apo

Supply Chain Planning with SAP APO

Functional Solution Management SCM2009

SAP 2008 / Supply Chain Planning with SAP APO / 2

1. Introduction into SAP APO2. APO 7.0 and Roadmap3. References & Analysts Reports

Agenda


Pain Points in your Global Supply Chain

Do you have problems with ? Forecast quality?? Excess inventory?? Lack of visibility in your supply chain?? Capacity shortages?? Creating an optimized finite production plan?

and therefore face? Lost sales due to missing capacity / components or

unnecessary production and high inventory

? Excessive work-in-capital; high scrap/expiry costs forproducts with shelf life or short life cycle

? No systematic consideration of inventory in your supplychain, which results in lost sales and/or excess inventory

? Lack of information for right planning decisions? High set-up costs/times and low resource utilization


Do you therefore need a tool to

increase the visibilityin your global supply

chain?

improve forecastquality?

systematically consideryour inventory and

calculate safety stockfigures?

optimize your shortterm distribution and

transportation planning?

support you increating optimized

production plans in allyour factories?

improve your salesorder entry confirmation

and provide reliable salesorder confirmation dates?


Synchronize supply with demand in yourglobal supply chain by balancing push andpull network-planning processes and byhandling replenishment and productionbased on actual demand.

? APO DP: Improves the forecast quality andplanning accuracy

? APO SNP: Improves visibility across your globalsupply chain and lowers inventory

? APO PP/DS: Supports you in creating optimizedproduction plans

? APO gATP: Allows state-of-the-art sales orderconfirmation planning processes

? APO TP/VS: Optimizes transportation loads andminimizes transportation costs

? APO Alert Monitor: Powerful exception messagesystem integrated in all APO planning modules

Global Available-to-Promise

Demand Planning

Supply Network Planning

Production Planning &Detailed Scheduling

Advanced Planning & Optimization

Alert M

onitorTransportation Planning &

Vehicle Scheduling

How SAP APO is structured


Scalability example

? Worldwide rollout of ERP, CRM, SCM, BI? Network: ~ 600 plants, ~ 650 distribution centers, ~ 400 sales offices? Users: 120,000

CP customer

Volumes

? Characteristic Value Combinations: ~ 1 Mio? New Sales Orders / Day: ~ 80,000 (400,000 SO changes / Day)? New SO-items (Peak): up to 10,000 per min? Goods Movements / Day: ~ 300,000 (within peak times up to 500 per min)? Purchasing Document / Day: ~ 150,000 (within peak up to 250 per min)? Planned/Production orders Create or Change / Day: ~ 250,000 (within

peak times up to 1000 per min)


APO DP (Demand Planning)

? Comprehensive forecasting tool-set? Statistical forecasting with causal

and time-series methods? Selection of best-fit model? Automatic outlier detection available? Highly configurable planning books

with macro functionality? Supporting aggregation /

disaggregation logic? Lifecycle planning? Plan promotions separately from the

rest of your forecast? Track & monitor forecast accuracy? Seasonal planning? Collaborative demand planning

? Improved forecast quality? One tool for power and business user? Consolidated demand plan (different

regions, countries, departments, )

Key BenefitsFeatures

Calculate and determine future demand to improve demand qualityand accuracy


Duet Demand Planning (not part of APO)

? Faster and accurate plans aligned to customer demandrequirements

? Leverages the full capabilities of Microsoft Excel (formulae,functions, graphics, etc.)

? Presents an intuitive interface that requires minimum training? Delivers improved user acceptance and productivity through simple

and timely access to relevant business information? Designed as a composite application based on Enterprise SOA

Duet Demand Planning enables managers, sales executives,and planners to utilize the full Microsoft Excel capabilities asan intuitive planning front end for SAP SCM


? Integrate purchasing, manufacturing,distribution, and transportation

? Consider constraints and penalties toplan the product flow along thesupply chain

? Advanced safety stock methodsconsidering multilevel supply chainnetworks and demand variability

? Supports system wide inventorymodeling and planning

? Enable planning on different levels ofdetail (aggregated planning)

? Choice of heuristic-, rule- oroptimization-based algorithm

? Increased visibility over the overallsupply chain

? Optimized sourcing and capacityutilization

? Reduced inventory levels? Improved customer service

APO SNP (Supply Network Planning)


Calculates quantities to be produced and delivered to the locationsto match customer demand and maintain desired service levels.


