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0 Demand Planning Delta Overview
SCM Solution Management October, 2008
1. Customer Forecast Management 2. Enhancements in Demand Forecasting 3. Release and Consumption of Forecasts with Configuration for VC 4. Enhancements in APO Alert Monitor
© SAP 2008 / Summary developments APO 7.0 / Page 2
Customer Forecast Management
1. 2. 3. 4. 5. Overview Basic settings Inbound processing Customer forecast analysis Waterfall analysis
© SAP 2008 / Summary developments APO 7.0 / Page 3
Page 4 7.0 / Page 4 Summary developments APO .Customer Forecast Management Customer Forecast Management My Company SAP APO CFM Analyze customer forecast Customer Forecast DP Use forecast for downstream planning © SAP 2008 / CFM .Claus Bosch.
0 / Page 5 Summary developments APO .Traditional Customer Forecast Management Process Customer Supply Chain Planner Generate material requirements plan Send forecast to supplier Use customer forecast for downstream supply chain planning Key Pain Points Too much variability in customer forecast impacting the MRP/Supply Planning process No ability to intercept and analyze the incoming forecast (EDI/B2B) from customer some companies adopt a manual Rip-and-Read process No ability to track whether the new updated forecast has been received or not © SAP 2008 / CFM . Page 5 7.Claus Bosch.
0 / Page 6 Summary developments APO .Customer Forecast Management Process Customer Service Manager Load Original Customer Forecast Use IDoc functionality. Excel upload or manual input for entering data Analyze Original Customer Forecast Check forecast data for readiness and completeness Check tolerances to compare different versions of customer forecasts Use alerts and monitoring capabilities Approve Customer Forecast for Demand Planning Integrate either original or adjusted customer forecast in demand and supply planning Perform Waterfall Analysis Download customer forecast to Excel for detailed analysis of data Customer Supply Chain Planner Generate material requirements plan Send forecast to supplier Use customer forecast for supply chain planning © SAP 2008 / CFM . Page 6 7.Claus Bosch.
Claus Bosch. Page 7 7.0 / Page 7 Summary developments APO Key Benefits Increased visibility of real customer demand Higher responsiveness to short-term demand fluctuation Increased sales and lower lost sales through prevention of stock-outs Overall processing speed is improved Data entry errors and customer order errors are reduced due to automated communication Improved cooperation relationship between the supplier and the customer .use customer forecast to sense demand © SAP 2008 / CFM . Features Powerful customer forecast analysis dashboard Intercept customer forecast and analyze tolerances. intercepting and analyzing incoming customer forecast. readiness and completeness of data Efficient inbound processing – Use standard IDoc functionality or CSV file Customizable profiles for forecast analysis Waterfall analysis in structured Excel format Standard integration to APO Demand Planning .SAP APO Customer Forecast Management (CFM) Allows efficient management and understanding of the customer forecast by controlling.
Page 8 7.Claus Bosch.Example scenario: Integrated scenario CFM with Consigned VMI © SAP 2008 / CFM .0 / Page 8 Summary developments APO .
2. 5.Customer Forecast Management 1.0 / Page 9 . 4. 3. Overview Basic settings Inbound processing Customer forecast analysis Waterfall analysis © SAP 2008 / Summary developments APO 7.
Definition of basic settings Define BI structures and objects to be used for data storage and mapping You specify the settings for the Demand Planning area from which statistical forecast can be read and used in forecast comparison Specify tolerance value for bucket offset in the inbound processing of forecast data Specify what to do if forecast data is incomplete © SAP 2008 / CFM . Page 10 7.Claus Bosch.0 / Page 10 Summary developments APO .
Page 11 7. SNP or ERP Demand Management) © SAP 2008 / CFM . APO SPP.Claus Bosch.g.0 / Page 11 Summary developments APO .Maintenance of Forecast Release Profile Define the release parameters for the release from Customer Forecast Management to Demand Planning Use BAdI /SAPAPO/CFM_DATA_RELEASE (CFM Data Release to Specified Destination) if you want to release data to other applications than APO DP (e.
