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Supply

Chain Management
with
SAP APO
Santosh Amogha Varsh(s0555272)
Sai Indrakaran Charabdi(s0555269)
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Content
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Typical Business Process Centralized and Decentralized

What is SAP - Products and Components, Modules

What is SAP APO, Structure

Demand planning, Supply Network Planning, Production Planning and Detailed scheduling

APO Supporting Features

Gaps in SAP APO

Disadvantages of SAP APO

References
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Typical Business Process


A typical enterprise has many departments/Business units (BU).
These departments/BU continuously communicate and exchange data with
each other.
The success of any organization lies in effective communication and data
exchange within the departments/BU as well as associated third party such as
vendors, Outsourcers and customers.

Enterprise software systems can be classified into two types


Decentralized Systems
Centralized systems also called ERP

Decentralized Systems
Data is maintained locally.
Creation of various info systems
individually.
Data integration is money and time
consuming.
Inconsistencies and data duplication.
Customer dissatisfaction, loss of
revenue and reputation.
Delay increases costs of raw
materials and labor.
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Centralized Systems(ERP)
Data is maintained at a central
location and shared. Every
department has an access.
Eliminates duplicates, redundancy
and discontinuity in data.
Information available in real-time.
Provides more control over business
processes.
Increases productivity.
Better Inventory management,
Effective human resource
management. Promotes quality.
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What is SAP?
SAP Stands for (System Applications and Productions in Data processing).
SAP was founded in 1972 by five former IBM employees in Mannheim,
Germany.
Business Application Software.
Largest Vendor of Standard business Applications
Used for small, medium and large businesses
Wide range of products(Analytic, CRM, SRM, SCM, Data Management, etc.).

SAP HQ - Walldorf

Products and components of SAP


Products or Components:
SAP ERP
SAP SRM
Each Product Consists of Modules:

SAP CRM
SAP PLC
SAP Netweaver
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Modules in SAP ERP


v FICO Finance and Controlling
v SD Sales and Distribution
v MM Material Management
v PP Production Planning
v QM - Quality Management
v WM Warehouse Management
v LE Logistics execution
v HR Human Resource
v PS Project Systems
v EHS Environment health and Safety
v PLM Product lifecycle management
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New Dimension Products


New Dimension Productions by SAP are called (mySAP).
v CRM Customer Relationship Management.
v SRM Supplier Relationship Management.
v APO Advanced planning and Optimization
v BI Business Intelligence
SEM Strategic Enterprise Management
BPC Business Process Consolidation
FSCM Financial Supply Chain Management

v PI Process Integration

What is SAP APO?

Set of Software Applications for SCM.


Designed to improve production planning, pricing, scheduling, and product shipping.
SCM Most Common Problems
Forecast Quality
Excess Inventory
Lack of visibility in your supply chain
Capacity Storages
Creating an optimized finite production
Consequences
plan.
Lost sales or unnecessary production and
high inventory. Excessive WIP
No systematic consideration of inventory
Lack of Information
High Set-up costs/times and low resources
utilization.
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SAP APO Structure?


Synchronize supply with demand in global supply
chain.
APO DP : Improve the forecast quality and planning
accuracy.
APO SNP : Improve visibility across global supply
chain and lowers inventories.
APO PP/DS : Supports in creating optimized
production plans.
APO gATP : Allows state-of-the-art sales order
confirmation planning processes.
APO TP/VS : Optimizes transportation loads and
minimizes transportation costs.
APO alert Monitor : Powerful exception message
system integrated in all APO planning modules.
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APO DP(Demand Planning)


Calculate and determine future demand to improve demand quality and accuracy
FEATURES

Comprehensive forecasting tool-set


Selection of best-fit model
Life-cycle planning
Plan promotions separately from the rest
of your forecast
Track and monitor forecast accuracy
Seasonal planning
Collaborative demand planning

KEY BENEFITS

Improved forecast quality


One tool for power and business user
Consolidated Demand plan (different
regions, countries, departments, )

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APO SNP(Supply Network Planning)


Calculate quantities to be produced and delivered to the locations to match customer demand and
maintain desired service levels.
FEATURES

Integrate purchasing, manufacturing,


distribution and transportation
Consider constraints and penalties to plan
the product flow
Safety stock methods considering
multilevel supply chain
Supports system wide inventory planning
Enable planning on different levels of
detail

KEY BENEFITS

Increased visibility over the overall supply


chain
Optimized sourcing and capacity
utilization
Reduced inventory levels
Improved customer service

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APO Production Planning


& Detailed scheduling
Delivers a short-term plan that matches overall supply to demand, given available resources and
production methodology
FEATURES

Multi-level production planning


Order pegging
Use existing or own developed heuristics

KEY BENEFITS

Determines how, when, where resources and


materials should be deployed to accomplish
the production goals
Mastering planning for materials and capacity

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APO Production Planning


& Detailed scheduling
Determines optimal production sequence for execution to meet delivery commitments based on
actual constraints on the shop floor

FEATURES

Capacity-load optimization
Optimal Sequencing
Flexible and graphical activity scheduling
What-if analysis and simulation
Configure Exception Alert Monitor

KEY BENEFITS

Optimal production sequence that is feasible


and can be executed
Allows simulation of various planning
scenarios to determine optimal schedule
Optimization based on actual constraints
ensures reliable delivery due date
compromises
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APO Supporting Features


GLOBAL AVAILABLE TO PROMISE : Allows state of art sales order Confirmation planning process

TRANSPORTATION PLANNING AND VEHICLE SCHEDULING: Optimizes transportation loads and


minimizes transportation costs.

ALERT MONITOR: Powerful exception message system integrated in all APO planning modules.
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Gaps in SAP APO


Vendor-managed inventory
Just in time
Customer response
Sourcing strategies
Demand Planning is stronger than supply
Increased Dependency on excel sheets
Business requirements are changing

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Disadvantages of SAP APO

High implementation and maintenance cost.


Training and high skilled professionals are required
SAP is discontinuing support of the current Supply chain planning Technologies

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References
http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/0045e1a1
-cb34-2d10-339aba46612dc62e?QuickLink=index&overridelayout=true&47463683667924
http://www.socialerp.com/sap-erp-review.php
http://www.saponlinetutorials.com/advantages-and-disadvantages-of-erp/
http://searchsap.techtarget.com/definition/Advanced-Planner-and-Optimizer
https://www.youtube.com/watch?v=lYCEQqSM08I
https://www.youtube.com/watch?v=I1fAcjEIEEM
https://www.youtube.com/watch?v=M45hOcgUiW8
https://help.sap.com/saphelp_scm70/helpdata/en/d0/46c95360267614e1000
0000a174cb4/frameset.htm
http://www.supplychainshaman.com/supply-chain-2/supply-chainplanning/three-reasons-why-sap-is-a-risk/
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