Product SAP ERP Release 6.0 SAP SCM Release 7.0 Global Bike company Level Undergraduate Intermediate Version 3.03 V1.0 Authors Marius Talos Marc Savard Amar Ramudhin V2.0 Revisions Mark Springer V3.0 Revisions Mark Springer

MOTIVATION This course is specifically designed for UA faculty members who want to introduce SAP Supply Chain Manager (SCM) in a supply chain management course. This section will focus on supply chain planning with the different components of SCM.

PREREQUISITES Required Knowledge

o Basic knowledge of SAP ECC Master Data

Recommended Knowledge o Basic understanding of the

SAP ECC Planning process and related master Data

NOTES Students must have complete section 1 and 2 of this course before doing this section

Supply Chain Management with

Global Bike Company using ERP and SCM

Section 3- Supply Network Planning in SCM

In this module, students use the data transferred from ERP system, to execute planning

in SCM with multiple heuristic methods and Optimizer.

2

Contents

1.  SUPPLY CHAIN MODELING .................................................................................. 4 

1.1  Global Bike Company (GBC) Supply Chain ................................................................................................. 10 

2.  TRANSACTIONAL DATA USED IN SUPPLY CHAIN PLANNING ....................... 26 

2.1  Interactive SNP Planning ................................................................................................................................ 31 

2.2  Selection profile ................................................................................................................................................ 48 

2.3  Review forecast values for production ........................................................................................................... 60 

3.  PLANNING AT THE PLANT LEVEL ..................................................................... 62 

3.1  Run SNP Heuristic – Location at the plant level ........................................................................................... 62 

3.2  Location Heuristic for Multiple Materials on Multiple Levels .................................................................... 80 

3.3  Run SNP Heuristic – Network at the plant level ........................................................................................... 91 

3.4  Capacity Levelling .......................................................................................................................................... 104 

3.5  Interactive Recalculation of Dependent Demand ........................................................................................ 109 

3.6  Review Production Plan in Product View .................................................................................................... 112 

4.  NETWORK PLANNING WITH HEURISTIC......................................................... 119 

4.1  Network plan with Multilevel Heuristic ....................................................................................................... 123 

4.2  The planning Board ....................................................................................................................................... 126 

5.  SNP OPIMIZER ................................................................................................... 136 

5.1  Create Demand ............................................................................................................................................... 136 

3

5.2  Adjust Master Data ........................................................................................................................................ 138 

5.3  Define SNP Optimizer Profile ....................................................................................................................... 140 

5.4  Run Optimization ........................................................................................................................................... 143 

6.  CHECK THE RESULTS IN SAP ERP ................................................................. 156 

4

Supply Network Planning – SNP The purpose of the next modules is to provide you with an overview of Supply Network Planning’s (SNP) functionality and processes. You will be able to understand the fundamental concepts of Supply Network Planning and learn how to set-up a supply chain network. You will also learn how to perform SNP runs.

1. Supply Chain Modeling This lesson will help you get an overview of Supply Network Planning (SNP). You will learn about the advantages of SNP and the need for managing the supply chain master data objects. You will also learn about the working of master data objects. The benefits of Supply Network Planning with SAP SCM are as follows:

o Cross-plant medium-term rough-cut planning o Simultaneous planning of procurement, production and distribution o Planning of critical components and bottleneck resources o Simultaneous material planning and finite capacity scheduling of production, storage, and

transportation resources o Cross-plant optimization of resource utilization o Prioritization of demands and receipts o Collaborative supply planning over the Internet

The Supply Chain Supply chain planning manages the flow of material and information through a network of suppliers, manufacturers, distributors, and customers. For effective Supply Chain Management (SCM), this flow must be well-coordinated and integrated within a company and across company boundaries, on a local and global scale. You can use SAP SCM to link several execution systems to one SCM planning server for cross-system planning of procurement, distribution, and production. This integrated planning enables you to:

o Reduce the costs for sourcing products and raw materials o Improve customer service o Dramatically reduce on-hand stocks o Make better use of company resources

5

Figure 1 The Supply Chain: From Supplier to Consumer Supply Network Planning (SNP) integrates purchasing, manufacturing, distribution, and transportation so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of one global and consistent model. Various planning methods can be used to create feasible cross-location plans for the flow of material along the supply chain, taking into account constraints and penalty costs. The result is coherent purchasing, production, and distribution decisions, reduced inventory levels, and improved customer service. The possible constraints are material availability and availability of work center, storage, transportation, and handling capacities. Master Data in Supply Chain Even when using an SCM system for supply chain planning, master data is created in the connected execution systems (for example, SAP ECC), modified, and then transferred to SCM. The execution systems, therefore, are the dominant systems for the master data. Only master data that exists purely in SCM and which does not exist in ECC is created in the SCM system. In SAP SCM, you define transportation lanes between the individual supply chain locations, such as plants and suppliers, which, among other things, define the means of transport and the shipment duration in the supply chain. In ECC, external procurement relationships can be defined for specific materials using special procurement types and transferred to the transportation lane in SCM. The supply relationship between a vendor and a plant is stored in SAP ECC in the form of a purchasing info record, scheduling agreement, or contract. When you transfer these external procurement relationships to SCM, they are displayed as external procurement relationships for the transportation lane.

6

The source list for source determination is not transferred to SCM, and so the selection of suppliers using the source list still takes place in ECC.

Figure 2 Master Data Objects in the Supply Chain APO Core Interface (CIF) Data transfer between the ECC and SCM systems is defined and controlled using the APO Core Interface (CIF). CIF is the central interface that connects SAP SCM to the existing SAP ECC system environment. It is available to the ECC systems through a plug-in. In the APO Core Interface you select the objects that you want to transfer to SCM via so-called integration models. Only the planning-relevant parameters from the complex dataset of SAP ECC are transferred to SAP SCM. The APO Core Interface is used for both initial data transfer (initial transfer) and change transfer (transfer of data changes) to SCM.

7

Figure 3 Master Data Objects of the APO Core Interface The active model and version 000 The master data transferred from ECC is assigned automatically to the active model 000 in SCM. The active model thus represents the supply chain in SCM. In addition, in SCM you need to maintain the means of transport in the transportation lanes as well as quota arrangements, since this information cannot be transferred from ECC. If you also want to plan production in SNP, you need to generate SNP objects that group the information about the components and resources to be planned from the ECC bills of material, work centers, and routings. The model represents the master data of the supply chain and consists of individual nodes (locations) and links. The transaction data for the master data of the model is stored in versions of the model. In SCM, you can create and manage different versions of a model for simulation purposes. However, for the active model (000) there exists only one active version (000) which exchanges transaction data with the connected execution systems. Inactive models are only used for strategic planning to, for example, examine the effects of new locations or modified transportation lanes. The model is the basis for all SCM planning functions and covers the entire supply chain network. The supply chain model contains all master data such as locations, resources, products, transportation lanes, etc. You can view and maintain the model using the Supply Chain Engineer. Master data, such as locations, products, resources, and demand plans transferred from OLTP systems, is automatically assigned to model 000. You must explicitly assign any master data that you create in SCM to the model. Versions contain the version-specific master data of the model and transaction data. For simulation purposes, you can change the master data of the model in different versions. For example, you can define

8

that a resource is available for 8 hours in version 000 but for 16 hours in version 001. Versions are uniquely assigned to one model within the entire system. Models and versions can be copied. From SCM, transaction data can be copied from an inactive version to the active version; the integration with the ECC systems (CIF) must be cancelled first. Transaction data in versions of different models cannot be copied.

