SAP (Advanced Planning and Optimizer) or SAP (APO)is the planning component within the mySAP
SCM solution. APO is an acronym for Advanced Planner and Optimizer. This is a large component of
SAP's New Dimension products. APO is an entire suite of supply chain planner applications that increase
overall knowledge of the supply chain and provide forecasting, planning and optimization. There are eight
application levels within SAP APO: network design, supply network planning, demand planning,
production planning and detailed scheduling, transportation planning and vehicle scheduling, global
availabilty and supply chain collaboration.
The SAP APO is not a standalone application and requires a backend ERP system such as SAP R/3 for
the execution. SAP R/3 communicate with SAP APO using the the APO Core Interface (CIF) which
supplies SAP APO with the master and the transaction data in the real time. Interaction between the SAP
R/3 at backend and the SAP APO is in real time and any data related to the production, the sales or the
supplies is immediately transfered from one system to another without requiring any batch processing.
The efficient way of installing some standard SAP APO scenarios is by reference to the SAP Best
Practices for Supply Chain Management.

Modules within SAP APO

Supply Chain Cockpit

Demand Planning - a toolkit of statistical and collaborative forecasting techniques.
Supply Network Planning - used to calculate quantities to be delivered to a location in order to
match customer demand and maintain the desired service level.
Global Available to Promise - uses a rule based strategy to ensure you can deliver what you
promise to your customers.
Transportation Planning / Vehicle Scheduling - optimizes transportation route and schedules
vehicle resources.

Service Parts Planning
Production Plan / Detailed Scheduling - create procurement proposals for in-house production
or external procurement to cover product requirements and optimizes the same.

Demand Planning Process
This process describes each activity in the Demand Planning (DP) cycle. In general, you can assume that
the order of the processes presented here is the order in which you should proceed through the DP cycle.
However, since DP is represented as a cycle, not a linear path, you may decide to repeat certain activities
or to proceed in a different order.

Process Flow
The following diagram depicts the DP cycle.

1. The planning area is the basis for all activities in APO Demand Planning. It is a collection of parameters that define the scope of all . Carry out all the steps needed to set up your planning area.

Verify the accuracy of the forecast. Supply Network Planning Process Purpose Supply Network Planning enables you to model your entire supply network including all of the associated constraints. causal analysis and/or composite forecasting. and so on. 18. Refine the forecast models in the light of knowledge gained from forecast accuracy checks. Result The result of Demand Planning is the demand plan. 11. Using this model. 15. and to closely match supply and demand. dealer allowances. Define macros to perform calculations. 16. Examples of promotions are free-standing inserts. carry out tests. with actual data and with other demand planning versions that you did not release to SNP. 12. consensus forecast. for example. Reconcile the demand plans of different departments by merging the plans into a one-number. divisions. 10. 6. inventory. Map the structure of your company (for example. Choose from a wide variety of forecasting methods and techniques. Simulate different planning scenarios. You load into the data mart the actual history (for example. manufacturing. Add new models for new products and product lines. Update the actual data. 14. to the opening of a factory to meet demand in a new market region. shipments or billings) that wlíll be used to create the DP master data and generate the demand forecasts. coupons. Define forecast models for time series forecasting. products and customers) for planning purposes in the DP master data. Plan promotions and other events. Monitor exceptional or critical situations through the Alert Monitor. and advertising. This step can be completed by either the demand planner or the SNP planner. and transportation. product displays. 17. regions. A comparison of the two plans could lead. contests. for example. Make the SNP plan available to DP by releasing it. Create a forecast of market demand using a top-down. 13. 4. trade shows. discounts. bookings. 7.planning tasks. Configure the layout of the planning screens for the different parties (departments. 2. brands. Process Flow . managers. 9. and so on) who will participate in demand planning by designing planning books. This allows you to create feasible plans for purchasing. customers. 8. The planning area is linked to the data mart. The demand plan is often unconstrained by any production or distribution restrictions. 3. Revise the master data to reflect the addition of new products. divisions. Store the forecasts made at different times for a period. or bottom-up approach. by comparing it with the constrained forecast from SNP. Forecast new products and discontinued products by applying lifecycle planning and "like" modeling techniques. 5. Fine-tune the demand plan by adding management overrides and modifications. Make the demand plan available in SNP by releasing it. you can synchronize activities and plan the flow of material along the supply chain. middle-out. The SNP plan takes into account any production or distribution restrictions. and warn you of exceptional situations. coupons.

you may need to repeat certain steps or to proceed in a different order.The following diagram depicts the Supply Network Planning cycle and SNP’s integration with other APO components. you can assume that the order of procedures presented in this document is the order in which you should proceed through the cycle. In general. However. not all activities are mandatory. • Planning Area Administration . Also.