APO PP/DS (Production Planning & DetailedScheduling)

? Capacity-Load Optimization? Optimal Sequencing? Flexible & Graphical Activity Scheduling? What-if Analysis & Simulation? Configurable Exception Alert Monitor

? Optimal production sequence that is feasibleand can be executed.

? Allows simulation of various planningscenarios to determine optimal schedule.

? Optimization based on actual constraintsensures reliable delivery due date promises.


? Multi-level production planning? Order Pegging? Use existing or own developed heuristics

? Determines how, when, and where resourcesand materials should be deployed toaccomplish the production goals.

? Master planning for materialsand capacity (resource loads).


Production Planning delivers a short term plan that matches overall supplyto demand, given available resources and production methodology.

Detailed Production Scheduling determines optimal production sequencefor execution to meet delivery commitments based on actual constraints onthe shop floor.


Industry specific planning processes in PP/DS

?Mill Industries:Block planning: Planning withcharacteristics, pre-assignment ofproduction capacities? Chemical/Pharmaceutical Industries:Production campaign planning andoptimization? Food Industries:Planning with shelf-Life?

?Automotive Industries:Sequencing and model-mix planning onproduction lines, determination and optimaldistribution and sequence of orders?Industrial Machinery & Construction:Project-oriented Manufacturing?Aerospace & Defense:Customization with Order Bill of Material?

Discrete IndustriesProcess Industries

Enables special planning processes tailored to industry-needs.


APO gATP (global Available-to-Promise)

? Rule-based ATP (alternativelocations, alternative products)

? Multilevel ATP (check oncomponents)

? Backorder processing? Integrated with PP/DS (checks

against actual production plan andconsiders capacity constraints)

? Integration with Demand Planning(product allocation)

? Fast response through liveCache*use for ATP check

? Meet the demand communicatedthroughout the supply chain

? Best sourcing for the availableinventories in the supply chain

? Sell what you can actually sell? Increase customer satisfaction

through reliable delivery dates? Higher Requirements Visibility


?* high performance, memory resident data processor to perform planning and optimization

Online information about the most recent state of plan allows orderpromising that will execute after the customers expectation

SAP 2008 / Supply Chain Planning with SAP APO / 13 SAP 2007 / Supply Chain Planning with SAP APO 13

APO TP/VS (Transportation Planning / VehicleScheduling)

? Transportation planning solutionfor shippers

? Tight integration with ERP andgATP

? Capacity consideration? Integrates with SNP and PP/DS? Fast response through SAP own

optimizer

? Reduction of transportation costsvia advanced planning algorithm

? Utilization of vehicles can beoptimized

? Clear visibility of vehicles /resources / demands

? Optimized Shipments in terms oflowest transportation costs


Plan and optimize shipments for orders (sales orders, purchaseorders, returns, and stock transport orders) and deliveries


APO VMI (Vendor Managed Inventory)

? Embed customers warehouses in theplanning process

? Use sophisticated SAP APO planningcapabilities

? Built efficient truck loads? Create sales orders automatically in

ERP based on confirmed SAP APOstock transfer orders

? Display in-transit inventory? Use standard IDOCs to integrate your

customer data (e.g. stock, demand)

? Increased visibility of real customerdemand

? Improved usage of stock along thesupply chain and better transportplanning

? Reduction of stock-outs, rush ordersand supply bottlenecks

? Improved cooperation to thecustomers

? Improved delivery service level? Lower safety stocks


Allows efficient management of the supply chain by managing customerinentory replenishment with automated collaboration


APO Alert Monitor

? First task of the day for aplanner: Check the existingalerts

? Drill-down from the alertmonitor to the application tosolve the issue.

