OVERVIEW of Planing in APO

© SAP AG AP010 Preface-1

? SAP AG 2001

Copyright 2001 SAP AG. All rights reserved.

No part of this publication may be reproducedor transmitted inany form or for any purpose without the express permission ofSAP AG. The information contained herein may be changedwithout prior notice.

All rights reserved.

Copyright

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? SAP AG 2001

SAP Advanced Planner and Optimizer (APO)

Level 2SAP R/3

Level 3SAP APO

Level 2SAP APO

SAP APO Overview

AP010 2 days

PP - Planning andExecution for Discreteand RepetitiveManufacturing

LO050 5 days

PP-PIProcess Manufacturing

LO060 5 days

liveCacheAdministration

BC555 2 days

Integration MasterData

AP205 2 days

Global ATP

AP230 2 days

Production Planning/Detailed Scheduling

AP220 3 days

SupplyNetwork Planning

AP215 3 days

Demand Planning

AP210 5 days

??The level 2 course AP010, the first in the series of SAP Advanced Planner and Optimizer courses, provides an overview of the individual SAP APO components and is a prerequisite for all of the level 3 SAP APO courses.

??The level 3 courses build on the knowledge gained during AP010 and broaden your working knowledge of the individual SAP APO components. The five level 3 courses give detailed information on the following areas: Demand Planning, Integration, Supply Network Planning, Production Planning and Detailed Scheduling, and Global Availability Check. System administrators can also attend course BC555 liveCache Administration, which is listed in the Basis Administation Training curriculum.


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Course Prerequisites

Prerequisites

Recommended

? General understanding of supply chain concepts

? None


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Target group

??

Target group

Duration

? Project team members involved in theimplementation of APO (Advanced Planner andOptimizer) in their company.

? 2 days

Notes to the user

??The training materials are not intended as self-study programs. They complement the course instructor's explanations. There is space for you to write down additional information on each page.

??There may not be enough time in the course to do all of the exercises. The exercises are additional examples that are done during the course. Participants can also use these examples to refresh or extend their knowledge after the course.


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Company Profile: Precision Pump Company

??

Precision Pump Company

Customers

Products

? The Precision Pump Company was launched in 1971 and is themarket leader, selling a large variety of high-tech standard pumps.It has been listed in the New York stock index Nasdaq 100 since1999.

? In the product catalog are turbomolecular, centrifugal,rotation and membrane pumps (for the manufacture ofultrahigh vacuums, for example).

? From the electronics industry, semiconductor industries,chemical technology, pharmaceutical technology, andprocess technology up to and including vehiclemanufacturers, and universities.

??The Precision Pump Company was launched in 1971 and is the market leader, selling a large variety of high-tech standard pumps. In the product catalog are turbomolecular, centrifugal, rotation and membrane pumps. Its customers come from the electronics industry, semiconductor industries, chemical technology, pharmaceutical technology and process technology up to and including vehicle manufacturers, and universities. The company recently became ISO certified and has been listed in the New York share index Nasdaq 100 since 1999.

??In the rapidly growing business area of turbomolecular pumps in particular, the company has shown a clear rise in revenue over the past business year: in the semiconductor industries countless steps, from wafer manufacture, to the final chip, can only be made under high vacuum conditions. In this area, there has to be ultimate pressure of < 10-10 mbar (i.e. ultrahigh vacuum).

??During the current fiscal year, the company is planning to enter the booming DVD growth market. DVDs are a form of rewritable optical memory media. They are distinguished from the CD by their large memory capacity. Coating equipment needed to create these rewritable DVDs also uses vacuum technology.

??Via intensive "co-engineering" with manufacturers, Precision Pump Company has optimized a large number of products to match these special requirements.


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Plants and Distribution Centers

2400 DC Milan2400 DC Milan

2500 DC Rotterdam2500 DC Rotterdam

1000 Hamburg (main plant and companyheadquarters)1000 Hamburg (main plant and companyheadquarters)

2300 Barcelona2300 Barcelona3800 Denver3800 Denver

3000 New York3000 New York

PlantPlant DCDC


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BOM P-102

1 1 1 1Item 0010 0020 0030 0040 0050 00601 1

Pump Precision 102P-102(FERT, T-F2##) (1000, 0, _ )

1Casing

100-100 (HALB, T-B1##)

(1000, 10, 2 )

1Fly wheel

102-200 (HALB, T-B?##)

(1000, 10, 2 )

1Shaft

100-300(HALB, T-B3##)

(1000, 0, _ )

1Pressure cover 100-400

(HALB, T-B4##)(1000, 10, 2 )

1DocumentP-100(T-F1##)

DRW, 000, 00

Screw100-130

(ROH, 100-130)(1000, 10007, 2 )

1 81Slug

100-110(ROH, T-T1##) (1000, 1000, 2 )

Flat gasket 100-120

(ROH, T-T2##) (1000, 1000, 2 )

Screw 100-130

(ROH, T-T3##) (1000, 1000, 2 )

Slug 100-210

(ROH, T-T0##) (1000, 1000, 2 )

Item 0010 0020 0030 0010 1

1

Slug 100-310

(ROH, T-T4##) (1000, 1000, 2 )

0010 1Slug

100-410(ROH, T-T5##)(1000, 1000, 2 )

0010 1

1003 Gusswerke(5300000866)

1003 Gusswerke(5300000867)

1006 Blacks(5300000720)

1011 Kugelmeier

(5300001081)

1002 Müller(5300000790)

1022 MaxWholesale

(5300000721)

1003 Gusswerke(?)

1011 Kugelmeier(5300001106)

1003 Gusswerke(?)

1011 Kugelmeier(5300001107)

1003 Gusswerke(?)

1011 Kugelmeier(5300001083)

SNP relevant Only R/3

??This slide shows the R/3 BOM for the product P-102 (T-F2##). This BOM was transferred via CIF as a PP/DS BOM with the screw 100-130 only being planned in R/3. An SNP BOM was then generated from the PP/DS BOM. During automatic conversion it was defined that only the products P-102, 100-100, 100-110, 100-300 and 100-310 are SNP relevant.

??Legend: (Demo material number for SD, consulting) (training material type, training material number (xx = 00 - 20)) (plant, stock, single/collective requirements indicator)

© SAP AG AP010 1-1

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Contents:

APO Overview

? Introduction to Supply Chain

? Overview of APO Planning Applications

© SAP AG AP010 1-2

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Course Goals

This course will prepare you to:

? List the fundamental planning scenarios of theAdvanced Planner and Optimizer (APO)

? Explain the functions and interplay of theindividual APO components

? Describe the integration with the execution systemand information systems

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Unit Objectives

At the conclusion of this course, you will be able to

? Explain the concepts of Supply Chain Management

? List the advantages of APO

? Summarize the functions of the planningapplications in APO

? Explain the interplay of the individual planningapplications

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Preface

Course Content

Unit 1 Course Overview

Unit 2 Integration and Technology

Unit 3 Modelling and Evaluation in APO

Unit 4 Demand Planning

Unit 5 Supply Network Planning

Unit 6 Production Planning / Detailed Scheduling

Unit 7 Transportation Planning /Vehicle Scheduling

Unit 8 Global Available-to-Promise

Unit 9 APO SCM Implementation

Unit 10 Conclusion

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Course Overview Diagram

444

333

Integration and Technology22211 Course Overview

555

666

11

777

888

999

Modelling and Evaluation in APO

Demand Planning

Supply NetworkPlanningProduction Planning/DetailedScheduling

TransportationPlanning/Vehicle Scheduling

Global Available-to-Promise

Conclusion

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Business Scenario

? Precision Pump company would like to improvemanagement of its supply chain, in order torecognize bottlenecks earlier, improve usage ofresources and to reduce costs.

? Reduced lead times and the guarantee of materialand resource availability improve PumpPrecision's customer service.

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Increase customer responsiveness at least cost

Manufacturer DistributionSupplier

Information flow

Retail Outlet Consumer

Supply Chain Optimization

CASH FLOW

Transfer Transfer Transfer Transfer

The Supply Chain: From Supplier to Consumer

??Supply Chain Management includes the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. The co-ordination and integration of these flows within and across companies are critical in effective Supply Chain Management.

??Why manage the supply chain?

??Lower sourcing costs of finished goods and raw materials

??Improve customer service

??Dramatically lower inventory levels

??Leverage all resources to bring substantial benefits to a company

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Changing Consumer Buying Patterns• More products• Alternative ways to shop

CollaborativePlanning

• Sales• Purchasing

More Effective Planning• More accurate forecasting• Feasible plans• Lower inventory levels

Shortened CycleTimes

• Improvedcustomer service

• Flexible reactionto servicerequests

Increased Demand forValue-Added Programs

• Custom packs/displays

Why Have Supply Chain Management?

Innovation … Companies today are being forced to adapt tochanges in the marketplace in order to stay profitable.

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Key Supply Chain Problems

Supply Chain

Lea

d t

ime

Del

iver

y tim

e

Suppliers

Plants

Customers

DCs

Pu

shP

ull

? Postponement

? Bullwhip Effect

??The key supply chain problem is that the delivery time of products to the customer must be considerably shorter than the production or the lead time. In order to realize this and to guarantee a high delivery service, inventory and safety stock must be built up at component or finished product level in plants or distribution centers (DC).

??You use postponement strategies to define how far the sales order links with the supply chain; in other words, where the decoupling of make-to-stock production (push strategies) (MTS), and make-to-order production (pull strategies) (MTO), takes place.

??The bullwhip effect refers to an increase in variability of a (constant) demand pattern - due to large fluctuations at the manufacturer or the supplier - as we move along the supply chain, triggered by lot size creation.

??Implementing an APS system (Advanced Planning System) does not in itself solve supply chain problems. It is also important that company bosses are prepared to consider making organizational changes to their companies, or at least looking into the possible benefits.