0 / Page 12 Summary developments APO . long-term horizon Acceptable upside and downside tolerance per horizon Expected horizon of customer forecast Expected frequency of receiving customer forecast A product-location can be set to require a mandatory manual review Different versions of uploaded data can be compared © SAP 2008 / CFM . mid-term.Maintenance of Forecast Analysis Profile Make the settings necessary for performing an analysis of customer forecast data Definition of short-term.Claus Bosch. Page 12 7.
Maintenance of key figure comparison and assignment Determine the key figures to be compared and assign them to the forecast analysis profile © SAP 2008 / CFM .Claus Bosch. Page 13 7.0 / Page 13 Summary developments APO .
0 / Page 14 Summary developments APO .g.Claus Bosch. location or on a product group level. Page 14 7.Assignment of release and forecast analysis profile You assign release and forecast analysis profile to location product master data on product. Manual assignment Mass assignment (e. per customer location) © SAP 2008 / CFM .
0 / Page 15 . 3. 4.Customer Forecast Management 1. 2. Overview Basic settings Inbound processing Customer forecast analysis Waterfall analysis © SAP 2008 / Summary developments APO 7. 5.
Claus Bosch.0 / Page 16 Summary developments APO . Additionally.Inbound Processing You receive and store incoming original customer forecast data. This enables the vendor to process the data in Customer Forecast Management. If the forecast data provided by the customer has the form of an IDoc. and then a background job uploads it to the InfoCube. the system first loads the data to a temporary table (/SAPAPO/CFM_IDOC). Page 16 7. Inbound processing supports both IDoc types PROACT and DELFOR with a new message variant CFM for both message types PROACT and DELINS. © SAP 2008 / CFM . data can be uploaded via CSV file. You can also enter the data manually on the Customer Forecast Management screen. and link it to a Business Intelligence (BI) InfoCube.
Page 17 7. MultiProvider 9ACFM_MP Customer Forecast Management UI: Customer Forecast Management UI: Manual adjustment Manual adjustment of adjusted forecast of adjusted forecast ODS Object 9ACFM_DS Real Time InfoCube 9ACFM_RC CFM application layer calculates reverse and new records Direct write access against Real Time InfoCube IDoc table /SAPAPO/CFM_IDOC CSV File Manual Adjustment Upload © SAP 2008 / CFM .0 / Page 17 Summary developments APO .Claus Bosch. if it was set in the CFM profile.Customer Forecast Management Inbound Dataflow Standard InfoCube 9ACFM_C Takeover Adjusted Forecast key figure from previous version.
Page 18 7. or as an IDoc © SAP 2008 / CFM .…) are available in the data warehousing workbench Predefined process chains are available to upload customer forecast either in a CSV file.0 / Page 18 Summary developments APO . ODS.Claus Bosch.BI structures Predefined BI structures (InfoCubes.
Upload CSV file For CSV upload use data format of data source 9ACFM_CSV Maintain the right file name in InfoPackage 9ACFM_CSV_LOAD or copy InfoPackage © SAP 2008 / CFM .0 / Page 19 Summary developments APO .Claus Bosch. Page 19 7.
4. 5. 2.Customer Forecast Management 1. Overview Basic settings Inbound processing Customer forecast analysis Waterfall analysis © SAP 2008 / Summary developments APO 7. 3.0 / Page 20 .
Forecast Analysis Run You run a forecast analysis manually. and compares different versions of forecasts performing a tolerance check.0 / Page 21 Summary developments APO . The system checks forecast data for readiness and completeness. the system generates and outputs alerts.Claus Bosch. If violations occur. © SAP 2008 / CFM . or schedule it as a background job. Page 21 7.
Claus Bosch. Forecast duration not for entire expected horizon Forecast not received per expected frequency New forecast exceeds specified tolerance limits New forecast received. change predefined queries or create new ones. Page 22 7.0 / Page 22 Summary developments APO . and you can also personalize the table for displaying the results of the query.Customer Forecast Analysis Dashboard View customer forecast data grouped according to alerts generated during the forecast analysis run. You can filter the forecasts. requires mandatory manual review/approval GUI alternatives: Netweaver Business Client Internet Browser © SAP 2008 / CFM .
creating adjusted customer forecasts. Page 23 7.CFM Dashboard Detailed View Make the necessary adjustments to the data. Approve and release for downstream planning Per profile: Comparison of new customer forecast with last customer forecast Adjust customer forecast as needed Per profile: Comparison of new customer forecast with new adjusted forecast © SAP 2008 / CFM .Claus Bosch. Release the data to Demand Planning by approving the data on the Customer Forecast Management overview or detail screen.0 / Page 23 Summary developments APO .
