SAP APO Overview Vijay Job,SCM Lead Consultant. Contents Supply Chain Management Why SCM over and...

SAP APO Overview

Vijay Job,SCM Lead Consultant

ContentsSupply Chain Management Why SCM over and above ERP Advantages of APO APO Architecture APO Components What is live Cache Data Mart Configuration InfoObjects Data Storage in APO Planning Architecture Master Planning Object Structure

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The Supply Chain: from Original Supply to Final Consumption

Increase Customer Responsiveness at Least Cost

Manufacturing DistributionSupplier

INFORMATION FLOW

Retail Outlet Consumer

Supply Chain Optimization

CASH FLOW

Transfer Transfer Transfer Transfer

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Supply chain management (SCM) is the process of - planning, implementing and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible.

Begins and ends with the customer.

SCM spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.

Coined by consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982.

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Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible.

Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. It includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers.

Supply Chain Management integrates supply and demand management within and across companies.

Innovation….Companies today are being forced to adapt to changes in the marketplace in order to preserve profitability Changing consumer buying patterns

Increased number of SKUs Evolving trade channel complexity

Polarization of markets Shortened cycle times Shift in balance of power

Changing brand loyalty / retailer exerting greater influence

Increased demand for value added programs VMI / custom packs

Dramatically lower inventory levels and reduce working capital

Improved customer service More accurate forecasting Lower cost sourcing of finished goods

and raw materials Optimizing decisions in an increasingly

complex business environment Reduce manufacturing cycle time Deliver reliability Responsiveness/ flexibility

Supply chain activities can be grouped into:

Strategic – Network optimization, partnerships, product design, IT infrastructure, Make or Buy decisions.

Tactical – Sourcing, production & inventory decisions, Transportation strategy, benchmarking with competition

Operational level – Daily production & distribution planning, master planning, production scheduling, forecasting and demand management.

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APO Advanced Planning and Optimization is the planning component within the mySAP SCM solution. APO is an acronym for advanced planner and optimizer. This is a large component of sap's new dimension products.

APO is an entire suite of supply chain planner applications that increase overall knowledge of the supply chain and provide forecasting, planning and optimization.

APO is not a standalone application and requires a backend erp system such as SAP R/3 for the execution. SAP R/3 communicate with APO using the Core interface Functionality (CIF) which supplies SAP APO with the master and the transaction data in the real time

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High performance using liveCache technology Global server: integrates multiple OLTP systems Collaborative planning via the internet Simultaneous material and finite capacity

requirements planning Cross-plant optimization of the resource load Sequence and setup time optimization of orders Transportation optimization with route planning Evaluation and analysis of orders Seamless integration between APO and R/3

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First Demand Planning - Of course R/3 provides Demand Management and also Statistical Forecasting tools. However the architecture in APO-DP is totally different and based on characteristic value combinations with liveCache for very fast data access. This allows easy aggregation and disaggregation. Moreover once you create the CVCs they can be modified easily with the associates transaction data using Realignment. The macro functionality in DP provides quick and user-friendly computations on the transaction data. Moreover the Statistical Forecasting toolset in APO-DP is more comprehensive to that in R/3. Not sure if MLR is possible in R/3. Promotion planning and Life-cycle planning are some nice features in APO-DP.

Supply Network Planning in APO can be mapped to DRP in R/3. But then APO offers planning cross-plant for a complete supply chain network. SNP in APO offers basic Heuristic-based planning (quite similar to R/3 DRP) along with advanced planning features like Optimization and Capable-to-Match (order-based planning for prioritized demand matching). Moreover Deployment and Transport Load Builder functionalities provides automatic planning in case of short supply followed by consolidation of deliveries according to transportation capacities.

Simultaneous material planning and finite capacity planning of production, storage and transportation.

Planning of critical components that use bottleneck resources.

Cross plant optimization of resource utilization.

Prioritization of requirements and receipts .Detailed distribution planning.Collective conversion of stock transfer

requisitions.Decision support with What-If.Optimizes plan in line with business goalsSeamless integration between APO and R/3

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APO PPDS is very close to R/3 Production Planning functionalities and relies on the same set of master data transferred from R/3 to APO via CIF. However the multitude of Heuristics (both Production Planning and Scheduling) provides automation and gives more time to the Planners and Schedulers in focusing on more important tasks. The Detailed Scheduling functionality especially Planning Board in APO is a rich graphical and intuitive application for carrying out sequencing of activities. Likewise the Product Planning Table and Product Overview features of APO provides a cockpit view of the Production Plan and allows drilling down to exceptions.

Cross plant planning: Production locations are connected, Products und Assemblies planned together

Simultaneous material and capacity requirements planning

Multi level capacity requirements planning; bi-directional propagation of order changes.

Extensive detailed scheduling and optimization possibilities

Global multi-site real time ATP. For production, ATP utilizes PP/DS

functionality to check against the actual order network, thereby including all capacity constraints.

Applying rules-based ATP is the basis for checking for alternative products in alternative locations as well as for considering production across all product levels.

Integration with legacy system.