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Comparison of MRP II with APS Systems

AggregationLevel

PlanningHorizon

Demand Planning foranonymous demands

Master Production Scheduling (MPS)

Material Requirements Planning forDependent Requirements (MRP)

Lot Sizing

Capacity RequirementsPlanning

MR

P II

APO

SchedulingResult:Feasible plans

??APS (Advanced Planning Systems) is the description of the new generation of planning systems with simultaneous quantities and capacity requirements planning.

??The acceptances for the MRPII concept proved to be too restrictive:

??Material planning has highest priority

??Capacity requirements planning and scheduling are functions that are separate and subsequent to material planning and are executed successively

??Individual planning of separate products. The BOM demands are planned successively and are not linked to each other (no pegging)

??Evaluation and rescheduling of exception situations is feasible

??Cross-plant planning and distribution resource planning do not have to be reflected in the system

??Disadvantages of the MRPII concept:

??The sequential planning process lasts too long; exceptions cannot be replanned quickly

??Constraints and capacities are planned infinitely and require the plan to be postprocessed

??Individual planning of separate products is not given for lot sizes and manufacture of co-products

??Static safety and buffer times lead to long lead times and unrealistic capacity loads

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Strategic Application Level

Core Business Application Level

•Finance

•MaterialsManagement

•Production Planning

•Sales

•HR

Open Systems

ScalabilityClient-Server

Flexibility

? ? ?

SupplyChain

Solutions(APO)

liveCacheIntegration

CustomerRelationshipManagement

(CRM)

•Logistics

Core level

•Database structure•Interfaces•Development tools•Communication

Non-R/3Systems

ElectronicCommerce

B2B

BusinessInformationWarehouse

(BW)

SAP's Total Supply Chain Solution

StrategicEnterprise

Management(SEM)

R/3

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Advantages of APO

? High performance using liveCache technology

? Global server: integrates multiple OLTP systems

? Collaborative planning via the internet

? Simultaneous material and finite capacity requirementsplanning

? 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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Levels of Supply Chain Management

Decision of direction for the company

Supply Chain DesignNetwork Design (ND)

Operational aggregated planning (tacticalplanning)

Aggregated sales anddemand planning Demand

Planning (DP)Supply Network Planning

(SNP)

Ext. proc. planning Productionplanning

Delivery planning

Partner

P

artn

er

External procurement ProductionOutbounddelivery

Externalprocurement at

customer

Operational detailed planning (operationalplanning)

Execution

Planning

Su

pp

lierC

ust

om

er

Su

pp

ly Ch

ain C

ollab

oratio

n m

arketplaceintegration

Su

pp

ly C

hai

n C

olla

bo

rati

on

mar

ketp

lace

inte

gra

tio

n

Strategy planning

Tactical planning: strategy realization and infrastructure planning (plan infrastructure)

SNP PP/DS SNP ATP, TP/VSPP/DS

for example,LES, MM

for example,PP

for example, LES,MM, SD

??In Supply Chain Management, there is a planning level and an execution level. Within the planning level APS systems are used (APS = Advanced Planning Systems), and at the execution level, ERP systems (ERP = Enterprise Resource Planning) are used. The planning level is divided into different planning levels depending on the meaning of the decisions made: strategic, tactical and operational. The criterion for deciding what belongs to which planning level is not primarily the planning horizon but rather the scope of the planning. Each hierarchically superior level determines the ranges of the planning levels below it.

??Strategic level (strategy planning): Here, comparatively unstructured and simple planning tools such as portfolio techniques (product life cycle analysis, Boston Consulting Group portfolios, McKinsey portfolios, for example) are used to make decisions about the direction of the company (such as product diversification strategies, quality strategies, cost leadership).

??Tactical level (strategy realization and infrastructure planning): decisions about direction are realized at this level when the company is restructured based on the strategies. Tactical planning is decisive for operational planning and execution because they form the planning environment in the company (plann ing personnel, IT systems for planning, their selection, implementation and setting parameters, planning processes) as well as the part of the company that physically executes (such as factory planning, personnel planning, transportation planning, logistically-relevant IT system for execution). This links the operational planning level and the execution level.

...

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??Operational level (operational aggregated and detailed planning): Structured, recurring planning based on tactical realization decisions such as strategies for settling sales orders and pre-planning, which are not questioned again in operational planning. Operational planning can also be long-term to bridge bottlenecks that will occur in the future, such as early planning for seasonal requirements or planning runs to determine components with longer replenishment times. Planning for further planning in the future is usually done aggregated objectively or based on time since planning data is uncertain. Aggregated planning also serves to redirect tactical planning if necessary, for example, additional shifts, additional capacity, outline agreements with suppliers. Detailed planning attempts to optimally use the logistic system within the limits set by tactical and aggregated planning and based on the most current data.

??Execution level: Along with the development of the product (production, stock transfer, sorting, receipt, delivery), administrative activities are also performed at the execution level. These activities are supported by execution systems, for example, when papers for production (production orders) are printed.

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APO Planning Components

APO Product MapMonitor

Tactical

Detailed Planning

Scheduling

Supply Chain Cockpit

Supply NetworkPlanning

ProductionPlanning

&Detailed

Scheduling

Sales

Planning

BUY

Purchasing

DistributionPlanning

&

Deployment

TransportationPlanning

&

VehicleScheduling

Network Design

MAKE STORE MOVE SELL


Agg. Planning

??Supply Chain Cockpit: A graphical tool for evaluating and controlling the supply chain.

??Network Design: Strategic planning for analyzing, optimizing and reorganizing the supply chain. Long-term sourcing, production and distribution decisions are supported here.

??Demand Planning (DP): aggregated and detailed demand planning with a variety of forecasting techniques based on aggregated sales figures.

??Supply Network Planning (SNP): Finite, cross-location, mid- to long-term production and procurement planning with simultaneous material planning and capacity scheduling. Deployment is used to plan short-term replenishment.

??Production Planning/Detailed Scheduling (PP/DS): Finite, detailed production planning. PP/DS uses simultaneous material planning and capacity scheduling, and optimization techniques to generate feasible plans that are in the optimum sequence with the optimum setup-times.

??Transportation Planning/Vehicle Scheduling (TP/VS): Optimizes use of transportation vehicles and selection of carriers. Generates deliveries and shipments.

??Global Available-to-Promise (ATP): Rules-based availability check that is integrated with production planning and product allocation.

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Network Design

Strategic Supply Chain Planning

??Network Design is a component used specifically for strategic planning. You can use this tool to make assignment decisions (relationships between individual locations and assignment of products to locations), as well as to make additional decisions regarding locations (location determination and location selection), taking account of demand and cost structures. Network Design can also be implemented for regular evaluation of the existing supply chain in order to discover any weaknesses and take any necessary measures.

??There are four methods available in Network Design for planning the supply chain network. These methods optimize either geographical distances or costs, in each case taking the demand structures into account.

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Purchasing(MM)

Production Planning (PP)

APO Planning Sequence with R/3 Integration

Demand Planning (DP)

Conversion

Flexible Planning

R/3 or non-SAP system APO

Supply Network Planning (SNP)Prod. Plng & Det. Schedlng (PP/DS)

Planned ind.reqmts

Sales orderConsumption

Sales orderSales &Distribution (SD)

Demandmanagement

Planned ind.reqmts

Transp. Plng & Veh. Schedlng (TP/VS)

Deploy-ment

Logistics Execution System(LES)

Release,Confirmations

Planned orderProduction order

Purchase requisitionPurchase order

Stock transport requisitionStock transport order


Purchase requisitionPurchase orderStock transportrequisition

Planned deliveryDeliveryDelivery

Transfer order Planned shipment / ShipmentExecution

??In APO Demand Planning (DP) you base forecasts on aggregated historical data from the R/3 or Business Information Warehouse (BW) system (such as sales quantities from past sales orders). You use the "Administrator Workbench" in APO to upload aggregated historical data from the R/3 or BW system. In APO Demand Planning you generate planned independent requirements (release forecast to APO Demand Planning) that are used for make-to-stock planning. If you are not yet using APO Demand Planning, it is also possible to generate planned independent requirements in the R/3 system (either manually in R/3 Demand Management, or automatically in R/3 Demand Management using data from R/3 Flexible Planning, Sales and Operation Planning (R/3 SOP), or Sales and Profit Planning (R/3 CO/PA). If you do this, the planned independent requirements are transferred to APO through the R/3 APO interface (CIF).

??Sales orders and planned independent requirements form the starting point for both Supply Network Planning (SNP) and Production Planning / Detailed Scheduling (PP/DS) in APO. Existing storage location stock is also included in the planning. Here, sales orders are entered in the R/3 system (sales module) but the availability check (or ATP check - Available to Promise) is done in APO. Sales orders then consume the planned independent requirements in APO depending on the APO "requirements strategy".

??In Supply Network Planning (SNP) you plan for the short- or mid-term horizon for the entire supply chain: you generate stock transport requisitions (for planning and stock transfer) between distribution centers and plants, and can also generate planned orders (for in-house production planning) and purchase requisitions (for external procurement planning) directly in the production plant for the longer term horizon. In Production Planning and Detailed Scheduling however, you usually generate planned orders and purchase requisitions directly in the production plant for the short term horizon.

...

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??Transaction data generated in APO (such as planned orders) is transferred to the R/3 system through the R/3 APO interface (CIF: Core Interface). The APO demand plan is only transferred from APO to the R/3 system as planned independent requirements through mass processing from within APO Demand Planning (however, you only need to do this if Production Planning is being done in the R/3 system rather than in APO). It is however possible to automatically transfer planned independent requirements that have been maintained in R/3, to APO through the CIF.

