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[

3913 - Update on SAP Supply Chain Planning


Eric Simonson & Mike Lipton

[ Learning Points
APO features in SCM 7.0 Enhancement Pack 1 APO features in SCM 7.0 Enhancement Pack 2 Enterprise Inventory Optimization by SmartOps Update Supply Chain Response Management by ICON-SCM Update

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 Overview


Clear-to-Build
* Enable an integrated APO SNC scenario to consider supplier confirmation for planning

Globalization & Outsourcing


Have resulted in stretched supply chains and increased risk. Timely analysis, response, and resolution of supply chain issues is impossible due to lack of control.

Direct Shipment
* Enable supply chain planning with direct shipping to end customers from vendors and factories

Lack of Visibility beyond the four walls


Anticipating the next supply chain disruption is not possible due to lack of visibility.

Enhancements in APO DP, SNP Improved Chart Engine Forecast Consumption Transport Load Builder

Fear of Poor Customer Service


Inability to sense and respond to real time demand signals.

gATP Enhancements
* Sub-Items * Inconsistencies with Descriptive Characteristics * Correction report for Sales. * MATP & Remaining Qtys.. * BOPIN Enhancements * Performance Enhancements

APO for AFS Industries


* Aggregated Planning

Real Experience. Real Advantage.

Enhancement Package 1 for SAP APO 7.0 [SAP Direct Shipment Planning / Third Party Order Planning
Objective of the new developments The off-shore vendor and off-shore own manufacturing model has grown significantly over the last years led by the fashion, hi-tech, and consumer products industries. Companies increasingly save on transportation and own distribution center handling costs by direct shipping to end customers from vendors and factories. Support of mid-term supply chain planning for third party orders considering forecasting capabilities and finite capacities at the supplier.
BRAND OWNER
- Low costs of co-ordination - Low costs of DC space

Sales Order

Purchase Order

CUSTOMER

- Better Service - More efficient transportation

VENDOR / FACTORY

- Value Added Services* and Customization - High visibility - High Collaboration

Deliver direct to Customer DC or Customer Store

Prerequisite: Business Function SCM_APO_DRS_PLAN & LOG_MM_OM_2 (ECC EhP5) need to be switched on.
Real Experience. Real Advantage.

[Direct Shipment Planning / Third Party Order Planning


Third Party Order Processing using SAP ERP Sales Order Processing with Direct Ship Check
Normal SO DS Order

SAP Enhancement Package 1 for SAP APO 7.0


Supply Chain Planning using SAP APO CTM

Normal Sales Process*

Creation of TP-Purchase Requisitions (blocked)

Supply Chain Planning


Forecast consumption CTM planning run

Comparison Report
TP-Purchase Reqs vs. CTM planned orders

TP-Purchase Requisitions (unblocked)


(*) The normal sales orders are treated in the same way as in previous ERP / SCM releases: They can be transferred to APO and be delivered from a DC

Release of TP-PReq to ERP

Manual Adjustments

Creation of Purchase Order

Notes: TP = Third Party Only Single Sourcing for DS Orders supported Vendor location has to be modelled in APO Direct Ship Check can be based on Product Group, Customer, Order Size,

Real Experience. Real Advantage.

SAP Enhancement Package 1 for SAP APO 7.0 Aggregated Planning (AFS)
Objective of the new developments With SAP APO 5.0, the concept of aggregated planning has been introduced to SAP APO. Currently, the aggregated planning does not consider the AFS distribution profile and works only correctly if infinite capacity is assumed. With SCM 7.0 EhP1, accurate aggregated planning in SAP APO includes the consideration of the AFS distribution profile, automatic aggregation in CTM and a new dis-aggregation report Functional Enhancements Transfer of AFS distribution profile to SAP APO via CIF Release of Forecasts from DP to SNP / Forecast Consumption Consideration of AFS distribution profile Forecast consumption on aggregated level CTM Enhancements Automatic aggregation Consistent disaggregation SNP Interactive Planning Order changes on aggregated level can be disaggregated according to AFS distribution profile, quotations or demands in the bucket. Pegging information is shown at detailed order level and will be retained.
Prerequisite: Business Function SCM_APO_HIER_AGG_PLAN needs to be switched on

