Use of Advance Planner and Optimizer in entire Supply Chain

Prepared By:Arava Santosh kumar

Supply Chain ManagementSC:

The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage, through the end user, as well as the associated information flow both up and down the supply chain.

SCM:

Supply chain management is the integration of these activities through improved supply chain relationships, to achieve sustainable competitive advantage.

Advance Planner and Optimizer

Advanced Planner and Optimizer is designed to help a company to improve its production planning, pricing, scheduling, and product shipping. APO can be integrated with the SAP R/3 and legacy enterprise resource planning (ERP) systems in entire supply chain.

Purpose of APOSAP Advanced Planning and Optimization (SAP APO) offers a fully integrated pallet of functions that you use to plan and execute your supply chain processes.

SAP APO supports the following:

·  Business collaboration on a strategic, tactical, and operational planning level.

·  Co-operation between partners at all stages of the supply chain process; from order receipt, stock monitoring, through final shipping of the product.

·  Cultivation of customer and business partner relationships.

· Constant optimization and evaluation of the supply chain network’s efficiency.

Advantages of APO High performance using live cache 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.

Modules in APO

Demand Planning

Supply Network Planning

Production Planning & Detailed Scheduling

Global Available to Promise

Demand PlanningContents :

Demand Planning Tasks and Functions

Integration with Business Information Warehouse (BIW)

Forecast Toolbox

Life Cycle Planning

Promotions

Demand Forecast ToolboxUnivariate Forecasting

Moving Average

Models (Constant , Seasonal, Trend and Seasonal Trend)

Exponential Smoothing Seasonal Linear Regression

Holt-Winters Croston’s Method (for sporadic demand)

Casual Analysis

Multiple Linear Regression

Composite Forecasting

Weighted Average of multiple models

Life Cycle Management & Like Modeling

Aims of SNP Planning

SNP planning plans the mid to long term horizon. It creates a rough quantity basedcross-location production and distribution plan with individual rough bills of material(BOM) and routing.

The SNP BOM contains critical products that are produced on bottleneck resources andproducts with a long replenishment lead time.

SNP ensures that the right quantity is available on the right day without critical resources being overloaded. The smallest unit used for scheduling is days.

Performing of SNP Mid-to-Long term planning Strategies:

Infinite Planning:

Heuristic : Resources and material availability are not checked when creating planned orders, Stock transfers and purchase requisition.

Finite Planning:

CTM and Optimizer :

Simultaneous quantity and finite capacity scheduling:SNP resources and material availability are checked during creation of orders.

Production Planning/Detailed Scheduling

Contents :

Consumption of planning by sales orders for forecast-controlled products in make-to-stock and make-to-order production.

Simultaneous material and capacity requirements planning at operation level in the production plant.

Tools for production planning and production scheduling. Schedule optimization in PP/DS.

Transfer of planning results to the execution system.

Global Availability Check in APO Rules-based availability check (multi step availability check ) : Check of Multiple locations and products.

Better integration between sales and distribution and production : Triggering of production when there is no availability ( integration PP/DS).

Multilevel component and capacity check (real-time operation).

Check against aggregated, memory-resident data.

Adaptation of APO in Unilever

Weekly Activities Monday Activity

Load Sales/Explored History Load MSO Stocks Run weekly (Monthly Stat.) – Various forecast profiles Run Short term Macros

Batch Jobs

MSO ActivitiesWork on improving forecast accuracy

Monday pm

Monday am

Batch JobsShort Term forecast MacrosRelease forecast to SNPMSO Heuristics

Load SU Intransit Stocks

Tuesday Activity

Tuesday am

Batch Jobs

Load Intransits

MSO Activities

Finalize SNP forecast and Dependent Demand

Flow Thru Management

Repack Planning

Tuesday pm

Batch Jobs

Short Term forecast MacrosRelease forecast to SNPMSO Heuristics

Wednesday Activity

SU Activities

Rough Cut mid term production planFocus on first 26 weeksUse SU Alerts & Stock Projection Report

MSO Activities

Repack PlanningForecasting (DP Only)Master Data

Batch JobsActual/Planned DispatchesMSO HeuristicsDeploymentMSO AlertsDelete ResponsesRe-Run MSO Heuristics ( re-generate the Request)

Thursday Activity

SU Activities

Review MSO Alerts for Critical Stock IssuesAmend production plan in Short termFinish planning to 26 weeks

