Supply Chain Planning With SAP APO

Suppl y Chai n Pl anni ng w i t h SAP APO
Functional Solution Management SCM

Apri 2010
SAP 2008 / Supply Chain Planning with SAP APO / 2
Pai n Poi nt s i n your Gl obal Suppl y Chai n
Do you have problems with
Forecast quality?
Excess inventory?
Lack of visibility in your supply chain?
Capacity shortages?
Creating an optimized finite production plan?
and therefore face
Lost sales due to mi ssing capacity / components or
unnecessary production and high i nventory
Excessive work-in-capi tal; high scrap/expi ry costs for
products with shelf life or short life cycle
No systematic consideration of inventory in your supply
chain, which results in l ost sales and/or excess inventory
Lack of i nformation for right planning decisions
High set-up costs/times and low resource utili zation
Do you t her ef or e need a t ool t o
increase the visi bil ity
in your global supply
chain?
improve forecast
quality?
systematicall y consi der
your inventory and
calculate safety stock
figures?
optimi ze your short
term distribution and
transportation pl anning?
support you in
creating optimized
production plans in all
your factories?
improve your sales
order entry confirmation
and provide reli able sales
order confirmation dates?
Synchronize supply with demand in your
global supply chain by balanci ng push and
pull network-planni ng processes and by
handling replenishment and production
based on actual demand.
APO DP: Improves the forecast quality and
planning accuracy
APO SNP: Improves visibility across your global
supply chain and lowers inventory
APO PP/DS: Supports you in creating optimized
production plans
APO gATP: Allows state-of-the-art sales order
confirmation planning processes
APO TP/VS: Optimizes transportation loads and
minimizes transportation costs
APO Alert Monitor: Powerful exception message
system integrated in all APO planning modules
Global Available-to-Promise
Demand Planning
Supply Network Planning
Production Planning &
Detailed Scheduling
Advanced Planning & Optimization
A
l
e
r
t

M
o
n
i
t
o
r
Transportation Planning &
Vehicle Scheduling
How SAP APO i s st r uc t ur ed
Cust omer s and r el eases
SAP APO by t he Number s
First release: SAP APO 1.1 (1998)
Current release: SAP APO 7.0 (9
th
APO release) - part of SAP SCM
7.0
Outlook: Planned next APO shipment: Q4/2009 -
Enhancement package 1 for SAP SCM 7.0 (APO
7.01)
Active customers: 2000+
Top Industries Adoption: CP, HighTech, Mill, IM&C, Chemicals,
Automotive, Life Sciences
APO DP (Demand Pl anni ng)
Comprehensi ve forecasting tool-set
Statistical forecasting with causal
and time-series methods
Selection of best-fit model
Automatic outli er detection available
Highly configurable planning books
wi th macro functionali ty
Supporting aggregation /
disaggregation logic
Lifecycle planni ng
Plan promoti ons separately from the
rest of your forecast
Track & moni tor forecast accuracy
Seasonal pl anning
Collaborative demand planning
Improved forecast qual ity
One tool for power and business user
Consolidated demand pl an (different
regions, countries, departments, )
Key Benefits Features
Calculate and determine future demand to improve demand quality
and accuracy
SAP 2008 / Page 7
Constant
Exponential smoothing
Moving average
Weighted moving average
Trend
Linear Regression
Season (without trend)
Trend - Season
Manual Forecasting
Seasonal linear regression
Others
Croston (sporadic demand)
History
No Forecast
External Forecast
Causal Analysi s
Multiple Linear Regression (MLR)
Influence Variables
Climate (e.g. Temperature)
Price
Advertising
Distribution
...
A
U
T
O
M
A
T
E
D
P
I
C
K
B
E
S
T
Composite Forecast
Own defined model selection
based on error measure
Combine different forecasts
Weight each forecast (time
independent or dynamic)
St at i st i c al For ec ast i ng Met hods
SAP 2008 / Page 8
Demand Pl anni ng Mast er Dat a:
Char ac t eri st i c Val ue Combi nat i ons
Characteristics
Product
Location
Customer
Characteristic
values
Prod01
Prod02
Prod03
DC01
DC02
DC03
Cust01
Cust02
Cust03
Characteristic
value combi nations
(CVCs)
Prod01, DC01, Cust01
. Planning
Object
Structure
Duet Demand Pl anni ng (not par t of APO)
Faster and accurate plans aligned to customer demand
requirements
Leverages the full capabilities of Microsoft Excel (formulae,
functions, graphics, etc.)