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0


Transfer of AFS Distribution Profile to SAP APO
Transfer of AFS distribution profile to SAP APO via CIF AFS size split is transferred to SAP APO hierarchy master data as time-dependent quota arrangements

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 - CTM


CTM Enhancements Automatic Aggregation in CTM run (enhanced aggregated planning) New Disaggregation report to disaggregate the CTM planning results from header product level to detailed SKU level The linkage information (pegging) between detailed and aggregated levels is temporarily saved and a consistent disaggregation is done.

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0


SNP Interactive Planning
Order changes on aggregated level can be disaggregated according to time-dependent quotations, AFS distribution profile or demands Pegging information is visibly shown at detailed order level and will be retained

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0


DP / SNP Chart Engine
Improve usability of the chart engine Ease of chart engine customizing

Objective of the new developments

Functional Enhancements
Interaction between chart and grid: marking of cells in the grid highlight the according points in the chart, and vice versa Display of the chart: Dynamically setting of start and end period of the chart Definition of shown periods in the chart independently from the grid Scalability of the Y-axis ( value axis): set of minimum and maximum value Show or hide chart legend The chart can be shown in full screen mode Inverting of key figure values Printing of the chart Central maintenance and transport from chart customizing: report /SAPAPO/MSDP_CHART_CUSTOM to copy and delete chart engine customizing
Prerequisite: Business Function SCM_APO_DP_SNP_CTM needs to be switched on
Real Experience. Real Advantage.

Enhancement Package 1 for SAP APO 7.0 [ SAP DP /SNP Chart Engine
General Chart Customizing in Design Mode of the Planning Book

Switch Graphic Settings to perform general chart customizing

Real Experience. Real Advantage.

Enhancement Package 1 for SAP APO 7.0 [SAP DP Continuous Improvements


Bucket-oriented forecast consumption The principle of the bucket-oriented consumption modes is that forecast is only consumed within the specified bucket and forecasts of other periods are unconcerned.

Application Log for Demand Planning (transaction: /sapapo/sdpapplog) to access the standard application logs for: DP in the background Promotion management Proportional factor calculation.

Prerequisite: Business Function SCM_APO_DP_SNP_CTM needs to be switched on


Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 CTM Continuous Improvements
Objective of the new developments
Avoidance of excess supply caused by lot sizes and lot splits Better understanding of CTM results

Functional Enhancements Merge Orders to avoid excess supply


In case Lot Sizing is used in CTM planning excess supply might get generated in upstream operations due to lot splits in downstream operations which is caused e.g. by capacity constraints.

Explanation Tool
Prior to today the CTM explanation tool gave insufficient and partly misleading information.With SCM 7.0 EhP1 new explanations are introduced to get a better understanding which issues have caused the capacity, lateness, or partial \ non fulfillment of orders. If the supply element is outside the threshold for notification setting in the Explanation Profile, will receive Order was scheduled with earliness of x hours message.
Prerequisite: Business Function SCM_APO_DP_SNP_CTM needs to be switched on
Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 CTM Continuous Improvements

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 CTM Continuous Improvements

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0 CTM Continuous Improvements

Real Experience. Real Advantage.

[ SAP Enhancement Package 1 for SAP APO 7.0


TLB Continuous Improvements
Objective of the new developments Better usability of TLB Functional Enhancements Selection Profile for TLB and TLB run for selected products only Using this feature of product selection only the selected products will be locked, and more than one planner can work on the same transportation lane.

Prerequisite: Business Function SCM_APO_DP_SNP_CTM needs to be switched on


Real Experience. Real Advantage.

[SAP Enhancement Package 1 for SAP APO 7.0 - GATP


Objective of the new developments Continuous Improvements to gATP basic functions. Functional Enhancements Sub-Items Avoid sub-item creation when the requested product was not changed and the confirmation is in one location.