Powerful exception message system integrated in all SAP APO planningmodules


An example of an APO UI Product PlanningTable (PP/DS)

Navigation onproducts / lines /

workcenters

Selection of charts

Periodic display ofcapacity load

Product Overview forselected products

Display relevantalerts


An example of an APO UI SNP Planning Book

Navigation onproducts and

locations

Selection of planning bookand data view

Interactive Planning Grid- Overall planning situation- Drill-Down options- SNP Heuristic and Optimizer- Deployment Heuristic and Optimizer

Pre-defined Selectionsfor an SNP planner


High-Level Business Process

Planning horizon

Demand Planning

Supply NetworkPlanning

PP/DS

Deployment

TransportationPlanning

Rough CutPlanned Orders

Planned StockTransfers

Confirmed StockTransfers

Planned Orders

Forecast


ERP

DB

Optimizer 7.0

SAP Enterprise Portal / NetWeaver Business Client

SCM 7.0(including SAP APO)

DB

SAPGUI 7.10 Web Dynpro ABAP

SAP SCM 7.0 Server ArchitectureABAP and Non-ABAP Components

SAPGUI 7.10

Geocoding 7.0

CIF

liveCache 7.7


Supply Chain Execution & Supply ChainPlanning

MasterData

Global Available-to-Promise

Demand Planning

Supply Network Planning

Production Planning &Detailed Scheduling

SAP APO

Alert M

onitorSupply Chain Planning

Material Management (MM)

Sales & Distribution Planning(SD)

ERP

CIF

Supply Chain Execution

Production Planning (PP)

TransactionalData (real-time)

? Locations? Products? Resources? BoM & Routings?

Master DataTransactional Data(real-time)

? Stock? Production Orders? Confirmation? Goods Receipt? Purchase Orders? Sales Order?

(ERP to APO)

Transactional Data(real-time)

? Planned Orders? Stock Transfer Orders? Order Conversion? Sales Order confirmation?

(APO to ERP)


1. Introduction into SAP APO2. APO 7.0 and Roadmap3. SAP APO References & Analysts Reports

Agenda


Continuous Innovation Around a Stable Core

Stable core defined to beSAP ERP 6.0 today, extended tocore applications of SAP BusinessSuite in 2008

Leverage proven functionality

Continuous innovation delivery viaenhancement packages,selectively adoptable

Continuous service enablement

Uniform availability of industrybest practicesStable Core

(SAP enhancement package 1 for)SAP NetWeaver 7.0

(as foundation for SAP Business Suite)

SAP Business Suite

ERP6.0

CRM7.0

PLM7.0

SCM7.0

SRM7.0

Industries

SAP 2008 / Page 22

SAP Enhancement Packages for Applications


The implementation of SAP enhancement package 2 for SAPERP 6.0 was much easier than upgrading a full release. Weinstalled all the software components that we could get in orderto be open to implement further innovations at minimized costat any time.

Thomas Muhler, Technology Consultant,cormeta ag

Innovate -Just in Time

Stability and Access toInnovation activate newfunctionality on demand.

Cost reduction Lower effort to install

functional enhancements,ideally silent as part ofsystem maintenance

Easier testing with standardtest case templates

Within an extremely short timeframe, we managed to implementfunctional enhancements around Real Estate Management. Wewent live after only a few weeks.

Martin Kling, Head of Group Financials,TreuHandStelle GmbH

We were delighted that no side effects occurred at all outsidethe activated new functional capability. The EHP conceptallowed us to fulfill requirements years before we will start ournext release upgrade. The end-user reactions were very positiveand no critical issues occurred.

Stephan Polster, Project Manager,ThyssenKrupp Steel

We implemented enhancement package 2 in order to use thenew capabilities for Bank Relationship Management. No criticalissues occurred. The implementation was very easy.

Joerg Engel, System Engineer, Wuerth-Group

Benefits of SAP Enhancement PackagesFurther Customer Proof Points


Lack of Visibilitybeyond the four wallsAnticipating the next supplychain disruption is not possibledue to lack of visibility.

Fear of PoorCustomer ServiceInability to sense andrespond to real timedemand signals.

Rising Costs &RegulationsHave increased cost andchallenges of compliance andtransportation.

Globalization & OutsourcingHave resulted in stretched supply chains and increased risk. Timelyanalysis, response, and resolution of supply chain issues isimpossible due to lack of control.

Driving the SCM Solution Direction

Customer Supply Chain Challenges DriveStrategy


APO for ProcessIndustries? Resource Networks? Finite tank planning

Customer Supply Chain Challenges DriveStrategy SAP APO 7.0

VMI enhancements? Consignment Stock.