Release customer forecast to Demand Planning
You can release the customer forecast data in either of the following ways: You schedule an automatic forecast release run. You can specify the parameters for the run under Advanced Planning and Optimization Demand Planning Customer Forecast Management Forecast Release Run (transaction /SAPAPO/CFM_FC_REL) . You manually approve the forecasts on the Customer Forecast Management UI screen, and thus trigger a release of the data to the DP planning area defined in the forecast release profile. After releasing the data, the system automatically deletes the relevant forecasts from the work list.
© SAP 2008 / CFM - Claus Bosch, Page 24 7.0 / Page 24 Summary developments APO
Customer Forecast Management
1. 2. 3. 4. 5. Overview Basic settings Inbound processing Customer forecast analysis Waterfall analysis
© SAP 2008 / Summary developments APO 7.0 / Page 25
Perform waterfall analysis
When needed, you can perform a waterfall analysis on the forecast data, which enables you to view forecast quantities at different points in time. The output is exported to an Excel sheet.
© SAP 2008 / CFM - Claus Bosch, Page 26 7.0 / Page 26 Summary developments APO
0 / Page 27 . Enhancements in APO Alert Monitor © SAP 2008 / Summary developments APO 7. Release and Consumption of Forecasts with Configuration for VC 4.Agenda 1. Enhancements in Demand Forecasting 3. Customer Forecast Management 2.
© SAP 2008 / Summary developments APO 7.Enhancements in Demand Forecasting 1. Forecasting Enhancement “MLR with POS” New Forecasting Algorithm to Incorporate Aggregated POS Data in Forecasting Statistical Forecast Enhancement Reinitialization and trend dampening 2.0 / Page 28 .
shipment scheduling. decrease costs and increase efficiency. Demand Signal Repository (DSR) applications have reached a maturity level that allows POS data to be cleansed and mapped with the high level quality that is necessary for supply chain applications and processes. AMR Research.“ (Lora Cecere. including POS data in forecasting dampens the short term variability („bull whip effect“) in all stages of the supply chain – and makes supply chain planning more stable – even down to the production schedule. © SAP 2008 / Summary developments APO 7. Consumer Products and Hi Tech companies continue to struggle with demand latency – „in both segments it takes more than 2 weeks to sense channel sales. May 2007) Increasingly more CP companies are receiving consistent daily or weekly point-of-sale data directly from an significant number of retailers. typically 2-8 weeks.0 / Page 29 .Using POS in Demand Planning & Forecasting Motivation and Business Benefits Motivation Leveraging POS data in supply chain processes is becoming more important than ever to increase revenue. Business Benefits Improve demand visibility and response typically shipment history includes effects such as logistic rounding. product substitution and availability effects and does not reflect the original demand. including POS data in forecasting counters the effects of historical inaccuracies and is closer to a forward looking view of demand patterns to come Higher forecast accuracy the reduced demand latency and improved demand visibility leads to a higher forecast accuracy in the the short to medium term forecast horizon.
. . but . .g. .A Quick Look at Different Approaches to Use POS in Forecasting Different approaches to using POS in forecasting: „exact“ method using detailed POS data (e. but .faster and easier to implement – „low hanging fruit“ Approach is often a question of cost-benefit trade-off and strategic importance to company and relationship to customer/retailer) © SAP 2008 / Summary developments APO 7.time & resource-intensive – cpu & user „qualtitative“ methods including POS data in existing processes with no or marginal process extension benefit potential maybe not as high as exact methods.0 / Page 30 . by store/sku/day) to create a store level POS forecast and include replenishment parameters to calculate impact on manufacturer supply chain highest benefit potential.