Inconsistencies with Descriptive Characteristics Correction report for Sales Orders and Deliveries, SDRQCR21, now will check and correct inconsistencies with descriptive characteristics. Multilevel available-to-promise (MATP) & Remaining Qtys. When creating the remaining requirement on component level of a MATP the checking horizon is used for correlating the results to header level . Backorder Processing (BOPIN) Enhancements General enhancements done in the interactive BOP transaction to allow for better navigation such as search functionality by availability date, Paging buttons enabled

Performance Enhancements Reading/Writing to the Planning Area in DP enhanced. Memory consumption down which could lead to a 20-25% improvement. Multi-item single delivery location (MISL) Enhancements Validities on Products, Exclusive Rules for Product determination

Prerequisite: Business Function SCM_APO_ATP_1 needs to be switched on


Real Experience. Real Advantage.

[ Collaborative Supply Planning


Enhanced integration between SAP APO and SAP SNC to support multi-tier and multi product planning and collaboration business scenarios Supplier submitted Planned Receipts in SAP SNC can be used in SAP APO Capable-ToMatch (CTM) planning runs to provide a more realistic plan considering near real-time information provided directly by the business partner Integration is industry independent and suitable for all industries with constraint based planning scenarios
Real Experience. Real Advantage.

[ Supplier Planning Collaboration - Process Overview

Real Experience. Real Advantage.

[ Supplier Planning Collaboration


Two Tier Collaboration
The 2 Tier Collaboration Process Collaboration first happens between OEM and CM for finished products: OEM shares finished product forecast with CM. Collaboration then happens for critical components (and not all components!) between OEM and Component Suppliers: to determine if sufficient component supply is available. Component Suppliers respond back with a supply commit. Collaboration finally happens between OEM and CM for finished products: OEM shares clear to build with CM. CM produces and ships finished products accordingly.

Real Experience. Real Advantage.

[ Learning Points
APO features in SCM 7.0 Enhancement Pack 1 APO features in SCM 7.0 Enhancement Pack 2 Enterprise Inventory Optimization by SmartOps Update Supply Chain Response Management by ICON-SCM Update

Real Experience. Real Advantage.

22

[ Legal Disclaimer
The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and/or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information on this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, and shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of this document. This limitation shall not apply in cases of intent or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

Real Experience. Real Advantage.

[ SAP APO Enhancements


Usability

in Enhancement Package 2 for SAP APO 7.0


Improved usability for Interactive Backorder Processing and Alert Monitor New Planners Home Page as entry point for supply chain planners Re-designed user interface adopting latest SAP UI technology

Simulation
Enhanced flexibility in managing supply chain scenarios and production plans Improved version management

Functional Enhancements
Improved handling of outliers, events & causal effects in Demand Planning Classification and forecast optimization Enable availability check during planning runs Enhanced capabilities for process industries in PP/DS Consistency checks for Service Parts Planning

Real Experience. Real Advantage.

[ APO UI Re-Design
SCM 7.0 EhP2 delivers the first step of a new SAP APO user experience
Solution Enhancements Start on a roadmap to re-design the most relevant interactive screens in SAP APO based on latest UI technology and user experience research In EhP2 focus is on re-designing interactive Backorder Processing, Alert Monitoring and introducing a Planners Home Page Key Benefits Improved usability and user efficiency Based on latest SAP UI technology Homogeneous end user experience between APO applications Enhanced built-in personalization features

Real Experience. Real Advantage.

[ APO UI Re-Design Technology Information


SCM 7.0 EhP2 delivers the first step of a new SAP APO user experience
Solution Enhancements Use of new interactive planning screens requires NetWeaver Business Client 3.5 (NWBC 3.5), either as front-end client or as HTML client NWBC follows the role paradigm. Planners Home Page requires defined user roles e.g. for navigation New user interfaces are based on SAP NetWeaver WebDynpro UI Technology Key Benefits Greatly improved personalization functionality in NetWeaver WebDynpro screens allows the user to customize content, structure as well as the overall layout of the screens

Real Experience. Real Advantage.

