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SAP SCM (APO) Short Overview

Supply Chain Management Advanced Planner and Optimizer Matthieu Lepelley SAP SCM Senior Consultant www.ExpertPlug.com

1 Agenda
The Supply Chain Management process in SAP Demand Planning SCM DP Supply Network Planning SCM SNP Production Planning and Detailed Scheduling - SCM PPDS Procurement Planning SCM PPDS or R3 MRP The Core Interface CIF Comments on other modules

2 The Supply Chain Management process in SAP

The objective of the Supply Chain Management process is to ensure that the company has the desired products available for its customers at the right time and place, at a minimal cost for the company. An efficient Supply Chain will enable the company to have: a higher service level = less shortages = less customers disappointed = more sales a lower stock level = less cash needed to run the operations lower operational costs = less emergency shipments, for instance

2 The Supply Chain Management process in SAP

The process starts by forecasting the future sales (Demand Planning). Then the optimal product quantities to distribute in the companys network are determined (Supply and Network Planning). From this distribution plan is deduced an ideal production plan (Production Planning and Detailed Scheduling). Finally, this production plan is used to source the required components (Procurement Planning). These steps are performed in different modules of the SAP SCM solution (formerly SAP APO Advanced Planning and Optimizer), described briefly in the following slides.

3 Demand Planning SCM DP

The Demand Planning process is performed in the SCM DP module. Its objective is to determine which products are needed for which customer or location, in which quantity and on which date. This is estimated via the process presented in the following slide, performed periodically (monthly, weekly depending on the company and type of product).

3 Demand Planning SCM DP

Monitor forecast accuracy Upload new products data Upload last period sales

Release forecast to Distribution Planning

Clean sales history of exceptional events

Add promotions Adjust the forecasts

Launch statistical forecast

4 Supply Network Planning - SNP

The Supply Network Planning Process is performed in the SNP module. Its objective is to plan the stock transfers needed between the different locations (factories, warehouses) to reach the target stock level and fulfill the demand at each of these locations.

5 Production Planning and Detailed Scheduling - PPDS

The Production Planning and Detailed Scheduling process is performed on each factory.
Its objective is to determine the optimal quantities to produce in order to fulfill the demand, limit overstocks as well as products set-up time (time lost when switching from a product to the next).

5 Production Planning and Detailed Scheduling - PPDS

By considering the demand on the factory (Sales orders, forecast, or stock transfers to warehouses), the target stock level on the factory, and the production constraints (lot sizes,) the Production Planning determines how much is to be produced for all each product per period. This is calculated for the Finished Products, and then for the intermediary Semi-Finished Products.

5 Production Planning and Detailed Scheduling - PPDS

Then by performing a Detailed Scheduling, the different production orders are scheduled optimally within a period.


6 Procurement Planning SCM PPDS or R3 MRP

The last step of the Supply Chain Management Process is the Procurement Planning. The objective of this step is to determine the components to supply in order to be able to realize the Production Plan.

This process can be performed in the SCM PPDS module for critical components to be planned in detail, or in SAP R3 using the Materials Requirements Planning (MRP) functionality.

7 The Core Interface - CIF

SAP SCM and SAP R3 are two different systems, which need to be integrated. Some SAP R3 data is sent regularly to SAP SCM for the Supply Chain Management process: product master data, sales orders, Some SAP SCM data is also sent to SAP R3 to perform the related execution processes: production orders, transfer orders,

The Core Interface (CIF) is the standard interface between these two environments.

8 Comments on other modules

Some other modules are part of SAP SCM process, and can be implemented depending on the requirements of the company:
Global Available to Promise GATP: to determine the availability of components or products Transport Planning/Vehicle Scheduling TPVS: to realize the detailed transport plan of the products

9 More on ExpertPlug.com
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