0 / Page 31 .Highlights of the new MLR Forecasting Method „MLR with POS“ combines statistical forecasting with causal analysis calculates fluctuation due to inventory in the retail supply chain (which is not visible to the manufacturer) works with Life Cycle Planning has its own alerts diagnosis group using MAPE new MLR with POS alert types in Alert Monitor © SAP 2008 / Summary developments APO 7.
0 / Page 32 . 25 periods) seasonal no trend © SAP 2008 / Summary developments APO 7. inventory fluctuations Check whether the data is sufficient to run the algorithm min.MLR With POS . 52 weeks or 364 days for seasonal: 2 seasons otherwise error Statistical forecasting methods: constant (min.Algorithm in a Nutshell Several sets of MLR iterations 1st regression run: dependent variable: week-to-week changes in (shipment) history independent variables: lagged week-to-week changes in shipment history and POS with different lags calculated coefficients: inventory fluctuation 2nd regression run inventory fluctuation and statistical forecast used to calculate flux-adjusted forecast dependent variable: shipment history independent variables: expost forecast.
MLR Forecasting Using POS Enhancements in SCM 7.0 The scope of the new development includes: New forecasting algorithm for POS data incorporation UI adjustment for the end user to set up the forecasting method as well as changing parameters in interactive planning New alerts for forecasting errors © SAP 2008 / Summary developments APO 7.0 / Page 33 .
MLR Profile Enhancements for MLR Forecasting Using POS Data Current MLR Profile used Additional subscreen to select MLR method New settings: History key figure and version POS key figure and version Forecast models: constant or seasonal Other parameters: Save flux to key figure – Ignore leading zeros – – Diagnosis group for interactive alerts © SAP 2008 / Summary developments APO 7.0 / Page 34 .
0 / Page 35 .Forecast in Interactive Planning Run & adjust forecast in interactive planning Key figures: Forecast Shipment history POS history Statistical forecast Inventory flux Adjust forecast parameters in interactive planning on the fly: Forecast / history horizon or number of periods Statistical forecast model & smoothing factors Key Figure & version Other parameters View messages © SAP 2008 / Summary developments APO 7.
0 / Page 36 .New Alert Types Alerts Insufficient data to execute algorithm MAPE upper limit exceeded Calculated MAPE greater than statistical forecast MAPE © SAP 2008 / Summary developments APO 7.
0 / Page 37 . © SAP 2008 / Summary developments APO 7.Enhancements in Demand Forecasting 1. Forecasting Enhancement “MLR with POS” New Forecasting Algorithm to Incorporate Aggregated POS Data in Forecasting Statistical Forecast Enhancement Reinitialization and trend dampening 2.
0 / Page 38 . state-of-the-art and scientific algorithms should be reflected as enhancements in DP forecasting Business Benefits Improve forecasting accuracy in a dynamic supply chain environment Shift planner’s time to more value added analytical tasks Less over forecasting in an automated system forecast © SAP 2008 / Summary developments APO 7.Motivation and Business Benefits Motivation Companies struggle with dynamic market conditions leading to changes in sales history basis used for statistical forecasting e. changing numbers of ship-to destinations by changing customer locations fast growth by entering new markets In such an environment traditional forecast methods can lead to over forecast by not considering dampening trends Improvements in competitive.g.
0 / Page 39 . © SAP 2008 / Summary developments APO 7.SAP APO DP Forecast Improvements (1) Introduce new means of limiting or dampening the trend while also providing a means to make more generally applicable settings Settings will be possible to maintain for a planning area as well as for Univariate Profile There are several possibilities to dampen the trend: use a trend dampening profile set an upper limit for the trend value set an upper limit for the forecast use the trend dampening factor Phi (applicable only for exponential smoothing methods).
trend value and seasonal indices when a structural change is detected in the historical data.SAP APO DP Forecast Improvements (2) Improve reaction of exponential smoothing methods (for certain smoothing parameters) to structural changes in the data by reinitialization. Reinitalization settings apply only to exponential smoothing class of forecast methods. © SAP 2008 / Summary developments APO 7.0 / Page 40 . Reinitialization means the re-estimation of the forecast parameters basic value. trend value. A structural change is detected in the historical data by means of 2 measures: tracking signal (TS) normalized error (NE) When the structural change was identified the forecast parameters (basic value. seasonal indices) are reinitialized from the historical values of the period that was processed and the periods that follow.