Enhancements in APODemand Planning? New forecasting algorithm forbetter use of POS data.? Better recognition of structuralchanges in the past

Characteristic BasedCross Location Planning? Enable CTM to usecharacteristics.? Enhance PP/DS to improve crosslocation planning

Customer ForecastManagement? Analyze & IntegrateCustomer Forecasts.




gATP enhancements? BOP enhancements? Allocations enhancements


APO for AFSIndustries? Aggregated Planning

Customer Supply Chain Challenges DriveStrategy SAP APO 7.01

Enhancements in APODemand Planning? Improved Chart Engine

Clear-to-Build? Enable an integrated APO SNCscenario to consider supplierconfirmation for planning




gATP enhancements? Sub-Items? Inconsistencies withDescriptive Characteristics? Correction report for Sales.? MATP & Remaining Qtys..? BOPIN enhancements? Performance Enhancements? MISL

This presentation is a preliminary version and not subject to your license agreement or any other agreement with SAP. This document contains only intended strategies, developments,and functionalities of the SAP product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that thisdocument is subject to change and may be changed by SAP at any time without notice. SAP assumes no responsibility for errors or omissions in this document.

Direct Shipment? Enable supply chain planningwith direct shipping to endcustomers from vendors andfactories


?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 handlingcosts by direct shipping to end customers from vendors and factories.

? Support of mid-term supply chain planning for third party orders considering forecastingcapabilities and finite capacities at the supplier.

VENDOR / FACTORYCUSTOMER- Value Added Services

and Customization- High visibility- High Collaboration

- Better Service- More efficient transportation

BRAND OWNER- Low costs of co-ordination- Low costs of DC space

Deliver direct to Customer DC or Customer Store

SAP APO 7.0 EhP1 - Planned EnhancementsDirect Shipment Planning / Third Party Order Processing

Sales Order Purchase Order



SAP APO 7.0 EhP1 - Planned EnhancementsPlanning and Collaboration Integration

Increase speed of information flow to achieve efficient execution using planning and collaboration

APOFinished Product Forecast

APOConstrained Supply Planning

(consider component supply constraints)Legend:OEM: Original Equipment ManufacturerCM: Contract ManufacturerCS: Component Supplier

Notes:ERP, APO, and SNC deployed at OEM.CM and CS use supplier view of SNC.Supported SNC Business Processes:? SNC Supplier Managed Inventory? SNC Order Forecast Monitor? Only Gross Demand Supported in this release

SNCReceive Component Demand

CS

APOUnconstrained Supply Planning

(generate total component demand)

OEM CM

SNCReceive Finished Product Demand

1. Finished Product Demand 2. Component Demand (and Stock)

3. Component Supply Commit

SNCReceive Finished Product Purchase Orders

(clear to build)

4. Finished Product Purchase Orders (clear-to-build signal)


SNCProvide Component Supply Commit

ERPFinished Product Purchase Orders

(output of a more realistic plan)

SAP 2008 / Supply Chain Planning with SAP APO / 29 SAP 2008 / Page 29

SAP APO 7.0 EhP1 - Planned EnhancementsgATP

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 onelocation.

? Inconsistencies with Descriptive Characteristics Correction report for Sales Orders and Deliveries, SDRQCR21, now will check and correct inconsistencies

with descriptive characteristics.? MATP & Remaining Qtys.

When creating the remaining requirement on component level of a MATP the checking horizon is used forcorrelating the results to header level .

? 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 a20-25% improvement.