??As soon as planned orders and purchase requisitions get closer to the today-line, the stock planner or buyer can collectively convert planned orders into production orders and purchase requisitions into purchase orders. You use the APO Deployment /TLB (Transport Load Builder) to convert stock transport requ isitions into stock transport orders.

??APO is a planning tool: execution functions such as release, confirmation, material staging, or goods movement for production orders or purchase orders are performed in the R/3 system. Confirmation and other data is then transferred back to APO from the R/3 system.

??You create planned deliveries in Transportation Planning and Vehicle Scheduling (TP/VS). In APO TP/VS different deliveries can also be grouped together into one shipment. It is then possible to convert planned deliveries and planned shipments into real deliveries and shipments and transfer them to the R/3. The R/3 system then actions the above (such as printing documents and managing status).

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Demand Planning


ProductionPlanning

The Demand Planning Lever Effect

??Small changes made during Demand Planning cause large changes to be made during Production Planning. The aim of Demand Planning therefore is to create sales quantity forecasts that are as accurate as possible.

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Retail outlet

DistributioncentersProduction

units

Suppliers

Functions of Demand Planning

? Cross-company DemandPlanning (internet)

? Consistent, detailed andconsolidated plans

? Statistical and causalforecasting techniques

? Lifecycle planning

? Promotion planning

??Demand Planning is a complex, powerful, and flexible tool that supports your company's demand planning process. User-specific planning layouts and interactive planning books not only allow you to include different departments, you can also use them to include other companies in the forecast creation process. With APO Demand Planning you can use statistical forecasting methods and advanced macro techniques to do the following: - Create forecasts from sales history, based on many different causal factors; - Test predefined, and user-defined forecast models, and forecast results; - And use a consensus-based approach to consolidate the demand plans of different departments. You can use forecast overrides and promotions to add marketing intelligence and management adjustments. The seamless integration with APO Supply Network Planning supports an efficient Sales and Operations Planning (S&OP) process.

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Demand Planning Concept

Aggregated actual data Future demandforecast

R/3ExcelNon-SAP system

? Incoming ordervalue? Quantities

? Values

? Invoice? Quantities

? Values

?…

?Statistical forecasting

?Collaborative forecasting

?Promotions

Sold-to party

Product hierarchy

Location

Region

Sales organization

BW

??The APO DP library of statistical forecasting and advanced macro techniques allows you to create forecasts based on sales history as well as any number of causal factors, and use a consensus -based approach to consolidate the results.

??Marketing intelligence and management adjustments can be added by using forecast overrides and promotions.

??Aggregated actual data can be extracted from the R/3 system in exactly the same way as it can be imported from BW, Excel, and legacy systems.

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ManufacturerSupplier Customer

Collaborationwith Suppliers

Collaborationwith Customers

? Demand plans? Promotions? Stock levels? Delivery dates

? Product requirements? Production dates? Procurement? Delivery dates

High efficiency, precise information and short leadtimes to improve delivery of service

Supply Chain Optimization

Collaborative Planning in APO

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Supply Network Planning (SNP)

Graph

Design

CapacityLeveling

APO - Product Total

APO - Product Total

Selection Profile

Screen Title

Grid Title

Key Figure 1

Key Figure 3

Key Figure 2

Key Figure 4

Key Figure 5

Object 1

Object 2

Object 3

Object 4

User

Selection ID

W 24

W 25

W 26

W 28 W 27

Planning Book

Grid 2 Title

Key Figure 1

Key Figure 3

Key Figure 2

Key Figure 4

Key Figure 5

W 24

W 25

W 26

W 28 W 27

ID Object Text

Text 1

Text 2

Text 3

Text 4

??SNP Planning plans the mid- to long-term horizon. It creates a rough quantity-based, cross-location production and distribution plan with individual rough bills of material (BOM) and routings.

??The SNP BOM contains critical products that are produced on bottleneck resources and products 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.

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Supply Network Planning Scenario

? SNP plans the material flow along the supply chain

? Mid- to long-term, finite, cross-plant planning

? Prioritization of demands; supply optimization

? Result: Feasible plans

Demand Plan

Supplier Plant DC Customer

??The role of Supply Network Planning involves:

??Planning supply to meet demand

??Integrating purchasing, production, and distribution in one consistent model in the entire supply network

??Synchronizing activities and planning material flow along the supply chain

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Comparison of Mid- and Short-Term Planning

Productionhorizon

ForecastsSales ordersForecastsSales orders

Supply Network PlanningProduction Planning/Detailed Scheduling

? SNP planned orders

? Purchase requisitions

? Stock transfers

? PP/DS planned orders

? Purchase requisitions

? Stock transfers

? SNP BOM and routing

? Cross-plant finite planning

? Distribution and procurement

? Quantity and bucket-oriented

? No pegging

? PP/DS BOM and routing

? Finite, detailed planning per location

? Sequences and setup times

? Continuous and order-related

? Pegging

Time

??SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of a single, global consistent model.

??SNP uses advanced optimization techniques, based on constraints and penalties, to plan product flow along the supply chain. The result is optimal purchasing, production, and distribution decisions, reduced order fulfillment times and inventory levels, and improved customer service.

??Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all dependent orders can be adjusted automatically.

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Production Planning / Detailed Scheduling (PP/DS)

??Where Supply Network Planning (SNP) is usually used for rough mid- to long-term planning over the entire supply chain (in particular when there are several plants and distribution centers), Production Planning and Detailed Scheduling (PP/DS) is usually used for to-the-minute short-term planning in a production plant.

??In Supply Network Planning (SNP) demands are aggregated for a specified bucket ("day" for example). It is irrelevant here whether a requirement falls within an early or a late shift, as requirements are only planned roughly here - it does not include break times either. The sequence of orders is not an SNP time consideration. Cross-plant planning, and mid- to long-term planning in the production plant however do all play an important role in Supply Network Planning.

??Production Planning and Detailed Scheduling however, does schedule orders to-the-minute (meaning that shifts and breaks are included here), and does include order sequences (sequencing and optimization of sequences). In the short-term horizon, these functions are highly important for the production plant.

??As soon as a requirement (such as a sales order or planned independent requirement) falls within a specific horizon, it is no longer planned in the SNP planning run, but instead in the production planning run of PP/DS.

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Customer

Functions of Production Planning / DetailedScheduling (PP/DS)

? Plans production, externalprocurement, and stock transferwithin the production plant to-the-minute

? Plans simultaneous materialrequirements and schedules finitecapacity at operation level for theshort-term horizon

? Takes order sequences intoaccount

? Optimizes machine schedules(sequences, lead times)

? Transfers the planning results toan execution system (such as theR/3 Shop Floor Control)

Time

Resource 3

Resource 2

Resource 1

30

20

10

Resource 1Resource 2

Resource 3

??Production Planning and Detailed Scheduling (PP/DS) is used mainly for short-term to-the-minute planning (both for in-house production and external procurement) in the production plant. PP/DS schedules and plans all operations of an order that are relevant for planning at the different resources. PP/DS has the following functions:

??It generates planned orders (to plan in-house production), and purchase requisitions or scheduling agreement schedule lines (to plan external procurement) in the event of product shortage. It uses simultaneous material and capacity requirements planning to do this: You can define resources as “finite” resources (planning-critical resources) in the resource master. Order operations are only created at these resources if there is sufficient capacity for the order quantity on the corresponding date. When there is no available capacity, the system searches for a date on which the order operation can be carried out, taking account of the capacity situation.

??Takes order sequences into account: when new in-house production orders are created, the setup times in the new order can be determined automatically from the setup status of the resources (depending on the preceding order).

??It is possible to display the orders in graphic format (in the detailed scheduling planning board), and to sequence from there. Alternatively you can use the optimizer to execute a sequencing.

??Machine scheduling optimization: during planning, it is possible for orders to be generated that do not have an optimum order sequence. Therefore, you can change the sequence and resource assignments of existing orders using the optimization run.

??PP/DS is a planning tool. Execution functions such as confirmations and goods receipts are performed in the execution system (for example, R/3). Therefore, the planning results are transferred to the execution system.

© SAP AG AP010 1-29

? SAP AG 2001

Deployment adjusts the stock transfers for short-term changeson both the supply and demand side (distribution detailed planning).

Deployment

Chicago

WinnipegCalgary

CustomerDC2

DC1

Plant

? Fair Share

? Proportional distribution

? Proportional targetfulfillment

? Quota arrangements

? Push deployment

? Push horizon

??The deployment function in SNP determines how and when inventory and planned supplies should be deployed to distribution centers, customers, and vendor-managed inventory (VMI) accounts. It generates optimized replenishment plans that take into account short-term changes on the supply or demand side, as well as constraints, such as transportation and storage capabilities.

??A variety of deployment strategies are used depending on the current situation (e.g., fair share, push deployment, pull-push deployment).

© SAP AG AP010 1-30

? SAP AG 2001

TP/VS, LES, and BW provide an integrated solution fortransportation management within the Supply Chain

Transportation Management

LESBW

APO TP/VS (Planning)

(Execution)(Monitoring)

? Is integrated with the APOcomponents DP, SNP,PP/DS, and ATP

? Evaluates the planning inBW

? Plans for both short, andlong term horizons

??The TP/VS component has the following functions:

??Transportation planning and transportation consolidation

??Vehicle Scheduling and route determination in a dynamic environment

??Transportation mode and carrier selection

??Multi-pick up and multi-drop functions

??Management by exception

??The APO system includes the tactical and operational planning area from the SAP Transport Management solution, which is complemented for transportation execution by the SAP component from Logistics Execution Systems (LES).

© SAP AG AP010 1-31

? SAP AG 2001

Rules

Global Available-to-Promise (Global ATP)

? Event-driven

? Internet capabilities

? Rules-based ATP:

? Location substitution

? Product substitution

? Integration with PP/DS

? Product allocations

? High performance (time series)

Is it possible to deliver the productin the required quantity, and on the

required date?