OLTP

R/3 R/3Legacy

OLTP

Non R\3

OLTP

Non R\3

OLTP

Application Link Enabling

Model Generator, Mapping, Connectivity

BW

APO

Solvers

APO

liveCacheliveCache

Demand

Planning

Detailed

Scheduling

ProductionPlanning

SupplyNetworkPlannin

g

AvailableTo

Promise

SC Cockpit

BWLIS

SC Manufacturing / Procurement

APOAPO

R/3R/3

Flexible Planning

Standard SOP

Demand Planning(DP)

Sales Global Available-to-Promise (Global ATP)

Supply NetworkPlanning (SNP)

Production Planningand Detailed

Scheduling (PP/DS)

Material RequirementsPlanning (MRP)

Demand Management

CapacityRequirements

Planning (CRP)Transportation

Planning & VehicleScheduling (TP/VS)

Demand Planning (DP) The Demand Planning component is a toolkit of

statistical and collaborative forecasting techniques that helps you create accurate forecasts and plans

Supply Network Planning (SNP) Using the Supply Network Planning and

Deployment component you can develop a model of your entire supply network and plan based on all its constraints

Production Planning / Detailed Scheduling (PP/DS) This component can generate production plans

and schedules that optimize resources

Global Available To Promise (GATP) The Global Available To Promise component uses

a rules based strategy to ensure you can deliver what you promise to your customers

Transportation Planning / Vehicle Scheduling (TP/VS) This component helps you to select the optimum

transportation route and schedules vehicle resources

Supply Chain Cockpit (SCC) The Supply Chain Cockpit is a graphical

instrument panel for modeling, navigating, and controlling all the links in the supply chain.

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Demand PlanningPlanner’s KnowledgeTask-specific planning tools Flexible views Graphics Promotional planning Life cycle management Cannibalization Accuracy reporting

Statistical MethodsMulti-model approach Average models Exponential smoothing Causal factors Trend dampening Model combination Pick best

Demand Planning Data Mart

Anticipation ofFuture Demand

Information

Collaborative forecasts

Order & shipmentactuals & history

Cost

POS data

Nielsen / IRI data

...

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S u p p l i e r s

C u s t o m e r s

D i s t r i b u t i o n C e n t e r s

M a n u f a c t u r I n g U n i t s

Key Processes - Distribution Planning

Supply and Distribution Network Planning

Supply Network Planning and Optimization

Supply/Demand balancing

Vendor Managed Inventory (VMI)

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SNP Distribution NetworkCustomerdemands

DistributionCenters

Plants

Transport Order Production Order

Suppliers

Available to PromiseGlobalRules Based

Product Allocation Material Substitution Vendor Managed Inventory

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What is liveliveCache ?Cache ?

Main objective = higher performance:

Performance critical routines (in C++) are running in address space of liveliveCache Management System Cache Management System

=> no heavy data transfer between application and data storage

> 1 ms

Application

Data Storage

< 10 µs

liveliveCacheCache

ApplicationApplication

Data StorageData Storage

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Application Server

ABAP-Application Programexec sql.

Execute procedure “Schedule_order”( OUT : var1,

IN : table1,IN : var2)

endexec.

liveCacheliveCache

Optimized Method CodingSchedule_order

Optimized Data Structures

liveCache Technology

Avoid disk I/O through shared, buffered data

Hold all application data in memory

Address large memories

Ready to run on 64-bit systems

Optimized data structures

Support application-specific data structures (e.g. store BOM as a tree rather than a relational table)

Built-in business functionality

Run application logic where the data is stored

Aggregate OLTP database information in main memory

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Live cacheTime series objects

Live cacheOrders

Info Cube

•Data Stored in Bucket with no reference to

order

•Storage method suitable for tactical planning

•Usual method for saving current DP data

•Data Stored with reference to the orders

•Storage method suitable for operative

planning

•The data is stored in an Info cube

•This storage method is suitable for data

backups, old planning data and actual sales

history

Info Object within BW

Business evaluation objects are referred to as the Info objects in the BW

Info objects are divided into :-- Characteristics

- Key figures - Units - Time Characteristics

Info objects have three basic functions Component of an Info source, as a field of a structure Formation of an Info cube by representing key figures and

characteristics Complete an info source with Master data and Hierarchies

Planning objects are called as characteristics

Characteristics are discrete names Standard characteristics are predefined

in APO Custom characteristics can be created

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Data is represented as a numerical value either a quantity or monetary value (Forecast, Safety Stock, etc..)

Different data storage can be used to store key figure

Standard key figures are predefined in APO

Custom key figures can be created

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Star Schema Properties

1. One business process is modeled at a time

2. Data storage optimized for reporting by “Star Schema”

3. Related Characteristics structured together in

Dimensions

4. The Key Figures, KPI’s and other calculations form the Facts

5. This structure is the same for all Application Areas

Example: Sales Data Model

Queries that can be addressed are:

• Who did we sell to?

• What did we sell?

• Who sold it?

• Sales quantity?

• Who is our competitor?

• When did we sell?

• Sales comparison

• Trends

• Reasons for Rejection

Info Objects

Source SystemR/3 Excel

Info Source

Update Rules

Metadata

Transfer Rules

BWLegacy

Info Area

Info Cubes

Catalogs Key Figures

Characteristics

OLTP System 1

InfoCubes

Communication structure

Transfer Structure

Extract Source Structure

Transfer Structure

Transfer Structure

Extract Source Structure

Transfer Structure

Transformation rules

Update Rules

APO Server

Staging Engine

OLTP System 2

InfoSource

Master Planning Object Structure

Planning Area 1 Planning Area 2 Planning Area n

Planning Book 1 Planning Book 2…

Data View 1

Data View 2….

Contains plannable characteristics for one or more planning area

Specific characteristics are required for Supply Network Planning

Structure on which all other planning object structures are based.

Prerequisite for being able to create planning area

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Pre-defined InfoObject can automatically be added

Map existing InfoObjects to Planning Object Structure

Central data structure Groups together parameters that define

the scope of planning activities Determines where and how planning

results are saved Contains Characteristics and Key Figures Maps where key figures for the planning

area are stored (InfoCube, Orders in liveCache, Time Series in liveCache

Planning Areas can be relevant for DP and SNP at the same time

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Planning Area Administration

Central point of control:

Planning Area configuration

Key Figure Characteristic Attribute Master Planning Object

Structure Aggregate Storage Buckets Profile Planning Area