MSO Activities

Repack PlanningForecasting (DP Only)Master Data

Batch JobsLoad Actual/Planned DispatchesMSO HeuristicsDeploymentMSO Alerts

Friday ActivitySU Activities

Review MSO Alerts for Critical Stock IssuesComplete & send out “Communication File”Final adjustments to Production Plan

MSO Activities

Review Stock Projection Report for NON-IVMI sitesEngage in critical stock discussions with SUMaster Data

Batch JobsDelete ResponsesLoad Actual/Planned DispatchesMSO HeuristicsDeployment (Final delivery plan)

Order Transport for following week

MSO Alerts

Sunday Activity

House Keeping

Deletion of Live Cache Database

Deletion of all Database Sales Orders

SUMI

SUMI++ is a web based platform, that supports 31 SUMI MSO’s & 16 SUMI SU’s by providing visibility to stakeholders in the extended supply chain.

It promotes a shared understanding of product requirements, projected deliveries and shipment tracking.

Introduction:

Navigation SUMI:

Top left corner of the home page is a button labeled location and is called location selector.

Once appropriate location (MSO or SU) has been selected, all information viewed in system will be in context of that location.

Master Data :

Master data field in the home page of SUMI system has the following options:

Create, modify and block users New MSO and SU location creations New product creations (Portfolio) Create and modify unit of measures Sourcing Matrix Inbound & outbound connectivity Upload help & sample files Home page settings

Sourcing Matrix:

Sourcing Matrix field helps to maintain new relationships between MSO’s and SU’s as mentioned below.

MSO SU Process

APO MSO SUMI SU Order At MSO

SUMI MSO APO SU VMI

Process runs on

Wednesday AM

Tuesday PM

After maintaining the new relationship it should be activated. Products to be sourced between MSO and SU should be maintained in the active relationship.

Outbound and Inbound Connectivity:

Outbound connectivity for VMI process:• MSO Forecasts• MSO Stocks• MSO In transits• Dependent Demand

Outbound connectivity for Order at MSO process:• SUMI SU projected deliveries

Inbound connectivity for VMI process:• APO SU projected deliveries• SUMI Dispatches (Shipments)

Inbound connectivity for Order at MSO process:• APO MSO demands

Actions:

Actions field enable users to upload, download, view and delete data for the following• MSO requirement at MSO • MSO Stocks (VMI)• MSO Forecasts (VMI)• Dependent Demand (VMI)• Projected Deliveries

Planning: To view planning by start date for particular MSO To search orders with brand and category Planning Status

Shipments:Shipment logTo search shipmentsShipment report

Interface between SUMI to APO:

• On Tuesday evening Intransits, MSO forecasts, MSO stocks and Dependant demands are transferred from SUMI MSO to APO SU through message broker.

• On Thursday evening SUMI SU send their responses to APO MSO through message broker

Interface between APO to SUMI:

• On Wednesday morning APO MSO send their demands to SUMI SU through message broker

• On Friday and Saturday evening APO SU send their responses to SUMI MSO through message broker

As in traditional supply chains evolve into supply networks, collaboration becomes increasingly critical. For manufacturers and their suppliers, successful collaboration starts with making sure that everyone has clear visibility into inventory information, so suppliers know what their customers need and when they need it.

Often, however, that visibility is not easy to achieve. Supply networks are typically complex and involve a wide range of suppliers, making it difficult to share timely inventory information.

Inventory Collaboration Hub (ICH)

Benefits of ICH

Interms of Cost:

A reduction in raw-material inventory buffers. Lower unplanned overtime as well as costs for setup and breakdown.Reduced administrative costs.

Interms of Customer Service:

Reduced risk of stock outs.Lower risk of production delays.Increased accuracy in production and delivery dates.

Supports network-oriented planning and optimization. Provides flexible and adaptive advanced planning capabilities that support the full spectrum of planning requirements. Integrates and synchronizes planning and execution information for timely decision-making. Integrates supply planning with other network processes (e.g., CRM, SRM, PLM).

Enables manufacturers and their suppliers to collaborate on the right level of inventory to meet production schedules. Provides suppliers with complete visibility into the inventory they supply to each manufacturing plant. Integrates seamlessly into any manufacturer's existing back-end transaction and planning system.

SAP APO

SAP ICH

Thank You