material
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Phase 4: Final Preparation - Objectives
l l
Prepare for "live" solution implementation Anticipate and plan for contingencies
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Phase 5: Go Live and Support - Objectives
l l l
Identify and resolve post go-live issues Validate "live" SCM solution results Perform a project review
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APO Implementation: Unit Summary (2)

l l l Explain the philosophy behind the ASAP SCM implementation methodology List the various phases of the ASAP SCM methodology Describe the objectives, deliverables, and use of tools of each phase of the ASAP SCM methodology
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Conclusion
1 Course Overview 2 Integration and Technology 3 Supply Chain Cockpit 4 Demand Planning 5 Supply Network Planning 6 Detailed Scheduling 7 Deployment 8 Transportation Planning 10 Conclusion 10
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Course Goals
At the conclusion of this course you will able to l l l List the fundamental planning scenarios of the Advanced Planner and Optimizer (APO) Explain the functions and interplay of the individual APO components Describe the integration with the execution system and information systems
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APO Planning Sequence
Planning Horizon
Deployment Transportation Planning & Vehicle Scheduling (TP/VS)

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APO is used to make strategic, tactical, and operational decisions: DP is used for long-term demand planning In SNP there is mid-term production, distribution and procurement planning PP/DS is used for short-term production planning Deployment plans short-term replenishment planning In Transportation Planning, routes are optimized and transportation methods are loaded as near to capacity as possible
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The Demand Planning Concept
Incoming orders
l l
Quantities Values Quantities Values
l l l
Statistical forecasting Promotions
Collaborative forecasting
Billing document
l l
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Supply Network Planning Scenario
Demand Plan
Supplier
Plant
DC
Customer
l l l l
SNP plans the material flow along the supply chain Mid- to long-term, finite, cross-plant planning Result: Feasible plans Prioritization of demands; supply optimization
SAP AG 2001
The role of Supply Network Planning involves: Planning supply to meet demand
Integrating purchasing, production, and distribution in one consistent model in the entire supply network Synchronizing activities and planning material flow along the supply chain
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Comparison of Mid- and Short-Term Planning
Sales orders
Forecasts
Sales orders
Forecasts
Production Planning / Detailed Scheduling l PP/DS planned orders

l l

l l l
SNP planned orders Purchase requisitions Stock transfers
Purchase requisitions Stock transfers

l l l l l
l l l l l
PP/DS BOM and routing Finite, detailed planning per location Sequences and setup times Continuous and order-related Pegging
SNP BOM and routing Cross-plant finite planning Distribution and procurement Quantity and bucket-oriented No pegging
Production horizon
SAP AG 2001
SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of a single, global consistent model. SNP uses advanced optimization techniques, based on constraints and penalties, to plan product flow along the supply chain. The result is optimal purchasing, production, and distribution decisions, reduced order fulfillment times and inventory levels, and improved customer service. Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all dependent orders can be adjusted automatically.
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Functions of Production Planning / Detailed Scheduling (PP/DS)

l Plans production, external procurement, and stock transfer within the production plant to-theminute Plans simultaneous material requirements and schedules finite capacity at operation level for the short-term horizon Takes order sequences into account Optimizes machine schedules (sequences, lead times)
Customer
l l

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30 20 10
Transfers the planning results to an execution system (such as the R/3 Shop Floor Control)
Time
Production Planning and Detailed Scheduling (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. PP/DS has the following functions: It generates planned orders (to plan in-house production), and purchase requisitions or scheduling agreement schedule lines (to plan external procurement) in the event of product shortage. It uses simultaneous material and capacity requirements planning 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. When there is no available capacity, the system searches for a date on which the order operation can be carried out, taking account of the capacity situation.
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Takes order sequences into account: when new in-house production orders are created, the setup times in the new order can be determined automatically from the setup status of the resources (depending on the preceding order). It is possible to display the orders in graphic format (in the detailed scheduling planning board), and to sequence from there. Alternatively you can use the optimizer to execute a sequencing. Machine scheduling optimization: during planning, it is possible for orders to be generated that do not have an optimum order sequence. Therefore, you can change the sequence and resource assignments of existing orders using the optimization run. PP/DS is a planning tool. Execution functions such as confirmations and goods receipts are performed in the execution system (for example, R/3). Therefore, the planning results are transferred to the execution system.
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Transportation Planning & Vehicle Scheduling (TP/VS)

Sales orders, stock transfers, forecasts
Goal:
Deliveries and transportation orders in R/3
Simultaneous route and load/weight planning
Optimizer
Selection of transportation provider

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TLB orders Express orders
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Vehicle resources
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ATP Integration with PP/DS and R/3
Sales order
R/3
Confirmation
APO
ATP
No ATP Make
SD
Planned orders
ATP request
Planned orders