Figure 4 Master Data Integration Supply Chain Engineer You use the Supply Chain Engineer (SCE) to create your supply chain model. The SCE allows you to analyze and modify a model. The SCE gives you an integrated display of the master data for which an SNP planner is responsible. The master data of the supply chain can be queried here. For example, you can request a list of all the products assigned to a specific location in your model. At the same time, you can add products to this location or make changes in the location master. However, maintaining object selections (work areas) is time-consuming, so in fact SCE is seldom used. Since your supply chain normally includes thousands of products, bills of materials, and routings, you need a filter for the SCE so that you can restrict the model display to just those objects for which an SNP planner is responsible. This filter is referred to as work areas. The work area is used exclusively as a filter to display objects in the Supply Chain Cockpit (SCC) and SCE.

9

Figure 5 Supply Chain Engineer (SCE) The Supply Chain Cockpit (SCC) allows planners to make an integrated analysis of transaction data in the supply chain. The SCC allows the evaluation of planner-specific exception messages (alerts) and partial scenarios (for example, individual regions or product lines). These evaluations, however, are normally performed directly in the planning table, in the Alert Monitor, or using the tools of the SAP Business Information Warehouse (BW), so SCC is used even less frequently. Together with the planning table, the Alert Monitor is an essential tool for the SNP planner. It gathers together the exception messages (alerts) and processes and prioritizes them according to user. The SNP planner is thus informed about problems with the plan and can intervene accordingly.

10

Figure 6 SCM Maintenance Tools and Reporting Tools 1.1 Global Bike Company (GBC) Supply Chain In this section we will review the model we created in Supply Chain Engineer (SCE) in Section 2. To have an overview of GBC Supply Chain follows the menu path: Menu path: SAP Menu – APO – Master Data – Supply Chain Engineer – Maintain Model Enter: Model – 000 Work area – ##_WK_MOD_000 And click on the Change button.

11

The network of the GBC is displayed.

To review the objects defined in the network, (under the graphic) open the trees at the bottom of your screen for each object defined: plants, distribution centers, customers, vendors, transportation zones. Review the objects and then press Location Products button.

12

13

A list of materials (finished products, semi-finished products and raw materials) defined at the locations level is displayed. Press Resources button.

In the plant there are three work centers. Press Production button.

The PDS which was transferred from ECC system to model 000. When we will plan the network the system will take in consideration automatically the PDS defined in our plant. Press Transportation Lanes button.

14

The existing transportation lanes in the model are displayed. They are characterized by a start point (Source Location) and an end point (Destination Location). Press again the Location button.

One nice feature of SCE is that we can navigate and change the objects directly from the model. As an example of this, let’s review the characteristics of the plant. Open the plants tree and then double click on the plant DL##.

The display mode of the location DL## is displayed. Take a look at the general data and then click Address tab.

15

16

The address of our location is displayed. Click Back to return at the SCE screen.

Now we will display the quotas defined at the plant level (DL##). In the menu bar follow the path: Model Objects – Location – Quota Arrangements – Display Incoming Quota Arrangements

17

18

The products defined in the plant are displayed. Press Total Quota Arrangements button.

The quotas for each material defined at a partner are displayed. Click Back .

Click Back to get to the SCE (Supply Chain Engineer) interface.

19

In the model we have defined the means of transport by truck. To review the means of transport, in the menu bar follow the menu path: Goto – Means of Transport

Select ##USA and the press Where Used icon.

20

The means of transport is assigned to all transportation lanes created within the USA. Click Enter to close the popup.

Click Cancel to close the Means of Transport Window.

21

Click on the Location Products button to check the products which are defined within a location. The list of products is displayed. To check the finished product DXTR1000 at the level of the plant DL## – USA double click on it.

Now you have direct access at the properties defined of the selected product. Open the list (on the right side). Select PP/DS view.

22

23

Various planning parameters are defined in this view. In the section Order Creation, the Plan Explosion is 5 – Production Data Structure generated from the ERP system. In the section Horizon the Opening Period is 1 days. Opening Period is a product-specific time period during which a planned order or a purchase requisition can be converted into a manufacturing order or a purchase order. It is basically a buffer period for the planner; the order is “open” before it needs to be started so the planner can convert the plan to an purchase or manufacturing order before its necessary start date. The PP/DS Planning Time Fence is 7 days - Period during which planning is fixed for the product for the following Production Planning and Detailed Scheduling (PP/DS) procurement planning functions and heuristics. Click Back to the SCE interface.

24

25

Essentially all of the master data elements transported from SAP ERP can be investigated in the Supply Chain Engineer. Take some time to investigate further on your own. When you are done, click on the

Exit button to return to main menu.

26

2. Transactional Data used in Supply Chain Planning This lesson will help you to get an overview of the transactional data used in Supply Network planning. You will also learn about the process for transition data integration. Supply chain planning is based on master data, for example work centers. The result of this planning is transaction data, which is used to plan for procurement. The planning process starts with planned independent requirements and/or sales orders. These planned independent requirements represent the expected demands in a distribution center or a sales center. Independent requirements can also be created directly for an individual production plant. You use the network to plan how to meet these independent requirements. These requirements are met either by stock transfer, in-house production, or external. Stock transfers are used to model goods movements, planned orders, and production orders are used to model in-house production, and purchase requisitions and purchase orders or scheduling agreement releases are used to model external procurement. Starting from a demand plan, SNP determines a medium to long term plan to deliver the estimated sales volumes. This plan includes the quantities that must be transported between locations, for example, distribution center to customer or production plant to distribution center and the quantities to be produced and procured, taking available capacity into consideration. Supply Network Planning (SNP) planning creates planned orders, purchase requisitions, and stock transfers that you can transfer directly to the connected OLTP systems.

Figure 7 Transaction Data Objects in SC

27

Planning Table The planning table is divided in two parts. On the left side there are four sections:

o Selection window – to select the objects (locations, products, resources, etc.) o Selection profile – to save your selected object in your profile ID o Planning book – to select the planning book and views o Macro – for each planning table we can create macros to generate alerts

On the right side we have the planning book. The planning book is used as an interactive planning tool in APO. A planning book contains one or more data views. Data views control the layout of the planning table and are the SNP planner’s most important tool to create, analyze and modify the planning data. Data views predefined by SAP for the standard planning area are provided as a template.