[ Planners Home Page and Alert Worklist


New UI experience for APO users using the Planners Home Page
Solution Enhancements Personalized UI building blocks (Add/Remove/Resize/Move) Better alert overview via user defined Alert Queries re-designed Alert Monitor Easy check of KPIs for Location Products, Resources, Characteristic Value Combinations Link favorite reports, notes, and launch favorite selections and applications Key Benefits Single APO entry point for planners Improved user efficiency Quick access to both APO internal and external information Improved usability accessing Alerts via Planners Home Page Based on latest SAP UI technology
Real Experience. Real Advantage.

[ Planners Home Page and Alert Worklist


One-Click navigation from Planners Home Page to alert details or interactive planning transactions

Real Experience. Real Advantage.

[ Planners Home Page Content Blocks


Personaliza tion

Content Blocks

Real Experience. Real Advantage.

[ Enhanced Interactive Backorder Processing


Improve flexible and efficient handling of backorders
Solution Enhancements Flexible selection of requirements worklist for interactive backorder processing Multi-item backorder processing and true availability checks (including rules-based ATP) for requirements Precise and user-driven definition of requirements priorities through flexible sequence definition

Key Benefits Higher efficiency in re-assigning order confirmations Display of relevant items in new requirements worklist can be personalized Better control of re-assignment results

Real Experience. Real Advantage.

[ SAP APO Enhancements


Usability

in Enhancement Package 2 for SAP APO 7.0


Improved usability for Interactive Backorder Processing and Alert Monitor New Planners Home Page as entry point for supply chain planners Re-designed user interface adopting latest SAP UI technology

Simulation
Enhanced flexibility in managing supply chain scenarios and production plans Improved version management

Functional Enhancements
Improved handling of outliers, events & causal effects in Demand Planning Classification and forecast optimization Enable availability check during planning runs Enhanced capabilities for process industries in PP/DS Consistency checks for Service Parts Planning

Real Experience. Real Advantage.

[ Version-Dependent Master Data


Better Simulation Capabilities via Extending the Version Specific MD
Solution Enhancements New version-dependent fields in Location, Location Product, PPM, Transportation Lane Master Data Extended mass maintenance (MASSD) for the objects mentioned above Editable PP/DS Product Data Structure (PDS) Restricted editing capabalities for SNP PDS Key Benefits More flexible changes to version-dependent master data Improved simulation capabilities for Planners in SNP, CTM, and PP/DS PDS is directly editable in APO for SNP (header level) & PP/DS (complete)

Real Experience. Real Advantage.

[ New Version-Dependent Master Data Fields

Real Experience. Real Advantage.

[ PDS Edit Matrix


PDS Type Feature
Copy via Version Copy Copy via CURTO_EDIT Changes in Active Model (000), Active Version (000) Changes in Active Model (000), Inactive Version Changes in Inactive Model, Inactive Version Inactive Status for the PDS

PP/DS
YES YES YES* YES YES YES

SNP
YES YES YES** YES** NO NO

CTM
YES NO NO NO NO NO

* No structural changes allowed, only fields that are editable in PDS_MAINT are changeable ** No structural changes allowed, only header fields from PDS_MAINT changeable

Real Experience. Real Advantage.

[ Partial Version Copy


Better Simulation Capabilities via Improved Version Copy
Solution Enhancements Enabling copy only parts of the supply chain including master and transactional data based on the defined selection Filtering (restricting) the supply chain copy based on objects (e.g. production resource, SNP selection profile,...) Easy selection of master data for copying Same capabilities between VERCOP & MVM Key Benefits Improved runtime Less liveCache memory usage More options to restrict the scope of copy of the supply chain Allows copying / resulting view of just a certain portion of the supply chain model

Real Experience. Real Advantage.

[ SAP APO Enhancements


Usability

in Enhancement Package 2 for SAP APO 7.0


Improved usability for Interactive Backorder Processing and Alert Monitor New Planners Home Page as entry point for supply chain planners Re-designed user interface adopting latest SAP UI technology

Simulation
Enhanced flexibility in managing supply chain scenarios and production plans Improved version management

Functional Enhancements
Improved handling of outliers, events & causal effects in Demand Planning Classification and forecast optimization Enable availability check during planning runs Enhanced capabilities for process industries in PP/DS Consistency checks for Service Parts Planning

Real Experience. Real Advantage.

