Integration of SAP

systems to enhance
the Functional
performance of SCM
 Software support for
Supply Chain Management
Adopting ERP systems resulted in dramatic change in
many Intra company information architecture in 1990’s
SAP With R3 products gas emerged as the result in the
segment and has become the market leader in the
software vendor firms
The integration scenario includes Frame work Between
•Manufacturing and financials
•Manufacturing and order management
•‘Manufacturing and billing
•Manufacturing and purchasing and shipping
•Customer service and ERP etc
Importance of IS for business
Processes
Every element of in the value chain needs and
generate information . Is is important for
coordination of the divisions and companies
cooperating in SC : they are crucial in bridging the
traditional boundaries between the members of
the chain
We can assign systems that support SCM to
different levels
•The lowest level lists those function areas that we
regard as element of intra company value chains
•The middle contains Planning, Scheduling , and
monitoring functions . In SAP environment these
gets implemented through its APO
 Over view of SAP SCM applications
•Supply chain cockpit
•Collaborative Planning , Forcasting and
Replenishment (CPFR)
•Demand Planning
•Supply network Planning
•Production planning and detail scheduling
•Availability to Promise (ATP) Function
•Logistics execution system
•Alert Monitoring
 Components of SAP
Environment
• Advanced Planner and Optimizer

• Business – to – business
Procurement

• Logistic Execution system

 SCM solution Components in sap

• Business Information Warehouse (SAP BW)

• Material Management (SAP MM)
• Production Planning (SAP PP)
• Sales and distribution (SAP SD)
Advanced Planner and
Optimizer
• APO provides functions for intra and inter
company planning of SC and for scheduling
and monitoring of associated processes
Architecture of APO
 Supply chain Cock pit
It provides advanced visualization capabilities for planning and
controlling both intra- and inter organizational logistical networks it
covers following components
•Network designs that permit modeling of logistic network network
• It is possible to evaluate different scenarios and apply
optimization algorithms
•Navigation component enables to look at features of network
•Monitor informs mangers of unusual states , According to
seriousness of problem , Sap distinguishes it as informative ,
Warning and error messages
Screen of supply chain Cockpit in SAP
Typical users of the SCC
•Network Planners who support establishment of new supply net
work or modify existing one
•Demand planners who access demand forecasts , Receive
messages from Alert monitoring and react appropriately
•Sales planners
•Controllers to analyze the elementary data
 Demand Planning

Demand planning component of APO is

used to forecast the products sold .
The APO component generates the sales
plan of business area which serves as
starting point for the subsequent
planning activities
 Basis of demand Planning
Demand planning involves interaction b/w DO and BW(Business
information ware house )

•Online Analytical processing (OLAP) servers provide the end

users with powerful aggregation and retrieval functions for data
analysis
Datasets in DP and BW
 Forecasting methods
• APO provides comprehensive forecasting
capabilities than what is available in R3/SD
module
• APO contains following extensions of R3
• Correlation and regression
• Option of including Casual factors like Advt
actions and marketing budgets
• Consideration to sporadic demand
 Collabrative Planning Forecasting
Technique (CPFR)
• This is business model involving several
companies in SC it starts with joint agreement on
business conditions ends with largely automated
stock warehouses
• It is directed at improving the inter organizational
partnership and customers through jointly
administered information and cooperatively
managed process to achieve win –win situation
 Divisions of CPFR process

• Planning
• Forecasting
• Replenishment and
comprises of nine steps
CPFR Process model
 Advanced Planning Scheduling
(APS)
SAP uses APS for product offers
Functions of vendors groups in APO
Supply network Planning
Deployment
Production planning and detail Scheduling
APS CYCLE
APS functions include customization capabilities
that can be used routinely applied planning
procedures
• Use of optimization procedures
• Task specific user interfaces
• Different aggregation levels and planning
accuracy
• Alert mechanism to deal with exception
situations
 Supply network planning
(SNP)
This APO model determines
Procurement, distribution
schedule at tactical level SNP is
based on periods whose length is
often week or a day
 SNP provides three different
planning methods
• SNP optimizer
• SNP heuristic
• SNP CTM
• PP/DS
 Phases in organization of SNP
Optimizer Phase
• Here sales plans are developed in R3/SD module
in APO , This plan is released in SNP where it is
used as in put for further planning steps
• Mid term production &distribution schedule is
determined by SNP Following procedures are in
use
• Use of Linear or mixed integer models
• Aggregate models , aggregation of products in
groups , individual order in order groups
 SNP Heuristics
Adds all planned demands for product at certain
location to determine the supply capability of
corresponding quantities using predefined quotas
for each source of supply
Capable to match (CTM)
CTM considers order priorities and categorized
sources of Supply
 Purchase planning and demand
Scheduling
• It is used to plan the sequence and to schedule
orders. Its tasks are
• Planning of Material supply
• Best use of Scarce resources ‘
• Determination of sequence that minimise set up
cost
• Consideration of unexpected events that might
disrupt internally determined schedule and
schedule of SC partners
 PP &DS heuristics
• PP &DS provides following two heuristics
1. CP Scheduler : Constraint propagation
designed for complex problems where
dependencies and constraints are
considered, so it is difult for planners to
solve problems. CP solves combinatorial
problems by quickly the solution space
with which optimum can occur and limit
time required for computing
 Genetic Algorithm (GA) Scheduler

• Tis uses the procedure like selecting ,mutation,

and crossover that are recoznises widely to find
improved solution for planning problems .
• GA application considers the set up cost in order
to determine the suitable sequence of work steps
to be performed
 Transport Planning and vehicle
Scheduling (TP/VS)
• TP/VS allows simultaneous consideration for
transport constraints for use of companies own
fleet or carriers for inbound and out bound
replenishment
• This enables companies to liaise via internet and
enable synchronization of transpot decisions ad
activities
 Functions of TP/VS
• Load consolidation and vehicle Scheduling
• Route determination
• Carrier Selection
Out bound process integration of APO , LES and R/3
 Vehicle Scheduling
• It is integral part of SCM process , it focuses
short-term decisions on vehicle resource
allocations
• Considers constraints such as time windows for
delivery and vehicles ,vehicle capacity,
handling capacity for loading and un – loading
 Available-to-promise (ATP)
• ATP investigates weather a promised
delivery can be made and if so when
 ATP considers following aspects
1. Whether existing order confirmation satisfied
with regard to both qty and date or dates can be
promised in response to request
2. Does check available to stocks existing or do
planned fluctuation also have to be considered
3. Are reservations sacrosanct or they be changed
to favor a privileged customer
4. Is check restricted to one ware house location or
other location to be considered
 ATP considers following aspects
5 . Does query apply only to end products or also
to availability of intermediate products

6. Can or should items not currently available be

supplied by date promised or to be promised
ATP test Example