Figure 8 Planning Table in SNP For our purpose, we will use two data views predefined by SAP: SNP94 (1) for Planning and SNP94 (2) for Capacity check. The planning book combines characteristics and key figures of the planning area that can be used in the data views. The planning book, therefore, is a preselection of characteristics and key figures. The characteristics define the master data like products, locations and the key figures define the transactional data like forecast, sales orders, etc.

28

Figure 9 Planning Books and Data Views Supply Network Planning Heuristic In this unit we will identify the steps in the SNP planning process as well as the steps in the heuristic process flow. You will identify the master data objects and parameters that are used in the heuristic run and influence the results. You will execute each heuristic planning method and analyze the results of each. In addition, you will identify the scheduling parameters that influence the scheduling of individual objects. Then you will check and level the capacity on individual resources to ensure a feasible production plan. SNP Heuristic The SNP heuristic plans the constant flow of material throughout the supply chain and gives you an overview of the products to be procured or produced at each location, in the form of long-term planning. Since the SNP heuristic schedules infinitely, there is no guarantee that the generated SNP planned orders are feasible. If capacity overloads occur in planning, it can be managed in the context of a repair-based planning process with the help of capacity levelling. Using deployment and the Transport Load Builder (TLB), the actual quantities of stock to be transferred are determined for the short-term. Heuristic processing groups all existing demands for a given product at a location into a total demand per period. Next, the heuristic run uses the lot-sizing procedure and quota arrangements for each source to determine the valid sources of supply and the quantities to be procured. These demands are then passed through the supply chain. If you perform the SNP planning run using the SNP heuristic, SNP optimization, or Capable-to-Match, you obtain a medium-term procurement, production, and distribution plan.

29

The final SNP plan consists of purchase requisitions, SNP stock transfers, and SNP planned orders. The SNP stock transfers use the planned independent requirements to define the total demand for Production Planning and Detailed Scheduling (PP/DS) in the production horizon. PP/DS then uses these PP/DS planned orders to create a feasible production plan. After the production planning is complete, the deployment run plans the SNP quantities of stock that can actually be transferred based on current receipts and demands. The TLB run groups the deployment stock transfers into Transport Load Builder shipments and generates executable stock transport orders in the OLTP system. You can manually create stock transport orders for deployment stock transfers that could not be taken into account during the TLB run due to specified threshold values.

Figure 10 The SNP process flow The Heuristic performs the following functions:

o Execute cross-plant planning of receipts to cover demands o Integrate purchasing, production, and distribution in one consistent plan o Model the entire supply network o Synchronize activities and plan the flow of material through the entire supply chain

Figure 11 shows an example for the heuristic:

o The system determines the sequence of the locations to be planned and starts with the location that only has inbound transportation lanes.

o There is a demand at the customer location. The net requirements calculation does not find any receipt elements to cover the demand at this location.

30

o The product is procured externally. The system analyzes the possible transportation lanes and comes to the distribution center.

o As there are no receipt elements at the distribution center either, the heuristic runs a check using the possible transportation lanes and arrives at the plant.

o There are also no receipt elements available at the plant, and the product is produced in-house, so the SNP PDS is exploded and a planned order is created for the finished product with dependent demands created for the components.

o The components are then procured using the possible transportation lanes and quota arrangements or priorities.

Figure 11 Heuristic scenario You can choose from the following three interactive methods of heuristic planning: The location heuristic You select a location-specific product. The heuristic is only run from the selected product in the location on one level. This means that receipts are only planned for this location product. The network heuristic You select a location-specific product. The heuristic method plans all locations and it makes no difference which location you selected, because the system defines the sequence of locations internally. The multilevel heuristic You select a location-specific product. The sequence in which the locations are planned is determined automatically for each product. In addition, all components of the selected product are planned. This corresponds to a multilevel cross-plant MRP run.

31

2.1 Interactive SNP Planning To plan with the interactive planning book we need to do some settings before. We will add in the selection window of the planning book some selections criteria. The selection criterias are for location products (finished products, semi-finished products and raw materials) and resources. To do this follows the menu path in SCM system: Menu path: APO – Supply Network Planning – Planning - Interactive Supply Network Planning If you get this message, confirm it by clicking Yes.

Similarly, if you get this message enter your planning version as 000 and click Execute.

Again, if you get this message click Yes.

32

Now we are in the main planning book view. We have to select the data that will populate the planning

table. Click on the Selection window icon in the top left section (SHUFFLER).

Select APO Location Product in the top rightmost field.

33

34

APO Planning Version 000 is used by default by the system. Select APO Product from the drop down

list of the second line. Open the multiple object selection for product.

Enter the following finished products: DXTR1000 and DXTR2000 and click Execute.

35

Now select APO Location for the third line, and click on the yellow arrow to the right.

Enter DL##, MI##, and SD## as the location and click Execute.

36

Click on Save selection .

If you get this message, click Yes.

Enter a description like- ## Finished Products and click Save

You will get this message:

37

Click on Enter in the view Object Selection.

Now in the selected objects window you have a list of locations where the products DXTR1000 and DXTR2000 are defined.

Click again on Selection window icon in the top left section (SHUFFLER).

38

We will create a filter for the semi-finished products. Open multiple object selection for product.

In the view Select Single Values, delete the finished products DXTR1000 and DXTR2000. Click tab Select Single Values. Enter: TRWA1000 and then press Execute.

39

Select APO - Location from the drop down list of the third line. Enter DL## for location. Click Save.

Enable radio button Create new selection. Enter name: ## Semi-Finished Products and click Save icon.

You will have this message: . Click Enter.

40

Now you have a list of locations where the semi-finished products are defined. Select again the icon

Selection window .

We will create a filter for the raw-materials. Open multiple object selection for APO product.

41

42

Enter the purchased parts: TRTR1000, TRTB1000, TRWH1000, HXNT1000, LWSH1000, BOLT1000, TRFR1000, TRFR2000, DGAM1000, TRSK1000, TRHB1000, PEDL1000, CHAN1000, BRKT1000, WDOC1000, PCKG1000 in the Single Value view. Select Execute.

Click Save.

43

Enable radio button Create new selection. Enter the name: ## Raw Materials and click Save.

You will have this message: Click Enter.

Now you have a list of location where the raw-materials are defined. Another data view has to be created to control the resource utilization during the planning procedure.

44

Select again the icon Selection window .

Choose in the drop down list APO – Resource.

45

As second criteria select APO – Location. Enter plant DL## as the Location. Save.

Check radio button Create new selection. Enter (Change) a description ## Resource and click on Save.

You will have this message:

In the initial screen of object selection, click on Adopt .

46

The three workcenters are displayed. Another data view has to be created to control the transport process

during the planning procedure. Select again the icon Selection window .

Choose in the drop down list APO Transportation Lane. For the second full line, select APO Source Location. For the source location, enter DL##. Click on Save.

47

Enable the radio button Create new selection. Enter the name: ## Transportation Lanes. Save.

You will have this message: Click Enter.

48

The transportation lanes from the plant to the customers and DCs are displayed. The means of transport assigned to transportation lanes are displayed too.

