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Demand and Supply Planning with SAP APO

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Demand and Supply Planning with SAP APO
Stechies

 

Contents

 

1 Introduction ............................................................................... 21
1 Introduction to Supply Chain Planning .................................... 27
1.1 Sales and Operations Planning ....................................................
1.1.1 Goal of Sales and Operations Planning ...........................
1.1.2 Sales and Operations Planning Case Study:
Manufacturing and Distribution .....................................
1.2 Supply Chain Operations Reference Model .................................
1.2.1 Level 1: Process Types ....................................................
1.2.2 Level 2: Process Categories .............................................
1.2.3 Level 3: Process Elements ...............................................
1.3 Types of Supply Chains ................................................................
1.3.1 Pipeline Structure ...........................................................
1.3.2 Late-Customization Structure .........................................
1.3.3 Diverging Structure ........................................................
1.3.4 Converging Structure ......................................................
1.4 Case Study: A Supply Chain Dilemma ..........................................
1.4.1 Business Situation ..........................................................
1.4.2 Sourcing .........................................................................
1.4.3 Manufacturing ...............................................................
1.4.4 Order Management ........................................................
1.4.5 Distribution ....................................................................
1.4.6 Modeling the Company with the SCOR Model ...............
1.4.7 Value Stream Mapping ...................................................
1.5 Demand and Supply Planning Overview ......................................
1.5.1 Demand Planning ...........................................................
1.5.2 Supply Planning .............................................................
1.5.3 Supply Chain Maturity Model .........................................
1.5.4 Supply Chain Performance Management ........................
1.6 Summary ....................................................................................
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2 Introduction to SAP APO as an Advanced Planning and
Scheduling (APS) Tool ..............................................................
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2.1 Advanced Planning and Scheduling Concepts .............................
2.1.1 Planning and Scheduling ................................................
2.1.2 Concurrent Planning ......................................................
2.1.3 Modeling ......................................................................
2.1.4 Exception Management Using the Alert Mechanism .......
2.2 Introduction to SAP Advanced Planning & Optimization .............
2.2.1 Core Planning Modules ..................................................
2.2.2 Task Structure .................................................................
2.2.3 Business Benefits of Using SAP APO ...............................
2.3 SAP APO Planning Functions ......................................................
2.3.1 Demand Planning and Forecasting .................................
2.3.2 Inventory Management ..................................................
2.3.3 Supply Network Planning ...............................................
2.3.4 Distribution Planning .....................................................
2.3.5 Supply Chain Monitoring ................................................
2.3.6 Sales and Operations Planning .......................................
2.3.7 Network Design and Optimization .................................
2.4 SAP APO Demand Planning Overview ........................................
2.4.1 Statistical Forecasting .....................................................
2.4.2 Casual Forecasting ..........................................................
2.4.3 Composite Forecasting ...................................................
2.4.4 Promotion Planning .......................................................
2.4.5 Collaborative Demand Planning .....................................
2.4.6 Data Management .........................................................
2.4.7 Bill of Material (BOM) Forecasting .................................
2.4.8 Characteristics-Based Forecasting ...................................
2.4.9 Lifecycle Management ...................................................
2.4.10 Transfer of Demand Plan ................................................
2.5 SAP APO Supply Network Planning Overview .............................
2.5.1 Supply Chain Definition ..................................................
2.5.2 Safety Stock Planning .....................................................
2.5.3 APO-SNP Solvers ...........................................................
2.5.4 APO-SNP Subcontracting ...............................................
2.5.5 APO-SNP Scheduling Agreement ....................................
2.5.6 APO-SNP Hierarchical Planning .....................................
2.5.7 APO-SNP Distribution Planning ......................................
2.5.8 Supply Chain Monitoring ...............................................
2.6 SAP APO Technical Architecture .................................................
2.7 SAP liveCache Technology ...........................................................
2.8 Summary ....................................................................................

