Backorder Processing

with SAP R/3 vs.

SAP APO Global
Available-to-Promise

Patti Kimler
Product Manager
PTU Applications
SAP Labs, LLC

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 2

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 3

Backorder Processing (BOP) the Basics

When is an order a backorder?

When a schedule line doesnt have a confirmed quantity

What should a backorder processing solution do?

Simulate results

Lend visibility to the situation

Run in a reasonable amount of time

Allow selection of orders based on business requirements

Allocate product in a prioritized way

Allow results to be sorted in a meaningful way

Note that both solutions R/3 and SAP APO can satisfy all
these items, to some extent

SAP AG 2005, 4

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 5

Prerequisites
ATP check for orders in question must be set to take
place in APO
R/3, mySAP ERP, or SAP CRM as an order
management system
What does that mean?!
Typically, in the setup of Global Available-to-Promise (gATP),
you specify (once) in the SAP APO Core Interface (CIF) that
you want your ATP customizing settings transferred from R/3
(or mySAP ERP) to SAP APO

Then, in another integration model of the CIF, you must have

selected the ATP check switch for the materials you have
specified in that integration model

SAP AG 2005, 6

Core Interface Settings Integration Models

SAP AG 2005, 7

mySAP ERP and mySAP Business Suite

mySAP ERP
Real-time business
Powered by SAP NetWeaver

SAP R/3
Standardized
business
processes
Client-server

SAP R/2
Real-time
Integration

Distributed
processing

uti
l
o
Ev

International
Mainframe

on
i
t
u
vol
e
R

mySAP Business Suite

on

mySAP PLM

mySAP
SRM

R/3

R/2

Enterprise Services Architecture

mySAP ERP

mySAP
CRM

mySAP SCM

SAP NetWeaver

1972
SAP AG 2005, 8

1979

...

1992

2000

2003

mySAP Business Suite

SAP Enterprise Portal
Business Information Warehouse & SEM
Supply Chain Event Monitoring SCEM
PLM

SRM

TPVS

SCM

EWM

SPP

CRM

RR

mySAP ERP
Design

Make

Move

Sell

Service

Strategy- Product Innovation

Strategy- SRM, Global Visibility

Strategy- Operational Excellence

Strategy- Customer Intimacy

Value Based Initiatives

Value Based Initiatives

Value Based Initiatives

Value Based Initiatives

< Time to Market

< Supplier Consolidation

< Inventory

> Revenue

> Product Quality $

< Material Consolidation

> Customer Service

> Market Share

> Life Cycle Product $

< Maverick Spending

> Global Resource Mgmt.

> Profitability

> Collaboration

> Collaboration

> Operational Efficiency

> Customer Satisfaction

ROI

Buy

ROI

ROI

ROI

< 20% Development $

< 5-15% Material Cost

< 10-30% Inventory

> 2-3% Market share- AMR

< 21% Scrap & Rework

> Productivity 20-30%

> Rev.-Customer Service

> Margins-5%>25%- Bain

< 7% Manufacturing $

< Planning Cycles- Days

> Selling Efficiency-$10>1

< 20% Warranty

> Customer Satisfaction

SAP AG 2005, 9

Where SAP APO Fits in SAP SCM

SAP Advanced Planning

and Optimization
(SAP APO 4.1)
SAP Inventory
Collaboration Hub
(SAP ICH 4.1)
SAP Event Management
(SAP EM 4.1)

SAP NetWeaver (Web AS, BW, )

(SAP NetWeaver 04)

SAP AG 2005, 10

Evolution of SAP SCM Functionality

SAP SCOPE
Initiative
MRP II for Planning
SAP R/3 MM/PP
Transportation Mgmt.
Warehouse Mgmt.
Partnership with
ILOG

