SAP APO


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Supply Chain Management: SAP APO

We are encountering endless advancements in technology and increasing levels of globalization. Businesses are now competing in an unpredictable world. Consumer shopping habits are changing, making sales and operational planning both highly important and challenging. It is important to keep modernizing to get ahead of your competition.

What is SAP APO?

SAP APO stands for Advanced Planner and Optimizer. It is a component complementing the SAP ERP Central Component (ECC) logistics and supply chain processes, like procurement, production, and sales. SAP APO is designed to improve the availability of products, putting customers at the center of the process.

SAP APO has four key capabilities:

  1. Demand Planning (DP). Analyze sales, consumer trends, historical patterns, and seasonality data to optimize your ability to meet your consumer demand most efficiently.
  2. Supply Network Planning (SNP). Focused on reducing inventory, safety stock management, and having a realistic supply plan. It supports hierarchical data structures with capabilities to consolidate data into families, versus combing extensive data for individual SKU’s, plants, or warehouses.
  3. Production Planning and Detail Scheduling (PPDS). Used for creating procurement proposals for in-house production or external procurement to cover product requirements. PPDS covers demand, excess inventory, resource planning, production monitoring, and modifications to the plan.
  4. Global Available to Promise (GATP). A module that searches to determine if product is available at specific times, and for quantities that satisfy the customer demand. The module works to optimize your customer demand fill rates.

Benefits of an SAP APO implementation are:

  • Improvement in profit margins
  • Reduced purchasing costs
  • Reduced production and logistics costs
  • Improved inventory management
  • Improved management.

Technical resource partners for consideration might be – SAP,  Gib, or Reveal.

Key considerations for SAPinsiders are:

Supply Chain Management: SAP APO

We are encountering endless advancements in technology and increasing levels of globalization. Businesses are now competing in an unpredictable world. Consumer shopping habits are changing, making sales and operational planning both highly important and challenging. It is important to keep modernizing to get ahead of your competition.

What is SAP APO?

SAP APO stands for Advanced Planner and Optimizer. It is a component complementing the SAP ERP Central Component (ECC) logistics and supply chain processes, like procurement, production, and sales. SAP APO is designed to improve the availability of products, putting customers at the center of the process.

SAP APO has four key capabilities:

  1. Demand Planning (DP). Analyze sales, consumer trends, historical patterns, and seasonality data to optimize your ability to meet your consumer demand most efficiently.
  2. Supply Network Planning (SNP). Focused on reducing inventory, safety stock management, and having a realistic supply plan. It supports hierarchical data structures with capabilities to consolidate data into families, versus combing extensive data for individual SKU’s, plants, or warehouses.
  3. Production Planning and Detail Scheduling (PPDS). Used for creating procurement proposals for in-house production or external procurement to cover product requirements. PPDS covers demand, excess inventory, resource planning, production monitoring, and modifications to the plan.
  4. Global Available to Promise (GATP). A module that searches to determine if product is available at specific times, and for quantities that satisfy the customer demand. The module works to optimize your customer demand fill rates.

Benefits of an SAP APO implementation are:

  • Improvement in profit margins
  • Reduced purchasing costs
  • Reduced production and logistics costs
  • Improved inventory management
  • Improved management.

Technical resource partners for consideration might be – SAP,  Gib, or Reveal.

Key considerations for SAPinsiders are:

  • Leverage collaborative demand planning with APO. Anjali Butley is a business analyst with over 18 years of SAP experience in design and development of integrated supply chain solutions. Read her article on the benefits of developing an accurate demand plan with better communication, transparency, and quick decision-making.
  • Address planning and scheduling challenges with APO industry extensions. Rajesh Raycurrently leads the SAP SCM product area at IBM Global Business Services. Read his insights to address the planning and scheduling challenges faced by the auto and retail industries.
  • Manage promotions planning in SAP APO. Alok Jaiswal, is a consultant at Infosys Limited and has more than six years of experience in IT and ERP in supply chain. See his example of how promotional planning can be configured into SAP APO, which helps you improve forecast accuracy.

27 results

  1. Bruggen Luftbild image

    Brüggen Leverages Old with New for Forecast Optimization

    Reading time: 10 mins

    H. & J. Brüggen KG (Brüggen), a family-owned, privately held company in Lübeck, Germany, that produces private label cereals and muesli bars, underwent a supply chain management transformation that began in 2008 and continues to evolve as the company expands its product offerings and global reach. Martin Gries, Head of Supply Chain for Brüggen, says…
  2. Enterprise-Class Demand Planning at Agilent Technologies

    Reading time: 6 mins

    For Agilent Technologies, a manufacturer of analytical instruments for the life science and laboratories sector, growth has been dramatic over recent years, including a number of acquisitions. Such growth has caused the company’s pathology division to experience a rapid expansion of sales, but also revealed that the division had outgrown its demand planning practices, which…
  3. Leverage SAP S/4HANA – PPDS Block Planning Functionality to Optimize Production Schedule Considering High Priority Customer Anticipated Demand