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3 SAP APO Implementation Guidelines ..................................... 111

3.1 Supply Chain Planning Transformation Initiatives and
Prerequisites ...............................................................................
3.1.1 Transformation Process ...................................................
3.1.2 Transformation Framework .............................................
3.2 SAP APO Implementation Methodology .....................................
3.3 SAP APO Template Rollout Approach .........................................
3.3.1 Pre-Activities ..................................................................
3.3.2 Baseline System Activities ..............................................
3.4 Change Management ..................................................................
3.5 Incorporating Performance Measures in SAP APO Projects ..........
3.6 Business Benefits Realization .......................................................
3.6.1 Increased Sales ...............................................................
3.6.2 Profit Optimization ........................................................
3.6.3 Finished Goods Inventory Reduction ..............................
3.6.4 Raw Material Inventory Reduction .................................
3.6.5 Material Cost Reduction .................................................
3.7 Business Case Study ....................................................................
3.7.1 Supply Chain Transformation Planning ............................
3.7.2 Key Guiding Principles ..................................................
3.7.3 System Architecture .......................................................
3.7.4 Sales and Operations Planning Characteristics ................
3.7.5 Demand Planning Characteristics ....................................
3.7.6 Inventory and Deployment Planning Characteristics .......
3.7.7 Rough-Cut Production Planning Characteristics ..............
3.7.8 Planning Organization ....................................................
3.8 Summary ....................................................................................

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4 Preparing for Basic Planning Functionality in SAP APO .......... 149
4.1 Basic Planning Tasks ....................................................................
4.1.1 Demand Planning ...........................................................
4.1.2 Supply Network Planning ...............................................
4.2 Basic Customization in SAP APO Demand Planning ....................
4.2.1 InfoObjects ....................................................................
4.2.2 Planning Object Structure .............................................
4.2.3 Planning Area .................................................................
4.2.4 Planning Book ................................................................
4.2.5 Macros ...........................................................................
4.2.6 Locking Key Figures .......................................................
4.2.7 Time Series Consistency Checks ......................................
4.3 Data Staging for SAP APO Demand Planning ..............................
4.4 Data Management in SAP APO Demand Planning ......................
4.4.1 Creating New Characteristic Value Combinations ............
4.4.2 Capturing History ...........................................................
4.4.3 Transfer Planning Data ...................................................
4.5 Setting up Forecast Methods ......................................................
4.5.1 Univariate Forecasting ....................................................
4.5.2 Forecast Definitions .......................................................
4.5.3 Univariate Forecasting Methods .....................................
4.5.4 Casual Forecasting Methods ...........................................
4.6 Basic Customization in SAP APO Supply Network Planning .........
4.6.1 InfoObjects ....................................................................
4.6.2 Category Group ..............................................................
4.6.3 Planning Area .................................................................
4.6.4 Planning Book ................................................................
4.6.5 Key Figures and Macros .................................................
4.7 Supply Chain Modeling for SAP APO Supply Network Planning ...
4.7.1 Model and Planning Versions .........................................
4.7.2 Location .........................................................................
4.7.3 Location Product ............................................................
4.7.4 Resources .......................................................................
4.7.5 Production Data Structure (PDS) ....................................
4.7.6 Transportation Lanes ......................................................
4.7.7 Quota Arrangement .......................................................
4.7.8 Supply Chain Engineer ....................................................
4.8 Summary ....................................................................................