0 / Page 41 Summary .Structural change in history Structural change © SAP 2008 / Page 41 developments APO 7.
SAP APO DP Forecast Improvements (3) Offer new BAdI method for additional white noise test calculation New white noise test is based on the Box-Pierce test Use BADI method /SAPAPO/SCM_FCSTPARA -> WHITE_NOISE_TEST to activate the BADI implementation containing the new white noise test © SAP 2008 / Summary developments APO 7.0 / Page 42 .
Agenda 1. Customer Forecast Management 2. Enhancements in Demand Forecasting 3. Enhancements in APO Alert Monitor © SAP 2008 / Summary developments APO 7.0 / Page 43 . Release and Consumption of Forecasts with Configuration for VC 4.
Machinery & Components) To enable the industries. Chemicals. Industries: High Tech.g.Overview Motivation for CBCL Planning Increasing customization of products leads to increasing requirement of planning with characteristics. Industries: Mill. Objective To enhance the cross location planning functionalities for the industries that are using characteristics (e. to use characteristics (e. Life Sciences) © SAP 2008 / Summary developments APO 7. using cross location planning. Globalization leads to planning across locations and visibility of the entire supply network.0 / Page 44 .g.
0 / Page 45 . Class Det. Forecast Release Assignment of Characteristic Values ATP Check Integrated Distribution & Production Planning Distribution Planning Production Planning Sales Sales Order Creation Distribution Production Forecast Consumption Detailed Scheduling Deployment Production Execution Transport Load Building Delivery Transport Execution © SAP 2008 / Summary developments APO 7.Release and Consumption of Forecasts with Configuration for VC Demand Planning Forecasting Sales Order with Rqmt.
0 / Page 46 .Release and Consumption of Forecasts with Configuration for VC Objective Enable the planner to release forecasts with their own configuration for the VC scheme These released forecasts can be consumed by the sales orders subsequently in case of identical configuration Features The planner can choose between releasing forecasts with own configuration or not. in the customizing. © SAP 2008 / Summary developments APO 7.
0 / Page /47 Summary developments APO 7.0 Page 47 .Characteristics Based Forecasting Forecasting done using the CBF (Characteristics Based Forecasting) technique © SAP 2008 / CBCL Planning in APO 7.
Release of Forecasts with Configuration Forecasts are released to SNP or PP/DS for planning (using transaction: /SAPAPO/MC90) Configuration are created according to the values in the CBF profile for the characteristics restricted by the consumption group.0 / Page /48 Summary developments APO 7.0 Page 48 . Requirement Strategy group chosen: 35 (Planning Without Final Assembly For Configuration © SAP 2008 / CBCL Planning in APO 7.
0 / Page 49 .Forecasts with Configuration for VC Released forecasts are available in a new planning segment – “Characteristic Based Planning without Final Assembly” – The segment can contain multiple configurations – Stock transfer demands and dependent demands can also be created in this segment © SAP 2008 / Summary developments APO 7.
0 / Page 50 .Planning for Forecasts with Configuration for VC Forecasts in the segment can be planned with CTM and PP/DS planning run – Orders within this planning segment are not integrated with ERP – © SAP 2008 / Summary developments APO 7.
Consumption of Forecasts with Configuration for VC Consumption of the forecasts by the sales orders happen only for matching configuration Possibility to release back the orders to DP/CBF considering configuration Forecasts can be created from dependent demands for the components for the same planning version (using transaction /SAPAPO/DMP2) Filter for configuration available in Product View Limitations: Multi-level configuration is not supported © SAP 2008 / Summary developments APO 7.0 / Page 51 .
Customer Forecast Management 2. Release and Consumption of Forecasts with Configuration for VC 4. Enhancements in APO Alert Monitor © SAP 2008 / Summary developments APO 7.0 / Page 52 . Enhancements in Demand Forecasting 3.Agenda 1.