    Reading time: 6 mins

    As supply chains evolve in complexity, manufacturing processes are becoming more complex as well. Evolving customer demands, proliferating SKU portfolios, increasing product design complexities, and the need to reduce manufacturing cycle time, are all adding to the complexities in the manufacturing world. A typical plant today manufactures a wide gamut of products, sometimes leveraging the…
  4. A Comparison of Production Planning and Scheduling functionality on SAP S/4HANA vs. SAP APO

    This session provides key criteria to differentiate between production planning and scheduling functionality delivered in SAP S/4HANA and SAP APO. Discuss the key changes, similarities, and differences between SAP S/4HANA and SAP APO and how these changes affect your supply chain. Explore different landscape options for customers who want PPDS functionality. Attend this session to:…
  5. Balancing supply and demand

    How to Setup Demand Planning in SAP Advanced Planning and Optimization

    Reading time: 21 mins

    SAP Advanced Planning and Optimization, demand planning allows a business to perform forecasting of their materials while considering all the factors that affect the demand. Demand planning is periodic and contains multi-step processes such as data gathering, statistical analysis, reviewing market intelligence reports, and performing adjustments against budgeted forecast to drive material requirements planning. SAP…
  6. Demand Sensing Improves Short-Term Demand Forecasting at Arla Foods

    Reading time: 5 mins

    Most organizations today are somewhere along the journey toward becoming a digital business, with meeting high expectations for the customer experience a central driver. One of the keys to creating an exceptional experience is the ability to access data in back-end systems in real time, which means that robust integration is critical. This article introduces…
  7. Logistics and SCM: Case study: Building a stable supply plan — See how Hollister reengineered a capacity planning solution without an engine and still managed to drive success

    Reading time: 1 min

    Learn how the Hollister expanded the standard capacity-leveling algorithm to include additional parameter checks in its system. SCM2017_Syed_Grace_Casestudybuildingastable Azeemullah Syed If you have comments about this article or publication, or would like to submit an article idea, please contact the editor. Steve Grace If you have comments about this article or publication, or would like…...…
  8. Not Your Same Old Advanced Planning System Implementation!

    Reading time: 37 mins

    Q&A with Dolphin Experts on Crafting a Successful Information Management Strategy This content is available to (General or Premium) members. Sign in or Join for free! Sign In Become a Member
  9. Optimize Your Supply Chain with SAP Solutions

    Reading time: 20 mins

    Q&A with Dolphin Experts on Crafting a Successful Information Management Strategy This content is available to (General or Premium) members. Sign in or Join for free! Sign In Become a Member
  10. Carry Out Planning for Production Replenishment Using the Supply-to-Production Process

    Reading time: 14 mins

    Learn the configuration, master data setup, and process flow for the supply-to-production process to replenish the components from a warehouse to production supply areas. Key Concept The supply-to-production process is used to organize the physical replenishment of components for production. It is generally used in the short-term horizon and uses a control cycle and supply…...…
  11. Leverage Control and Lower Procurement Costs by Exploiting the Subcontracting Process in PP/DS with Third-Party Provision of Components

    Reading time: 11 mins

    Learn the process flow, master data setup, and the subcontracting process with third-party provision of components in SAP Advanced Planning and Optimization (SAP APO) Production Planning and Detailed Scheduling (PP/DS) with integration to SAP ERP Central Component (ECC). Key Concept In a normal subcontracting process, a manufacturing plant has a contractual agreement with a subcontractor…...…
  12. Manage a Distribution Plan in a Supply Chain Model in SAP APO When Demand Exceeds Supply

    Reading time: 19 mins

    Sergei Peleshuk provides an overview of SAP BW/4HANA and key considerations to think about when making the decision to migrate. This content is available to Premium Members. Sign In Learn more about Premium Access
  13. How to Manage a Distribution Plan in a Supply Chain Model in SAP APO When Supply Exceeds Demand

    Reading time: 21 mins

    Sergei Peleshuk provides an overview of SAP BW/4HANA and key considerations to think about when making the decision to migrate. This content is available to Premium Members. Sign In Learn more about Premium Access
  14. A Step Toward Understanding SAP S/4HANA Embedded PP/DS

    Reading time: 12 mins

    Discover the new features introduced by the new SAP S/4HANA embedded Production Planning and Detailed Scheduling (PP/DS). Learn the necessary master data changes and how to run PP/DS on SAP S/4HANA. Key Concept SAP S/4HANA Embedded Production Planning and Detailed Scheduling is available on SAP S/4HANA release 1610. This functionality introduces in SAP S/4HANA the…...…
  15. Enable Global ATP to Provide Differential Customer Service

    Reading time: 23 mins

    Learn how to enable Global Available-to-Promise (Global ATP) to optimally allocate sales order confirmations considering various customer parameters and business needs. Key Concept Key configuration objects such as check instructions and scope of check play a very important role during an availability check. Check instructions control what availability check methods are called during the available-to-promise…...…
  16. How to Carry Out Data Extraction from a Planning Area in SAP APO