• Interactive Planning After the Supply Network Planning run. you can also level resource capacity to resolve problems from the interactive planning table. products. Supply & Demand Propagation. They can also be used to perform mass maintenance of product master data. the master data must be set up with care to achieve the desired results. and vice-versa. or Capable-To-Match results in a mid-term production and distribution plan. Whether you plan to use the Heuristic. and/or safety stock planning. You then add transportation lanes to link supply to demand locations. You can assign the model to several different versions for simulative purposes. It is a collection of parameters that define the scope of all planning tasks. resources. This step can be carried out by either the demand planner the SNP planner. If you use.Carry out all the steps needed to set up your planning area. • Release Demand Plan to SNP You release the demand plan from Demand Planning to Supply Network Planning. • Supply Network Planning Run You execute planning based on the methods you chose. allocate products to the transportation lanes. • APO Master Data Setup Supply Network Planning is a very master data-intensive component of APO. products. you assign the locations. • Model/Version Creation You must create a model name before you set up the model in the Supply Chain Engineer (SCE) and assign the model to at least one version. you review the plan in the interactive planning desktop. Master data for Supply Network Planning includes locations. The version is also used for the release of the Demand Plan (final forecast) to Supply Network Planning. and production process models (PPMs). You may need enter additional master data specifically for the method that you are using. In the SCE. The demand plan is often unconstrained by any production or distribution restrictions. and maintain quota arrangements. Capable-To-Match planning. • Supply Chain Model Setup You set up the supply chain model for Supply Network Planning in the Supply Chain Engineer (SCE). Then you make the settings in the appropriate profiles for each of the methods for which this is required. and PPMs to a model. supply & demand propagation. the Heuristic planning method. or Capable-To-Match (CTM). . including all prerequisite steps Performing the supply network planning runusing the Heuristic. These profiles can be changed on the fly for simulation purposes. The planning area is the basis for all activities in APO Supply Network Planning. for example. Optimizer. • Supply Network Planning Method Determination and Profile Settings You determine which of the following methods to use for your planning: optimization. heuristic planning. resources. Optimizer.

• Deployment Run After production planning is complete and the system knows what will actually be produced (this information is stored automatically in liveCache). it is included in the cycle because this step is usually performed before running Deployment and Transport Load Building. it is included in the cycle because production planning and detailed scheduling is usually performed before running Deployment and Transport Load Building. re-planning. However. • PP/DS Planning This is not part of the Supply Network Planning process because it can only be executed in PP/DS.• Release of Supply Network Plan to Demand Planning You release the final supply network plan back to DP for comparison of the unconstrained demand plan to the constrained supply network plan. In PP/DS. For example. Major discrepancies between these two plans could trigger re-forecasting. and. In PP/DS. you create a viable production plan based on the planned orders generated in Supply Network Planning. which are included in the Supply Network Planning interface. you may release the supply network plan back to DP if the capacity situation cannot cover demand created by a promotion. • Transport Load Building The Transport Load Building (TLB) run groups the confirmed transport orders resulting from the Deployment run into transportation plans. For transport orders that could not be satisfied during the TLB run due to specified constraints. APO Global Available-to-Promise (Global ATP) Purpose . you convert supply network planning orders into PP/DS orders to make them available for production planning and detailed scheduling. • Conversion of SNP Orders into PP/DS Orders This is not part of part of the Supply Network Planning process since it can only be executed in Production Planning and Detailed Scheduling (PP/DS). ultimately. However. so you must make changes in the promotional planning strategy in DP. the Deployment run generates confirmed transport orders. you can build transportation plans manually.

you can subsequently modify the check in the simulation and then investigate and display the effects of these modifications. The data is stored in liveCache in the form of time series’. Implementation Hints For the business objectives of Global ATP. the results of the check should be analyzed. this means that information has to be made available across system boundaries as quickly as possible to provide optimized decision support. which are prescribed by enterprises and customers. a technology in which data is stored in the form of time series’. By specifying parameters. Depending on these rules. Global ATP can be used in heterogeneous system landscapes to provide necessary information as quickly as possible. companies operating worldwide are forced to globalize available information in order to conduct business efficiently. See also: Backorder Processing Basic Methods Advanced Methods Rules-Based Availability Check . Specifically.Increasingly. this means that executing the check can depend on rules determined solely by a process that was just carried out. and the dates and quantities for product availability should be determined. Global ATP is one of the central methods of the SAP APO server that utilizes liveCache.