??You use Global ATP (Available To Promise) to check product availability and capacities, to provide customers with reliable confirmation dates for their sales orders. ATP checks are triggered from the OLTP system (R/3 system, or non-SAP system) as an event (event-driven). In the interface with APO you can specify that the ATP check is to be done in APO and not R/3. If you create a sales order in R/3, for example, the system first checks if there is enough of the requested product in stock. The system can also check if receipts (for example, production orders and planned orders) have already been planned by the requested date.

??Global ATP has the following functions:

??Rules-based ATP: When there is no availability, it is possible in APO to set it so that the system does an ATP check for the product at another location or else substitutes that product for an alternative one (location and product substitution).

??Integration with PP/DS : It is also possible to set it so that when a product is not available, the sales order directly triggers production. If it triggers an order for in-house production, APO creates a planned order for the required quantity in PP/DS.

??Product allocations: Product allocation allows you to manage the supply of scarce products to customers, so that each customer only receives an allocated amount.

??Time series: Planned orders and production orders are aggregated and represented in a time series, which can be used to evaluate the incoming requests from the sales orders. This improves performance of the ATP check.

© SAP AG AP010 1-32

? SAP AG 2001

APO optimization solutions

Optimization Solutions

A complete range of optimization solutionsadjusted to the planning tasks

Linear programming /mixed / whole numberprogramming

Genetic algorithmconstraint-based

programming

Tab. search

SupplyNetworkDesign +Planning


Transportationplanning

??In APO, the following optimizers are available: optimizer for CTM, optimizer for PP/DS, optimizer for Network Design, optimizer for Sequence Planning, optimizer for Supply Network Planning, optimizer for Transportation Planning.

??In Supply Network Planning, optimization problems are usually of the nature that they can be solved with an "exact mathematical solution procedure" (which can be solved using linear equations). For this reason, linear programming is used for optimization in Supply Network Planning. Linear programming is able to calculate an "exact solution".

??In Production Planning and Detailed Scheduling (PP/DS) however, there are usually more complex optimization problems for which no "exact solutions" can be found. Therefore, linear programming is less suited for PP/DS. Instead, solutions are more able to approximate an "optimum or exact solution". Approximate optimization procedures are therefore more suited to be used in PP/DS (genetic algorithm/constraint-based programming). This allows the optimization system to find a suitable solution faster.

??The different optimizers can be installed on the same server on which the APO application, the liveCache, and the database are all installed (but you can also install them on different servers). The APO application server and the optimizer are linked via a TCP/IP connection. Here you specify whether the optimizer is to be called on the APO application server or on a different server (transaction sm59).

© SAP AG AP010 1-33

? SAP AG 2001

You are now able to

APO Overview: Unit Summary

? Explain the concepts of Supply ChainManagement

? List the advantages of APO

? Summarize the functions of the planningapplications in APO

? Explain the interplay of the individual planningapplications

© SAP AG AP010 2-1

? SAP AG 2001

Contents:

APO Integration and Technology

? liveCache Technology

? Integration of the Online Transaction Processing (OLTP)System and APO

? Pegging

© SAP AG AP010 2-2

? SAP AG 2001

Unit Objectives

At the conclusion of this unit, you will be able to

? Describe the advantages of liveCache Technology

? Outline the data exchange between R/3 (or otherOLTP systems) and APO

? Explain the pegging tasks.

© SAP AG AP010 2-3

? SAP AG 2001

Overview Diagram (1)

444

333

Integration and Technology111

22Course Overview

555

666

22

777

888

999


Demand Planning

Supply Network Planning

Production Planning/DetailedScheduling



Conclusion

© SAP AG AP010 2-4

? SAP AG 2001

Business Scenario

? With high performance and pegging procedures,the liveCache technology allows quick,simultaneous material and finite capacityplanning.

? Pump Precision uses the R/3 as an executionsystem and APO for planning. The Core Interface(CIF) provides a close integration of the systems,where order data is exchanged in real-time.

© SAP AG AP010 2-5

? SAP AG 2001

APOAPOOLTP (R/3)OLTP (R/3)

GlobalATP

InformationWarehouse(SAP BW)

InformationWarehouse(SAP BW)

Demand Planning

Customerorders

ProductionScheduling

Inventorymanagement

SupplyNetworkPlanning

Supply Chain Cockpit

Deployment

PP / DS

APO Application Architecture

Transportation PlanningTransportationprocessing

LIS, CO-PAHR, FI

KeyPerformanceKey figures(KPIs)

Planned Indep.Requirements

Historicaldata

??Aggregated actual data can be transferred to APO from OLTP, BW (Business Information Warehouse), Excel, and Legacy systems, and saved in InfoCubes. This data is the basis for forecasting. The demand plan is created as a result of the forecast.

??You release the demand plan to Production Planning, which creates planned independent requirements for Supply Network Planning (SNP), and PP/DS. You can also transfer the demand plan to the operating system (OLTP) as planned independent requirements.

??The seamless integration with Supply Network Planning (SNP), and PP/DS supports an efficient S&OP process.

© SAP AG AP010 2-6

? SAP AG 2001

> 1 ms

Application

Data Storage

< 10 µs

liveliveCacheCache

ApplicationApplication

Data StorageData Storage

What is liveCache ?

? Main objective = higher performance:

? Performance-critical routines (in C++) are running in addressspace of the liveCache management system

? => no heavy data transfer between application and data storage

??Access to data in the liveCache is approximately 100 times faster than it is in a database (10 microseconds as opposed to one millisecond).

??Display of complex data structures (nets, trees). The typical liveCache data structure is NOT a relational data table.

??Easy node access (grid access points, navigation).

??Simultaneous access is possible (read & write).

??Fast data recovery.

??Little navigation needed within the networks.

??Applications run where the data is stored

??Further advantages for the user:

??"Shared data" for application and the application server (independent of the R/3 OLTP database).

??Higher performance (performance-critical routines run the stored operations and problem-specific data modeling is therefore supported in the same address space as it is in data management. This is more efficient than relational data modeling).

??Scalability via a number of processors.

??Scalability of the liveCache, because of an interlaced architecture.

?? Higher data security in a simple C program that saves all data. In case of a program termination (downtime), data will not be lost.

© SAP AG AP010 2-7

? SAP AG 2001

Application Server

ABAP-Application Programexec sql.Execute procedure "Schedule_order"

(OUT : var1,IN : table1,IN : var2)

endexec.

Optimized method codingSchedule_order

Optimized data structures

liveCache Technology

? Avoid disk I/O through shared, buffereddata

? Hold all application data in memory

? Save large datasets

? Optimized data structures

? Support application-specific datastructures (e.g. store BOM as atree rather than a relational table)

? Built-in business functionality

? Run application logic where thedata is stored

? Aggregate OLTP databaseinformation in main memory

liveCacheliveCache

??A liveCache management system is in a non-ABAP environment.

??During the first liveCache upload (bring up), mass data (master data and transaction data) from the connected R/3 and legacy system(s) is either sent to the APO System, reduced (filter) or transformed into an APO presentation. Some of the data is then also sent to the liveCache.

??Changes from an OLTP are transmitted into APO in real-time and therefore into liveCache, if the OLTP system is an R/3 System. In case of non-R/3 Systems there is only one periodic upload of the changes.

??The APO server presents changes to be sent back from APO or liveCache into an OLTP system, in a special data structure (black board). From here, the OLTP system collects the relevant changes in regular intervals.

© SAP AG AP010 2-8

? SAP AG 2001

R/3 Plug-In Technology

R/3R/3

Plug-in

Information on R/3 Plug-in: SAPNet/R/3 Plug-in

CRM BW SEM

(from Release 3.1I)

BBP

CIF APO

??An R/3 interface is marked with an R/3 Plug-in to make it possible to integrate a mySAP.com component (for example, APO or BW) with one or several R/3 Systems. With R/3 Plug-ins, several mySAP.com components can be inserted at the same time. Most Plug-ins concern add-ons (R/3 standard software enhancements with additional functions).

??The data transfer between R/3 and APO Systems is defined and controlled using the APO Core Interface (CIF). The CIF is the central interface for connecting APO to the existing R/3 System environment.

??Plug-ins supply the components with transaction and master data. In this way, APO CIF does not only provide the SAP APO System with initial data records (initial supply), it also guarantees a step-by-step supply with all the relevant data changes. Only the object data relevant for the individual planning and optimization process in APO is transferred from the complex data records into R/3. The integration between R/3 and APO is possible as of R/3 release 3.1I (for the PM/SM area and production process models, integration is possible as of 4.5B).

© SAP AG AP010 2-9

? SAP AG 2001

APO

PlantPlant22

PlantPlant33CompanyCompany

CC

PlantPlant11

CompanyCompanyBB

CompanyCompanyAA

liveCacheliveCache

APO

Global APO Server

??A multi-system environment is possible

??Different layouts of enterprises and plants are possible

© SAP AG AP010 2-10

? SAP AG 2001

APO Integration (2)

SAP APOSAP APO

SDSD LOLO

HRHR

SAP R/3SAP R/3

Non-R/3 System

Non-Non-R/3 SystemR/3 System

BAPI

BAPI

BAPI

CIF(Core Interface) BAPIs

??The APO Core Interface (CIF) is responsible for the data exchange between APO and R/3 Systems. The APO Core Interface is a real-time interface, linking APO with one or several R/3 Systems.

??Only the data objects needed in the data structures in APO for the different planning and optimization processes are transferred from the complex dataset of the R/3 into APO.

??The APO Core Interface guarantees both the initial data transfer (initial transfer) and also the transfer of data changes within APO.

??The outbound delivery from APO CIF takes place as an R/3 Plug-in.