2.2 Selection profile In the next step we will assign our selections to our own profile. For this we must define a Selection profile. Under the selection window, click on the Selection profile bar.

49

The window Maintain Selection Profiles for Users opens. Search in the right section under Selection for all of the selection profiles that you just created. Select them all with the help of Ctrl key and then drag and drop them on your user folder in the left section.

50

At the bottom of the popup, click on Save then Copy .

51

In the selection profile view, five selection profiles are displayed. Under the Selection profile section another section is available – Planning Book/Data View. In this section the planning book 9ASNP94 (Standard SAP Planning Book) is defined with two separated views: SNP94(1) – SNP Plan and SNP94(2) – Capacity Check Double click on SNP Plan.

52

The key figures defined for this view are displayed. If you double click on Total Demand and Total Receipts key figures. Additionnal key figures will by displayed.

To switch to the CAPACITY CHECK view double click on it.

In the right side there is two sections. The first section (upper section) is defined for the capacity plan view – available capacity, capacity levelling.

The second section (bottom section) is used to show the quantity planned.

53

Switch again to the SNP Plan view by double clicking on it.

In the selection profile double click on ## Finished Products.

The location products are shown in the shuffler (the upper left section). Double click on product DXTR1000, Location – DL## in the shuffler.

With the icon “Switch shuffler on/off” on the upper left corner of the screen you can extend the table view.

54

Double Click on Total Demand and on Total receipts

to see the details of demand and receipts. Total demand is the total sum of the demand key figures. A total receipt is the total sum of the supply key figures. Only the related data is loaded into the scheduling section on the right. Your forecast is in your SNP Plan. The time periods are days for the first two weeks (10 working days), and then switch to weeks. Since we have no forecast until 2 months into the future, you will have to scroll to the right to see your first forecast. The weeks are numbered sequentially. The first forecast below appears in week 01/2012.

Since we forecasted by months, it would be useful to see the plan in monthly time buckets. In the

Planning Book/Data View window click on the Periods Icon

55

56

Check Current Settings and search for the TB profile 9ASNP_TSW_M (you need to search for it – sometimes entering it directly doesn’t work). Click on the detail view icon to uncheck the Standard Settings button. Then click enter.

57

Now you have the monthly values in your planning book. Note that the continuing forecast lead to an increasing supply shortage throughout the planning horizon.

58

To see the order category of the key figure Forecast, right click on the first value and select Display details.

Details of the forecast for the month appear. 100 units of DXTR1000 are needed at DL99 on 1/01/2013

Double click on the second finished product DXTR2000 created at the level of the same plant DL##.

59

We now see the forecast needs for DXTR2000 in plant DL##.

Now we will load the both materials at the same time in the planning book. Select both materials with the

Ctrl key and click Load data

60

The system aggregates the demand values of both materials into a single value.

Click Back to the main APO menu. 2.3 Review forecast values for production The demand data in the SNP interactive planning comes from the planned independent requirements we ported over from SAP ERP. In APO: Menu path: APO – Production Planning – Interactive production Planning – Product view Plng Version – 000 Product – DXTR1000 Location – DL##

Click on Enter

61

The requirements are listed. All the Planned independent requirements for the product DXTR1000 defined in plant DL## are displayed. The requirement date is the first day of the each month.

Repeat the procedure for DXTR2000 and then click Back to the main SCM menu.

62

3. Planning at the plant level SNP supports planning at the plant level and at the DC level. 3.1 Run SNP Heuristic – Location at the plant level SNP Heuristic is a medium to long term production and distribution plan. The Heuristics performs the following roles

Plan supply to meet demand without taking into account constraints such as available capacities and materials (infinite planning –MRP 2 concepts)

Plan receipts for purchasing, production and distribution within the supply network on a cross plant bucket oriented basis.

Synchronise activities and plan the flow of material throughout the supply chain. The final SNP Plan consists of purchase requisition, SNP stock transfer and SNP planned orders. In SCM: Menu path: APO – Supply Network Planning – Planning - Interactive Supply Network Planning Make sure the planning book/data view is SNP Plan

In the selection profile double click on ## FINISHED PRODUCTS.

63

All location products are shown in the shuffler. Double click on product location DXTR1000 / DL##.

Now you have the values in your table. Expand the key figures and

by double clicking on them. To switch to the monthly periods, click on the Period Structure Setting icon.

Enable the Current Settings radio button and select on the profile list TB profile ID (future) – 9ASNP_TSW_M , then click Enter.

64

65

The daily values are aggregated for each month. Click on Change mode .

Click on the Heuristic Location button to perform the plan for the location DL##.

Just one location was processed. At plant DL##, the BOM of the finished product DXTR1000 was exploded (single level).

66

Values were added to the Production Planning, Total Receipts, ATD Receipts (Available to deployment) rows. Notice that production has been planned to satisfy the forecasted demand.

Right click on one of the value in the row of the Production (Planned) key figures and select Display details.

67

The details of the order are given. The system created an SNP Planned order to complete the demand. Scroll to the right to look at the other characteristics of the order. Close the details window by clicking

Scroll down and right click on the first value of the ATD Receipt (Available to Deploy) key figure and select from the list Display details.

These are the same orders that we have for Production. The system considers the quantities available for

deployment. Close the details window by clicking

In the Selection profile section double click on the ## Semi-finished Product.

68

Because we have done the heuristics location just at the level of the plant DL## – USA, we will check the plan for others products only in the USA plant. To load data for the semi finished product in the planning book, double click on the TRWA1000 / DL##.

We have a Dependent Demand created by the system. There is however, no production planned—this is because the Location heuristic only does single-level planning at a single location. Right click on the first value and select Display details on the list.

69

The order category is: SNP: Dependent demand . The detail also gives us some pegging information, i.e. that the source of supply is DXTR1000 in location DL##.

TRWA1000 is at the first level in the BOM; all first-level items used in DXTR1000, whether semi-finished or raw materials, would have had their dependent requirements calculated. Raw materials will have dependent demand calculated when they are on the first level; none done if they are on the second level of the BOM. Double click on the ## RAW MATERIALS.

Double click on the first raw material defined in location DL##.

70

Because BRKT1000 is in the first level of the BOM, we have dependent demand but no production.

For the other raw materials at the second level, the system didn’t created any order (plan). To check this, double click on TRTB1000/ DL##.

71

There is no dependent demand.

Now we will check the utilization of the capacity. In the planning book section, double click on SNP94(2) CAPACITY CHECK.

72

In the Selection Profile double click on ## RESOURCES.

The work centers are displayed. Double click on the work center WASSY1000_DL##_002 defined in plant DL## to load the data in the planning table.

We have a production plan for this work center. It looks like we’re not using the 27 hours available on any day. But of course we aren’t producing in November.

Note that somewhat annoyingly, the periods have switched back to the default. To switch on monthly period, click on the Period Structure Settings icon.

