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Solutions

Unit: Demand Planning

Topic: Interactive Planning

1-1 Go to Demand Planning.

Open the selection window and, under “Show”, select “APO PRODUCT”. Version000 is already displayed automatically. In the next row, enter APO - Product once

again, and on the right-hand side enter your product T-F2##. Load the data for theproduct into the planning table.

Demand Planning ? Planning? Interactive Demand Planning

The selection window is the second icon in the top left. Open the selection

window and, under “Show”, select “APO PRODUCT”. Version 000 is already displayed automatically. In the next row, enter APO - Product once again, and

on the right-hand side enter your product T-F2##. Select “Adopt”, and your selection will be adopted by the selection window.

Double click on your product T -F2##. Entries can now be made for this

selection in the planning table rows.

1-2 Perform a univariate forecast and analyze the graphic results. The seasonal patternthat occurred in the past has been extrapolated into the future. Go back to theplanning table.

Click on the “STAT” symbol and the forecast is calculated automatically. Select the “Switch table/graphic” button, and the forecast results plus historical data

will be displayed graphically.

To get back to the original table, click on the green “back” arrow.

1-3 For three months from now enter a manual correction of 100 pumps. Check that the

correction is automatically added to the demand plan. Save your plan.

In the “Correction” key figure, type in 100.

The total from the “Forecast” plus “Correction” key figures is displayed in the

“Demand Plan” key figure. Save your plan and exit the table.



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1-4 Release your demand plan to Production Planning. Use the “RELEASE” variant,and enter your product T-F2## and the horizon. Which locations have had planned

independent requirements created for them?

Demand Planning? Planning? Release to Supply Network Planning

Select the “Get variant...” button and choose the RELEASE variant. Enter your product T-F2##, and choose Execute.

Field Name Input Data

Planning area SALES

Planning version 000

Key figure FINFOR


Category FA

Horizon The next 3 months

Daily buckets profile 90 days

Product T-F2##

Planned independent requirements are created for Distribution Centers 2400,

and Plant 1000.

1-5 Make sure that planned independent requirements have been created in theLiveCache. Go to PP/DS product view for version 000, product T-F2##, andlocation 2400.

Production Planning? Interactive Production Planning? Product View

Enter version 000, product T-F2##, and location 2400. Continue. Your monthly planned sales quantities have been transferred here and distributed over days.



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Contents:

Supply Network Planning (SNP)

? Distribution Network and Process Flow

? Master Data Requirements

? Planning Methods

? SNP Heuristic

? SNP Optimizer

? Capable-to-Match

? Deployment (distribution detailed planning)



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Unit Objectives

At the conclusion of this unit, you will be able to

? Describe the Supply NetworkPlanning distribution network

? Explain the Supply NetworkPlanning process flow

? Identify master data that is requiredto run Supply Network Planning

? Describe and compare Supply

Network Planning planning methods? Explain the function of deployment



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Course Overview Diagram

444

333

Integration and Technology

111

55

Course Overview

222

666

55

777

888999

Modelling and Evaluation in APO

Demand Planning

Supply NetworkPlanning

Production Planning/DetailedScheduling

TransportationPlanning/Vehicle Scheduling

Global Available-to-Promise

Conclusion



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Business Scenario

? The Precision Pump Company is implementing

Supply Network Planning (SNP) to plan, in the mid-to long-term, the material flow of critical materialsthrough the entire supply chain.

? Production and storage resources should beconsidered finitely and simultaneously.

? This planning is used to guarantee the procurementof parts with long delivery time and the effective useof resources, in order to improve customer serviceand to minimize inventory and lead times.

? Precision Pump company uses deployment to matchstock transports to supply and demand when there

are short-term changes.