[ Demand Planning Events and Outliers


Detect and manage outliers and events with irregular occurance
Solution Enhancements Separate outlier detection and forecasting Event type definition for one-time and recurring events Automatic detection of events in history and consideration in forecast Visualization and manual labeling in interactive planning Key Benefits Easier correction of history and inclusion of promotions and events in the future due to automation and usability improvements Improved statistical forecast quality for volatile products e.g. products with frequent promotions

Real Experience. Real Advantage.

[ Demand Planning Forecasting Improvements


Improve forecast accuracy by better modeling external impacts
Solution Enhancements Use of seasonality pattern from a higher aggregation level Combined causal analysis with time series (univariate) forecasting Automatic causal factor selection Price changes handled as a key causal factor Key Benefits More accurate forecasting results due to more sophisticated forecasting methods Enhanced forecast quality for seasonal products and products with strong causal correlation

Real Experience. Real Advantage.

[ Demand Planning ABC / XYZ Classification and


Forecast Optimization
Improve quality and automation of forecast parameter determination
Solution Enhancements Segmentation of demand planning data based on value (ABC class) and volatility (XYZ class) Define own classes and thresholds for segmentation Forecast profile assignment based on class Optimal forecast model selection based on univariate and causal models Key Benefits Improved forecasting process using segmentation More accurate new product forecast due to special consideration for new products as an own class Automate a more sophisticated forecasting process without high level of skill and intervention needed by the user

Real Experience. Real Advantage.

[ Invisible Orders Concept for CTM / SNP Optimizer Run


gATP check during SNP Optimizer or CTM run provides better results
Solution Enhancements Invisible Order concept allows to keep prior supply elements visible to gATP checks during the planning runs Prior supply elements will be deleted at the end of the planning run before saving the newly created supply elements Key Benefits Reliable gATP check results during CTM / SNP Optimizer run Easy setup one flag in CTM / Optimizer profile

Real Experience. Real Advantage.

[ CTM Supply Consumption


Consume existing inventory from entire network before creating new supplies
Solution Enhancements Consume fixed supplies on lower priority path before creating new supply on path with higher priority Consume components for production on lower priority path before creating new supply on path with higher priority Key Benefits Better usage of existing inventory and supplies Peformance will be improved currently 2 CTM runs are required for achieving the same result Easier CTM profile setup (one instead of two)
Primary Path Secondary Path Forecast = 100

Distribution Center

Stock = 0

Stock = 100

Plant 1

Plant 2

Plant 3
Explanation: Stock of 100 PC from secondary path (Plant 2) is used-up to fulfill the forecast of 100 PC in the distribution center instead of creating a new supply along the primary path in Plant 1

Real Experience. Real Advantage.

[ APO PP/DS Functional Enhancements for


Process Industries
Enhanced detailed scheduling capabilities for process industries
Solution Enhancements Duration/rate change of an activity on the Detailed Scheduling Planning Board without changing the production quantity considering minimum and maximum limits New scheduling heuristic to close gaps by stretching the duration of activities Continuous and simultaneous fill/drain of containers/tanks Key Benefits Support production planning capabilities for process industries Easy change of throughput to avoid projected overflow of tanks or react to short term increase of customer demand Better insight into planned tank fill levels

Real Experience. Real Advantage.

[ APO PP/DS Multi Resource Scheduling Heuristic


Enhanced detailed scheduling capabilities for multi-resource scenarios
Solution Enhancements A new scheduling heuristic is delivered which enables flexible finite scheduling across alternative modes and alternative sources of supply
Res. 1 Res. 2 Res. 3
With Switch periods and Max. periods
6 5 4 3 2 1

Orders

PDS 1 / Mode A PDS 1 / Mode B PDS 2 / Mode A

Key Benefits Better compliance to due dates and minimization of set-up time Support finite production planning scenarios with all alternative resources The modeling of alternative resources is not only restricted to modes and can also be done by alternative sources of supply

Real Experience. Real Advantage.