Alert Profile Maintenance Overall Profile Maintenance Application Profile Maintenance © SAP 2008 / Summary developments APO 7.Enhancements in APO Alert Monitor 1. 3.0 / Page 53 . 2.
as other way of improving performance. Moving the execution of alert determination process from ABAP to liveCache. collection the detailed alert information. not necessary to populate the overview screens. © SAP 2008 / Summary developments APO 7.0 / Page 54 . Improve performance of alert determination process In case of large amount of alerts it can happen that the alert determination process runs for a long time. In order to reduce response time of populating the overview screen of alert monitor. is also part of the development. In order to make the process of alert profile maintenance easier and friendlier a new user interface is to be implemented.APO Alert Monitor Improve usability of alert profile maintenance In order to display and manage alerts the Alert Monitor uses alert profiles that specify selection criteria for the checked business area. The alert profiles are created and maintained by the users. will be omitted.
Profile can be activated only if no error item is generated.0 / Page 55 .Alert Profile Maintenance (main screen) Profile Selection: List existing profiles Profile Detail: Display and maintain profile settings Check area: When profile check performed. the result is displayed in the check area. © SAP 2008 / Summary developments APO 7.
transported.0 / Page 56 . etc …) • Activate profile (check performed successfully.Alert Profile Maintenance (toolbar) General profile functions (also available from context menu of selection tree) • Display/change mode • Create new profile • Copy existing profile • Delete profile • Transport profile • Search profile based on different criteria (name. alert type. assignment. hierarchy. ready to use) • Run overall/application profile (for application profile „planning version + period” asked) • User specific settings (favorite profiles. performance prediction. etc…) • Check profile (consistency check. description. substitute settings) © SAP 2008 / Summary developments APO 7.
Alert Profile Maintenance (profile tree) Provides an easy way to access alert profiles (overall & application) Displays profiles grouped by profile type (overall.0 / Page 57 . etc) are available © SAP 2008 / Summary developments APO 7. delete. application) Context menus for accessing general functions (create. copy.
0 / Page 58 . 3.Enhancements in APO Alert Monitor 1. 2. Alert Profile Maintenance Overall Profile Maintenance Application Profile Maintenance © SAP 2008 / Summary developments APO 7.
Overall Profile Maintenance The overall alert profile collects applicationspecific alert profiles and defines the time period for which the system determines alerts. you make the following settings: • Period for which the system determines alerts • Planning version • Application-specific alert profiles assignment © SAP 2008 / Summary developments APO 7. In the overall alert profile.0 / Page 59 .
Alert Profile Maintenance Overall Profile Maintenance Application Profile Maintenance © SAP 2008 / Summary developments APO 7. 3.Enhancements in APO Alert Monitor 1. 2.0 / Page 60 .
If you are working with SAP APO.Application Profile Maintenance Defines application-specific selection criteria for alert determination. you must define an application-specific alert profile for the application. If you want to use the Alert Monitor to monitor an application. the following alert profiles are available to you: • Available-to-Promise (ATP) Alert Profile • Forecast Alert Profile • Supply and Demand Planning (SDP) Alert Profile •Transport Load Builder (TLB) Alert Profile • Production Planning and Detailed Scheduling (PP/DS) Alert Profile • Vehicle Scheduling (VS) Alert Profile • Vendor-Managed Inventory (VMI) Alert Profile © SAP 2008 / Summary developments APO 7.0 / Page 61 .
0 / Page 62 .Application Profile Maintenance (attributes) General attributes of application profile: • Name (unique) • Description (language dependent) • Application • Administrative data (actions performed by/at) © SAP 2008 / Summary developments APO 7.
Application Profile Maintenance (alert types) Select alert types • Displayed alert types are application dependent • Configurable hierarchy ? (corrently only fix hierarchy: alert object type/alert type) © SAP 2008 / Summary developments APO 7.0 / Page 63 .
0 / Page 64 .Application Profile Maintenance (selection) Specify selection: Application dependent selection criteria © SAP 2008 / Summary developments APO 7.
Application Profile Maintenance (overall profile assign) Overall Profiles: • List of overall profiles the application profile is assigned to • Direct navigation to overall profile screen © SAP 2008 / Summary developments APO 7.0 / Page 65 .
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