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5 Basic Interactive Planning in SAP APO .................................... 245
5.1 Demand and Supply Planning Cycle ............................................
5.2 Interactive Demand Planning ......................................................
5.2.1 SAP APO Planning Book Navigation ...............................
5.2.2 Characteristic Value Combination (CVC) Maintenance ....
5.2.3 Realignment ...................................................................
5.2.4 Notes Management ........................................................
5.2.5 Fixing Cell ......................................................................
5.2.6 Chart Engine ..................................................................
5.2.7 Releasing the Demand Plan from APO-DP to Supply
Planning ........................................................................
5.3 Interactive Statistical Forecasting ................................................
5.4 Interactive Supply Planning .........................................................
5.5 SNP Heuristics ............................................................................
5.5.1 Heuristic Engine Run Process ..........................................
5.5.2 Replenishment and Procurement Using SNP Heuristics ...
5.5.3 Master Production Schedule and Capacity Leveling
Using SNP Heuristics ......................................................
5.5.4 Distribution Planning Using SNP Deployment
Heuristics .......................................................................
5.5.5 Master Data Maintenance ..............................................
5.5.6 Interactive SNP Deployment Planning ............................
5.6 Load Planning Using the SNP Transport Load Builder ..................
5.7 Demand and Supply Planning Alerts ...........................................
5.7.1 Types of Alerts ................................................................
5.7.2 Visualizing Alerts with the Alert Monitor ........................
5.7.3 Methodology: The Decision Tree ....................................
5.8 Simulation via Version Management ...........................................
5.9 Summary ....................................................................................
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6 Advanced Demand Planning Concepts in SAP APO ................. 301
6.1 Promotion Planning ....................................................................
6.1.1 Promotion Planning with SAP APO ................................
6.1.2 Promotion Planning with SAP CRM: Integrating SAP
APO and SAP CRM ........................................................
6.2 Lifecycle Planning .......................................................................
6.2.1 Phase-In/Phase-Out Modeling .......................................
6.2.2 Interchangeability ..........................................................
6.3 Seasonal Planning .......................................................................
6.4 SAP APO Demand Planning Bill of Material Functionality ...........
6.4.1 Creating a New Planning Object Structure .....................
6.4.2 Creating a New Planning Area ........................................
6.4.3 Define a New Planning Book ..........................................
6.4.4 Maintaining the Production Process Model (PPM) or
Production Data Structure (PDS) ....................................
6.4.5 Maintenance of Characteristic Value Combinations
(CVC) .............................................................................
6.5 Customer and Product Segmentation ..........................................
6.6 Customer Forecast Management .................................................
6.7 SAP APO Demand Planning Alerts ..............................................
6.8 Duet Demand Planning ...............................................................
6.9 Summary ....................................................................................
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7 Advanced Supply Planning Concepts in SAP APO ................... 335
7.1 Safety Stock Planning ..................................................................
7.1.1 Manual Static Safety Stock Planning ...............................
7.1.2 Manual Time-Dependent Safety Stock Planning .............
7.1.3 Advanced Safety Stock Planning .....................................
7.2 Aggregated Planning ...................................................................
7.2.1 Hierarchical Planning Scenarios ......................................
7.2.2 Setting up the Hierarchy Structure ..................................
7.2.3 APO-SNP Customization ................................................