[ Learning Points
APO features in SCM 7.0 Enhancement Pack 1 APO features in SCM 7.0 Enhancement Pack 2 Enterprise Inventory Optimization by SmartOps Update Supply Chain Response Management by ICON-SCM Update

Real Experience. Real Advantage.

44

[ Growing the Business while Satisfying Consumer


Demand is Getting Tougher
Linear supply chains have evolving into complex global supply networks

Outsourced Manufacturers Packaging Suppliers

Distribution Centers

Customers Customers

Manufacturers

Retailers

Customers Retailers Customers Raw Material Suppliers Distributors

Serving more consumers in more markets


Growing product and network complexity leading to supply and demand volatility and risk

Rising costs and shrinking margins


Global sourcing and increased risk has lead to increased buffer stocks of inventories and associated costs

Capacity Constraints/Variability
Increasing asset utilization pressures and capacity shortages

Real Experience. Real Advantage.

[ Safety Stock \ Inventory Planning Options


Enterprise Inventory Optimization can set safety stock levels (and min/max levels) for raw, intermediate, and finished products at all levels throughout the Supply Chain. This holistic view provides the optimal inventory positioning for the entire Multi-echelon network while talking into account demand variability, supply uncertainty, and production attainment.
1 2 3

Basic Safety Stock Planning


Single product, single location Integrated with SNP planning run Based on manually entered values from master data (fixed quantities or days supply) Can be static quantity, or time dependent SAP SCM or ERP solution

Advanced Safety Stock Planning


Time-dependent values can accommodate seasonality and promotions Based on forecast and delivery variability and desired service levels Considers one location at a time SAP SCM solution

Multi-echelon Inventory Optimization

Balance inventory and service levels Considers entire network at all levels simultaneously (manufacturing, distribution, supply) to minimize total inventory cost Supports risk-pooling (reduction in variability of demand at component level by aggregating all end-item demands) SAP Enterprise Inventory Optimization by SmartOps

Real Experience. Real Advantage.

[ Intelligence Modules leverage existing transactional data


to calculate up-to-date planning parameters
Intelligence Module Transactional Data Planning Parameters
Forecast error Identifying and adjusting for: Forecast history Sales history Demand Intelligence Module
Bias Intermittency Seasonality Outliers and missing data

Lead time mean Order date Ship date Receipt date Supply Intelligence Module
In-transit Order processing / goods receipt

Lead time variability

Planned production Actual production

Production Intelligence Module

Schedule attainment mean Schedule attainment variability

Real Experience. Real Advantage.

[ How Inventory Optimization Complements SAP


more layered, multi-tier supply chains more frequent product launches increasing customer service expectations

Multi-echelon Safety Stock

Inventory Segmentation

Service Level Optimization


Optimal Service Level for Every Product, Location Combination

VMI Customer

DC

Central DC

MFG

Suppliers

Basic A,B,C Segmentation

Inventory Optimization
Advanced demand, supply & production variability analysis Optimal, time-phased inventory policies for multi-tier network Inventory segmentation
Real Experience. Real Advantage.

SAP SCM & SAP ERP

Inventory Policies

[ EIO Yields Significant Results


Improvement Area
Improve Customer Service Levels

Benefit Enabler
Optimize inventory levels to "fix the mix Analyze and implement planning parameters that meet longer term service objectives

Benefits
5-10% increase in order fill rates and on time delivery 30-50% reduction in out of stocks and order lead time variability 15-30% reduction in inventory and working capital 20-40% reduction in inventory carrying and obsolescence costs 20-30% reduction in time used in expediting 10-20% reduction time spent on manual inventory planning processes

Reduced Inventory and Working Capital

Manage inventory by SKU, location, and planning period Manage dynamic, integrated demand, supply, production, and inventory analytics and exceptions Reduce expediting and firefighting Effectively handle large numbers of low volume SKUs

Improve Planner Productivity

Reduced Production & Distribution Costs

Transition from push to pull strategies Reduce over production, excessive storage facilities, and expediting

10-20% reduction in PPE and depreciation due to excess storage facilities

Real Experience. Real Advantage.

