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Contents
SCM Overview
APO Overview
SAP R/3 Vs APO
Contents
SCM Overview
APO Overview
SAP R/3 Vs APO
Supply
Financial Planning
Business Planning
Functional Planning
Demand
Planning
Customer
Service
Distribution
Requirements
Planning
Production
Planning &
Scheduling
Material
Requirements
Planning
Execution
Warehousing
Transportation
Manufacturing
Procurement
Operating Expenses
Working Capital
Shareholder Value
Competitive Advantage
Revenue
Profitability
Costs
Shareholder
Value
Working
Capital
Invested
Capital
Fixed Capital
Typical Benefits
2-5% sales
5-10%
conversion
costs
10-30%
transport
costs
10-20%
inventory
10-30%
assets
Outsourced
manufacturing
operations
Outsource
d logistics
services
Global
supply
chain
operations
Increasingly
demanding
customers
PLAN
Suppliers
DESIGN
BUY
SELL
Customers
P
P
L
WEEKS
DAYS
I
E
R
HOURS
MAKE
Negotiations
O
L
L
A Material
B Materials
Supply
Planning
O Planning
R
A
T Procurement
I
OMaterial Inventory Tracking /
N Warehouse Management
MOVE
HOLD
SELL
Strategic Network
Network
Modeling
Sales
Demand
Forecasting
C
Sourcing
Planning O
Territory Planning
L
Supply
Network Planning /
Supply
Chain Planning,
L
Master Planning
Master
Production Planning
Supply Demand
Product
A
Matching
Allocation
B
Material Requirements
Inventory Order
O
Transport
Planning
Planning
Promising
R
Planning
Detailed
Production Planning
A
Distribution
Scheduling
Available to
Transportation
Requirements
T
Promise
Planning
Planning
Load
I
Detailed / Line Scheduling
Planning
O
N
In-transit &
Supply Contract
U C
MONTHS
DESIGN
B2B Exchanges
Contract
Manufacturers
Customer Service
On-hand Inventory
Tracking
3PLs / 4PLs
Inventory
Target
Setting
Order Management
Channel Partners
B2B Exchanges
C
U
S
T
O
M
E
R
Internal
Extended
Partnership
Community
Collaboration
Scope
Agents
B-Web
Marketplace
XML
Network
CNO
EDI
Chain
CIF
APS
Enterprise
ERP
SCM Objective
Optimization
Integration
Collaboration Synchronization
Technologies
Contents
SCM Overview
APO Overview
SAP R/3 Vs APO
Historical Development
SAP APO (Advanced Planner & Optimizer) emerged as an entrant into APS market in the late
nineties. It now forms part of a suite of products called SAP SCM, covering the whole Supply
Chain Management process footprint.
SAP SCOPE
Initiative
1997
1997
Collaborative Scenarios
SAP APO available
in mySAP.com
1998
1998
SAP APO 1.1
Source: SAP
1999
1999
2000
2000
mySAP SCM
mySAP SCM
2001
2001
2002
2002
mySAP SCM
2003
2004
SCM 5.0
Planning - APO
Execution R/3
APO
APO
SCM 5.0
4.1
EM
Coordination - EM
Lieferant
Collaboration - ICH
APO
APO
SCM 5.0
4.0
SCM 5.0
4.0
EM
Coordination - EM
SCM 5.0
4.0
Lieferant
(SMI)
Collaboration - ICH
SAP-APO Overview
Global
Availableto- Promise
Supply
Network
Planning
Demand
Planning
Production
Planning
Detailed
Scheduling
BW
Transportation
Planning
SC Cockpit
Infocubes
liveCache
APO
Connectivity Layer
ERP
CRM
SCM
Private
Exchange
Portal
Solvers
Material
Planning
Production
Planning
Inventory
Planning
Demand
Planning
Customer
Yearly
Monthly
Weekly
Daily
SAP-APO Modules
SAP Advanced Planner & Optimizer
SAP application used to enable real time decision support, advanced
constraint based planning and optimization
Covers the planning requirements (optimization, finite capacity, what-if
simulation...) not covered by the R/3 system:
Sales forecasting
Production orders planning and
Production
Demand
APO
runs
on
an
independent
server
from
the
R/3
one
sequencing
Planning/
Planning
Advanced statistical methods
Detailed
(DP)
Supply
Network
Planning
(SNP)
Available
to Promise
(ATP)
Demand Planning
Statistical Forecasting
Selection of advanced statistical tools (Univariable, Multilinear, Composite, etc.)