? SAP AG



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? Multi-site mid-term rough-cut planning

? Simultaneous material planning and finite capacity planning ofproduction, storage and transportation resources

? Simultaneous production planning and distribution resourceplanning

? Planning of critical components on bottleneck resources

? Cross-plant optimization of the resource load

? Prioritization of demand and supply

? Collaborative procurement planning via the internet

? Distribution detailed planning (deployment)

? Collective conversion of stock transport requisitions

Benefits of Supply Network Planning in APO



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Planning Horizon

Demand Planning (DP)


Production Planning (PP)

Detailed Scheduling (DS)

Deployment

Transportation Planning (TP/VS) / TLB

APO Planning Sequence

??The tasks of the individual APO modules can be summarized as follows:

??DP is used for long-term unconstrained planning of the future demand plan

??SNP is used for mid-term planning of feasible cross-plant procurement and production

??PP/DS optimizes production in the plant in the next few weeks according to sequences and setuptimes

??Deployment and the TLB (Transport Load Builder) are functions of the SNP module for short-term replenishment planning.Deployment and the TLB adjust stock transfers according to short-term changes on the demand or

supply side.

??In Transportation Planning, routes and vehicle utilization are optimized.



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Aims of SNP Planning

? SNP Planning plans the mid- to long-term horizon. It creates arough quantity-based, cross-location production and

distribution plan with individual rough bills of material (BOM)and routings.

? The SNP BOM contains critical products that are produced on

bottleneck resources and products with a long replenishmentlead time.

? SNP ensures that the right quantity is available on the right daywithout critical resources being overloaded. The smallest unitused for scheduling is days.



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Supplier WH

ManufacturerDC

Customer DC

Production process model

Production plant

Supplier plant

Beyond Traditional Planning

??SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensivetactical planning and sourcing decisions can be simulated and implemented on the basis of a single,

global consistent model.

??The stock and previously-planned receipts for finished products and components of all connectedOLTP systems are known by SNP.

??Various planning methods can be used to create cross-location, feasible plans for the material flowalong the supply chain, taking account of constraints and penalties. The result is optimal purchasing,

production, and distribution decisions, reduced inventory levels, and improved customer service.

??Possible constraints are, for example, material availability and unrestricted availability of work

center, storage, transportation and handling capacities.



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Supplier CustomerDCPlant

Locations in the Supply Network

CarrierMRParea

Stock transferpoint

Transportationzone

? Locations are only differentiated

by the location type that controlsthe symbol on the map

(exception VMI)

? Products can be stored at everylocation

? Demands can be fulfilled fromeach location

? You can maintain storage,

handling, transportation andproduction capacities for each

location

? Storage cost per unit for eachproduct

? Purchasing cost per unit foreach product

??Production, shipping and storage calendars can be defined for each location.

??A handling and a storage resource can be associated with a location to represent aggregate handling

and storage capacity.

??The geographical data is used to position the location on the geographical map of the Supply Chain

Engineer. Predefining it as a part of the location data forces the location to be positioned at a specific

point on the map. If you leave these fields blank, they are filled automatically when you place thelocation on the map.

??The VMI customer tab only applies to the location type '1010 customer'. The carrier tab is only

activated when you select the location type '1020 carrier'.

??Input fields that are not available to other location types are activated for location type '1007 MRP

area'.

??For each location you can define costs for storage, handling, procurement and production as well aspenalties for non-delivery. Procurement costs are used to select suppliers and production costs for

selecting PPMs. An integrated examination of the costs is carried out during the SNP optimization

run.



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Transportation lanes control the material flow alongthe supply chain

Transportation Lanes

? Procurement

? Transportation method

? Products that can be carried

by a transportation method

? Transportation capacity byvolume, weight, pallets

? Transportation costs per unit,product and transportation

method

??A transportation lane in APO represents a business relationship between the locations that you canuse to transport goods. The relationships and the locations represent the supply chain network. The

direction of the transportation lane from source to target location defines the material flow. Thesetransportation lanes enable you to:

??Define the product procurement parameters like lot sizes, cost functions, unit costs and lane

priorities

??Define the transportation methods (truck, ship, airplane, etc) for each lane and the related

parameters like transportation costs, distances and times

??Assign product-specific transportation methods

??Assign carriers to the lanes

??You can query the lane relevant data via the Supply Chain Engineer menu or on the map. For

example, you can display a list of all products that are assigned to a specific lane.