1997

SAP APO 2.0

mySAP SCM

SAP SCM 4.0

Collaborative
Planning

ASCN vision
announced

SAP APO 4.0

Collaborative
scenarios

SAP is market leader

in Q2

SAP EM 4.0

SAP APO available

in mySAP.com

Strategic
partnership with MIT
Auto ID Center

1998

1999

2000

2001

Default
SAP SCM
release

SAP ICH 4.0

SAP NetWeaver
integration
RFID pilots for Metro
Store and P&G

2002

2003

2004

SAP APO 1.1

mySAP SCM

mySAP SCM

SAP SCM 4.1

SAP enters APS

market with standalone solution

SAP APO 3.0 SCM

Content Workplace

SAP APO 3.1

Industry Release

SAP APO 4.1

SAP LES R/3 4.6 C

Decentralized
warehouse mgmt.
system

SAP EM 4.1

Transportation
Planning

Supply Chain Event

Management 1.1

Radio frequency

CRM SCM
integration

SAP ICH 4.1

SAP NetWeaver
Integration
RFID-enabled SCM

SAP SCM release

in ramp-up since June 2004
SAP AG 2005, 11

Global ATP The Technical Perspective

SAP AG 2005, 12

Key Capabilities
Multiple Operating Modes

Batch

Interactive

Simulative

Filter
Sorter

Support for Product Allocations

SAP AG 2005, 13

Batch Backorder Processing

2 modes:
Direct update of batch backorder processing
BOP runs and immediately updates the results to the database
without an intermediate step
Batch backorder processing with postprocessing
BOP runs, saves the results to a buffer, and protects the
assigned quantities with temporary quantity assignments

The results can be updated or rejected. If rejected, the

temporary quantity assignments are deleted

SAP AG 2005, 14

Interactive Backorder Processing

Similar to batch backorder processing with postprocessing,
except for the addition of a pre-configured worklist
It can be accessed directly from the menu structure within
SAP APO, or used as a postprocessing function of Batch
backorder processing

Filters and sorts are available to both operating modes

SAP AG 2005, 15

Interactive Backorder Processing With a Worklist

SAP AG 2005, 16

Interactive Backorder Processing Without a Worklist

SAP AG 2005, 17

Simulative Backorder Processing

No temporary quantity assignments are written to liveCache
No orders are updated in R/3
The results can be viewed in a log but cannot be
updated interactively

The results can be saved in the buffer or deleted

SAP AG 2005, 18

Filter

Plus a Userexit!

SAP AG 2005, 19

Sorter

Plus a Userexit!

SAP AG 2005, 20

Product Allocations and Backorder Processing

As of SAP SCM release 4.1 (currently in Phase II Ramp-Up),
product allocations may be checked as part of
backorder processing
In prior releases, product allocations are neither checked
nor updated

Also as part of release 4.1, if product allocations are checked by

BOP, a new icon will display on the results screen telling you
that this occurred

SAP AG 2005, 21

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 22

Prerequisites
ATP check must be set to occur in R/3
What does that mean?!

Youre using R/3 and not APO for ATP checks

SAP AG 2005, 23

The Selection Screen

Selection

Sort

SAP AG 2005, 24

The Results

SAP AG 2005, 25

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 26

Comparison
APO

R/3 and mySAP ERP

Redistribution flag

No redistribution flag releases

all orders assigned quantities,
then rechecks them if they
didnt have a check before

Redistribution for each

basic method
Filter has 28 fields plus userexit
Sorter has 25 fields
plus userexit

Able to confirm new

results with old prior to
database commit

SAP AG 2005, 27

No redistribution
Fixed filter with <10 fields
Fixed sorter
Changes are committed to
database with no comparison

Comparison (cont.)
APO

R/3 and mySAP ERP

Schedule line check available

for all documents

Schedule line checks for stock

transport orders only

Date configuration material

availability or goods Issue

Date configuration No
option (material availability
date is used)

Possible to preserve the lesser

quantity that has been agreed
upon without giving more

Possible to improve and not

degrade confirmations

SAP AG 2005, 28

R/3 and mySAP ERP do not

differentiate between confirmed
quantity and requested quantity
No opportunity to preserve
what was done previously