Capabilities
Promotion Planning
Planning, managing and evaluation of the impact of promotions on demand
Planning by Exception
Use of Alerts to report exceptions
Simulation
Ability to use what-if scenario simulation
Capabilities
Ability to model the entire supply network and all of its constraints such as
resource capacities, storage limits, transportation capacities, material
availability, safety and target stock levels, etc.
Concurrent Planning
Produces Distribution/Production/Inventory/Procurement plan concurrently
SNP Heuristic
Capable-to-Match (CTM)
Creates a feasible plan, using finite production capacities.
SNP Optimizer
Deployment
Dynamically determine how and when to distribute inventory
Uses the results of the deployment run, groups stock transfers and create
transport orders for multiple products
Planning by Exception
Use of Alerts to report exceptions
PPDS is used for short term to-the-minute planning (both for in-house
production and and external procurement) in the production plant. It is tightly
integrated with the execution system transfers planning results to R/3.
Concurrent Planning
Capabilities
Interactive Planning
Scenario Running
Provides an on-line search to verify across the network that the requested
product can be provided in the quantity and date requested
Key Components
Basic methods Inventory availability check (SNP)
Rules-based ATP Location and/or product substitution (SNP)
Capable To Promise (CTP) Production plan check, and automatic
planning in PPDS to trigger production if necessary & feasible (PPDS)
Product Allocation Allows management of scarce products
Tightly integrated with R/3 - Logistic Execution System (LES) for execution,
and BW for reporting
Exception Management
Alert monitors and event triggers for problems, material, capacity,
transportation and storage constraints
Flow Algorithms
Distribution Production
Planning &
Planning
Deployment Scheduling
Linear Programming /
Mixed Integer Linear
Programming
Genetic Algorithms,
Constraint-based Programming
Demand
Planning
Heuristic Methods
Planning (APO)
Plant
Location
Vendor
Info Record
Transportation Lane
Material Master
Product Master
Bill of Material
Routing
Work Center
Resource
Contents
SCM Overview
APO Overview
SAP R/3 Vs APO
APS Vs ERP
5 key enablers that distinguish the functionality and capabilities of an APS to those of an ERP system:
Calculation Speed
Memory Resident Architecture.~ 300 times faster than a typical MRPII/DRP system
Creates Capability for continuous process where replanning can be executed every time a change occurs
MRPII/DRP is a sequential logic, checking one level in the supply chain at a time
APS can check impact on all constraints in the supply chain simultaneously
Using APS, the impact of a supply side constraint can be reflected in terms of downstream effects in the supply chain
APS presents opportunities for sophisticated planning methods, such as profitability optimization, not available
through MRPII.
Capabilities
4.6C
Budget Planning
Demand
Forecasting
Demand forecasting
S&OP
Sales &
Operations
Planning
SAP APO
: Fully coverage
: No coverage
DP : Demand Planning
: Partly coverage
: Not applicable
Production
Planning
Capacity
Planning
Capabilities
SAP R/3
4.6C
SAP APO
DP
: Fully coverage
: No coverage
DP : Demand Planning
: Partly coverage
: Not applicable
Order
Fulfillment &
Distribution
Transportation
& Fleet
Management
Capabilities
SAP R/3
4.6C
SAP APO
DP
SNP PP/DSTP/VS
/ route optimization
: Fully coverage
: No coverage
DP : Demand Planning
: Partly coverage
: Not applicable
Thank You