SAP APO

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.