7.2.4 Preparing Master Data ...................................................
7.2.5 Technical Design Flow ....................................................
7.2.6 Testing Business Scenario ...............................................
7.3 Shelf Life Planning ......................................................................
7.3.1 Shelf Life Master Data ....................................................
7.3.2 Shelf Life Transaction Data .............................................
7.3.3 SAP ERP Batch Integration .............................................
7.3.4 Shelf Life Key Figures .....................................................
7.3.5 Shelf Life Propagation ....................................................
7.3.6 Shelf Life Alerts ..............................................................
7.4 Planning Strategies and Forecast Consumption ...........................
7.4.1 Planned Independent Requirement Segment
(Requirement Planning) ..................................................
7.4.2 Assignment Mode (Forecast Consumption) ....................
7.4.3 Category Group (Forecast Consumption) ........................
7.5 Subcontracting ............................................................................
7.5.1 Master Data Requirements .............................................
7.5.2 Planning Book ................................................................
7.6 Warehouse Capacity Overview ....................................................
7.6.1 Master Data ...................................................................
7.6.2 Perform the APO-SNP Planning Run ...............................
7.7 Direct Shipment Customers ........................................................
7.8 Product Interchangeability in APO-SNP ......................................
7.8.1 Scenario 1: Consume Existing Inventory .........................
7.8.2 Scenario 2: Consuming Existing Inventory until a
Specific Date ..................................................................
7.9 Transport Load Builder ................................................................
7.9.1 TLB Profile .....................................................................
7.9.2 TLB Loading Method ......................................................
7.9.3 Shipping Strategies .........................................................
7.9.4 Pull-In Horizon ...............................................................
7.9.5 Shipment Sizing .............................................................
7.10 Stock Balancing ...........................................................................
7.11 Supply Planning Alerts ................................................................
7.11.1 Managing Favorites in the Alert Monitor ........................
7.11.2 Using the Alert Monitor .................................................
7.11.3 Alert Monitor Hierarchies ...............................................
7.11.4 Alerts in the Interactive Planning Screen ........................
7.12 Supply Chain Cockpit ..................................................................
7.13 Summary ....................................................................................
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8 Collaborative Planning with SAP APO ..................................... 419
8.1 Collaborative Planning Overview ................................................
8.2 Collaborative Demand Planning ..................................................
8.3 Collaborative Supply Planning .....................................................
8.4 Collaborative Planning Workflow ................................................
8.5 Collaborative Planning Configuration Steps .................................
8.5.1 Activate ICF Services ......................................................
8.5.2 Maintain Entries in Table TWPURLSVR ...........................
8.5.3 Maintain ICM Monitor ...................................................
8.5.4 Publish Internet Services ................................................
8.5.5 Collaboration Partner User .............................................
8.6 Vendor Managed Inventory ........................................................
8.6.1 VMI Model and Technical Flow ......................................
8.6.2 Configuring VMI Scenario in SAP SNP ............................
8.7 Integrating SAP Supply Network Collaboration with SAP APO:
Overview ....................................................................................
8.8 Inter-Market Demand and Supply Planning in the Same
Advanced Planning and Optimization Application Instance .........
8.9 Summary ....................................................................................