??Technical integration of SAP APO with:

??an R/3 environment where Core Interfaces are used

??a non-R/3 environment where the official standard of Business Application Programming Interfaces (BAPIs) is used.

© SAP AG AP010 2-11

? SAP AG 2001

APO Integration (3)

R/3 APOOrder• Production• Procurement• Replenishment

liveCachelive

Cache

LocationProductResourceProduction process model

Plant, Customer,...Material masterCapacityRouting and

bill of material

Sales orderPlanned orderProduction orderOrder...

CIF

CIFReal-time

??The planning in APO is based on its own master data that is usually transferred automatically from a R/3 System, but can also be created manually.

??The transfer of master data from the R/3 is displayed in the corresponding master data in APO. Only the master data relevant for planning in APO is transferred (firstly in the form of an initial transfer, and then later as transfers of data changes).

??The R/3 remains the execution system for the master data. Only the settings which cannot be transferred from the R/3 are maintained directly in APO.

??The transaction data relevant for planning, such as warehouse stock and sales or production orders is also transferred from the R/3 into APO via the CIF interface. And vice versa, the results of the planning in APO are returned to the R/3 via CIF and executed there. This integration of transaction data takes place in real-time.

© SAP AG AP010 2-12

? SAP AG 2001

Master Data Objects of the CIF

R/3 APO

Location

Product

Resource

Production process model

R/3 master data APO master data

Plant

Customer

Vendor

Material master

Capacity

Routing and

bill of material

Initial transfer

Incremental datatransfer

??The APO Core Interface concerns a real-time interface. Only the data objects needed in the data structures reconciled in the planning in APO for the particular planning and optimization processes are transferred from the complex dataset in R/3 into APO.

??Both the initial data transfer (initial transfer) and the transfer of data changes within APO take place via the APO Core Interface.

??The master data objects in APO are not identical with those in R/3. For the master data transfer it is in fact the relevant R/3 master data that is mapped onto the corresponding planning master data in APO.

??The R/3 System remains the dominant system for the master data. Only specific APO master data that does not exist in R/3 is maintained directly in APO.

© SAP AG AP010 2-13

? SAP AG 2001

Initial datatransfer

Transaction Data Objects of the CIF

R/3 APO

Order with category BF (PchOrd) AG (PurRqs) BM (SalesOrder) AI (PlOrd.) FA (FC req.) AM (PrdRes) CC (Stock) ...

R/3 transaction data APO transaction data

Orders

Purchase requisitions

Sales orders

Planned orders

Planned ind. reqmts

Reservations

Supplies...

Real-time

Changetransfer

??The initial data transfer of transaction data takes place first, via the APO Core Interface. The change transfer between R/3 and APO usually automatically follows for transaction data objects that belong to an active integration model. New transaction data or changes to existing transaction data is automatically transferred. (For transaction data of the APO component SNP, you can define in Customizing whether a real-time or periodic publication is to be performed.)

??The transaction data objects in APO are not identical to those in R/3. All transaction data in R/3 is transferred to APO as orders that can be distinguished by ATP category.

??In the standard system, planned independent requirements can only be transferred from the R/3 into APO. The retransfer of the planned independent requir ements that you may require if you only perform Demand Planning in APO, must be triggered from Demand Planning in APO with a specific transaction.

??For planned orders and purchase requisitions, you can specify in APO that they are only transferred from APO to the R/3 System if the conversion indicator has been set.

© SAP AG AP010 2-14

? SAP AG 2001

Transfer of Data to APO

1. Generate integration model NameTarget system

Sales ordersProduction orders

Storage location stock...

Determine name and APOtarget system

Select master and transactiondata

2. Activate integration model

Integration model is active

Data is transferred for the first time, a continuousreal-time incremental transfer of transaction datafollows

Start

??You define the integration model that controls the transfer of master and transaction data in the R/3 System. You can find the menu option Core Interface Advanced Planner and Optimizer (the CIF menu) under Logistics -> Central Functions -> Supply Chain Planning Interface.

??The integration model distinguishes between master data and transaction data. We recommend selecting these two types of data in separate integration models and then also transferring them separately.

??In the integration model, you select the master and transaction data you want to transfer. You specify the following in the integration model:

?? The APO target system for the data transfer

??The data objects you want to transfer

??You can delete integration models that you no longer need. Note that you must first deactivate these integration models.

??For any transaction data that is contained in an active integration model, a continuous real-time incremental data transfer is performed between the R/3 System and APO.

© SAP AG AP010 2-15

? SAP AG 2001

SD MM PP

Sales order


Purchase requisitionStock transfer

Storage location stockIntransit receipts

Purchase requisitionOrder

ForecastliveCacheliveCache

liveCache Integration with R/3

R/3

APO

Planned indep.requirement

CIF

DPDPBWextractors

??The historical data from Demand Planning (DP) is transferred into APO with the help of the extractors from the Business Information Warehouse (BW).

??You can release the Demand Planning forecast to the liveCache and therefore create planned independent requirements. Alternatively, you can transfer planned independent requirements from the execution system.

??The orders, supplies and planned independent requirements of the execution systems are transferred via the CIF interface into APO.

??The planning results of APO, the purchase requisitions, stock transport requisitions, stock transport orders and planned independent requirements, are also distributed via the CIF interface into the execution systems. Planned orders can also create direct production orders in the OLTP system.

© SAP AG AP010 2-16

? SAP AG 2001


Supply Network Planning (SNP)

Production Planning (PP)

Detailed Scheduling (DS)

Deployment

Transport Load Builder (TLB)

APO - OLTP Integration

APO OLTP

Planned independent requirements

Planned ordersPurchase requisitionsStock transportrequisitions

Planned ordersProduction ordersPurchase requisitionsStock transportrequisitions

Adjustment ofstock transportrequisitions

Grouping ofstock transport orders

??This slide shows the exchange of movement data between APO and the connected OLTP systems.

??You can transfer the results of Demand Planning as planned independent requirements to the OLTP systems, similar to the transfer from Flexible Planning or Sales and Operations Planning (R/3) to demand management.

??You can transfer the SNP planning results as planned orders, purchase requisitions and stock transport requisitions to the OLTP system.

??You can also transfer the PP/DS planning results as planned orders, purchase requisitions and stock transport requisitions to the OLTP system. If you convert SNP planned orders into PP/DS planned orders, the planned orders are adjusted in the OLTP system. You can only transfer planned orders as production orders to the OLTP system from PP/DS.

??Deployment and the TLB confirm the OLTP stock transport requisitions and can convert them into stock transport orders or VMI sales orders.

??Via Customizing -> APO -> Supply Chain Planning -> Supply Network Planning (SNP) -> Basic Settings -> Configure Transfer to OLTP Systems you can configure how transfer should take place.

© SAP AG AP010 2-17

? SAP AG 2001

50 50

80 20Pegging

Input nodeOutput node

Demand

Order

50 2030

Pegging

? The pegging network

? assigns receipts torequirements

? propagates therequirements throughthe BOM

? is cross-location

? finds unassigned orderquantities

? APO offers fixed anddynamic pegging

??Pegging describes the assignment of quotation and requirement. It links each input node from requirements or receipts with output nodes from receipts. The material flow between requirements, stock transfers, purchase requisitions, planned orders and storage location stock is therefore defined in the system. Pegging allows the bi-directional planning of components to the end product and of the end product to the components.

??There are two types of pegging:

??Dynamic Pegging: The pegging relationship is re-calculated each time, with regard to quantity and date changes, when a product receipt or issue takes place.

??Static Pegging: All relationships are fixed. Only the user or an external program can change these relationships.

© SAP AG AP010 2-18

? SAP AG 2001

Sales order

Transfer order

Production order

Order

10

30

30

50

50

80 80

50

50

50

50

50

20 10 40 60

100

100

30 20 50

305020

30

10 20 10 40 50

(+20)

(+10)

(-10)

Surplus

Shortage

Supply Chain Pegging

© SAP AG AP010 2-19

? SAP AG 2001

You are now able to

Conclusion

? Describe the advantages of liveCache Technology

? Outline the data exchange between R/3 (or otherOLTP systems) and APO

? Explain the pegging tasks.

© SAP AG AP010 3-1

? SAP AG 2001

Contents:


? Models and version in APO

? Supply Chain Cockpit

? Supply Chain Engineer

? Alert Monitor

? Evaluations using the BW explorer

© SAP AG AP010 3-2

? SAP AG 2001

Unit Objectives


? Explain the functions of models and versions inAPO

? Describe the modelling of the Supply Chainnetwork

? Analyze master and transactional data in theSupply Chain Cockpit

? Call alerts from the Supply Chain Cockpit

? Evaluate aggregated historical data

© SAP AG AP010 3-3

? SAP AG 2001


444

222 Integration and Technology111

33

Course Overview

555

666

33

777

888

999

Modelling and Evaluationin APO

Demand Planning

Supply Network Planning

Production Planning/DetailedScheduling



Conclusion

© SAP AG AP010 3-4

? SAP AG 2001

Business Scenario

? Precision Pump company uses the Supply ChainCockpit for multi-site analysis and documentationof planning results.

? In the Alert Monitor, every planner can find hiscurrent planning problems and exceptionmessages.

? Key Performance Indicators (KPIs)provide benchmarks for defining the goals of thecompany. After each planning cycle, PrecisionPump company uses KPIs to analyze theperformance of its supply chain.

? SAP AG

© SAP AG AP010 3-5

? SAP AG 2001

Planning Version 1 version dependent masterdata and movement data

Planning Version n version dependent masterdata and movement data

Active Version 000 version dependent masterdata and movement data

Legacy R/3

APO Master Data (model independent)

Model 1

OLTP Master Data

Active Model

PPMsTransportation

lanes

Locations

ProductsSimulation

Models

Models and Planning Versions

??The network model represents the supply chain and consists of individual nodes and relationships. In APO it is possible to create and maintain different versions of a model for simulation purposes. There is only one active model (000) with an active version. The active planning version is 000.