such as master and transaction data. See also: Product Availability Check Product Availability Check Using Checking Horizons Shortage Check Characteristics-based Product Availability Check Product Allocations Check Against the Forecast Production Planning and Detailed Scheduling (PP/DS) Purpose The component Production Planning and Detailed Scheduling (PP/DS) enables you to plan and optimize multi-site production while simultaneously taking into account product and capacity availability. is provided by a connected OLTP System. With PP/DS you can create executable production plans and • • • • Reduce lead times Increase on-time delivery performance Increase throughput of products based on better resource coordination. Integration The data relevant for planning. Reduce inventory costs because the work in process inventory is reduced as a result of better coordination of product release. PP/DS is designed to plan critical products. with long replenishment lead times or that are produced on bottleneck resources. where you perform execution functions. for example.Explanation and Simulation Basic Methods of the Availability Check Use The elementary methods of the global availability check are called basic methods. Requirements data from long and medium-term . Products are planned in the APO System and the planning results are then transferred to the OLTP System.

The following diagram represents the integration between an OLTP system and the APO system and its components: Integration within APO and with an OLTP System The following table shows how PP/DS is integrated with the OLTP System and other APO components: Integration with Other APO Components and an OLTP System To Procedure Other Information Set up master data Transfer the master data from the OLTP System and maintain the necessary data in the APO System The OLTP System provides PP/DS with master and transaction data. products. resources and production process models (PPM) to a model. Set up the Supply Chain Model Use the Supply Chain Engineer (SCE) In the SCE. For more information. see Integration of APO and R/3. You control which data is to be transferred to and from the OLTP System in the integration model of the core interface. you assign the locations. You then add transportation lanes to link supply .planning can also be transferred to PP/DS within APO from Demand Planning and Supply Network Planning.

With automatic planning. The result is feasible availability dates for the product and its components. The system generates a pegging structure that is organized according to the BOM structures of all relevant products. multi-level transfer of changes to quantities and dates Using pegging. the system checks the availability of resources and components when orders are created. Global ATP calls up PP/DS to determine the availability date while taking product availability and capacity into account. • Interactive Planning . Perform execution of orders Use the connected OLTP System For example. confirmation. The dynamic pegging structure ensures that quantity or scheduling changes are transferred to orders at lower levels of the BOM structure. goods receipt.to demand locations and to allocate products to the transportation lanes. the APO system creates a relationship between the receipt and requirements elements of a product within a location. You can also to convert specific individual orders that are outside the production horizon. Transfer the planning results of Supply Network Planning to PP/DS for more detailed planning Convert the orders that lie in the production horizon into PP/DS orders. This enables up-to-date planning data in both systems. are transferred directly to PP/DS. Make the unconstrained forecast (from Demand Planning) available in PP/DS Release the demand plan to Supply Network Planning Requirements that fall within the production horizon and thus the planning responsibility of PP/DS. Perform an ATP check using Global ATP and PP/DS Create a sales order in the connected OLTP System If the result of the ATP check is to produce. • Automatic. unexpected or critical situations in the PP/DS planning process Access the Alert Monitor You can define which types of alerts you would like the system to generate and display. Display exceptional. Features • Automatic Planning You can define that the System is to plan products automatically in PP/DS when you change orders or data relevant to planning in the APO System or the connected OLTP System.

Transportation Planning/Vehicle Scheduling Purpose The Transportation Planning/Vehicle Scheduling (TP/VS) component. • Heuristics and Background Planning o Heuristics You use heuristics to solve specific planning tasks for selected objects (depending on the focus of planning: products. You can apply heuristics both during interactive planning and during the production planning run. o Product planning table You use the product planning table to plan the production quantities for products and the schedule of the production lines. resources or line networks) using a particular planning procedure algorithm. such as shop floor control with confirmation. o Optimization Using the optimization tool. Execution functions. You use the detailed scheduling planning board to reschedule orders or operations manually. o Production Planning Run You use the production planning run to execute heuristics. must be performed in an OLTP system. It enables the transportation planner to optimally use the .You can use interactive planning for important products that you wish to plan manually and to solve any planning problems that have arisen during automatic planning. several heuristics or functions can be executed one after another. is described in this section. such as setup times and setup costs. Constraints The component Production Planning and Detailed Scheduling is a planning tool. to improve the planning situation and solve particular detailed scheduling problems. purchasing and so on. Interactive planning is supported by the following tools: o Detailed scheduling planning board In the DS Planning Board the planning situation and resource schedule are displayed in Gantt charts. operations. detailed scheduling functions or optimization for a large number of objects online or as a background job. which consists of the two partial components Transportation Planning and Vehicle Scheduling. During the production planning run. you can optimize the resource schedule according to certain criteria.