Presents an intuitive interface that requires minimum training
Delivers improved user acceptance and productivity through simple
and timely access to relevant business information
Designed as a composite application based on Enterprise SOA
Duet Demand Planning enables managers, sales executives,
and planners to utilize the full Microsoft Excel capabilities as
an intuitive planning front end for SAP SCM
Integrate purchasi ng, manufacturing,
distribution, and transportation
Consider constraints and penalties to
plan the product flow along the
supply chain
Advanced safety stock methods
considering mul tilevel supply chai n
networks and demand variabil ity
Supports system wi de inventory
modeling and pl anning
Enable planning on different levels of
detail (aggregated planning)
Choice of heuristic-, rul e- or
optimization-based algorithm
Increased visibil ity over the overall
supply chain
Optimi zed sourcing and capacity
utilization
Reduced inventory levels
Improved customer service
APO SNP (Suppl y Net w or k Pl anni ng)
Calculates quantities to be produced and delivered to the locations
to match customer demand and maintain desired service levels.
SAP 2008 / SNP Overview, Dr. Gerald Heisig, 11
Al gor i t hm: SNP Heur i st i c
Local DC
30%
70%
40%
60%
SNP Heuristic is a heuristic wi thout considering constraints in
the supply network.
SNP Heuristic does the sourcing based on quota arrangements
and priori ties.
As additional planni ng step, Capacity Levell ing can be
performed in order to resolve capacity overloads.
Planned Stock
Transfers
Planned Production
Orders
Planned Purchase
Requisitions
Demands
Demands
100%
100%
Plant
DC
Supplier
Al gor i t hm: Capabl e-To-Mat c h (CTM)
Local DC
CTM pl anning uses a constraint-based heuristic planni ng
approach for the cross-supply-chain checks of capaciti es as wel l
as materi al avai labi li ty.
CTM considers predefined supply categories and demand
priorities
CTM supports characteristic-based planni ng (as of SCM 7.0)
Planned Stock Transfers
-> Transportation and Handling Capacities
-> Quota Arrangements and Procurement Priority
Planned Production Orders
-> Production Capacities
-> Priority of PPM/PDS
Planned Purchase Requisitions
-> Procurement Priorities
Demands
-> Priority Classes
Demands
-> Priority Classes
Prio 2
Prio 1
Prio 1
Prio 1
Prio 2
Prio 1
Plant
DC
Supplier
Al gor i t hm: SNP Opt i mi zat i on
Local DC
$
SNP Optimi zation is a cost-based optimi zation considering all
capacity constraints and material availabi lity in the supply
network.
SNP Optimi zation determines the optimal sol ution based on
predefined costs for suppl y alternatives and demands.
Planned Stock Transfers
-> Transportation and Handling Capacities
-> Transportation Cost
Planned Production Orders
-> Production Capacities
-> Production Costs
Planned Purchase Requisitions
-> Procurement Costs
Demands
-> Cost for
- non deliveries
- late deliveries
$
$
$
$ $
Plant
DC
Supplier
Di st r i but i on Pl anni ng: Depl oyment and Tr anspor t
Load Bui l der
Deployment determines the best short-term
solution to all ocate availabl e supply to meet
demand and to replenish stocking l ocations.
Deployment confirms or changes the supply
network plan dependi ng and creates a
optimized plan for stock transfers
The rules-based Deployment Heuristic
distributes the products according to
quotations and priori ties.
The Deployment Optimizer distributes the
products according to cost while also
consideri ng specific rules.
Supply
Supply
Stock
Stock
Stock
D
e
m
a
n
d
The Transport Load Builder (TLB)
groups deployment results for single
products (i.e. confirmed stock
transport purchase requisitions) to
mul ti product stock transport orders.
The TLB considers factors li ke
volume, wei ght or number of pal lets to
fill transport vehicles optimal.
Plant
DC
SAP 2007 / PP/DS Overview 15
Oper at i onal Pl anni ng Pr oduc t i on Pl anni ng
and Det ai l ed Sc hedul i ng (PP/DS)
Purpose
Create procurement proposals
Optimize and plan the resource schedule and the
order dates/times in detail
Plan critical products and bottleneck resources
Create executable production plans
Benefits:
Reduce lead times
Increase on-time delivery performance
Increase the throughput of products
Reduce the stock costs, through better coordination
of resources, production, and procurement
Optimization integrated into PP/DS
APO PP/DS (Pr oduc t i on Pl anni ng & Det ai l ed
Sc hedul i ng)
Capacity-Load Optimi zation
Optimal Sequencing
Flexible & Graphical Activity Scheduling
What-if Analysis & Simulation
Configurable Exception Alert Monitor
Optimal production sequence that is feasible
and can be executed.