??All APO planning functions are based on the supply chain model. The model covers the entire supply chain network. It is modeled in the Supply Chain Engineer and contains details like locations, resources, products, transportation lanes and production process models (PPMs).

??You also have the option of creating several models, each with different versions for simulation purposes.

??Master data like locations, products, resources and plans that are transferred from OLTP systems are automatically assigned to model 000. You must assign master data that you create in APO explicitly to the model.

© SAP AG AP010 3-6

? SAP AG 2001

Alert MonitorAlert MonitorEngineerEngineer

Information

Warning

Error

Ignore

APO Maintenance and Analysis Tools

CockpitCockpit

Modeling theNetwork

Analysis of thePlanning Situation

Evaluation of theException Messages

??The Supply Chain Engineer enables you to maintain the model of your supply chain. You can use this component to create or change supply chain network models. The network model represents a supply chain and consists of individual node points and links. A model can have different planning versions. You also have the option of creating several models, each with different versions for simulation purposes.

??The Supply Chain Engineer is a fully integrated APO component used for creating models. The model is the basis for all APO planning functions. It covers all areas of the network chain, from the supplier's supplier to the customer's customer. The relevant data objects are imported here from the source system to APO.

??The Supply Chain Cockpit allows planners to make an integrated analysis of transactional data in the supply chain. It also allows data to be broken down into planner-specific subsets, such as by indvidual region or product line.

??The Alert Monitor gathers messages regarding problems within your plan.

© SAP AG AP010 3-7

? SAP AG 2001

Work Areas

Access to frequently used objects

? Used for queries

? Serve as filters

? Configured for users

??The complete supply chain view can be unclear. You can limit the view to the objects on which you want to concentrate when you are defining work areas. The work area is used exclusively as a filter for displaying objects in the Cockpit and Engineer.

??The pre-defined work area is the basis for the queries which you can use to gain information about all aspects of your supply chain from the APO system. The transportation lanes in your work area are defined using the model in which you are working.

??In the work area of the supply chain you can select:

??Locations (plant, DC, supplier, customer)

??Resources, production, storage, processing, transportation

??Products

??PPMs (production process models)

© SAP AG AP010 3-8

? SAP AG 2001

? Locations

? Transportation lanes

Objects in the Supply Chain Network

CarrierCarrierMRPMRPareaarea

Stock transferStock transferpointpoint

Transport.Transport.zonezone

SupplierSupplier PlantPlant DCDC CustomerCustomer

??In APO, a location can represent a distribution center, manufacturing plant, supplier location, a customer, a carrier, transportation zones, MRP areas, for example.

??The material flow between locations is modeled via transportation lanes. You map your supply chain via locations and transportation lanes.

??A transportation zone can be used to group together customers, for example, in the form of a location hierarchy. The transportation zone is used in the TLB and in transportation planning. Carriers and stock transfer points are only used in transportation planning. An MRP area is planned in SNP like a production plant.

??Product master records, resources and PPMs (production process models) are assigned to the locations.

??You can map production, storage, transportation and handling capacities via resources.

??DP, SNP and PP/DS PPMs (production process models) are available to allow you to define BOMs and routings.

© SAP AG AP010 3-9

? SAP AG 2001

Cockpit controlsCockpit controls

Network mapNetwork map

Control panelControl panel

Overview mapOverview map

PlanningobjectsPlanningobjects

Application toolbarApplication toolbarAlertmonitoring

Alertmonitoring

WorkareasWorkareas

Supply Chain Cockpit Navigation

??Use this navigational component of the Supply Chain Cockpit to:

??Retain a complete overview of your supply chain model

??Retrieve information from the APO system through queries

??Measure performance with KPIs (Key Performance Indicators)

??Display location, product, resource, PPM and lane data

??Keep track of alert situations

??The three main business tools available from the Supply Chain Cockpit include:

??Queries that facilitate the planning function

??Key Performance Indicators that provide feedback on actual performance

??The Alert Monitor that provides notification of exception messages

© SAP AG AP010 3-10

? SAP AG 2001

Fixed Network Information - Transportation network - Production network

APO Master Data• Products• Resources• Locations• Transportation lanes• Production process model

Business InformationWarehouse• Key PerformanceIndicators - Service level - Supply chain costs

APO Applications - Supply Network Planning - Production Planning - ATP - Demand Planning

Planning Results - Production - Demand - Stock - Transportation - Capacity load

Alert Monitor

Information Retrieval

??Queries facilitate the planning function.

??Key Performance Indicators provide feedback on actual performance.

© SAP AG AP010 3-11

? SAP AG 2001

What was the total profitmade from Gel 250delivered to customer Xfrom DC Milan?

Purpose of Key Performance Indicators

??The APO key performance indicators (KPIs) express abstract supply chain objectives in financial or physical units for comparative purposes. Data pertaining to the various planning and execution processes such as demand planning or product planning is collected, measured, and transformed into physical or financial information that can be used to compare results and thus measure performance.

??For example, a KPI could tell you what percentage of your products were damaged during production. Based on that information, you could set a goal to reduce the percentage of damaged goods by 5%. After implementing the steps necessary to reach the goal, you would again launch a KPI query to check your progress.

© SAP AG AP010 3-12

? SAP AG 2001

? Planning

? Order quantities/values

? Days' supply

? Stock levels

? Material consumption

? Resource load

? Purchasing

? Purchase order quantities

? Delivery time

? Service level

? Vendor evaluation

? Days' supply

? Production

? Lead times

? Date variances

? Scrap

? Delays

? Service

? Credit memos

? Deliveries

? Billing documents

? Returns

Standard KPIs (Selection)

??The slide shows some of the standard KPIs provided by SAP. In addition, you have the option to defin e specific KPIs - tailor-made to your company - in the Business Information Warehouse and to assign them to the Supply Chain Cockpit.

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0. Identify key performance indicators (KPIs) Measure performance using KPIs

1. APO: Plan & Optimize

2. Execute

3. Measure performance using KPIs

4. Compare results of KPIs

5. Identify gaps and improve

Key Performance Indicators

??The graphic above depicts the three steps to improving supply chain performance using APO KPIs:

??Plan and optimize in APO

??Execute decisions in an execution system (R/3)

??Benchmark in BW

??The KPI function allows you to track and measure your supply chain performance by retrieving information stored in the Business Information Warehouse (BW) pertaining to your business.

??Performance measurement is a way to determine if your business has improved or not.

??The use of metrics to measure performance is a complex business process that requires careful planning, analysis and a thorough knowledge of the supply chain. For more information on measuring supply chain performance, refer to the SCC1_E.doc, Appendix 1: The SCOR Model.

© SAP AG AP010 3-14

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Exception Windowfor Details

Alert Notification

Alert

Alert Monitor Definition

? Exceptions are calculated using macros and displayed inthe Alert Monitor

? There are standard macros and the option to define yourown alerts

??The role of the Alert Monitor is to inform you of exception cases that occur in your plan. Every situation that has to be adjusted in planning is an exception.

??In Supply Network Planning you have the option to display either database or dynamic alerts. The database alerts show the planning situation as it was at the time of the planning run, while the dynamic alerts reflect the current planning situation.

??The Alert Monitor in Supply Network Planning enables you to display and remove alerts for resources and location products. Typical alerts are: When the resource is too overloaded (over 100% utilization of capacity), when the resource is not sufficiently loaded (less than 50% utilization), backlog, shortfall in safety stock, target days' supply excess/shortfall, customer -specific alerts.

??You retain constant control over your supply chain network because of the alerts you defined and because you have the option to send these by mail. As planner or manager you will be prepared for any problems that occur. You will be informed in time so that you can take the necessary precautions.

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Cockpit

Alert Monitor

Example:

ProductionPlanning /Detailed

Scheduling


Problem resolution

APOAlert

Repository

DPDPDP

PP/DSPP/DSPP/DS

ATP

SNP

Alert Monitor Integration

??The Alert Monitor in Supply Network Planning enables you to display and remove alerts for resources and location products. Typical alerts are: When the resource is too overloaded (over 100% utilization of capacity), when the resource is not sufficiently loaded (less than 50% utilization), backlog, shortfall in safety stock, target days' supply excess/shortfall, customer -specific alerts.

??You retain constant control over your supply chain network because of the alerts you defined and because you have the option to send these by mail. As planner or manager you will be prepared for any problems that occur. You will be informed in time so that you can take the necessary precautions.

??You can call the Alert Monitor from the Supply Chain Cockpit, from the menu or directly from interactive planning. Right-click on the alert to go directly to the problem resolution screen.

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ATP: Requirements not covered

Resource load (SNP)

DemandPlanning

SupplyNetworkPlanning

Production Planning/Detailed

Scheduling

ATP

BusinessInformationWarehouse

DP macro status alerts

Violation ofdue dates

Resource load (PP/DS)

Alert Types

??APO's monitoring component comes equipped with a selection of 20 alert types ranging from product shortage to various capacity overloads. The alert types must be prioritized and assigned to the various APO applications. For example, some alerts apply only to SNP, but others can be assigned to DP and PP/DS as well.

??The Alert Monitor differentiates between alerts in a specific planning version and alerts in general. For example, capacity overload pertains to a specific planning version while Demand Planning alerts are general. Both types of alerts, however, are displayed in the Monitor.

??If you want to show an alert in the SCC, you can assign the alert type to the application. This ensures that the traffic lights in the monitoring slot in the control panel go on. Lights indicate that at least one alert of that priority type exists.

??Since some alert types cannot always be clearly assigned, it can happen that the same alerts may appear under more than one priority light.