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TransportationProduction

Storage Handling

Resource Categories

??You can model additional bottlenecks in your supply chain using bucket resources.

??For period-oriented short- and mid-term planning in Supply Network Planning you use bucket

resources that you plan in detail based on days.

??You can define the capacity of a bucket resource as

??Quantity (without time base) - this defines the transportation capacity of a truck or the storage

capacity of a warehouse, for example.

??Rate (quantity with time base) - this defines the consumption or production capacity of a resource,for example; in other words, the quantity that is consumed or produced on a working day at the

resource.

??You can use transport bucket resources to model the capacity of transport fleets in order to avoidoverloading them.

??You can use storage bucket resources to model the capacity of storage locations in order to avoidoverloading them.

??You can use handling bucket resources to model the capacity of forklifts, conveyor belts or pipelinesin order to avoid overloading them.



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Structure of Plan and PPM

Operations:

? Material staging

? Pre-assembly

? Final assembly

? Inspection

Activities:

? Produce

? Tear down

? Queue time

? Product

? Relationship

? Resources

In / Out

Resource consumption

PPM: Product, location,lot size area

$

Sequence

Plan (location independent)

Control costs

??The detailed information required for producing a product is specified in the plan. Each plan includesone or more operations. Each operation includes one or more activities, the components consumed

by the activity, the resources used and their sequence within the operation.

??The plans used for Supply Network Planning (SNP) are usually rougher than those used forProduction Planning/Detailed Scheduling (PP/DS). They contain:

??The variable costs contain all production costs.

??Activity type: P (system always considers operations as production)

??Consumption mode: S (system always considers consumption at start of activity)

??Resources:

??Unit of measure must be the same unit as in the resource itself

??Fixed duration for scheduling: 1 day means that the activity lasts one day, for example.

??Variable resource consumption: Time to produce one base quantity of material.

??PPMs that determine the location, lot size, and time inter val for which the plan is valid are assignedto the plan.

??A consistency check can be performed manually but is always executed when saving the PPM. If

there are inconsistencies, the PPM cannot be activated.



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Perform SNP Heuristic,Optimization, or CTM run

Finalize SNP plan(available to PP / DS)

Check plan/

solve problems

Deploymentrun

Release constraint-based SNP plan

to DP

TLB run

Build loads fornon-assigned

transport orders

Set up master data andsupply chain model

Release demandplan

SNP Planning Sequence

??Planned independent requirements are generated for SNP or PP/DS when the demand plan isreleased from Demand Planning. This step can either be carried out using the demand planner or the

SNP planner.

??Performing the SNP run using the SNP Heuristic, SNP optimization, or Capable-to-Match (CTM)results in a mid-term production and distribution plan.

??After the SNP run, check the exception messages (alerts) and resolve any problems that occur.

??The final SNP plan consists of purchase requisitions, stock transport requisitions and SNP plannedorders. You can automatically convert the SNP planned orders into PP/DS planned orders in the

production horizon. Production Planning and Detailed Scheduling (PP/DS) then starts with these

PP/DS planned orders to remove detailed constraints and bottlenecks and to create a feasibleproduction plan.

??The final SNP plan can be released back to DP for comparison of the unconstrained demand planwith the feasible SNP plan. If the differences between these two plans are too great, you can use a

macro to trigger alerts so that the demand planner plans his forecasts again.

??After production planning has been completed, the deployment run confirms the stock transportrequisitions based on current supplies and demands.

??The TLB run groups the stock transport requisitions resulting from the deployment run into stock

transport orders.

??You can build stock transport orders manually for stock transport requisitions that could not be taken

into account during the TLB run due to specified threshold values.