73

Enable the Current Settings radio button and select on the profile list TB profile ID (future) – 9ASNP_TSW_M , then click Enter.

Now we have a production plan in month. The monthly capacity of the work center meets the needs. We’re never even getting close to 10% of our available monthly capacity.

74

With a monthly display, the quantities to produce in each month are displayed on the table Quantity View. This is simply our planned production of DXTR1000

Click on the Display Dependent Objects icon and select PPM/PDS.

The quantity window breaks into details to show us how much is being produced of each material produced in the workcenter. The Total and Planned numbers will be the same for us, since the “manufacture of co-products” (not shown) is zero. The PDS responsible for the production of the finished product DXTR1000 is of type SNP (S).

Press again Display Dependent Objects icon and select Products.

75

The same detailed production information is shown, but the details regarding the PPM/PDS names are not. It is conceivable that these views might be different if we had defined our PDS differently.

Switch the view of the planning book to SNP PLAN by double clicking on

Double click on ## FINISHED PRODUCTS.

Double click on the finished product DXTR2000.

76

We don’t have any production plan for this product. We will run Location Heuristic for product

DXTR2000 at location DL##. Run Location heuristic by pressing .

77

Now you have a production plan for the second finished product in your planning book.

At the bottom of your screen this message will appear.

Switch the planning book to the CAPACITY CHECK view.

78

In the section Selection profile, double click on ## RESOURCE.

Double click on the WASSY1000_DL##_002 which is responsible for the production of the product DXTR2000.

Capacity usage of the workcenter has increased.

The total monthly quantities assigned to the work center are displayed in the QUANTITY VIEW table.

Click on the Display dependents objects icon and select Products.

79

The name of the product and the monthly quantities are displayed.

Don’t save your plan. We will plan the materials with another method. Click on the Back button.

Click the NO button.

80

3.2 Location Heuristic for Multiple Materials on Multiple Levels We have used the Location heuristic to plan production of a single material in a single plant. We can also use this heuristic to plan groups of materials. This can give the planner level-by-level control in a sequential hierarchical planning framework. We will see how to do this next. Since the user should now be familiar with the the procedure for selecting the proper view, we will no longer show screen shots of this action unless some new element is introduced. As a reminder, to show a particular view, there are three steps: 1) Make sure the Planning Book/Data view is correct (SNP Plan for materials, Capacity Check for workcenters). Select the correct view if it is not selected. 2) Select the type of object from the Selection Profile (Finished Products, Resources, etc.) 3) Select the object from the Selected Objects window (e.g., material number, resource number). These three steps must always be performed in order or you risk losing whatever plan you have been working on. We will also no longer instruct the user how to set time bucket (TB) profile, but merely state what profile should be set. Again, see the previous section for details if you have forgotten. Menu path: APO – Supply Network Planning – Planning – Interactive Supply Network Planning. In the section Selection Profile, select FINISHED PRODUCTS Press the Ctrl key to select the finished products (DXTR1000, DXTR2000 ) and then click on Load Data

.

81

Change the TB Profile to 9ASNP_TSW_M. Double click on Total Demand and Total Receipts keys figures to expand them. Now our plan is in months. In the forecast key figures we have the values for all finished products.

82

To run the Location Heuristic, click on Change mode .

Click the Location Heuristic button.

You will have this message on the bottom of your screen.

83

The system planed both materials.

84

To look at the planning of each product double click on DXTR1000/DL##. The disaggregated plan is the same as we planned initially. To switch on graphic mode, press the Graphic button.

A large graph appears. Click on the Table with Graphic button to view the table and a smaller graph at the same time.

85

The greenish line is our planned production . Switch back to table mode by clicking on the Table

button .

We will check the production plan for thecommon semi-finished product. In the selection profile double click on ## SEMI-FINISHED PRODUCTS. In the Selection window , double click on the first semi-finished product TRWA1000 / DL##. We don’t have any production planned for this product. We only have the dependent demand. Right click on the first value of key figure Dependent Demand and select Display details.

86

The semi-finished product is involved in the production of the two finished product DXTR1000 and DXTR2000.

Click on the Heuristic Location button.

1 location were processed by the system.

87

Now we have a production planned for this materials too.

If we were to check the raw materials we would now find dependent demand for both the level 1 and level 2 raw materials, and no demand for those at lower levels. Switch to the CAPACITY CHECK view and select ## RESOURCES. Selecct the workcenter WASSY1000_DL##_002. Change the TB Profile to 9ASNP_TSW_M.

Then click on Display Dependent Objects icon and select Products.

88

Capacity usage has increased since the semi-finished goods are produced in the same workcenter as the finished goods. The Quantity view shows us how much of each material is used to drive the capacity needs.

Since we have now planned all semi-finished goods, we have generated dependent demand requirements for all raw materials. We can therefore complete our planning by loading all raw materials into the planning view and executing the Location Heuristic. In the Selection profile section double click on ## RAW MATERIALS. Select all Raw materials with the help of Ctrl.key or Shift and press Load data icon.

89

Press the Heuristic Location again.

The message confirms the end of heuristic run.

The totals for raw material receipts could be of use if we are planning staffing levels in the warehouse. But to check out a plan for a single raw material, say the break kit, double-click on BRKT1000 in the Selected Objects window. The system generated a plan for the Distribution Receipts.

90

Right click on the second distribution receipt and select Display detail.

A purchase requisition for the product BRKT1000 with destination location and means of transport assigned was created by the system.

Click on the Exit button.

Don’t save your plan. Click on the No button.

91

3.3 Run SNP Heuristic – Network at the plant level Now we will plan with another heuristic available on the SCM system, the network heuristic. While we could have planned DC level demand as well as plant demand using the Location Heuristic, this is easier to do with the network heuristic. We will no longer provide screen shots for how to Display Details of an individual entry in the planning view. If you need to review this, consult the previous section. Enter into the same transaction Interactive Supply Network Planning. Be sure that the SNP PLAN view is active, if not double click on it. In the Selection profile section, double click on ## FINISHED PRODUCTS. Select all the finished products defined in the plant and click on the Load data button.

Switch on the monthly period structure 9ASNP_TSW_M. Click on the Change mode icon.

The forecast for all products are now loaded in the table. Press the Heuristic Network button.

92

The message confirms the end of the heuristic run.

93

We have a production plan and an ATD Receipts planned.

94

Double click on the finished product DXTR1000 / DL## to check the production plan. The plan looks similar to what we generated using the Location Heuristic.

95

Now double click on the product DXTR1000/ MI##. This shows us the plan for the DC MI##. Currently there is no demand for DXTR1000 at the Miami distribution center. The Network Heuristic, unlike the Location Heuristic, considers demand for all locations; in this example, however, there is no demand at the distribution center as of yet.

Since we have only one facility at which semi-finished and raw materials are used, the Network Heuristic will work essentially the same as the Location Heuristic for those goods. You may repeat the exercises of the previous section using the Network Heuristic to confirm this, or move on to the Multilevel Heuristic. Click on the Exit icon.