??Each alert type can be assigned to any number of applications.

© SAP AG AP010 3-17

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liveCacheliveCache

? Using the BW Business Explorer you can evaluate:

? Order data from the liveCache

? Aggregated data in InfoCubes

Planningarea

Extractionstructure

RemoteCube

DP InfoCubeBusiness Explorer

Evaluations in APO

??You can also evaluate data from APO using the BW frontend.

??It is not only the aggregated actual data from the InfoCubes that are evaluated, but also all of the order and time series objects from the liveCache.

??The prerequisites for 'liveReporting' orders and time series are as follows: a planning area in APO; an extraction structure for the planning area; an infosource, and an SAP RemoteCube that reflects the liveCache data.

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You are now able to

Conclusion

? Explain the functions of models and versions inAPO

? Describe the modelling of the Supply Chainnetwork

? Analyze master and transactional data in theSupply Chain Cockpit

? Call alerts from the Supply Chain Cockpit

? Evaluate aggregated historical data

© SAP AG AP010 3-19

Exercises

Unit: Supply Chain Cockpit

Topic: Display and Query


?? Maintain the user settings for the Supply Chain Cockpit

?? Execute queries in the Supply Chain Cockpit and with the Business Information Explorer

Precision Pump company’s supply chain planner can procure all necessary information about the products, locations and resources for which he/she is responsible via the Cockpit.

The group number ## that you need for the following exercises is on your monitor.

1-1 Open the Supply Chain Cockpit with the following entries:

Planning version 000

For model 000

Work area PUMP

Change to the logical view PUMP and analyze the supply chain. Which distribution centers supply the plants 1000 and 2300?

1-2 Display the global master data for the product T-F225 and the master data for the product T-F225 in the distribution center 2400 in the Supply Chain Cockpit.

1-3 Query the stock/requirements list for product T-F225 at location 2400.

© SAP AG AP010 3-20

1-4 Query the transportation lanes permitted for the product T-F225 .

1-5 Open your user settings profile directly from the Cockpit. Enter the SDP alert profile PUMP. Save the profile, go back to the Cockpit and refresh the alert situation. Are alerts displayed? How can you process the alerts?

1-6 Evaluate the aggregated historical data for the product T-F2##. Log on to the APO system using the Business Information Warehouse (BW) Analyzer and open the query SALES DATA for the SALES InfoCube. Find out the extent that Product T-F2##, with Sold-to party 1000, and in Sales Organization 1000, contributed to sales in the past few months.

© SAP AG AP010 3-21

Solutions

Unit: Supply Chain Cockpit

Topic: Display and Query


?? Maintain the user settings for the Supply Chain Cockpit

?? Execute queries in the Supply Chain Cockpit and with the Business Information Explorer

Precision Pump company’s supply chain planner can procure all necessary information about the products, locations and resources for which he/she is responsible via the Cockpit.

The group number ## that you need for the following exercises is on your monitor.

1-1 Open the Supply Chain Cockpit with the following entries:


For model 000

Work area PUMP

Change to the logical view PUMP and analyze the supply chain. Which distribution centers supply the plants 1000 and 2300?

Supply Chain Monitoring ? Supply Chain Cockpit

Enter the input data and select “Use”.

Select the “Fit to objects” button on the left above the graphic to adjust the objects.

Enter the logical view PUMP and select “Logical view”.

If you want to restrict the area further, you can define the zoom area using the left mouse button.

The transportation lanes show you that the plants 1000 and 2300 supply the distribution centers 2400 and 2500.

© SAP AG AP010 3-22

1-2 Display the global master data for the product T-F225 and the master data for the product T-F225 in the distribution center 2400 in the Supply Chain Cockpit.

Choose the Products tab

Right-click on product T-F225 and display the master data for this product: Display ? Product

Select the location 2400 in the graphic and the product T -F225 in the Products tab and display the location product by right-clicking on the product: Display ? Product at location

1-3 Query the stock/requirements list for product T-F225 at location 2400.

Select the location 2400 on the map

Select product T -F225 in the Products tab and right-click to call up the context menu: Call up planning applications ? PP/DS Stock/Requirements List

Check that Product and Plant have green lights in the selection options screen and check which product is selected by clicking on the Display button

Execute the query by clicking on the Execute button

1-4 Query the transportation lanes permitted for the product T-F225 .

Choose T-F225 in the Products tab

Right-click to call up the context menu: Query: Master data ? Transport net - map

1-5 Open your user settings profile directly from the Cockpit. Enter the SDP alert profile PUMP. Save the profile, go back to the Cockpit and refresh the alert situation. Are alerts displayed? How can you process the alerts?

Settings ? User profile

Enter the SDP alert profile PUMP in the Alert Monitor tab.

Save the profile and use the green arrow to go back to the Cockpit.

Press the “Refresh alerts” button and the exception messages are shown in red. Double-click here to go directly to the Alert Monitor and right-click to process the alerts.

© SAP AG AP010 3-23

1-6 Evaluate the aggregated historical data for the product T -F2##. Log on to the APO system using the Business Information Warehouse (BW) Analyzer and open the query SALES DATA for the SALES InfoCube. Find out the extent that Product T-F2##, with Sold-to party 1000, and in Sales Organization 1000, contributed to sales in the past few months.

Call up the BW Analyzer, activate the macros, and press the “Open” icon in the Business Explorer. Log on to your APO system.

Expand the SALES PLANNING info area and the SALES infocube. Select the SALES DATA query and press OK.

You are given an aggregated view of the invoiced sales quantity and invoiced sales value of the three sales organizations. Right-click on the field next to APO product to restrict the evaluation for your product T-F2## via “Select filter value”.

By right-clicking on sales organization you can drilldown the evaluation according to sold-to parties by choosing “Add Drilldown According to” sold-to parties.

By right-clicking on the SALES key figure, you can drilldown the evaluation according to months by choosing “ Filter and drilldown according to” cal.year/month.

© SAP AG AP010 4-1

? SAP AG 2001

Contents:


? Demand Planning Tasks and Functions

? Integration with the Business Information Warehouse (BW)

? Forecast Toolbox

? Lifecycle Planning

? Promotions

© SAP AG AP010 4-2

? SAP AG 2001

Unit Objectives

At the conclusion of this unit, you will be able to:

? Explain how the Business Information Warehouseis integrated with Demand Planning,

? Describe the tasks of Demand Planning,

? Define various forecasting strategies,

? Create a simple sales forecast, and release theresults to Production Planning.

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222

333

Integration and Technology111

44

Course Overview

555

666

44

777

888

999


Demand Planning

Supply NetworkPlanningProduction Planning/DetailedScheduling



Conclusion

© SAP AG AP010 4-4

? SAP AG 2001

Business Scenario

? The Precision Pump company will implement APODemand Planning and use it to execute theirmonthly finished product forecasting.

? Consistent planning allows you to enter theforecast data on different planning levels andautomatically consolidate the data in the masterforecast.

? SAP AG

??Demand Planning is a complex, powerful, and flexible tool that supports your company's demand planning process. User-specific planning layouts and interactive planning books not only allow you to include different departments, you can also use them to include other companies in the forecast creation process. With APO Demand Planning you can use statistical forecasting methods and advanced macro techniques to do the following: - Create forecasts from sales history, based on many different causal factors; - Test predefined, and user-defined forecast models, and forecast results; - And use a consensus-based approach to consolidate the demand plans of different departments. You can use forecast overrides and promotions to add marketing intelligence and management adjustments. The seamless integration with APO Supply Network Planning supports an efficient Sales and Operations Planning (S&OP) process.

??Demand Planning is the application component in the Advanced Planner and Optimizer (APO) that allows you to forecast market demand for your company's products. The result of APO Demand Planning is the demand plan.

© SAP AG AP010 4-5

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Advantages of Demand Planning in APO

? Global server with a BW infrastructure

? Integrated exception handling, creation of user defined alerts

? Integration with Production Planning (S&OP scenario)

? Main memory based planning

? Flexible navigation in the planning table, variable drill down

? Extensive forecasting technique

? Promotion planning and evaluation, 'like' modeling

? Collaborative planning via the internet

? Sales Bills of Material (BOMs)

??The Business Information Warehouse (BW) infrastructure includes easy to use features for extracting all the data from execution systems and analyzing it in the SAP BW Business Explorer.

??Macros can be used to perform complex calculations, and to define conditions and exception messages (alerts). Mails can be sent automatically, and status automatically queried.

??In the S&OP scenario, the feasible production plan from SNP or PP/DS is compared with the original demand plan. Deviations are identified automatically and reported to the planner.

??The following statistical procedures are all available for forecasting; Constant model, Trend model, Seasonal model, Trend and Seasonal model, Croston method with exponential smoothing, Linear regression, and Causal models with multilinear regression. External forecasting procedures can also be linked to this.

??"Like modeling" refers to the forecasting of new products using historical data from old products. Life cycle definition is also covered in like modeling.

??You can make each planning book accessible to customers or suppliers over the internet in order to be able to exchange data as soon as possible.

© SAP AG AP010 4-6

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CentralStore

RegionalD/C

CentralStore

RegionalD/C

StorePromotionPromotion

Sales ForceSales Force

PricePrice

AdvertisementAdvertisement

PromotionPromotion SeasonSeason

WeatherWeather

PricePrice

Company 1 Company 2 Customer

Influencing Factors in Demand Planning

? Understanding demand in a dynamic business environment

? Multiple sources of demand plan data such as: internally created forecastsbased on history, forecasts from customers, or point of sale (POS) datadirect from retailers

? Managing all significant factors that influence demand

? Tracking and management of product lifecycles

??The complexity and competitive nature of today's business environment requires organizations to consider many variables when developing a sales and operations plan.