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9 Demand and Supply Planning Reporting .................................

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9.1 SAP Supply Chain Performance Management Overview ..............
9.2 SAP APO and SAP NetWeaver BW Integration ............................
9.2.1 Data Dimensions in SAP APO .........................................
9.2.2 SAP NetWeaver Business Warehouse Layers ...................
9.2.3 Integration Scenarios ......................................................
9.3 Extraction Process from SAP APO liveCache to
SAP NetWeaver BW ....................................................................
9.3.1 Generate DataSource Export ..........................................
9.3.2 Create a Query ...............................................................
9.4 Demand Planning Data Model ....................................................
9.4.1 Flow 1: Historical Data Load (Inbound Flow) ..................
9.4.2 Flow 2: Data Extraction (Outbound Flow) ......................
9.5 SAP APO Supply Network Planning Data Model .........................
9.6 SAP NetWeaver BW Business Content ........................................
9.6.1 Access Standard Business Content ..................................
9.6.2 Install Standard Business Content ...................................
9.6.3 Supply Chain SCOR Metrics ............................................
9.6.4 Level 1 ...........................................................................
9.6.5 Level 2 ...........................................................................
9.6.6 Level 3 ...........................................................................
9.7 Summary ....................................................................................
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10 SNP Optimizer .......................................................................... 487
10.1 SNP Optimization Concept .........................................................
10.1.1 SNP Optimization Steps .................................................
10.1.2 Differences between Heuristics and Optimizers ..............
10.1.3 SNP Optimizer Constraints .............................................
10.2 SNP Optimizer Costs ...................................................................
10.2.1 Unsatisfied Demand or Delay .........................................
10.2.2 Storage Costs .................................................................
10.2.3 Safety Stock Penalty .......................................................
10.2.4 Production ....................................................................
10.2.5 Transportation ................................................................
10.2.6 Resource Expansion ........................................................
10.2.7 Procurement ..................................................................
10.3 Profiles Used by the SNP Optimizer ............................................
10.4 Case Study Scenario: Network Model .........................................
10.4.1 Identifying Variables for a Graphical Representation .......
10.4.2 Running the SNP Optimizer with Constraints .................
10.5 SNP Optimizer: Automatic Cost Model .......................................
10.5.1 Priorities and Preferences ...............................................
10.5.2 Business Rules ................................................................
10.6 SNP Optimization Explanation Log .............................................
10.7 Case Study Scenario: Supply Allocations ......................................
10.7.1 Optimization Model Input .............................................
10.7.2 Optimization Constraints ................................................
10.7.3 Optimization Cost Factors ..............................................
10.7.4 Production Capacity Maintenance ..................................
10.7.5 Maintain Storage Inventory Costs ...................................
10.7.6 Testing ...........................................................................
10.7.7 Planning Run ..................................................................
10.8 SNP Deployment Optimizer ........................................................
10.9 The APO Performance Monitor ...................................................
10.10 Integration of External Optimizers to SAP APO ...........................
10.11 Summary ....................................................................................
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11 Demand and Supply Matching with Capable-To-Match .......... 537
11.1 Capable-to-Match Concept .........................................................
11.1.1 CTM Planning Characteristics .........................................
11.1.2 CTM Planning Scenario ..................................................
11.1.3 CTM Planning Modes .....................................................
11.1.4 Demand Prioritization ....................................................
11.1.5 Supply Categorization ....................................................
11.1.6 Search Strategy ...............................................................
11.2 CTM Customization ....................................................................
11.2.1 CTM Profile: Planning Scope ..........................................
11.2.2 CTM Profile: Strategies ...................................................
11.2.3 CTM Integration with Global ATP ...................................
11.2.4 CTM Early/Late Demand Fulfilment ................................
11.2.5 CTM Profile: Aggregation ...............................................
11.2.6 CTM Profile: Demand ....................................................
11.2.7 CTM Profile: Supplies .....................................................
11.2.8 CTM Profile: Settings ......................................................
11.2.9 CTM Supply Distribution ................................................
11.3 CTM Master Data .......................................................................
11.4 CTM Planning Run ......................................................................
11.5 CTM Case Study ..........................................................................
11.6 Summary ....................................................................................
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12 Inventory Planning and Optimization with SAP APO and
SAP ERP ....................................................................................
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12.1 Inventory Optimization ...............................................................
12.1.1 Dynamics .......................................................................
12.1.2 Supply Chain Applications ..............................................
12.1.3 Techniques ....................................................................
12.2 Inventory Analysis Methodology .................................................
12.2.1 Product Portfolio Classification (ABC Analysis) ................
12.2.2 Inventory Stocking Policies Quadrant .............................
12.2.3 Inventory Historical Analysis ..........................................
12.2.4 Inventory Un-Bundling ...................................................
12.2.5 Inventory Modeling ........................................................
12.2.6 Inventory Cost-Benefit Analysis ......................................
12.3 Designing an Inventory Control System .......................................
12.3.1 Economic Order Quantity ...............................................
12.3.2 Lot Sizing .......................................................................
12.3.3 SAP APO Target Stock Level ...........................................
12.4 Multi-Echelon Inventory Planning ...............................................
12.5 Summary ....................................................................................
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13 Characteristics-Based Planning in SAP APO ............................ 607
13.1 Characteristics-Based Planning Process Overview ........................
13.2 Characteristics-Based Planning Technical Steps ............................
13.2.1 Business Case Study .......................................................
13.2.2 Variant Configuration .....................................................
13.2.3 Material Master .............................................................
13.2.4 Characteristics ................................................................
13.2.5 Variant Class ...................................................................
13.2.6 Super BOM ....................................................................
13.2.7 Super Routing ...............................................................
13.2.8 Configuration Profile ......................................................
13.2.9 Object Dependencies .....................................................
13.2.10 Customizing Sales Orders ..............................................
13.3 Characteristics-Based Forecasting ................................................
13.3.1 Activate Characteristics-Based Planning ..........................
13.3.2 CBF Master Data ............................................................
13.3.3 Planning Book Design ....................................................
13.3.4 Descriptive Characteristics ..............................................
13.3.5 Demand Planning Release .............................................
13.4 Supply Planning Integration ........................................................
13.4.1 Business Scenario and Technical Steps ............................
13.4.2 Block Planning Integration .............................................
13.5 Summary ....................................................................................