96

Don’t save the plan. Click on the NO button.

Run SNP Heuristic – Multilevel at the plant level The last heuristic available from the system is the Multilevel Heuristic. To run the heuristic launch the transaction Interactive Supply Network Planning again. Be sure that the view SNP PLAN is active. In the Selection profile section double click on ## FINISHED PRODUCTS. Select all finished products with the help of Ctrl key and click on the Load data icon.

Switch to a TB Profile of 9ASNP_TSW_M. Press the Change mode icon.

Press the Multilevel Heuristic button.

97

The message confirms the end of the Heuristic run.

To have a disaggregated plan for each finished products you must select the material and the location and double click on it. Double click on DXTR1000 / DL##. The plan is identical to what we saw in the Network Heuristic.

Let’s now consider the impact of selecting different time buckets. Note that the Production of DXTR1000 shown above occurs in the same month as the demand. This is because the Period Structure affects not only the display of results, but also how the planning calculations are done. With monthly time buckets and short lead times, there is not much resolution. To see the iimpact of lead times we need to increase the resolution. Change the time period struction to 180 DAYS - 9ADRPDEFAULT.

98

In the new daily display, scroll over to the first forecast. Note that there is a forecast of 100 for the day, but no production is scheduled....where is the production that we saw scheduled for the same month in the monthly view?

99

Scroll over further to the right until you see production for 100 units. In the current example, production doesn’t take place to satisfy the demand until two weeks after it is needed. This isn’t textbook MRP! Actually it is – but since we planned with monthly buckets, the production is scheduled just to be completed by the end of the month.

To see the effects of lead time out a couple months, we need to run the Heursitic when the planning view is set to 180DAYS. Then we can switch the view to weeks, months, or whatever, and the calculations won’t be rerun but will be shown aggregated in the chosen time frame.

100

Load both the DXTR1000 /DL## and DXTR2000 into the planning view again.

Run the Multilevel Heuristic.

101

Double-click on DXTR1000. Scroll over to the first forecast. Now the lead time offset for production is correctly aligned with the forecast (one day in advance of the demand). The production row shows the planned completion time of the 100 units (note they are shown as ATD for the same period as production). To see wheh they will be started select the details of the Production entry.

Scrolling to the right of the details, we see that the order will be released on 12/13/12 and completed on 12/31/12. Classic MRP lead-time offsetting is apparent at this level of detail.

102

Close the detail and now double-click on Semifinished product TRWA1000. Scroll over to the first dependent demand. Note that it is completed before the start time for producing DXTR1000 or DXTR2000. Click on the details of the dependent demand.

We see that the dependent demand is from both DXTR1000 and DXTR2000. Note also that there are two wheel assemblies needed for each bike (100 DXTR1000s and 40 DXTR200s = 280 TRWAs)

Now click on the details for the Production entry and scroll to the right. The start time for the TRWA1000 is the same day as the demand, 12/13/12.

103

If we go back to the monthly view, our calculations are not changed, and the view may look different than it did when we ran the multilevel heuristic in the monthly view. Load DXTR1000 and change the TB Profile to 9ASNP_TSW_M. Note that the production of the first 100 units is now shown as being shifted into the month prior to the demand.

Switch the TB Profile back to 180DAYS. Now switch to the CAPACITY CHECK view. In the Selection profile section double click on ## RESOURCES. Double click on the work center (plant DL##). Switch the TB Profile to 9ASNP_TSW_M. We appear to have more than enough capacity in the workcenter at the aggregated monthly level.

104

Now change the TB Profile to 180 DAYS and scroll to the first capacity usage When looked at in detail, we have much heavier capacity usage on the initially scheduled production days.

Select the products view:

Scroll the products over until the time frame matches that of the capacity plan. It appears making a big batch of TRWA1000 is driving the spike of capacity requirements on 12/12/2012.

3.4 Capacity Levelling Capacity levelling supports the following resource categories:

o Production resources o Transportation resources

Capacity levelling supports the following resource types:

o Bucket resources o Single-mixed resources o Multi-mixed resources o Transportation resources

105

The planner can use the following methods to adjust the plan: o Backward scheduling of the capacity load to fulfill demand using high priorities without due date

violations. This rescheduling does not create any orders in the production horizon. o Forward scheduling of the capacity load for lower priority demand and use of demand priorities

to minimize due date violations. o A combination of backward and forward scheduling of the capacity load.

Figure 12 Capacity Levelling The main settings in the capacity levelling profile are Scheduling Direction, Prioritization, and Method. Scheduling Direction controls whether Forward, Backward or Combined scheduling is used. Prioritization for the heuristic run defines how levelling determines the sequence of orders. The two possible choices for prioritization are by order size or by product priority. These can then be sorted in ascending or descending order. The three Method choices are Heuristic, Optimizer or BAdi. The Heuristic method is described in further detail below. Heuristics-based capacity levelling

o Heuristic-based capacity levelling compares, period by period, the capacity load on a resource with the requested load, either from the beginning or from the end of the planning horizon – depending on which scheduling direction is selected (forward or backward scheduling). If the system finds that the resource is overloaded, it first selects all the activities or orders that cause the overload in this period. It then sorts these orders according to the priority that is defined and shifts, one by one, orders or partial quantities of orders into subsequent or previous periods until the required maximum resource utilization is reached. With forward scheduling, the system moves the orders so far that the first activity using the resource to be levelled only begins after the overloaded period. With backward scheduling, the system moves the orders so far that the last activity using the resource to be levelled actually ends before the overloaded period. The system takes the lot sizes and rounding values defined in the master data into account when moving the orders.

106

o Only orders that cause overloads are changed. Only orders that were moved are changed (liveCache, R/3). This proves advantageous when a lot of orders exist but only some of them overload the resource.

o Prioritization is done by product or by product quantity.

Now select Capacity Levelling from the menu.

107

Uncheck the log boxes: Display, Detailed and Resource results. Select Backward Scheduling and spsecify that only 30% of capacity should be utilized. Accept the other default values by clicking on the Execute button.

108

The capacity utilization of the resource was leveled. Note that capacity on the “heavy” day of 12/12/12 is now no more than 30%

The Quantity view shows us how production was shifted. Basically the batch of 280 was split into two lots.

109

3.5 Interactive Recalculation of Dependent Demand Finally, the planning table is interactive. Go back to SNP Plan Data view, Finished Products Selection Profile, and DXTR1000. Scroll to the first forecast, and change the corresponding production quantity from 97 to 200.

110

Hit the Enter key and see how the plan for DXTR1000 Changes. Basically, it adjusts the inventory.

111

Select TRWA1000, which goes directly into DXTR1000. The dependent demand has changed to 400 (two wheel assemblies per bike), but the production quantity has not changed – note that there is now a projected supply shortage. The production will not change unless we change it manually or rerun a heuristic. Basically, we can manually change production, and that will affect the demand and inventory levels of the component parts, but production/purchasing will not be automatically recalculated.