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 29

The Highlights
R/3 and mySAP ERP have limited sort and filter fields

With no user exits available to expand the selection

R/3 and mySAP ERP are not as flexible as mySAP SCM

Dates arent configurable

Operating modes are selectable

Schedule line checks are limited to one document type

No way to preserve previous check

Orders are opened, quantities are released, check is redone

No new development taking place

SAP AG 2005, 30

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 31

SCM 4.1 gATP Developments

Better support for time zones
Usability of ATP

Configurable rules-based ATP results screen

Usability of Backorder Processing

SAP AG 2005, 32

Enhanced usability

Better icons to explain what occurred

Correct and reject individual orders

Improved links from the results display

Product Allocations

Link to TP/VS added in 4.0

But SCM 5.0 Is Coming, and

... Its HUGE!

(my boss said I should keep saying that, to get everyone ready for it)

SAP AG 2005, 33

gATP Highlights in SCM 5.0

Temporary facility closure
A hurricane just hit my Florida distribution center
Alternate locations to use when a primary facility is closed
Ship out of Texas and Georgia instead
Maximum numbers of substitutions in RBA
Locations and location products, not products
Consolidation
Id like to take all these orders sourced from different
locations and consolidate them at this single location
before I ship them to the customer

Drop ships/Third party

Id like the vendor to deliver this to the customer

SAP AG 2005, 34

gATP Highlights in SCM 5.0 More!

RBA in Stock Transport Orders (not location, just
product substitution)
The product you requested is not available,
substitute another
Reassignment of order confirmations
Id like to borrow from Peter to pay Paul, automatically,
not manually, based on criteria that I specify
Event-driven backorder processing
Ive just gotten stock in and I want to allocate it to a
group of high-priority orders that are waiting for it

This is not a complete list

SAP AG 2005, 35

Event-Driven Backorder Processing?!

Uses something new called the Order Due List, which is also
used by reassignment of order confirmations
Uses Workflow
Allows an event, like a stock receipt or a return order, to trigger
a run of BOP against the Order Due List
The Order Due List will contain your highest priority,
unconfirmed orders

Brilliant!

SAP AG 2005, 36

How to Decide?
If R/3 or mySAP ERPs ATP functionality just isnt enough
of a solution anymore, consider the APO gATP solution in
mySAP SCM. However, dont wait for SCM 5.0!
(Remember, its HUGE)
Prioritize what you need and figure out what release its in

SCM release notes are posted on http://help.sap.com/

How many APO releases back are you?

SAP AG 2005, 37

If youre on APO 3.0 or 3.1, consider upgrading now to at least

4.0, if not 4.1

Why? Chances are theres a lot in 5.0 that youll want to roll-out,
and itll be a smaller bite if youre not tackling all the interim
releases before you can get to 5.0

Also, 4.0 and 4.1 are smaller releases from a gATP perspective
(Remember, 5.0 is HUGE)

What Well Cover

What is Backorder Processing and what should it do?
SAP APOs Backorder Processing
R/3s Backorder Processing
Lets look at them both now SAP APO vs. R/3
The gaps Where R/3 falls short
Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 38

Key Takeaways
The BOP program you use is dependent on the system in which your
ATP check takes place
APOs Backorder Processing has more Sort and Filter options than R/3
or mySAP ERP, with user exits to add even more fields
APOs BOP is scalable no need to do a full run every time
With any BOP solution, force it to do what you really need it to do. Use
variants, etc., to tailor your BOP runs
If R/3s ATP solution just isnt a solution for you, and youve already got
all or part of mySAP SCM in place (i.e. APO DP), consider implementing
gATP and attaining the benefit of the BOP program, among other things
Never assume that the product as it is today is the product that youll
be using tomorrow. New enhancements and opportunities are always
right around the corner

It is possible to implement BOP without an ATP check in the order, and

there are successful implementations that have done it!

SAP AG 2005, 39

Your Turn!

Questions?

SAP AG 2005, 40

To Contact the Speaker

Patti Kimler
Product Manager SCM
PTU Applications
SAP Labs, LLC
M 386-334-4756
HO 386-960-5257
patricia.kimler@sap.com
SAP AG 2005, 41