? MISL enhancements (Multi Item Single Delivery Location) Validities on Products Exclusive Rules for Product determination Calculation profile on MISL-Group level



SAP Supply Chain ManagementResponsiveness combined with Operational Excellence

Composites

ERP SRM PLM

APODemandPlanning Supply

NetworkPlanning

PP / DS

GlobalATP TP / VS

EWM T MSNC

SCM InfrastructureEvent

Manager AIISCMBasis

DuetDemandPlanning

SCMAnalytics

PTA

Co-Innovation Ecosystem


How to put SOA to work in APO

1) Develop your Business Process Flow

3) Deploy the enterprise services as web services in theappropriate backend system(easily by just calling transaction WSADMIN)+enable services from other Non-SAP systems includedin the process

ERP SCM

Office

Mobile

Widgets

Forms

Web Browser

2) Discover enterprise services relevant for the processin the Service Repository:(Online reduced version via ES Workplace:www.sdn.sap.com/irj/sdn/explore-es)

4) Implement your business process flow within yourChoice of UI (connecting to the backend via theimplemented web services)


SOA Composite Example:SNP Master Data CockpitThe goal is to improve usability of creation and maintenance of master data,which is not created automatically in SCM via CIF. The automatization ofmany transactions and easy-to-learn User Interface of the cockpit reduceserrors and speed up the time spent on Supply Planning process. Theplanner can free up time to spend on more important planning activities.

ERP 6.0 SCM APO 5.1

Enterprise Services

Composite Application NW CE 7.1

Web Dynpro Java CAF

Technical Details:

Business Drivers? APO-SNP relevant master data cannot be

created automatically by CIF? APO-DP and APO-SNP master data is not

created in one-step? Customer-specific Planning Parameters are

missing? No multiple creation of master data objects

Solution Benefits? Improved data quality for Supply Planning? Enhanced Efficiency via planner-friendly User

Interface? Automatization of the multiple transactions

CreateCustomerLocationProducts

MaintainTransportationLanes

MaintainReplenishmentParameters

IBU: HighTech & CP company

? Composite application built with SAP NetWeaver CompositionEnvironment 7.1 SP 5

? User Interfaces built with Web Dynpro JAVA? Process specific business logic implementation with Composite

Application Framework (CAF)? Utilization of the SAP SCM APO and ERP MM business objects

through web service standard (Enterprise Service)? Based on SAP SCM 5.1 (APO, SNP and DP components). Use

of ERP MM is beneficial, but not mandatory

SNP Master Data Cockpit

Supply Planner


1. Introduction into SAP APO2. APO 7.0 and Roadmap3. SAP APO References & Analysts Reports

Agenda


APO CustomersCustomer Snapshot:

? 225 + Reference Customers? 2000 + Active Customers


Danisco Provides Quality Products at theRight Time and Place with SAP APO


Better Planning for More Efficient Productionwith SAP APO


ThyssenKrupp Electrical Steel ImprovesProduction Planning with SAP SCM


Sauer-Danfoss Improves CustomerSatisfaction with Lean and SAP Solutions


Business Transformation Study:Brown-Forman


Business Transformation Study:Conagra Foods


Analyst Quotes: Gartner Supply Chain PlanningMarketScope Evaluation

? SAP earned a Strong Positive rating in Gartners Supply ChainPlanning MarketScope for Supply Chain Planning.

? Strong Positive is the highest ranking that Gartner gives in theirMarketScope evaluations.

? If you are a Gartner client, we recommend that you visit Gartnerswebsite to view the report.

? Source: MarketScope for Supply Chain Planning: Process Automation, 2009 by Tim Payne,Gartner, April 28, 2009

The MarketScope is copyrighted 2009 by Gartner, Inc. and is reused with permission. The MarketScope is an evaluation of a marketplace atand for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined byGartner. Gartner does not endorse any vendor, product or service depicted in the MarketScope, and does not advise technology users toselect only those vendors with the highest rating. Gartner disclaims all warranties, express or implied, with respect to this research, includingany warranties of merchantability or fitness for a particular purpose.


Information

? Service marketplace for SCM: http://service.sap.com/scm? http://help.sap.com/? SCM Express (preconfigured PP/DS): www.sap.de/scmexpress (inGerman) or presentation in English: SCM Express


SAP SCM

Dr. Stephan Kreipl

[email protected]

www.sap.com/scm

Q & AThank you for your

interest!This presentation is a preliminary version and not subject to yourlicense agreement or any other agreement with SAP. This documentcontains only intended strategies, developments, and functionalities ofthe SAP product and is not intended to be binding upon SAP to anyparticular course of business, product strategy, and/or development.Please note that this document is subject to change and may bechanged by SAP at any time without notice.

SAP assumes no responsibility for errors or omissions in thisdocument.


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