112

3.6 Review Production Plan in Product View SCM offers multiple ways to view the same data; here we’ll look at views afforded by the Product View. Switch to the SNP PLAN view. In Selection profile section, double click on ## Finished Products. Double click on DXTR1000, location DL##. Right click on the product DXTR1000 and select from the list Show Product View.

Confirm this message.

113

At the bottom of your screen a new section will appear. This is the “list view” or demand and supply elements similar to what we see in the stock requirements list of SAP ERP. Scroll down to the SNP Planned Order for 200 (the one we modified), select it, and double click on it.

The new screen shows details on the order to right, and a tree listing requirements to the left.

114

Double click on TRWA1000).

115

The right screen breaks into two pieces; the top shows the details of the dependent demand, and the bottom shows the orders and demands for TRWA1000 starting from the point of the dependent demand

for 400 units. Click on to review your plan by periods.

116

Click enter .

This is another view of the same information. The basic idea of this series of screens is that we can quickly move from one component part schedule to another to spot possible problems or solutions involving the scheduling of the parent product DXTR1000. Click on the Quantity tab for a graphical display of the cumulative receipts and requirements.

Click Back after reviewing the chart.

117

Click Exit to the main APO menu.

Don’t save any data. Click on the No button.

118

119

4. Network planning with heuristic Our network planning example so far was mainly was about planning for the plant, since the only demand we had at the DCs was for safety stock. To do more realistic network planning we will create demand for the DCs in SCM. Menu path: APO - Production Planning – Iteractive Production Planning – RequirementsView Enter a date range from today to one year from now. Enter DXTR1000 to DXTR2000 as the product range. Click on the yellow arrow next to Location.

120

Enter DL##, SD##, and MI## as the locations in the Single Value view. Click on Execute.

121

Click on Execute.

Click on the pencil icon to go into edit mode.

122

Click Enter.

2 Enter the following demand requirements for the DCs. Then Save your entries and Return to the Easy Access Menu. Let T+2 be two months from todays date.

Required Qty Product Source T+2 600- DXTR1000 MI## T+2 300- DXTR1000 SD## T+2 200- DXTR2000 MI## T+2 100- DXTR2000 SD##

123

4.1 Network plan with Multilevel Heuristic To plan the network with the multilevel heuristic, start the transaction Interactive Supply Network Planning in SAP SCM. Be sure that the SNP PLAN is active. In the Selection profile section, double click on ## FINISHED PRODUCTS. Select all the finished product defined in the DCs and click on the Load data icon. Expand the Total Demand and Total Receipts key figures.

Change the TB Profile to 180DAYS. Click on the Change mode icon.

124

Click on the Multilevel Heuristic button.

The message confirms the end of the heuristic run.

To look at the disaggregated plan, double click on DXTR1000 / SD##. The forecast for 300 is shown, and a distribution receipt for 300 is shown on the same day.

125

Double click on DXTR1000 in the DL## plant. The demand from the DCs shows as distribution demand at the plant level

Display the details of the first distribution demand. It is registered as a stock transport requisition, and you can see the destination.

We could drill down into the other parts, but the results would be similar to what we did before adding DCs to our planning. Close the detail view.

126

4.2 The planning Board We will level capacity again in DL##. Choose the Capacity Check Planning Book/Data View. Choose Resources in the selection profile. Choose WASSY1000_DL##_002 as the selected object. Set the TB Profile to 180DAYS. Click on Capacity Leveling.

127

Make sure backward Scheduling is selected. Click Execute.

Click through any Information boxes about production starting in the past, such as this one.

128

Since we are now producing for distribution centers as well as the forecast, the workcenter is getting greater utilization.

Select SNP Plan from Planning Book/Data View, Finished Products from Selection Profile, and DXTR1000 from the Selected Objects. Right click on the product DXTR1000 and select Show Product View.

129

Confirm the popup by clicking on Enter.

At the bottom (right side) of your screen highlight the third forecast (FC req- you may have to scroll down) and click on the Context of order icon.

In the first section, the context of the material is In-house production. The source location is DL## (USA plant) and the target location is DC – DL##. On the bottom section you have the pegging structure for the product. Open the tree for SNP:PL-ORD to have access to the orders and materials involved in the production of the finished product DXTR1000. Note that demand for all items is being satisfied by planned production from multiple planned orders. Highlight the last one in the sequence and expand it to see the orders pegged to it. Note the AvailDay of the last planned order for DXTR1000.

130

Click on the tab DS Planning Board 1.

A graphical view of the network orders is displayed (scroll to the right if you don’t see any bar). Change the view to weeks by selecting DS –planning Board – Settings – Vew- Weeks.

131

The planning board shows part production and purchasing events in a bar chart format. Time is across the horizontal line. Click on the legend icon to see how to interpret the board.

132

133

The square marked by the arrow is one of the independent demands we created at one of the DCs. Note the date.

134

Scrolling back to the left, we see that the green lines show us the pegging information about how each part connects to the independent demand entry in the previous page.

135

Continue scrolling leftward until you see a bright red line. That represents today. Note that we have production scheduled in the past due to our immediate need for safety stock.

Click Back to leave the Planning Board. Don’t save your plan!

136

5. SNP Opimizer

The SNP Optimizer offers a possibility to execute the panning that is based on costs. It means that it tries to find the cheapest plan among all possible variants.

It uses the method of linear programming in order to take into account all terms that are relevant for the problem in the planning. Assessment of all problems happens simultaneously in an ideal solution. The more constraints are activated, the more complex the optimization problem becomes, and the more time will be needed for the search of the solution to it.

The optimizer compares solutions basing on the amount of the incurred costs and then selects the cheapest solution using the basic conditions and objective functions defined in the system.

They can be:

Fines for non-delivery Fines for delay Production costs Storage costs Transportation costs Procurement costs Costs for capacity adjustments (production, storage, procurement, handling) Fines for violation of the safety stock

If we want our optimizer work in a more realistic way, we should create one more demand, this time in our plant. 5.1 Create Demand In APO: Menu path: Advanced Planning and Optimization - Production Planning - Interactive Production Planning - Requirements View Set a planning horizon from today till in a year from today, location DL##, and product DXTR000. Press Execute.

137

Press Edit.

Scroll down and type in the following data: Avail/ReqD: 1) the next Wednesday four weeks from today

2) the next Monday four weeks thereafter Received quantity/required quantity: 600- Product: DXTR1000 Source: DL10 Pay attention: the minus is after demand! Save and go back to the menu.

138

5.2 Adjust Master Data Before you start using the optimizer, let’s take a look at the previously set costs: In APO: Menu path: Advanced Planning and Optimization - Master Data - Product - Product Enter DXTR1000 as Product and DL## as Location. Press Change.

Chose the tab SNP1.

139

The delay penalty cost shows the rate per day for one piece. Enter 200 for the delayed penalty and 3000 for the Non-Delay Penalty. Change the maximum allowed delay for the demand to 3 days. Until then not covered requirements are counting as Non-Delivery and will be rated with the shown penalty. Change the tab to Procurement.

