Overview

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.
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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
Purpose
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.

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

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

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

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

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

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

with long replenishment lead times or that are produced on bottleneck resources. Reduce inventory costs because the work in process inventory is reduced as a result of better coordination of product release. such as master and transaction data. Products are planned in the APO System and the planning results are then transferred to the OLTP System. where you perform execution functions. is provided by a connected OLTP System. 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. for example. Requirements data from long and medium-term . 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.Explanation and Simulation Basic Methods of the Availability Check Use The elementary methods of the global availability check are called basic methods. PP/DS is designed to plan critical products.

you assign the locations. You then add transportation lanes to link supply . For more information. You control which data is to be transferred to and from the OLTP System in the integration model of the core interface. see Integration of APO and R/3. products.planning can also be transferred to PP/DS within APO from Demand Planning and Supply Network Planning. Set up the Supply Chain Model Use the Supply Chain Engineer (SCE) In the SCE. 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. resources and production process models (PPM) to a model.

to demand locations and to allocate products to the transportation lanes. 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. With automatic planning. The result is feasible availability dates for the product and its components. 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. You can also to convert specific individual orders that are outside the production horizon. the system checks the availability of resources and components when orders are created. 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. Perform execution of orders Use the connected OLTP System For example. Global ATP calls up PP/DS to determine the availability date while taking product availability and capacity into account. • Interactive Planning . confirmation. the APO system creates a relationship between the receipt and requirements elements of a product within a location. goods receipt. multi-level transfer of changes to quantities and dates Using pegging. This enables up-to-date planning data in both systems. 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. Display exceptional. The dynamic pegging structure ensures that quantity or scheduling changes are transferred to orders at lower levels of the BOM structure. are transferred directly to PP/DS. 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. • Automatic. The system generates a pegging structure that is organized according to the BOM structures of all relevant products.

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

planning strategies control the sequence of supply consumption and multi-level BOM explosion. and airplanes with the goals of planning more efficient loading capacity and lowering costs. as is the case with traditional planning approaches. instead of considering the supply chain production level-by-production level. an order-based method of Supply Distribution. SDM aims at a short. Because SDM is order-based. as well as a tool that provides a graphical. since most customers depend completely on external transportation companies nowadays for optimum transportation (which means deliveries that are on time and cost saving). SDM focuses on the supply chain. . Capable-To-Match (CTM) is the central planning tool of Multi-level Supply & Demand Matching. 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. complement this application. as well as on time-dependent process parameters.available capacity of trucks. such as yield and process times. 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. Capable-To-Match performs a quick check of production and transportation capabilities. not production resource-centric. In addition. For more information. Integration Multi-Level Supply & Demand Matching complements Supply Network Planning and Production Planning in APO's multi-site Supply Chain Planning strategies. floworiented view of the supply chain. SDM’s approach is production flow-centric. ships. In addition. CTM’s focus is multi-site production processes based on resource allocation rules. trains. Like other APO Supply Network Planning strategies. it requires a tool that also supports a multi-level dynamic order split.until mid-term planning horizon and guarantees a timely multi-level synchronous production flow. triggering flow only when it is necessary.

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

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

To do this. 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. .Because of its linear complexity. and considering the amount of demands.

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