Allows simulation of various planning
scenarios to determine optimal schedule.
Optimization based on actual constraints
ensures rel iable delivery due date promises.
Multi-level production planning
Order Pegging
Use existing or own developed heuristics
Determines how, when, and where resources
and materials should be deployed to
accomplish the production goals.
Master planning for materials
and capacity (resource loads).
Production Planning delivers a short term plan that matches overall supply
to demand, given available resources and production methodology.
Detailed Production Scheduling determines optimal production sequence
for execution to meet delivery commitments based on actual constraints on
the shop floor.
Pow er f ul Tool s : Det ai l ed Sc hedul i ng Pl anni ng
Boar d
Save your own
simulation
Resource View
Product View
Feat ur e: Mul t i -l evel pr obl em sol vi ng w i t h or der
peggi ng
10
30
30
50
50
80 70
50
50
50
50
50
20 10 40 60
100
100
30 20 50
30 50
20
30
10 20 10 40 50
(+20)
(-10)
Excess
coverage
Shortage
Delay
Sales Order
Planned Order
Planned Order
Pur. Requisition
Dependent Req.
Dependent Req.
Sc r eenshot : Or der c ont ex t (t abl e vi ew )
Demand
Which orders cover
the demand
Feat ur e: Capac i t y Reser vat i ons
Guarantee most profitable capacity
utilization
Import from SNP optimization result
Flexi ble level s of fini te check
Release capacity prior to production to fil l
total capacity
Conversion from time to production unit
Example
Capacity Reservations for named
customers
Unreserved capacity everyone can use it
Collecti ve reservation not named
customers can use it
I ndust r y Sol ut i ons
IMC and AD: Scheduling for Project Manufacturing
Mill and Mining: Block Planning
Auto: Model Mix Planning
Pr oduc t i on Sc hedul i ng
Project
Planning
Advance
Procurement
Engineering
Engineering
Change
Management
Quality
Assurance &
Control
Manufacturing
Execution
Shipping,
Assembly &
Start-Up
Production
Planning &
Optimization
Production
Scheduling
Proj ect Planning
Manufacturing
Procurement /
Warehouse
Monitor alerts on projects / main assemblies
Pegging automatic matching of demand and supply
Visualization of complete order context
Alerts - Early warning system late orders, bottlenecks
Filter on alerts in order context, sort late orders by delay
Interactive scheduling to reduce late projects, orders
Detect critical path for order context
Reduce buffers on critical path
Reduce duration of project order operations
Multi-level forwards/backwards scheduling
Interactive scheduling to reduce capacity overload
Evaluate resource utilization, filter on overload
Alternative work centers, sequences, production versions
Switch to external procurement, subcontracting
Work overtime, run additional shifts
Adaptiveness and Simulation
What-if simulation, compare alternatives
Bl oc k Pl anni ng (Mi l l and Mi ni ng)
Business Requirement
Combine optimal resource utilization and precise customer due dates
Consider constraints like minimal and maximal lot sizes, setup time, fixed maintenance
intervals etc.
Plan bottleneck resources in an early planning phase where the final products and product
characteristics are not known
Solution
Define time intervals on a resource where products with certain characteristics can be
produced
Operations of orders are scheduled into matching blocks
100 to, grade A, grammage 180 120 to, A, 200 75 to, C, 150
Product xy
A, 180
Quality S
Width 1000
Product vb
A, 200
Quality M
Width 1200
Orders Line network
Model -Mi x Pl anni ng: Si t uat i on
Objective
Generation of a feasible plan
for highly configurable
products with high volume
Adherence to promised
delivery date
Position
Equal
distribution
Block
X in Y
Distance
Quantity
Business value
Balanced usage of production
resources
Early identification of potential
bottlenecks
Reliable delivery date leads to
increased customer
satisfaction
Restrictions
Model -Mi x -Pl anni ng
day x day x+1 day y day 1
Period Slot
Sequencing
1 1
2 2
SAP 2008 / Page 26
A snapshot of SAP SCM c ust omer s
Demand Planning and
Supply Planning
Supply Network Collaboration
Order Fulfillment & Transportation Management
Production Planning &
Detailed Scheduling
SAP SCM
Ms. Sher r y Gong
sher r y.gong@sap.c om
Ms. Fan Li
f an.l i @sap.c om
w w w.sap.c om/sc m
Q & A
Thank you f or your
i nt er est !
