• Solutions created to improve the capabilities of one of the SAP ERP industry solutions. This means applications requiring a special integration with an add-on or enhancement to the central components. In this group, you find solutions for retail, oil and gas, and others such as aerospace, automotive, and mills that come inside Discrete Industries and Mill Products (DIMP).
• Solutions based on standard SAP APO and integrated with SAP ERP, but with a focus clearly oriented to specific industries. Here you find solutions for chemical companies, such as campaign or project management for the machinery industry.

Some of these solutions have been delivered through new functionalities, but many are based on the flexibility of the heuristic in production planning and detailed scheduling (PP/DS). A heuristic is a method of problem solving or algorithm implemented in a program and embedded in most PP/DS transactions. Additionally, heuristics allow you to adapt planning to specific processes by developing new custom heuristics.

Industries Not Part of SAP ERP

All of the applications provided by SAP SCM for specific industries require an external application not contained in the SAP ERP Central Component (SAP ECC):

Retail: Forecast and Replenishment (F&R)

With SAP SCM 4.1, SAP introduced Forecast and Replenishment (F&R) to meet the retail sector’s needs for its planning processes, especially in stores and distribution centers (DCs). F&R also handles the replenishment process of stores and DCs. This application — which supports retail processes for millions of items sold daily — includes processes such as forecasting, planning, and deployment built according to special industry requirements and highly oriented to exception management. One example of this specialization is the Collaborative Planning Forecasting and Replenishment (CPFR), a process in which manufacturers and retailers collaborate to improve the forecasting accuracy and efficacy of the replenishment.

Aerospace: Maintenance and Service Planning (MSP)

Maintenance and Service Planning (MSP) helps companies with airplanes, ships, or other complex equipment. It focuses on the planning and scheduling of regulated preventive maintenance. Also, MSP allows companies to plan for finite resources such as the hangar for planes or the shipyard for ships or submarines. This solution is based on a special planning board (Figure 1). The maintenance cycle for aircraft or ships can be handled graphically, taking into account finite resources such as the hangar.

Figure 1

Special planning board for MSP

MSP integrates with the maintenance functionality deployed with the DIMP. Complex equipment and maintenance task lists can be modeled and transferred to SAP APO.

Mills Industry 

SAP for Mill Products, which requires the DIMP enhancement, covers special processes in industries such as paper, steel, furniture, textiles, or cable. Two special heuristics — length-based planning and multiple-output planning (MOP) — support these sectors in SAP APO. The heuristics SAP_LEN_001 and 002, for long product planning such as the cable industry, provide special rules to optimize cutting long products (such as cables or pipes). Those products have special requirements as you need to choose the best piece to cut in order to avoid scrap. Basically, these two processes are the same: length-based planning is the name of the heuristics in SAP APO. Long product planning is the name of the process.

MOP, heuristic SAP_MOP001 and 002, includes the functionality to cover the cutting or splitting process used in the paper or wood industry. In these companies, rolls or wooden board are cut to obtain different products. MOP requires the activation of this functionality, which changes the way PP/DS works, in the IMG through menu path APO > Supply Chain planning > PP/DS > Multiple Output Planning. Additionally, SAP APO offers the possibility to connect industry cutting optimizers (software based on complex algorithms) to improve the use of the materials.

Automotive

Manufacturing in the automotive industry is characterized by large order volumes, requiring the optimization of the production sequence. SAP APO combines several heuristics to support the planning process. Part of the repetitive heuristics can be used with PP as well. SAP APO includes a specific heuristic named Model Mix Planning (SAP_MMP_HFW1) for planning configurable products with a high volume of orders.

In the procurement area, car manufacturers work closely with their providers. Usually, this collaboration takes place through electronic means, and SAP APO provides several heuristics and functions integrated into the PP table. Known as Procurement and Sales Scheduling Agreements, this helps the planner to check the admissibility and feasibility of delivery schedules received electronically, and confirms them with the customer.

SAP O&G

If you are familiar with SAP APO, you might have wondered about a location type called Terminal in the location master data (transaction /SAPAPO/LOC1). That’s another good example of adaptation to the functionality of an industry, in this case a particular node in the oil and gas supply chain.

SAP for Oil & Gas provides solutions to core scenarios for downstream (refining, selling and distribution) and upstream (searching and crude/gas production) oil and gas companies. Particular areas are the planning and transportation processes of the oil and gas products (such as crudes, Liquified Natural Gas, and Liquified Petroleum Gas). In transportation processes, this industry uses elements such as pipelines, tankers, or special carriers for gas. Factors such as the temperature or product quality play a special role.
 
SNP provides the stock projection crude planning book (Figure 2) that offers special key figures such as Physical Stock or Book Stock for crude planning integrated with Trader’s & Scheduler’s Workbench (TSW) functionality in SAP Oil & Gas (SAP O&G). For more information about TSW, read the article “Scheduling Oil and Gas Trades — An SAP TSW Perspective” by Rajat Agrawal, posted to the SCM Expert knowledgebase in December 2007.

Figure 2

aSNP planning book for crude planning

Service Parts Management

Due to inherent properties such as high volume, irregular demand, or complex distribution networks, managing service parts constitutes a special scenario. It is covered through several applications such as SAP ERP, SAP Customer Relationship Management (SAP CRM), and SAP SCM. Service Parts Management, integrated with SAP ECC and SAP CRM, is a cross solution composed of several applications in SCM (Service Parts Planning [SPP] and SAP Extended Warehouse Management [SAP EWM]) and combines Global Available-to-Promise (Global ATP) functionality (third-order processing and multi-item single delivery location [MISL]).

