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Global Business Services

SCM APO
Training Course in Supply
Network Planning
Unit2: SNP Overview
deeper

© Copyright IBM Corporation 2010


Global Business Services

Course Overview Diagram

Course Overview
Introductions 1 SNP Run Using Heuristics 8
SNP Overview 2 Deployment 9
Planning Area
Administration 3 Transportation Load Builder 10
SNP Profiles 4 SNP Run Using Optimizer 11
SNP Run Using CTM
Master Data 5 12
Supply Chain Cockpit /
Supply Chain Engineer 6 Advanced Topics 13
Interactive Planning and
Release of the Plan 7

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APO and SNP Intro: Unit Objectives


At the conclusion of this unit, you should:
 Understand the processes that APO supports
 Be familiar with the APO architecture
 Understand the SNP Business Applications
 Be introduced to SNP functionality

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The Supply Chain: Original Supply to Final


Consumption

INFORMATION FLOW

Transfer Transfer Transfer Transfer

Supplier Manufacturing Distribution Retail Outlet Consumer

CASH FLOW

Supply Chain Optimization

Increase Customer Responsiveness at Least Cost

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Global Business Services

To be competitive, increase revenues and market share and be


profitable

Companies need to …….


 Have the right product at the right place at the right time
 Improve replenishment cycle time
 Improve Return on Inventory investment
 Increase utilization of capacity/resources

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APO

 Stands for Advanced Planning and Optimization


 It’s intent is to enhance global planning capabilities supported through
advanced heuristics and optimization algorithms
 An Advanced Global Planning Tool
 Not an Execution System
 A Tool to control the entire Supply Chain
 A Package focussed on Constraints (Material, Capacities)
 A Tool capable to replace some current OLTP Functionality

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APO Product Map

Monitor Supply Chain Cockpit

Strategic Network Design

Supply Network Planning


Tactical Demand
Production Transportation Planning
Distribution
Operational Purchasing
Planning Planning
Planning Collab.
& &
WorkBench &
Detailed Vehicle Planning
Scheduling Deployment
Scheduling Scheduling

BUY MAKE STORE MOVE SELL

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Transaction Data Transmission

R/3
APO

Initial Transfer
Transaction Transaction
DATA DATA

Incremental transfer

The transaction data is transferred from SAP R/3 to APO in the beginning.
Subsequently, the Transport and Production orders are transferred from
SNP to SAP R/3 after each run, and data such as inventory status is passed
regularly from SAP R/3 to APO

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APO Application Architecture

OLTP APO OLAP

Historical
Demand Planning Data

Sales External
Orders Production
Data
Planning and
detailed
(e.g. POs
Manufacturing Supply
Global Scheduling
Execution Network
ATP Key
updates Planning
Perform.
Inventory Deployment Indicators
Movements
TP/VS TLB

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APO Platforms

Operating Systems
 Windows NT
 HP UX
 IBM AIX
 Sun Solaris
 Compaq True64 Unix,
 Siemens Reliant Unix

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APO Platforms

Data Bases
 Oracle
 SQL-Server

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Client Concept

 Similar to R/3
APO
 One APO client to n R/3 clients
 Live cache‘ applications on client
– SNP
– PP/DS
– TP/VS live
– ATP Cache
 BW Basis for Demand Planning
– Not on client
– Needs to be organized
DB
via dedicated infocubes

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What is Supply Network Planning ?

 A planning approach to create Tactical Plans and Sourcing Decisions


that takes the complete supply network into consideration

Supply Network
Planning

Transport
Deployment
Load Builder

 Meet Forecast and Actual Demand by:


– Optimal use of Manufacturing, Distribution and Transportation Resources
– Consider all constraints in the supply chain

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SNP Overview

 SNP ensures the optimal Use of Manufacturing, Distribution, and


Transportation Resources to meet Forecasts and actual Demand while
considering all Constraints in the Supply Chain
 SNP plans Production, Procurement and Transportation throughout the
entire Supply Network using Optimizing and Heuristic Approaches
 Configurable Profiles determine on how the System generates Supply
and Demand within Short, Mid and Long-term Planning
 SNP offers three competitive Algorithms: CTM, SNP Optimizer and SNP
Heuristics

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SNP Business Applications:

 Inventory planning and deployment taking into account logistics and


sales variability.
 High level capacity planning and macro global scheming to aid with
capital equipment decision making based on sales runs.
 Visibility for planning with confidence. System provides cost- trend
analysis for control on manufacturing expansion, Out-sourcing, 3rd
party supply, etc.
 Support system for modeling what if scenarios that would impact the
bottom line.
 Stores, DCs and VMI stock leveling with ability to build transport loads
with predetermined constraints

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SNP Business Applications (Continued)


 Match supply to demand
 Integrate purchasing, manufacturing, distribution and transportation in one
consistent model (PPM)
 Model the entire supply network and related constraints
 Synchronize activities and plan material flow throughout the supply chain
 Create feasible plans for purchasing, manufacturing, inventory and
transportation

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Beyond Traditional “DRP”

Production Process
Model

Manufacturer
Plant
Manufacurer
DC

Customer DC
Supplier Plant

Supplier WH

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APO Planning Functionality Sequence

Planning Horizon
Demand Planning (DP)

Supply Network Planning (SNP)

Production Planning (PP)

Detailed Production Scheduling (DPS)

Deployment

Transport Load Builder (TLB)

Transportation Planning and Vehicle


Scheduling (TPVS)

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SNP Process

Demand Planning
Forecast

Supply Network Pl.