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SNP Planning Functionality

? Mid- to Long-Term Planning Methods

? Heuristic

? Capable-to-Match (CTM)

? Optimization

? Propagation

? Deployment (short-term Replenishment Planning)

? Heuristic

? Optimization

?

Transport Load Builder? Grouping of Stock Transfers

??The following planning scenarios are supported by Supply Network Planning:

??Supply Network Planning creates feasible mid-term procurement, production and distribution

plans.

??Deployment distributes stock and available receipts to distribution centers and vendor-managed

inventory (VMI) customers.

??Transport Load Builder converts the stock transport requisitions used by deployment into stock

transport orders, taking account of transportation capabilities.



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Heuristic Scenario

1. Demandno stock

2. Demandno stock

? Quantity-based, rapid, multi-site planning

? MRP II concept (planning against infinite capacity)

? Time-based aggregation to weekly splits, for example

3. Explosion of planCreation and scheduling of

receipts

4. Valid transportationlanes, quota

arrangements,

priorities

??The role of the Heuristic involves:

??Planning supply to meet demand

??Integrating purchasing, production, and distribution in one consistent model

??Modeling the entire delivery network

??Synchronizing activities and planning material flow throughout the supply chain

??The slide shows an example of the Heuristic:

??There is a demand in the customer location. The net requirements calculation does not find anystock. The product is procured externally. The system analyzes the possible transportation lanes.

??There is also no stock in the distribution center so the Heuristic checks the possible transportationlanes in the plant.

??There is no stock in the plant, so the SNP plan is exploded and a planned order is created for the

finished product and dependent demands for the components.

??Procurement for the components then occurs via the possible transportation lanes and quotaarrangements or priorities.



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1. Day 2. Day 3. Day 4. Day 5. Day

Capacity load

100 %

BACKWARD FORWARD

Time-Based Capacity Leveling

Capacity Leveling

??The planner can use the following methods to adjust the plan:

??Backward shift of capacity load to satisfy demand with high priorities without due date violations.

However, rescheduling does not create any orders in the production horizon. Forward shift of

capacity load related to demand with lower priorities and minimization of due date violationsbased on demand priorities.

??A combination of backward and forward shift of capacity load.

??If you choose a time-based capacity leveling option, you can select various priority rules:

??If you do not select a priority rule, the priority is determined by the system and is completely

random.

??If you choose Time-Based Capacity Leveling by decreasing order quantity, the system first adjuststhe largest order, then the second largest, and so on. If you choose Time-Based Capacity Leveling

by increasing order quantity, the system adjusts the smallest order first, then the second smallest,and so on.

??

If you choose Time-Based Capacity Leveling by decreasing stock range of coverage, the systemfirst adjusts the order with the largest stock range of coverage, then the one with the second largest

range, and so on. If you choose Time-Based Capacity Leveling by increasing stock range of

coverage, the system adjusts the order with the smallest range of coverage first, then the one with

the second smallest range, and so on.

??If you choose Time-Based Capacity Leveling by decreasing product priority, the system first

adjusts the order with the highest priority, then the one with the second highest priority, and so on.

If you choose Time-Based Capacity Leveling by increasing product priority, the system adjusts theorder with the lowest priority first, then the one with the second lowest, and so on. The product

priority is maintained in the product location master record on the SNP2 tab.



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CTM Scenario

1. Demand withhighest priority,

no stock

3. Strategy: Search for surplus stock

Result: No stockATP rule: Substitution product

Result: No stockProduction: Search for availablecapacity

Result: No resource available

4. Strategy: Search for

surplus stockResult: Stock

5. Stock transfercreated

2. Transp. lane

highest priority

??This slide shows the determination of feasible receipts for the demand with highest priority. CTMgradually checks the feasible receipts, whereby you can define the sequence of checks via rules.

CTM takes the first feasible solution.

??CTM considers:

??Prioritized single requirements

??Production capacity and not handling, storage or transport capacities

??Splitting production between resources

??Component availability

??CTM is order-based planning that uses pegging methods to trace orders back to the individualrequirement. In Supply Network Planning no order-based planning takes place; rather, quantity

planning takes place. After the optimization run (or after the heuristic run), no information relating to

connections between particular planned production orders and original sales orders can bedetermined.