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14 SAP Industry Solution Example with SAP APO ....................... 641
14.1 SAP Apparel and Footwear (AFS) Industry Solution .....................
14.2 SAP ERP (AFS Extension): Integrated Solution Overview .............
14.2.1 Process Steps .................................................................
14.2.2 AFS Planning ..................................................................
14.3 Master and Transactional Data Integration ..................................
14.3.1 Maintain Master Data ....................................................
14.3.2 Data Transfer from SAP ERP to SAP APO ........................
14.3.3 Bill of Materials Construct in SAP ERP (AFS Extension) ...
14.3.4 Transactional Data Integration ........................................
14.4 SAP APO Solution for AFS Using Aggregated Functionality .........
14.4.1 Demand Planning: Seasonal Functionality ......................
14.4.2 SAP APO Supply Network Planning: Aggregated
Functionality ..................................................................
14.5 SAP Business Function ................................................................
14.6 Summary ....................................................................................
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15 Technical Concepts in SAP APO ............................................... 665
15.1 APO Core Interface .....................................................................
15.1.1 CIF Configuration Steps ..................................................
15.1.2 CIF Integration Models ..................................................
15.1.3 CIF Incremental Data Transfer ........................................
15.1.4 CIF Administration .........................................................
15.1.5 Troubleshooting CIF .......................................................
15.1.6 Customer Exits ...............................................................
15.1.7 Publication of Planning Results .......................................
15.1.8 Regular CIF Monitoring Transactions ..............................
15.2 SAP APO Technical Upgrade: Functional Activities ......................
15.2.1 Plan Phase .....................................................................
15.2.2 Prepare Phase ................................................................
15.2.3 Upgrade Phase ...............................................................
15.2.4 Post-Upgrade Phase .......................................................
15.3 SAP APO Authorization Concept .................................................
15.3.1 Master-Derived Role Concept ........................................
15.3.2 Defining Roles ................................................................
15.4 SAP APO Process Chain ..............................................................
15.4.1 Main Components ..........................................................
15.4.2 Create the Process Chain ................................................
15.4.3 Process Chain Monitoring ..............................................
15.4.4 Parallel Processing ..........................................................
15.5 Hardware Sizing using Quick Sizer ...............................................
15.6 Technical Integration with Non-SAP Applications ........................
15.6.1 SAP APO Business Warehouse ........................................
15.6.2 Enterprise Service Bus ....................................................
15.7 Summary ....................................................................................
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16 Data Conversion and Technical Enhancements ........................ 727
16.1 Data Conversion Strategy for SAP APO .......................................
16.1.1 Data Conversion Process ................................................
16.1.2 Data Mapping and Cleansing ..........................................
16.2 Introduction to the Legacy System Migration Workbench
(LSMW) ......................................................................................
16.3 SAP APO Data Conversion Using LSMW .....................................
16.3.1 Loading Master Data ......................................................
16.3.2 Converting Transactional Data ........................................
16.3.3 Importing Data with IDocs .............................................
16.4 Technical Enhancements in SAP APO ..........................................
16.4.1 Business Scenario 1: Material Master CIF .......................
16.4.2 Business Scenario 2: SAP APO Product Master
Creation .........................................................................
16.4.3 Business Scenario 3: Transaction Data Mapping ..............
16.4.4 Business Scenario 4: APO-SNP PDS Modification ...........
16.4.5 Business Scenario 5: APO-SNP Planning Book
Modifications .................................................................
16.4.6 Business Scenario 6: SAP APO User Exit Macro ..............
16.4.7 Business Scenario 7: SNP Heuristics Lot Sizing ................
16.4.8 Business Scenario 8: CTM Demand Prioritization ...........
16.4.9 Business Scenario 9: Demand Planning with SAP
NetWeaver BW ...............................................................
16.4.10 Business Scenario 10: Demand Planning to Supply
Planning Release ............................................................
16.4.11 Business Scenario 11: Alert Monitor ...............................
16.4.12 Business Scenario 12: TLB Interactive Display .................
16.5 Summary ....................................................................................
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17 Conclusions and Outlook ......................................................... 763
Appendices ....................................................................................... 767
A Resources ..............................................................................................
B List of Acronyms ...................................................................................
C The Author ...........................................................................................
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Index ......................................................................................................... 779


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