[ SAP EIO is the lowest cost, easiest to maintain, and least


risk inventory optimization solution to integrate with SAP Inventory optimization has the potential to create significant and quick
benefits through reductions in inventory and increased sales Integrating inventory optimization to SAP at an enterprise level in a cost effective way has many challenges, which can put not only the value of inventory optimization solutions at risk, but also put the entire business at risk SAP EIO pre-built integration assets reduce the cost and risk of implementation of implementing inventory optimization
Pre-built assets reduce the implementation effort, making SAP EIO the lowest cost to implement By leveraging existing master data and proven automated process, SAP EIO is the easiest to maintain Up-to-date accurate inventory targets over time, produces sustainable results with the least risk to the business

Real Experience. Real Advantage.

[ SAP EIO Pre-built Integration Assets Reduce the Cost


and Risk of Implementation

Source Systems
Standard SAP Enhancements Topology Converter Transfer

Data Gateway Loader & Validation

Load

Data Gateway

DW BusinessObjects Universe & Reports

Outputs

SAP Connector

Data Store

Outputs

Multi-Stage Inventory Planning & Optimization

Outputs

Intelligence Modules

Lowest Cost Faster to implement Fewer project resources


Real Experience. Real Advantage.

Easiest to Maintain
Leverages existing data Sustainable automated process

Least Risk
Proven enterprise integration Accurate inventory targets over time

Inputs

APS

ERP

Extract

[ SAP Connector reduces the time and effort to link EIO


with ERP and APO
SAP Connector is a library of commonly used and custom BAPIs
Extracts input data from SAP master data tables, including:
Item-material list Location-plant list Sourcing Bill-of-material Forecast Sales Purchase orders Planned production Actual production

Feeds inventory targets to SAP MM or APO tables Co-developed by SAP and SmartOps, and updated with SAP upgrades Reduces interface development time and effort
Real Experience. Real Advantage.

[ Whats Coming - New integration functionality provides


enhanced connectivity with ECC
Business Objectives
Facilitate integration to SAP data sources Maintain and manage SmartOps data in appropriate system

SAP when part of material data SmartOps when system information New Functionality Item-Location (EIO 1) Item-Location-Customer (EIO 2)

Customization of ECC to support SmartOps-specific data through an ABAP Add-On

Integration/Infra structure

Reconfiguration of existing Material BAPI to leverage standardization and improve performance Configuration of BAPIs to take advantage of SmartOps data now in SAP

BAPIs for transaction data needed to analytical modules (PIM, SIM)


Ability to persist supply chain information and settings across data loads

Real Experience. Real Advantage.

[ BusinessObjects Universe & Reports rapidly deploy


supply chain dashboards and ad hoc reporting
Leverage SAP BusinessObjects Enterprise (BOE) modules
Data universe defined for BOE modules Supports analytics & reporting needs for essential common workflows Monitoring of Supply Chain performance Executive dashboards Ad hoc reporting Pre-defined dashboards, include: Demand Analytics Target Performance Scenario Comparison

Real Experience. Real Advantage.

[Demand Analytics Dashboard Review Forecast Error,


Bias and Intermittency

Real Experience. Real Advantage.

[ Inventory Target Performance Dashboard Demand,


Supply, and Inventory at a glance

Real Experience. Real Advantage.

[ Scenario Comparison Dashboard Review any Supply


Chain Scenario

Real Experience. Real Advantage.

[ Learning Points
APO features in SCM 7.0 Enhancement Pack 1 APO features in SCM 7.0 Enhancement Pack 2 Enterprise Inventory Optimization by SmartOps Update Supply Chain Response Management by ICON-SCM Update

Real Experience. Real Advantage.

58

[ Growing Need for Response Management


Powerful Customers / Distribution Partners Big Box Retailers: Fulfillment penalties Fast order turnaround requirements Long lead times Offshore Suppliers Contract Manufacturers / Visibility Challenges Internal and external capacity constraints
Key customer orders exceed forecast Can I chase supply? Supplier says delivery will be late

Channel wants to increase / pull in forecast? Supply is short how to allocate?