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PrioritizedDemands Demands

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Demand Prioritization

Priority Order Date Customer Product

1

2

3

KAUF

KAUF

forecast

1.3. 2001

1.4. 2001

Baker

Baker

P-102

P-102

P-1021.2. 2001 DC1

? The sort can be carried outaccording to:

? Customer (location) priority

? Product priority

? Order type

? Due date

? Demand selection

? CTM work area

??CTM prioritizes current demands based on order category (for example, sales order (KAUF) anddemand planning forecasts), due date and the defined priorities.

??The sequence of the priority criteria is of great importance for processing demands in the CTM run.

Note: If no priorities are set, prioritization occurs on a first come, first-served basis by due date.

??You can simulate demand prioritization and check the results.

??Below is a list of possible prioritization criteria: Maximum number of partial deliveries allowed per

item, stock / receipt / demand / forecast categories, confirmed quantity, ATP, BOP: confirmationshare, CTM quantity, order / MRP element number, order / MRP element item, date on which the

record was added, delivery group (items are delivered together), location, ATP, BOP: delivery date,

delivery priority, location, location product number priority, product priority, material staging date,item type sales document, ATP, BOP: user exit priority, sales document type, requested quantity.

??The sort within a prioritization criterion can be descending, ascending or user-defined.

??Define your demand selection in the CTM profile. (Multilevel Supply & Demand Matching >

Planning > Planning CTM > Demands tab) or (Multilevel Supply & Demand Matching >

Environment > Current Settings > Demand Prioritization > Sort Profile)



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1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Categorized

Supplies

Prioritized

DemandsCapable-to-Match

Multi-site capacity and

transportation capability check

CTM Results

??The CTM planning run is powered by the CTM engine, which matches the prioritized demands tothe available stock and receipts. Then it matches receipts and demands, taking account of production

capacities and transportation capabilities.

??Performing the CTM planning run in the SNP environment generates a mid-term production anddistribution plan.

??CTM complements SNP's multi-site supply chain planning strategies. Its purpose is to perform aquick check of production capacities and transportation capabilities based on a preprocessed set of

categorized supplies and prioritized demands.



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The Principle of the Optimizer

Product requirementspriorities, resources,

horizons

Simultaneous product

and resourceplanning

Feasible receipts: planned orders, stock transfers and

purchase requisitions

Optimizer

Result:

? Constraints:

? Customer priority

? Product priority

? Production capacity

? Storage capacity

? Transportation capacity

? Lot sizes

?

Safety stock

??The Optimizer uses linear programming to consider all relevant factors simultaneously as oneproblem. The Optimizer compares alternative solutions for the incurred costs and proposes the best

feasible solution based on constraints defined in the system. You use the control costs to alsoconfigure your priorities such as minimizing delays or minimizing on-hand stock. The Optimizer

considers all constraints in the supply chain model that were activated in the optimizer profile. As

more constraints are activated, the optimization problem becomes more complex and the timerequired to solve this problem increases.



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Aims of Optimization

What should be optimized

Costs - optimal

Prerequisite: "real" variablecosts or adequateestimate

Non-delivery costs :=Sales price + surcharge forcustomer loss/dissatisfaction

Service level - optimal

Prerequisite: "simplified"costs accepted(Control costs)

Non-delivery costs (NC) := highStorage costs := > 0, << NC

Other costs := << NC

??Service level - optimal on this slide shows the simpler configuration made by the Optimizer. Youmaintain high non-delivery costs (NC) and storage costs for the finished products via mass

maintenance. The high non-delivery costs force the Optimizer to exhaust all possible procurementand production capacities to satisfy the demands. The storage costs make sure that procurement and

production are carried out as late as possible.