Recommended
Planned TransportOrders
Orders
Production Planning
Detailed Scheduling

Deployment

Confirmed
Transport Orders
Transport Load
Builder

Transportation Planning Transport


& Vehicle Scheduling Orders

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Data Objects:
Distribution Network

Customer
Demands

Distribution
Centers

Plants

Suppliers

Transport Order Planned Order Purchase Order


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Supply Chain Cockpit

 Graphical instrument panel for modeling,


navigating and controlling the supply chain

 Provides the insight and control needed to


effectively manage the entire supply chain

 It is highly configurable to conditions within a


wide variety of industries and business
situations

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Supply Chain Engineer

 Used to create and maintain supply chain


network models
 The network model represents a specific
supply chain and consists of individual
nodes and links
 A model can have different planning
versions
 Several models, each with different
versions can be created for simulation
purposes

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Objects in the Supply Chain Network


Objects include:
 Locations
 Products
 Resources
 Production Process Models
 Transportation Lanes provide links between
objects in a supply chain model

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SNP Planning Functionality

 Supply Network Planning Strategies


– Heuristics
– Optimization SNP
– Capable to Match
 Deployment PP/DS
– Faire share, push rules and deploy to order
Deploy-
– Optimization
ment
 Transport Load Builder
– Leveling in transport loading

TLB

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SNP Strategies

 SNP Heuristics: repair-based planning


– Quota arrangements
– Production capacity check
– Capacity leveling
 SNP Optimization: cost-based optimization
– Selection of best production site
– Optimization of production, transportation, and inv. costs
– Mixed Integer Linear Programming
– Metaheuristics
– Feasible solutions
– Calculation of quota arrangements
 Capable to Match: supply to demand match
– Matches supply to available demand via production
and transportation capacity check

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Deployment

 Fair share
– Proportional
– Target fulfillment
– Deploy to order Montreal
 Push deployment
Calgary
 Pull-push deployment Winnipeg

– Demand fence Montreal

– Supply fence
SAPCO Customer
Philadelphia
Chicago

New Orleans

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Transport Load Builder

 Plan for loading of transportation vehicles


– Maximum range of coverage
– Minimum/maximum load weight
– Maximum volume
– ATP check

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Vendor Managed Inventory

MANUFACTURER RETAILER
APO

Inventory Inventory
Plant (integrated)
Warehouse (EDI 852)
Distribution
Center
Forecast Forecast
(integrated) (EDI 830)

SNP VMI

R/3, Sales order


Legacy Order (EDI 855)

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SNP Process Flow

Planning Area Administration

APO Master Data Setup

Model/Version Creation

Supply Chain Model Setup

Release of Demand Plan to SNP

Planning Method Determination


& Profile Settings
Transport Load Supply Network
Building Planning Run
Simulation

Deployment Run Interactive Planning


Management
by Exception

Conversion into Release of SNP


PP/DS orders Plan to DP
PP/DS Planning

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POWERTASTIC, Co. Scenario

Vendor I
Tampa, FL
ER_TD_VTA DC I
Battery, Motor Los Angeles, CA
Mfg Plant I
Raleigh, NC ER_TD_DLO
ER_TD_PRA
Vendor II
San Francisco
ER_TD_VSF
Battery,Chuck
DC II
Newark, NJ
ER_TD_DNE
Vendor III
Phoenix, AZ Mfg Plant II
ER_TD_VPH Chicago, IL
Steel ER_TD_PCH

VMI Customer
Vendor IV
ER_TD_VHO
Portland, OR
Houston, TX
ER_TD_VPO
Polypropylene

Direct Links
Casting Supply
Steel Supply
Interplant Handle Transport

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Current BOM

Auto Screwdriver
Level I
Handle Consumer Motor Consumer Battery Bits Chuck
ER_TD_SHA ER_TD_SMQ ER_TD_SBA ER_TD_SBI ER_TD_SCH
Manufactured Procured Procured Manufactured Procured

Level II
Polypropylene Steel
ER_TD_RPQ ER_TD_RST
Procured Procured

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Manufacturing Layout

Manufacturing Layout

Shipping

Assembly

Injection Casting

Raw Mat Warehouse

*Not that manufacturing plant in Chicago does not have a casting operation, casting requirements are sourced from Raleigh

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Global Business Services

SNP Overview: Unit Summary

You are now able to:


 Describe the supply chain process
 Describe how SNP fits into APO planning
 Describe the Supply Chain Cockpit
 Identify and describe the use of SNP’s key components

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