    Reading time: 15 mins

    Learn the process flow of how data can be extracted from a planning area in Demand Planning to an InfoCube in the SAP Advanced Planning and Optimization (SAP APO) database. Follow a step-by-step procedure to understand the prerequisites, importance, and configuration steps with the help of an example case study. Key Concept Demand Planning in…...…
  17. How to Optimize SAP APO Capable to Match for Process Industries

    Reading time: 17 mins

    Learn how to meet key design challenges in the process industry for supply planning and how to overcome these challenges when the preferred engine for implementation is SAP Advanced Planning and Optimization (SAP APO) Capable to Match (CTM). Key Concept Generating a supply plan considering material and production capacity constraints is crucial to effective supply…...…
  18. How to Reduce the Bullwhip Effect by Following a Demand-Driven Supply Chain Strategy

    Reading time: 26 mins

    Learn how to integrate consumer demand signals to achieve a demand-driven supply chain that is used to optimize short-term forecasts and increase demand network visibility. From a demand planning perspective, planners can now compare the traditional consensus demand forecasts with a point-of-sale (POS) statistical forecast and therefore apply corrections based on true consumer demand. From…...…
  19. Manage Promotion Planning in SAP APO

    Reading time: 13 mins

    Learn how promotion planning can be configured in SAP Advanced Planning and Optimization (SAP APO) to model special events or promotions separately from the normal forecasting process. Follow a step-by-step procedure to configure and run the associated master data objects, run simulations, and interpret the results. Key Concept Promotion Planning is a special feature provided…...…
  20. Manage Lifecycle Planning in SAP APO

    Reading time: 13 mins

    Learn how lifecycle planning can be configured in SAP Advanced Planning and Optimization (SAP APO) to forecast a new product, manage the introduction of the new product (phase-in), phase out the old product being replaced, and integrate it with forecasting techniques. Follow a step-by-step procedure to configure and run the associated master data objects, run…...…
  21. Meet Demand-Driven Scheduling Requirements with SAP ERP and SAP APO: Q&A on When to Use Which for Enhanced Supply and Production Planning

    Reading time: 31 mins

    SAP ERP and the production planning and detailed scheduling (PP/DS) and supply network planning (SNP) components of SAP Advanced Planning and Optimization (SAP APO) offer functionality that can be utilized in a variety of design options to optimize production plans and provide greater visibility into your inventory management, but when do you use which? Especially…...…
  22. Manage Alerts with the Alert Monitor in SAP PP/DS

    Reading time: 18 mins

    Learn the process flow for configuring the Alert Monitor so that each planner can get specific alerts in SAP Advanced Planning and Optimization (SAP APO) Production Planning and Detailed Scheduling (PP/DS). Follow a step-by-step procedure to configure and run the process and interpret the results. Key Concept Alerts in the context of SAP Advanced Planning…...…
  23. Control Disaggregation Using a Proportional Factor for Consistent Planning in SAP APO

    Reading time: 47 mins

    Learn the configuration, use, and importance of proportional factors. See how they can be used to control the disaggregation of values in SAP Advanced Planning and Optimization (SAP APO) Demand Planning (DP). Follow a step-by-step procedure to configure and run the associated master data objects, run simulations, and interpret the results. Key Concept Demand Planning…...…
  24. Meeting Demand with a Constrained Supply Using Product Allocation in SAP APO Global ATP

    Reading time: 22 mins

    Learn the process flow of how product allocation can be used in SAP Advanced Planning and Optimization (SAP APO) Global available-to-promise (Global ATP) to meet customer requirements by managing the supply of scarce products. The system can perform availability checks in conjunction with product allocation checks. Key Concept Availability checks, also known as available-to-promise (ATP),…...…
  25. Correlate the Use of Causal Analysis in SAP APO with the Underlying Mathematical Model

    Reading time: 44 mins

    Learn how to carry out causal analysis in SAP Advanced Planning and Optimization (SAP APO) when demand is correlated with some known and measureable factor (demand is a function of some variables). Understand how regression is used to find correlations between a single dependent variable (y) and one or more independent variables (x1, x2…xn) and…...…
  26. Configure Capable-to-Promise for Both External and Internal Demands

    Reading time: 26 mins

    Learn how to configure Capable-to-Promise in SAP Global Available-to-Promise (GATP) in a manufacturing environment for both external as well as internal demands. Understand the various configuration aspects of both GATP and Production Planning (PP) /Detailed Scheduling (DS). Key Concept Production can be directly triggered through a Capable-to-Promise check within the SAP Global Available-to-Promise (GATP) module…...…
  27. Create Consignment Fill-Up Sales Orders Using SAP APO SNP

    Reading time: 28 mins

    Follow these prerequisite, configuration, and implementation steps to model the automatic creation of consignment fill-up sales orders in SAP ERP Central Component (ECC) using Supply Network Planning (SNP) deployment functionality in SAP Advanced Planning and Optimization (SAP APO). This process enables the automatic planning and creation of sales orders from SAP APO. It minimizes the…...…