Internal View
How to protect commits for key accounts?

Internal Financial Goals New Product Introductions Strategic Priorities


Real Experience. Real Advantage.

[What is Response Management?


A solution that can quickly answer and respond to changes in the supply chain

Operationally, against the actual demand/supply situation In simulation, against hypothetical situations

Answering critical SCM questions \ what-if in minutes


How can I fulfill an unexpected customer order or demand? How best to adjust to my disrupted supply? What orders are impacted by my inventory shortage? How much excess inventory will I have if I make this part substitution? What orders from next quarter can I build and ship this quarter? How much capacity do I have, can I add demand or increase capacity?
Real Experience. Real Advantage.

SAP Supply Chain Response Management at a glance


Respond to change in during economic uncertainty

Responsive planning and what-if analysis to ensure highly efficient demand-supply matching
Key Capabilities Offered Order-based, operational replanning to adjust for changes to demand and supply What-If simulation and analysis to resolve real and hypothetical challenges Characteristics
Fast Finite materials and capacity Multi-tier Intelligent, synchronized supply planning Flexible Transparent / Explainable
Real Experience. Real Advantage.

[ SAP Supply Chain Response Management


Key Elements
Forecasts & Orders Demand Priority Management End to End Pegging What-If Analysis / Transparent & Flexible Reporting High Speed Solution Engine Supply Planning Demand & Supply Plan

1.

Demand Priority Management


Nets and prepares demand for prioritization Applies flexible priority rules to demand

2.

Supply Planning
Matches supply and demand Efficiently plans deliveries and planned orders Fully pegs through all tiers of supply network

3.

What-If Analysis / Transparent & Flexible Reporting


Outputs are insightful end-to-end pegging and planning reports

Real Experience. Real Advantage.

[ How does SCRM compare with other planning tools?


SCRM APO/
Supply Network Planning

APO/
Capable to Match

APO/
global Available to Promise

APO/
Demand Planning

ERP

Performs Supply Planning


Order-level Order-level Infinite

Performs Demand Rescheduling


Order-level

Performs Allocations Planning


manual

Supports Batch Order Promising Supports Real-time Order Promising

Real Experience. Real Advantage.

[ Use Cases
Use Case Master Scheduling Simulation Description
Derive feasible, balanced multi-site demand/supply plan What-if analysis for changes to master or transactional data

Timefram e

Complement Components APO DP, ERP, (SNC)

Shadow Planning

Offline analysis of potential changes to demand/supply across outsourced network

M i d S h o r t

APO DP, ERP, (SNC) ERP, SNC

Allocations Planning

Deriving Allocation levels for enforcement during order promising

APO DP, ERP, APO gATP APO DP, ERP, (SNC) ERP

Response Management

Re-planning to match demand and supply to make short-term supply changes and/or reschedule demand Generate build triggers to internal and/or external manufacturing

Build Determination

Real Experience. Real Advantage.

[ SAP Supply Chain Response Management


How Response Management Complements SAP
SAP APO (Advanced Planning) Provides demand plan and forecast Runs tactical supply plans Global ATP for real-time order execution

SAP Supply Network Collaboration Extends supply requirements to suppliers Provides VMI requirements and demand

SAP Supply Chain Response Mgmt Operational re-planning and simulation Demand prioritization and feasible supply analysis

SAP ERP Provides current orders and demand data for prioritization Provides current supply data Receives updates & changes from SCRM

Real Experience. Real Advantage.

[ Return on Investment
If applicable, highlight any aspect of your presentation that can contribute to a significant ROI. Omit slide from presentation if necessary.

Real Experience. Real Advantage.

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[ Key Learnings
Understand recent changes to SCM-APO for Enhancemnet Package 1 & 2 Review upcoming improvements to Enterprise Inventory Optimization by SmartOps including Analytics & Integration Short overeview and update on new version for Supply Chain Response Management by ICON

Real Experience. Real Advantage.

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Thank you for participating.


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SESSION CODE: 3913

Real Experience. Real Advantage.