As part of these scenarios, SAP SCM includes features that help answer specific questions for Service Parts Management such as:

• Where should I locate the stocks?
• What’s the best stock level?
• What’s the optimal order quantity or safety stock for replenishment?

SPP answers these questions. It includes features for forecasting, inventory planning, Distribution Requirements Planning (DRP), and reporting and monitoring. Parts supply planning, distribution planning, and monitoring are shown in Figure 3.

Figure 3

Entries in the SCM menu for Service Parts Management

Industries with Applications Available in SAP ECC

In this second part, I introduce functionalities for specific sectors that do not require enhancements to SAP ECC because they are integrated with modules such as PP, Production Planning for Process Industries (PP-PI), Project System (PS), or Plant Maintenance (PM). I introduced one of the applications that integrate maintenance orders in the SAP APO planning process in my article “Achieve Increased Efficiency through the Integration of Maintenance and Production” posted to the SCM Expert knowledgebase in April 2009. It increases planning efficiency, especially in SAP for Industrial Machinery & Components (SAP for IM&C).

Project Manufacturing

As of SAP SCM 4.1, processes for Engineer-to-Order (ETO) or project manufacturing, especially relevant for industrial machinery and components, were integrated into SAP APO. The integration with PS in SAP ECC was possible, offering SAP APO capabilities to plan and schedule such scenarios. Beginning with SAP SCM 4.1, new heuristics were added so planning and scheduling projects with complex networks of orders could be performed. With SAP SCM 5.0, three new heuristics, Critical Path (SAP_PMAN_001), Infinite Forward Scheduling (SAP_PMAN_002), and Infinite Backward Scheduling (SAP_PMAN_003), the mid and short- term scheduling of the multi-level order network was improved.

Another example of the evolution of SAP APO due to industry requirements is the extension of the planning horizon. When a company plans projects, typically the duration extends through several years. That is why the PP/DS planning horizon or maximum days in which you can run the planning processes was extended to 9999 days with SAP SCM 5.0.

Block Planning

Block planning is for products with the same characteristics — for instance, steel with the same properties (such as percentage of carbon). Usually, when planning the production in a steel installation, steel with the same properties are produced together on predefined periods or blocks.

Figure 4 shows that a block can be defined as a set of characteristic values and a period of time in which you can schedule production or planned orders with the same properties. In the example, Block 1 contains four orders (101, 102, 105, and 120) produced from Monday to Wednesday. Following my example, these four orders would correspond to particular steel with same characteristics values (such as same % of carbon).

Figure 4

Example of blocks with the numbers representing production or planned orders

This functionality is supported by four heuristics, SAP_CDPBP01 to 04 in PP/DS that help the planner to manage these blocks. When a planned order is created, the system tries to locate it in its corresponding block. These blocks are represented in the detailed planning board in a similar way to Figure 4, so the planner operates over the block instead of the single order.

Campaign Planning

Grouping orders or production lots in campaigns is a common practice in sectors such as chemical or pharmaceutical industries. By grouping similar orders, you can minimize cleaning and setup costs. You can find this functionality in the SNP and PP/DS planning processes. PP/DS offers special heuristics that facilitate the campaign creation and graphical functions such as color bars that identify objects in the detailed planning board. This functionality is integrated into the campaign management in PP-PI, where orders are executed and costing processes take place.

Aggregated Planning

This functionality that I introduced in my article “Supply Network Planning: Aggregated Planning Redux: More Relief for Aggravated Planners” explains the complexity of planning each stock-keeping unit (SKU) in apparel and footwear manufacturing. In this industry, a material is characterized by properties such as style, color, size, or quality. To simplify the planning process of thousands or even millions of SKUs, the SKUs are mapped to sub-products of a hierarchy in which the header product is represented by the apparel and footwear material itself. The planning process is executed at the top level, reducing the complexity.  

For instance, a T-shirt with several sizes (S, M, L, XL) needs different SKUs planned using only one material. Objects such sales orders, stocks, and production orders for the different sizes are aggregated to the header product. Then, the SNP planning process is executed at header level and the result of the execution is disaggregated to the sub-products, in this example, to the different sizes of the T-shirt.

Adolfo Menéndez Fernández

Adolfo Menéndez Fernández is the application architecture manager at Repsol in Madrid. Previously, he worked at SAP Consulting Spain as the logistics consulting manager. He studied at the University of Oviedo, where he earned an electronic engineering degree. He is a certified SAP consultant in supply and demand planning (SNP and DP), order fulfillment (Global Available-to-Promise), production planning and detailed scheduling (PP/DS), as well as procurement and materials management (MM). Adolfo has more than 10 years of SAP implementation experience in the consumer product goods, pharmaceutical, automotive, furniture, textile, chemical, oil & gas, and steel industries using SAP ERP logistic modules (including PP, MM, and sales and distribution [SD]) as well as SAP SCM (DP, SNP, and PP/DS). He is APICS certified in Production and Inventory Management (CPIM).

You may contact the author at asturiasadolfo@yahoo.com.

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