such as yield and process times. complement this application. instead of considering the supply chain production level-by-production level. triggering flow only when it is necessary. since most customers depend completely on external transportation companies nowadays for optimum transportation (which means deliveries that are on time and cost saving).until mid-term planning horizon and guarantees a timely multi-level synchronous production flow.available capacity of trucks. Because SDM is order-based. For more information. as well as on time-dependent process parameters. it requires a tool that also supports a multi-level dynamic order split. trains. see: Transportation Planning Vehicle Scheduling Planning for Vehicle Scheduling Interfaces TP/VS Master Data Transportation Management Multi-Level Supply and Demand Matching Purpose Multi-Level Supply & Demand Matching (SDM) is the umbrella for APO’s solution for matching a large set of prioritized customer demands and forecasts to a set of supplies while taking into account the current production capacities and transportation capabilities. CTM’s focus is multi-site production processes based on resource allocation rules. ships. In addition. as is the case with traditional planning approaches. and airplanes with the goals of planning more efficient loading capacity and lowering costs. as well as a tool that provides a graphical. . SDM’s approach is production flow-centric. To exploit the given production capabilities to their maximum – as is necessary in the high tech industries – a capacity check down to operation level is performed. not production resource-centric. Capable-To-Match (CTM) is the central planning tool of Multi-level Supply & Demand Matching. In addition. planning strategies control the sequence of supply consumption and multi-level BOM explosion. Like other APO Supply Network Planning strategies. Integration Multi-Level Supply & Demand Matching complements Supply Network Planning and Production Planning in APO's multi-site Supply Chain Planning strategies. SDM aims at a short. an order-based method of Supply Distribution. SDM focuses on the supply chain. Capable-To-Match performs a quick check of production and transportation capabilities. floworiented view of the supply chain.

Finally. On the one hand. In addition. Priorities and Quotas Priorities and quotas can be used to control the flow within the supply chain.such as order priority. BOM explosion Multi-site planning Features Capable-To-Match • CTM Demand Prioritization Using demands currently in liveCache. On the other hand. The overall strategy is 'First Come. different replenishment sites can be balanced using quotas. CTM’s Focus Focus Explanation Order-Based Supply & Demand Matching Demands are first prioritized and then planned individually. • CTM Supply Categorization Based on the supplies (for example. • CTM Engine The CTM Engine matches the demands to the supplies while taking into account the production capacities and transportation capabilities. CTM supports all dimensions of the APO decision cube: • • • Product substitution capability Multi-level propagation. . CTM Demand Prioritization prioritizes these demands based on specific characteristics. product priority or order category. inventories or planned deliveries) in liveCache. First Served'. CTM Supply Categorization is performed based on user-defined inventory limits. A feasible plan is proposed while taking into account the constraints in supply chain. these characteristics can be easily combined. different production processes or transport lanes can be given preference using priorities. Traceability of the result supports the analysis and understanding of the result. such as sales orders or forecasts from Demand Planning. for example. Control of the Supply Chain Several business targets can be modeled and considered while planning. Further criteria can be added. Demand Prioritization Demand prioritization provides you with the possibility to rank the demands based on predefined characteristics .

Time-Phased Process Parameters Such parameters can be used to fit the real planning situation. can be derived for CTM planning using the APO rule evaluation component. In addition. as well as alternative products. Rules-Based Planning By taking into account the characteristics combination of the demands. customer-oriented rules. such as fulfillment strategies and product/location substitutions. CTM takes into account available supply as well as the current capacity profile simultaneously. What-If Simulation and Analysis To support strategic network planning. to satisfy the demand before planning the production. Master Data Selection Master data selection for the planning run allows you to handle a subset of master data of. Special Features of CTM Feature Explanation Search Strategies The searching process for a given demand can be carried out stepwise for the different supply categories as well as for production and transports. where infinite material and capacity can be made available. taking into account the CTM specific requirements as well as general data requirements. CTM searches all available supply of the required product. the master data checker provides a summary of all master data information downloaded to the CTM Engine. and incremental changes to. the entire supply network. CTM Engine The CTM Engine runs on a dedicated server. Concurrent Material and Capacity Planning Unlike classical MRP. CTM Master Data Checker This can be used to cross-check the entire supply chain for consistency. .Replenishment Policies Explicit safety stock replenishment and a targetdays’-supply approach support guaranteeing delivery. Planning with Down Binning By using the substitution rules of products. a simulation can be executed based on a planning scenario that has been slightly modified to measure the quality by performance indicators.

the CTM Engine is tuned to handle higher volumes of data. the engine is supported by ILOG’s constraint-based programming library Solver and ILOG’s scheduling library Scheduler. and considering the amount of demands.Because of its linear complexity. To do this. .

Sign up to vote on this title
UsefulNot useful