This presentation is a preliminary version and not subject to your
license agreement or any other agreement with SAP. This document
contains only intended strategies, developments, and functionalities of
the SAP product and is not intended to be binding upon SAP to any
particular course of business, product strategy, and/or development.
Please note that this document is subject to change and may be
changed by SAP at any time without notice.
SAP assumes no responsibility for errors or omissions in this
document.
www.orbis.de
ORBIS Consulting Shanghai
+,][||([) ||,)
Zao Fong Universe Building, 3D
1800 Zhongshan Xilu
200235 Shanghai
Tel.: +86 21 6440 1276
Fax: +86 21 6440 1279
http://www.orbis-china.com.cn
Andr Bohe
ORBIS Consulting Shanghai
Forecasting and Allocation in Supply-Chains
2 ORBIS Consulting Shanghai 2010+4)
Forecast and Planning situation
SupplyChain Structure
Methods / Conflicts
1.a) Definition of Goals and Functionalities in SAP R/3
1.b) Realisation with SAP R/3
2.a) Definition of Goals and Functionalities in SCM-DP
2.b) Realisation with SAP SCM-DP
3.a) Definition of Goals and Functionalities in SCM-SNP
3.b) Current Project Status SAP SCM-SNP
3.c) Next Steps
AGENDA
Forecast and Planning Situation
Forecast and Planning Situation Supply Chain Structure
Central Warehouse Production Sites Logistic Center
Material Supply
Material Supply
Sales Orders Sales Orders
Cross Company Scenarios
Cross Client Scenarios
Demands
Demands
Situation: - Different SAP Systems with different Clients
- more than 100 SAP Locations
- more than 10 Non-SAP Locations
Forecast and Planning Situation Methods/Conflicts
Logistic Center
With Stock-Responsibility
Unreliable Customer
Forecasts
Min/Max-Levels
(not flexible)
SaftyStock
(not dynamic)
Phase-In
Phase-Out
Priority 1:
Demands, coming from
Real sales-orders
Priority 2:
Min/Max-Triggers
Central Warehouse
Forecast and Planning Situation Methods/Conflicts
Priority 1:
real sales-orders
Priority 2:
Min/Max-Triggers
Not able to
distinguishbetween
demands
Priorityof own
Cust.Demands
Calculate own
Forecast to Prod.
sites
Logistic Center
Central Warehouse
1.a) Definition of Goals and Functionalities SAP-R/3
Definition of Goals and Functionalities
Reduce Stocks in Logistic Center by replacing manual
Reorderpoint Planning with automatic consumption based
forecasting
Automatic Calculation of consumtion based Forecast-Figures
Forecast-Figures and PIRs on weekly basis
Consumption of Forecast with Sales Orders
Automatic Transfer of Forecast-Figures to MRP
Automatic Creation of Transfer P.O.s after MRP
Realisation with SAP R/3
SOP
Projects an
Independent
Forecast by week
based on 52 weeks
usage history. This
forecast is
transferred to
Demand Mgt. where
it is converted into
Planned Idependent
Requirements
Run mass
Sales Forecast
16 Weeks
forecast for
Product-Group
Demand Mgt
Manages rules for
the impacts on
PIRs and for
adjusting PIRs
accordingly
Consumption by
Sales Orders
Transfer into
PIRs for use in
MRP-Run
MRP
Keeps track of
impacting transactions
and PIRs.
Calculates Net
Requirements for the
Coverage period,
based on Demand
Management figures.