??Multiple sources of demand plan data (e.g. manufacturer forecast is based on a distributor’s sales history, and/or point of sales direct from retailer.)

??Factors influencing demand (sales force size, R&D expenditures, advertising expenditures, price, promotions, seasonality.)

??Demand data can be exchanged with sales organizations, customers, and suppliers over the Internet (Collaborative Demand Planning).

© SAP AG AP010 4-7

? SAP AG 2001

Demand Planning

Sales history,Price, Costs, ...

Forecast

BusinessInformation Warehouse

ForecastForecast ReportingReporting

APOData Mart

APO Integration - Business Warehouse

Demand Planning specific data

? Forecast & planning scenarios

? Causal factors

? Lifecycle patterns

? Seasonal patterns

? Promotional patterns

Central Data Pool

? Summarized data

? POS, order, and shipmentdata

? Syndicated POS data

? Cost information

? ...

??SAP's Business Information Warehouse (SAP BW) is contained in the APO scope of supply and is completely integrated with it.

??If you are going to execute extensive reporting, it is a good idea to set up an independent BW server, and only transfer the data that is relevant for planning to the APO system.

??As data structures in BW and APO are identical, you can also evaluate APO data with the BW frontend.

© SAP AG AP010 4-8

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Demand Planning Concept

Aggregated actual data Future demandforecast

R/3ExcelNon-SAP system

? Incoming ordervalue? Quantities

? Values

? Invoice? Quantities

? Values

?…

?Statistical forecasting

?Collaborative forecasting

?Promotions

Sold-to party

Product hierarchy

Location

Region

Sales organization

BW

??The APO DP library of statistical forecasting and advanced macro techniques allows you to create forecasts based on sales history as well as any number of causal factors, and use a consensus -based approach to consolidate the results.

??Marketing intelligence and management adjustments can be added by using forecast overrides and promotions.

??Aggregated actual data can be extracted from the R/3 system in exactly the same way as it can be imported from BW, Excel, and legacy systems.

© SAP AG AP010 4-9

? SAP AG 2001

time sequence

Aug. Sept.

W32 W33 W34 W35 W36 W 3 7 W38 W 3 9 W 4 0 W41

124

203

Material

Cus

tom

er

Period

Product Groups

Regions

Planning & Reporting

? Consistent planning (top down,middle out,bottom up)

? Slice & dice

? Drill downs & ups

? Multiple demand plansto be simulated

? Standard forecast accuracyanalysis

??Planning supports online simulation in multiple planning scenarios, consistent planning throughout your enterprise (top down, middle out, or bottom up), drilling up and down, aggregation and disaggregation, and slice-and-dice techniques.

??Consistent planning means that planning data on all planning levels can be consistently held (automatic aggregation and disaggregation).

© SAP AG AP010 4-10

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The Planning Table

Title viewKey figure 1

Key figure 3

Key figure 2

Key figure 4

Key figure 5

Object 1 Object 2 Object 3

Object 4

GraphDesign Capacity Leveling

APO - Product Total APO - Location Total

W 24

W 25

W 26

W 28 W 27

ID Object Text

Text 1Text 2Text 3

Text 4

Selection profile

UserSelection ID

Planning bookData views

Macros

Selection

Selected objects

Standard selections

Header information

Right mouse button:additional settings

??The APO modules Demand Planning and Supply Network Planning have a standard user interface. It consists of two significant components: the selection range and the work area.

??The selection range (Shuffler) is the window, where you choose the InfoObjects to be planned.

??In the Shuffler, you can save commonly used selections, and load existing selections. To open the Shuffler, choose the symbol selection window.

??The selection profile displays all the selection IDs which have been assigned for the planner. The planner can access commonly used selections quickly using the selection IDs.

??In the data view area, you choose your planning books, and views. You can define a filter for available planning books and views.

© SAP AG AP010 4-11

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Calculations in Demand Planning

? Calculate deviations

? Make automatic corrections

? Calculate sales budgets

? Define your own exceptional situations

? Launch status queries

? Send mails

You can use macros to:

??Macros perform complex calculations quickly and accurately. The extreme flexibility of the macros allows the planner to model a planning environment based on individual business tasks.

© SAP AG AP010 4-12

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Statistical Toolbox

? Univariate Forecasting

? Moving average

? Models (constant, seasonaltrend, seasonal)

? Exponential smoothing

? Seasonal linear regression

? Holt-Winters

? Croston's method (for sporadicdemand)

? Causal Analysis

? Multiple linear regression

? Composite forecasting

? Weighted average of multiplemodels

??The product portfolio of a company covers a variety of products in different stages of their lifecycle and with different demand types.

??APO Demand Planning offers a "toolbox" of proven forecasting methods. The system allows you to choose the best method for a specific demand type.

??Composite forecasting extends the idea of pick-the-best; with this technique you combine two or more methods.

??Croston's method allows you to model "lumpy" (sporadic) demand.

??The statistical forecasting toolbox provides all the features you require to efficiently create accurate forecasts, including everything from data analysis via time series models through multiple linear regression.

© SAP AG AP010 4-13

? SAP AG 2001

Lifecycle Management & Like Modeling

Actual data of the old product

Forecasting of the new product

Lifecycle

Time

Sales

Like

??You use lifecycle planning and "Like" modeling to forecast the launch (phase-in) and discontinuation (phase-out) of a product.

??A product's lifecycle consists of different phases: launch (phase-in), growth, maturity, and discontinuation (phase-out). This process models launch, growth and discontinuation phases.

??For all characteristic value combinations, you can use either a "like" profile, a phase-in profile, or a phase-out profile, or any combination of these.

??If the phase-out profile period is within the history horizon of the master forecast profile, the system adjusts history input values, displays the adjusted values in the original history and corrected history key figures, and writes the adjusted values in the corrected history.

??If the phase-in profile period is within the future horizon of the specified master forecast profile, the system adjusts baseline (original) forecasts, and writes the adjusted values in the corrected forecast key figure.

© SAP AG AP010 4-14

? SAP AG 2001

Forecast simulation

Sales

Profit

Total sales:

Total profit:

Promotion 1

Price

Quantity

-10%

Promotion patterns

’95

’97

’96

’98PlannerPlanner

Promotion Planning

??Promotions can have a major impact on consumer behavior.

??In APO Demand Planning, you can plan promotions or other special events independently of the rest of your forecast.

??Use Promotion Planning to record either one-time events, such as the millennium, or repeated events such as quarterly advertising campaigns. Other examples of promotions are trade fairs, coupons, free-standing inserts, competitors' activities, market intelligence. Examples of events that also have an impact on consumer behavior are upward/downward economic trends, and acts of nature, such as hurricanes, and tornadoes.

??Promotional uplifts can be defined in units or percentages by common promotion patterns. The effect of a promotion pattern that occurred in the past can be automatically detected using sales history or estimated by the planner. A promotion pattern can be archived in a promotion catalog; it can therefore be reused if a promotion of the same type is repeated. A copy function in the promotion catalog also supports "like" modeling of "like products," "like regions", and so on. There are several techniques available to determine the impact of a historical promotion. One suc h technique is multiple linear regression with or without a trend or seasonality.

© SAP AG AP010 4-15

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Release of Sales Quantities as PlannedIndependent Requirements

Demand Planning Production Planning

Key figure: sales quantityPlanned independentrequirements

SNPPP/DS

Production quantitiesKey figure: feasiblesales quantity

MacrosAlerts

??Once the various stakeholders in the forecast have reached a one-number, consensus plan, you release the demand plan as a planned independent requirement.

??You release the demand plan from Demand Planning (DP) via either the demand planner or the SNP planner.

??This release causes planned independent requirements to be created in the order liveCache. These anonymous demands form the basis of SNP, or PP/DS, where BOM explosion, capacity planning, and sourcing are carried out for the complete supply network.

??After feasibility of the planned sales quantities in SNP or PP/DS has been checked, the results can be transferred back to Demand Planning. Macros are used to analyze the differences between the demand plan and feasible quantities and alerts are generated if large differences occur.

© SAP AG AP010 4-16

? SAP AG 2001

You are now able to:

Demand Planning: Unit Summary

? Explain how the Business Information Warehouseis integrated with Demand Planning

? Describe the tasks of Demand Planning

? Define various forecasting strategies

? Create a simple sales forecast, and release theresults to Production Planning.

© SAP AG AP010 4-17

Exercises

Unit: Demand Planning

Topic: Interactive Planning

At the conclusion of this exercise, you will be able t o:

?? Evaluate historical data

?? Create a sales forecast including corrections

?? Release the demand plan to Production Planning

The Precision Pump company is creating a demand plan to provide planned independent requirements for Supply Network Planning. This plan uses a statistical forecast based on historical data, and includes input from regional sales managers.

1-1 Go to Demand Planning. Open the selection window and, under “Show”, select “APO PRODUCT”. Version 000 is already displayed automatically. In the next row, enter APO - Product once again, and on the right-hand side enter your product T -F2##. Load the data for the product into the planning table.

1-2 Perform a univariate forecast and analyze the graphic results. The seasonal pattern that occurred in the past has been extrapolated into the future. Go back to the planning table.

1-3 For three months from now enter a manual correction of 100 pumps. Check that the correction is automatically added to the demand plan. Save your plan.

© SAP AG AP010 4-18

1-4 Release your demand plan to Production Planning. Use the “RELEASE” variant, and enter your product T-F2## and the horizon. Which locations have had planned independent requirements created for them?

Field Name Input Data

Planning area SALES


Key figure FINFOR


Category FA

Horizon The next 3 months

Daily buckets profile 90 days

Product T -F2##

1-5 Make sure that planned independent requirements have been created in the LiveCache. Go to PP/DS product view for version 000, product T-F2##, and location 2400.

Documents

OVERVIEW of Planing in APO