SAP APO

OVERVIEW.
By Naveen T K
Email: naveenkrishna_tarur

Goal of Presentation
Gain a fundamental understanding of
APO and R/3 Comparison.
APO components, Functionality,
Integration with OLTP environments.
Case Study SAP APO Implementation at
M&M.

APO and R/3 Comparison

SCP
Data structure.
Planned Independent requirements generation from
DP.
Promotion planning
Life cycle planning
Various special forecasting models
Stock transport requisitions generation from Supply
network planning

APO and R/3 Comparison

Supply Network design
Unconstrained
Demand Plan

Strategic
Decisions
Tactical
Decisions

Production Plans
Purchase requisitions

Constrained Plans
like MPS, DRP,

Operational
Decisions
Transactional Decisions

APO Within SAP SCOPE

Business
Information
Warehouse

Advanced
Planner and
Optimizer
to enable real time
decision support,
advanced constraint
based planning and
optimization.

R/3

CRM..

Non R/3
systems

Core level
Db,
Interfaces etc

Advanced
Planner &
Optimizer

B2B
Electronic
Commerce

Advantages of APO

Simultaneous material and capacity requirements planning.

Collaborative planning via internet.

Cross Plant optimisation of resource load.

Transportation optimisation with route planning.

Seamless integration with OLTP(R/3)

Decision support with what if analysis

Consider real world constraint while taking decisions.

Optimize plans in concert with business goals.

The Supply Chain Planning Problem

Location
Manufact.
Plant

Tier 1
Supplier

Tier 2
Supplier

Time

Level of Detail
Customer
Demand

Market Data

POS Data

APO Product Map

APO Contents
Complete toolset needed to plan and optimize supply chain processes at the strategic, tactical and
operational planning levels.
APO has following components:
DP: Demand planning
SNPD: Supply network planning Deployment
PPDS: Production planning & Detailed scheduling
GATP: Global available to promise.
TPVS: Transport Planning and Vehicle scheduling
Besides these, following supply chain features are available:
Supply network design
Supply chain monitoring using supply chain cockpit

Tight integration between APO and SAP R/3

APO Architecture
Demand
Planning

Supply
Network
Planning

Available
Production Detailed
To
Planning Scheduling
Promise

BW
SC Cockpit
liveCache

APO
Solvers

APO

Application Link Enabling

Model Generator, Mapping, Connectivity
OLTP

R/3

R/3

Legacy
OLTP

Non R\3
OLTP

Non R\3
OLTP

Supply Chain Cockpit Applications

Alert Monitor

Cockpit

Alert Handling

Engineer

Modeling

Navigation and Information Retrieval

Continous Improvement Using Standardized

Key Performance Indicatorss
SAP Business
Information
Warehouse

SAP Advanced
Planner &
Optimizer

SimuKey
BenchPerformance lation &
mark
OptimiIndicators
zation
according to

Non-R/3

Execution of
decisions
Non R/3
R/3

R/3

APO Applications DP

Demand
Planning

Demand Planning
Planners Knowledge
Task-specific planning tools
Flexible views
Graphics
Promotional planning
Life cycle management
Cannibalization
Accuracy reporting

Anticipation of
Future Demand

Demand Planning Data Mart

Information
Collaborative
forecasts
Order & shipment
actuals & history
Cost
POS data

Statistical Methods

Nielsen / IRI data

Multi-model approach
Average models
Exponential smoothing
Causal factors
Trend dampening
Model combination
Pick best

...

APO Applications SNP

Supply
Network
Planning

Supply Network Planning

Liste

Supply Chain Model

Sourcing
Sourcing
Production
Production&&
purchasing
purchasing
requirements
requirements
Inventory
Inventorylevels
levels
Inventory
Inventorypolicies
policies

Flexible Constraint Definition

Supplier capacities
Production capacities
Transportation capacities
Storage capacities
.

Minimize total costs

Maximize margins

Optimization

APO

Supply
SupplyFeedback
Feedback
for
Demand
for Demand
Planning
Planning
Forecasts
Forecasts
Customers
Customersorders
orders

Deployment
Demand priorities
Multi sourcing
Minimum cost flow
optimization

Supply Network Planning

Liste

Heuristics
Fair Share
Push
Pull-Push
Transport load planning

APO

Deployment

APO Applications PPDS

Production
Planning &
Detailed
Scheduling

Production Planning & Detailed Scheduling

APO Order Network
Demand
Supply

Production situation

Supply
SupplyDemand
Demand
Situation
Situation
Flexible Constraint Definition
Machine capacities
Labor pools
Shift plans
Component availability, ...

Executable
Executable
Optimal
OptimalProduction
Production
Plan
/
Schedule
Plan / Schedule

Multi plant / single plant

Finite and infinite planning
Conflict resolution
Multi level forward / backward Customers Orders
Customers Orders
propagation
Anonymous
Anonymous
Pegging
Requirements
Requirements
Simulation and what-if

Optimization

Computational Solvers
APO Solvers
A wide variety of computational solvers
applied to specific planning functions with
industry-specific variations
Linear Programming /
Mixed Integer Linear
Programming
Production

Flow Algorithms

Distribution
Planning &
Planning
Deployment Scheduling

Branch & Bound Algorithm

Exponential Smoothing
Holt Winters
Multiple Linear Regression

Demand
Planning

Genetic Algorithms,
Simul. Annealing

Heuristic Methods

Master and Transactional Data

Transmission
R/3

APO

Initial/
Incremental
Transfer
Master
Data
:::::::
::::::::::::::
:::::::::::::::::::::
::::::::::::::
:::::::

liveCache
Initial/
Incremental
Transfer

Real Time

Planning Results Transmission

APO

R/3
Real Time
Request

liveCache

Data
Transmission

Key processes Demand Planning

1.
2.
3.
4.
5.
6.

Statistical Forecasting
Causal Forecasting.
Consensus Based Planning
Collaborative Forecasting
Life Cycle Planning
Promotional Planning

Key processes - Distribution

Planning.
Supply network planning and
optimization
Supply/demand balancing
VMI

Knowledge of

Forecasting
Operations Research
Optimization
Heuristics.

Will be an added advantage.

SAP APO Case Study

Implementation at M&M.

Direct advantages
Planning: Where to produce when what how
much for which market?
Shift from push based model to pull based model
Reduced cost - Improved Margin.
65% reduction in Inventory in its supply chain
Replenishment lead time reduced to 19 days from
52 days.

M&Ms Supply Chain and

market environment
Strategically located 2 main plants and 5 assembly
plants.
23 Area Stock yards.
400 Dealers.
800 Suppliers.
Complex supply chain.
Competitive market. Stable selling price.
Investment for product development.
Promotional budget increasing.

Case Learning
Complex
Supply Chains
Reduce
Supply Chain Cost,
mySAP SCM(APO)
Handles
Complexity Effectively.

SAP APO
Documentation
is available
at
\\blrkecfps32\ESSCM\07-SAP APO Documentation

THANK
YOU