Produces Purchase
Requisitions
Requirements
Listing
Run
MRP
Stock,
PIRs
Sal es Orders,
Transfer P.Os
Purchase
Requisitions
Purchasing
Purchase Requisition will
be automatically
converted into Purchase
Orders according to
replenishment horzion
Purchase
Orders
Still open Issues
No global view on stocks and Planni ng Situation (Cross System, cross Client
and Non-SAP Systems)
No Alert Functionality for critical Stock-Levels / Stock coverage
No possibi lity to track the Requirements (Customer orders / Stock refill )
No automatic mass processing in SOP for new products
Isolated Planning of singl e Logistic Centers
No Consideration of non-working periods
2.a) Definition of Goals and Functionalities for SCM-DP
Definition of Goals and Functionalities in SAP-SCM
A.) Get Global view on stocks and planning situation
Integrate all SAP-Systems/Clients and Non-SAP Systems
Define Alert Functionality for Stock-Levels and Stock coverage
B.) Replace R/3 SOP-Forecast with SCM-DP Forecast and provide
Key-Figure for SNP-Planning
Consider plant holidayin Forecastingmechanism
IncludenewProducts automaticallyfor Forecasting
Use Phase-In / Phase-Out Functionality
1. Definition of Data-Flow model
Source-System Level:
SAP Systems
Non-SAP Systems
Source-System Level:
SAP Systems
Non-SAP Systems
DataSourceLevel:
Definition of fields andUpload-process
DataSourceLevel:
Definition of fields andUpload-process
Transformation Level: Field-Mapping andRules Transformation Level: Field-Mapping andRules
Info-Cube Level Info-Cube Level
Info-Cube Level Info-Cube Level
2. Definition of Process-Chains and upload cycles
3. Definition of Tableau
Country
Prod. Hierarchy
Product
Location
Nav. Attributes
4. Definition of Alert-Monitor and Alert-Handling
Mail,
tri ggerd
by Alert
Creati on
Alerts, created after
Macro-Calculation
and Result-Check
Alerts, created after
Macro-Calculation
and Result-Check
B.) Replace R/3 SOP-Forecast with SCM-DP Forecast and provide
Key-Figure for SNP-Planning
1. Enlargement of existing Settings by Forecast Key-Figures and -models
InfoArea, InfoObjectCatalog, InfoObject
Planning Object Structure
Planning Area (expand with Forecast-Figures)
Planning Tableau (expand with Forecast-Figures)
2. Creation of Forecast Profile
Realised Functionalities:
BW-functionality to collect data from Non-SAP systems
Process chain to define update and upload procedures
Global view on Stocks , Stockranges and other Key-Figures (across
Clients, across Systems) with Planning Tableau possible
Extended Planning structrues and levels (clearly arranged Display of Key-
Figures and Graphics)
Automatic Integration of new products to be forecasted via Core Interface
Realised Functionalities:
Individual Calculation of Key-Figures with Macro-Technology
Automatic Alert-Creation Mail to responsible Person (direct link)
More forecasting methods available (e.g. Statistical Forecast, causal
analysis, Croston, Holt-Winters)
Considering Factory-Calendar in Forecast-Calculation
Like-Modelling in Case of Phase-in /Phase-out Products
SCM-DP is easier to handle more flexible and offers muchmore
functions and possibilities comparedto R/3-Functionalities
3.a) Definition of Goals and Functionalities for SCM-SNP
Definition of Goals and Functionalities in SAP-SCM
Planning of entire Supply-Chain based on DP Forecast Key-Figures
with Prioritisation of actual Demands
Calculate and allocate quantities for production plants
Reduce Costs in entire Supply Chain
3.b) Actual Project Status SAP SCM-SNP
Actual Project Status SAP SCM-SNP
Planning methods
Heuristic CTM Optimization
Passes on demand /
generates reallocations
BOM explosion / generates
supply
Interactive / local capacity
evaluation
Infinite planning / (MRPII
- approach)
Rule-based finite planning
of individual needs
Integrated finite planning
Prioritization of demand and
supply (rules)
Generates reallocations
feasible supply
Constraint-based planning
Prioritization of demand and
supply (costs)
Generates reallocations
feasible supply
Linear programming
Decision-Process for CTM or Optimization because Prioritization of
Demands necessary
Actual Project Status SAP SCM-SNP
Optimization
With Optimzier it is only possible run a
bucket-basedplanning
Character based Optimization is not
provided (Variant Configuration)
Optimizer does not know Make-to-
Order production
CTM Decision pro
3.c) Next Steps
Next Steps
To Do:
1. Create Prioritization rules for different demand categories (sales orders;
PIRs; Transfer P.o.)
2. Create Prioritization rules in between sales orders (material availability
date; delivery priority; recieving location)
3. Definie CTM-Planning Parameter with link of prioritized demands to
prioritized receipts
4. Create PP/DS Alerts (Quantity + Scheduling Alerts) for open demands
after CTM-Run
5. Check Possibility to change CTM results with BEx-Analyzer and copy back
to SNP-Planningtableau via IP (integrated Planning)
3
rd
SIG Automotive Meeting
Thank you for your Attention
Andr Bohe
ORBIS Consulting Shanghai Co., Ltd. - +,][||[||,)
ZAO FONG Universe Building, Office: 3D
No. 1800 Zhongshan Xilu (/Yishan Lu) - [1800_=',3|D
200235 Shanghai
Tel: +86 21 6440 12- 76
Fax: +86 21 6440 12- 79
Mobile: +86 131 2215 2136
Email: andre.bohe@orbis.de
www.orbis-china.com.cn

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Functional Solution Management SCM

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