The Procurement Type is set on External Procurement or In-House Production. Enter for the Procurement Costs 500. Based on them the Optimizer will calculate which type is cheaper but it doesn’t take into account where the amount is coming from or if the needed capacities are available. Enter for the Product Storage Costs 200.They are used to calculate how much it costs to store the product in the associated storage resource (warehouse) per base unit of measure and per day. Save.

140

Repeat for the product DXTR2000.

If you want to change something of the master data, please make sure to only to this in your own planning version! Go back to the menu. 5.3 Define SNP Optimizer Profile In APO: Menu path: Advanced Planning and Optimization - Supply Network Planning - Environment - Current Settings - Profiles - Define SNP Optimizer Profiles Press New Entries.

Type in Opt-## for Optimization Profile and Optimization Opt-## as a description. Then click on Maintain Profile.

141

Mark Production Capacit, Storage Capacity, and Consider Quota Arrangements. Then change to the Model Params Tab.

Change Bucket Offset During Production to 1. Then change to the Integration Tab.

142

Mark the following horizons: the SNP Production Horizon, the SNP Stock Transfer Horizon, and the Forecast Horizon.

Adopt all the remaining settings. You should also look at the other tabs and settings.

143

When you are done, click on Back. Now you can press Save and go back to the menu. 5.4 Run Optimization To start an optimization run, use the following menu path: In APO: Menu path: Advanced Planning and Optimization - Supply Network Planning - Planning - Interactive Supply Network Planning Load DXTR1000 from the DL## Location and press Period Structure Settings. Change time period to 9ADRPDEFAULT and then click on Adopt settings.

Disaggregate the total demand and total receipts, go in the Change Mode and press Optimization Run.

144

Select the optimization profile you have created before Opt-## and click on Start Optimization Run.

In a few seconds a result log will appear. In the Message Log window the amount of the individually selected data objects (at the top of the log) and also the newly added data (at the bottom of the log) will appear. (Meanwhile some messages can appear which say that some resources do not have capacity. These alerts appear because the planning period of the selected planning book with the data view SNP PLAN goes beyond the planning periods of the resources. As a result at the end of the planning period there is not enough capacity for the planning book. However this part of the planning period is not relevant for your planning, since your planning lasts only 26 weeks.) In the Solutions tab you can see the results about the costs. You should be able to see the stock costs, the procurement costs, and the costs for belated supply. The result could look like that:

145

Go back to the planning book. Scroll to our first demand of 600. As you can see the Optimizer has planned the corresponding production. One part will be produced before the requirement date. Since it is possibly to have a delay till 3 days after, the remains will be produced in the two following days. The costs for Non-Delivery are very high, so it will be carried out in good time. Since this demand is needed on a Wednesday the Optimizer has no problems to meet the needed quantity. Like you can see, it calculated it to better keep the Stock on Hand low and to produce part of it with delay instead to procure externally. Generally, the Optimizer has created a perfect solution with the lowest amount of expenses considering the Procurement Costs, Stock Costs, penalties for delayed demands and Non-Deliveries.

146

Go back to the main menu. DO NOT Save! Press No.

147

Now we are going to create a cost profile. Follow the menu path: In APO: Menu path: Advanced Planning and Optimization - Supply Network Planning - Environment - Current Settings - Profiles - Define SNP Cost Profiles Press New Entries.

Name the profile Cos_GBI-##. The description should be Cost Profile GBI-##. Type in the following values: Production: 1 Procuremnt.: 3 Prod. Cap.: 1 Transport: 1 Trans. Cap.: f Storage: 3 StockCapa: 3 Sfty Stock: 1 Handlg Cap: 1 Late Del.: 1 No Del.: 1 Rec.Bound: 1 Quota Arr.: 1 Setup C.: 1 Save and go back to the main menu. Go again to the network planning:

148

In APO: Menu path: Advanced Planning and Optimization - Supply Network Planning – Planning - Interactive Supply Network Planning Load DXTR1000/DL10 in SNP PLAN. Change the time period again to 9ADRPDEFAULT, then go to the Change Mode and press Start Optimization Run. Enter the just made Cos_GBI-## as a cost profile and start the Optimization Run.

The costs for procurement are gone therefore the delayed demand did rise.

149

Due to weighting the stock and the procurement costs are so high that the Optimizer decides to produce so much as possible on the last possible days. Sometimes due to the production capacities, some part of demand cannot be covered. This amount is marked as Supply Shortage in the planning book.

150

Click on Optimization Run and in the next window click on Cost Profiles.

The graph at the bottom of the newly opened window gives you a good overview of the weighting. Change the values for Non-Delivery and Outbound delivery delay to 3 and change the values for Procurement, Storage and Storage capacity increase to 1. Press Enter Now you can see in the diagram how the weighting has changed. Click on Save. If a pop-up appears which asks you, whether the cost profile should be saved, press Yes and then click on Adopt.

151

Start a new Optimization Run. Now there are mainly procurement costs.

152

Go Back to the planning book. Since the costs for delayed demand and Non-Delivery are very high in our cost profile, the Optimizer commands to produce and procure only required amounts beforehand. The production capacity is fully used and therefore the total remaining required demand is covered by a higher distribution demand.

Press again Optimization Run and afterwards click on Costs Profile. Change the values for Procurement to 3.Then press Save and Adopt.

153

Start again an Optimization Run. Now there should be costs for procurement and very high costes for storage.

154

Go back again to the planning book. Since due to weighting the costs for procurement are also considered much higher now, the optimizer produces on its own. To avoid production capacity overload, the Optimizer starts at our second demand of 600 the production much earlier. That is why the stock costs have risen.

155

Save. Press one more time Optimization Run. If afterwards you start another optimization run, you can change to optimization tab instead of going back to the planning book and there you can change the optimization profile or the costs profile and then you can start the Optimizer one more time. In Solutions the former runs and their costs are displayed, so you can compare them. Now you could try a few different weightings on your own. As soon as you are done, go back to the main menu. Don’t save any changes though.

156

6. Check the results in SAP ERP We will check now the ERP system. Since we saved our plans, it should have been automatically transferred to SAP ERP. Log on to the ERP system with the credentials provided by your instructor. In ERP Menu Path: SAP Menu – Logistics – Production – MRP – Evaluation – Stock/Requirement List or transaction MD04. Enter: Material – DXTR1000 Plant – DL## Click Enter.

157

We have the independent requirements (forecasting values) and the planned orders transferred by SCM.

Click on Switch to the period total .

158

Now we have an aggregated plan for days, weeks and months. Clickon the tab Months.

159

Note that our plan only goes 12 months into the future – that’s all we planned for in SCM. Click on to return to the previous display.

160

Change the material. Enter TRWA1000 and click on Enter to look at a plan for a Semi finished product. A list with the Dependent Requirement for the finished products and planned orders for semi finished product TRWA1000 is displayed (transferred by SCM to ECC).

Click Back to reach the SAP Menu.