Update time series
MRP
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Event-driven: In the R/3 APO interface you can define that the ATP check in the sales order should not be carried out in R/3 but in APO, as soon as a sales order is created. If you create a sales order in R/3, the system first checks if there is enough stock available for the requested product. The system can also check if receipts (for example, production orders and planned orders) have already been planned by the requested date. Time series: Planned orders and production orders are aggregrated and represented in a time series, which can be used to evaluate the incoming requests from the sales orders. Rules-based ATP: When there is no availability, you can configure in APO that the system should carry out the availability check for the product in another location or else for an alternative product. Integration with PP/DS: You can also define that the sales order should trigger production directly if a product is not available. If it triggers an order for in-house production, APO creates a planned order for the desired quantity in PP/DS. All of the operations are scheduled on the resources, and the system takes the capacity restrictions into account (available capacity and orders that may have already been scheduled). In addition, component availability can be checked. If the capacities are already exhausted on the desired date, the system uses simultaneous material and capacity requirements planning to find a date on which the planned order can be created. The availability date of the newly-created planned order (end date) is returned to the R/3 sales order and adopted as an internal confirmation date. Using shipment scheduling, the date on which the product reaches the customer is determined in the sales order. In the R/3 sales order the sales employee recognizes these proposed delivery dates.
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In dieser Dokumentation verwendete Abkrzungen

APO APS ATP BBP BAPI BW CIF CPFR CRM CTM DC DP DS iPPE LES KPI MLR MRP OLTP PP PPM SCC SCE SCM SEM SNP SOP TDL TLB VMI Advanced Planner and Optimizer Advanced Planning System Verfgbarkeitsprfung (Available-to-Promise) Business to Business Procurement (B2B) Business Application Programming Interface SAP Business Information Warehouse Core Interface (Schnittstelle fr Stamm- und Bewegungsdaten R/3-APO) Collaborative Planning, Forecasting and Replenishment Customer Relationship Management Capable-to-Match (Multi-Level Supply and Demand Matching (SDM)) Distributionszentrum (DZ) Absatzplanung (Demand Planning) Feinplanung (Detailed Scheduling) integriertes Produkt- und Proze- Engineering Key Performance Indicator
Logistics Execution System (=LE, Warehouse Management (WM)) Multiple lineare Regression
Material Requirements Planning
MRPII Manufacturing Resource Planning
Online Transaction Processing System
OLAP Online Analytical Processing System
Produktionsplanung
Produktionsprozemodell (APO Stckliste und Arbeitsplan zugeordnet) Supply Chain Cockpit Supply Chain Engineer; Supply-Chain-Execution Supply-Chain-Management Strategic Enterprise Management Supply Network Planning Sales and Operations Planning (Absatz- und Produktionsgrobplanung) Transportdienstleister Transport Load Builder Vendor-Managed-Inventory
AP010 Preface-229
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TP/VS Transportation Planning / Vehicle Scheduling
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APO Overview

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APO Overview

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SAP Advanced Planner and Optimizer (APO)

Level 2 SAP APO

Level 3 SAP APO

PP - Planning and Execution for Discrete and Repetitive Manufacturing

SAP APO Overview AP205 2 days

Supply Network Planning AP220 3 days

Integration Master Data

Production Planning/ Detailed Scheduling AP230

PP-PI Process Manufacturing

Course Prerequisites Prerequisites

Target group Target group

Notes to the user

Company Profile: Precision Pump Company Precision Pump Company

Plants and Distribution Centers

3000 New York

100-300 (HALB, T-B3##) (1000, 0, _ )

Course Overview Diagram

1 1 Course Overview 1 2 Integration and Technology 3 Modelling and Evaluation in APO

7 Transportation Scheduling Planning/Vehicle 8 Global Available-to-Promise 9 Conclusion

The Supply Chain: From Supplier to Consumer

Supply Chain Optimization

Increase customer responsiveness at least cost

Leverage all resources to bring substantial benefits to a company

Why Have Supply Chain Management?

Increased Demand for Value-Added Programs Custom packs/displays

Key Supply Chain Problems

Postponement Bullwhip Effect

Comparison of MRP II with APS Systems

Capacity Requirements Planning Scheduling

Result: Feasible plans

SAP's Total Supply Chain Solution

Supply Chain Solutions (APO)

Levels of Supply Chain Management

Supply Chain Design Network Design (ND)

Operational detailed planning (operational

Ext. proc. planning PP/DS SNP

Production planning PP/DS SNP

Delivery planning ATP, TP/VS

External procurement for example, LES, MM

Production for example, PP

Outbound delivery for example, LES, MM, SD

Supply Chain Collaboration marketplace integration

Supply Chain Collaboration marketplace integration

APO Planning Components

APO Product Map

Supply Chain Cockpit

Sales Transportation Planning & Vehicle Scheduling Planning

Detailed Planning Purchasing

Strategic Supply Chain Planning

APO Planning Sequence with R/3 Integration

Logistics Execution System (LES) Delivery Transfer order Execution

The Demand Planning Lever Effect

Supply Network Planning Production Planning

Functions of Demand Planning

Demand Planning Concept

Aggregated actual data

Future demand forecast

Incoming order value

BW R/3 Excel Non-SAP system

Statistical forecasting Collaborative forecasting Promotions

Collaborative Planning in APO

Manufacturer Product requirements Production dates Procurement Delivery dates l l l l