??Costs - optimal on this slide shows the more complex configuration made by the Optimizer. You

maintain realistic costs for procurement, production, transportation and storage. You modellost salesand customer dissatisfaction via delay and non-delivery costs. In this scenario the Optimizer uses the

costs to determine the most cost-effective integrated solution.

??The result of the optimization run is an optimal solution (minimum costs or maximum profit) taking

account of planning-relevant transportation, production, storage and handling constraints. In that

sense, the solution is feasible. However, the result might be that due date constraints are violated orsafety stocks are not filled. Due dates and safety stocks are considered to be soft constraints. There

are costs associated with such violations, so the Optimizer only proposes this solution if, according

to the costs specified in the system, it is the least costly solution.



© SAP AG AP010

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30

CostsPenalty costs for

late delivery

Optimizer Decisions

? Where will procurementtake place?

? Where will production takeplace?

? When will production takeplace?

? What will be produced?

? Where will transportationtake place?

? When will transportation

take place?

? Where will the product be

stored?

? How long will the productbe stored?

??The essence of optimization is finding the best feasible solution. For example, is it less costly todeliver two days late or to produce three weeks early? The challenge with optimization is to properly

define the relevant costs (for example, cost of late delivery). You can fine-tune the relativeimportance of different cost types via the cost profile.



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Demand at a location

Dependent demand at loc.

Processing flow

Heuristic: Optimizer:

CTM:

SNP Strategies: Comparison (1)

??The Heuristic is a rapid infinite planning method that generates alerts when there is a materialshortfall or resource overload.

??CTM is a rules-based method with extensive prioritization capabilities and finite, global planning of

production resources. CTM is order-based planning that uses pegging methods to trace orders back to the individual requirement.

??The Optimizer considers material and resource availability simultaneously. It uses linearprogramming to consider all relevant factors simultaneously as one problem. In other words, there is

no sequential processing in the determination of a solution. The Optimizer considers transportation,

production, storage, and handling costs to propose a minimum cost solution that meets the respectiveconstraints.

??The lack of pegging of orders back to the individual requirement has the following repercussions: In

Supply Network Planning no order-based planning takes place. After the optimization run (or afterthe Heuristic run), no information relating to connections between particular planned production

orders and original sales orders can be determined (CTM can, however, provide such information via

order tracing).



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Speed

Quality

Prod. resources

Other resources

Multi-level

Costs

Priority

Quota arrangements

Heuristic Optimizer CTM

+

-

2. Step, local

2. Step, local

+

-

-

+

-

+

global +

global +

+

+

Product/location

creates

?

?

global +

-

+

-

Location / prod.+

+

SNP Strategies: Comparison (2)

??The performance of the three planning methods can be divided up roughly as follows: The Heuristicis the fastest method, CTM is in the middle and the Optimizer is the most complex and the slowest

method. This is just a rule of thumb. If you plan a lot of orders per period and location product, theperformance of CTM and the Optimizer can be compared since planning in CTM is order-based.

??The quality of the heuristic planning result is poorest (infinite!), next comes CTM (rules), and you

should expect the best result from the Optimizer that weighs up all possibilities of this algorithm.

??Production resources are considered globally and finitely by the Optimizer and CTM, while the

infinite planning result of the Heuristic must be postprocessed interactively.

??Transportation, storage and handling resources can be considered globally and finitely by the

Optimizer, while the infinite planning result of CTM and the Heuristic can be postprocessedinteractively.

??All methods can plan all BOM levels automatically.

??Costs ar e only relevant to the Optimizer.

??Priorities control CTM. There are product, location, order and due date, procurement and stock transport priorities. You set priorities for the Optimizer via the penalty costs for late delivery and

non-delivery of the location products.

??Quota arrangements are used by the Heuristic and CTM. They can be optimized using the Optimizer.



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Planning Process

Planning Horizon


Demand Planning

Production Planning /Detailed Scheduling

Transport LoadBuilder

Recommendedstock transportrequisitions

Forecast

Deployment

Stock transportorder

Planned orders

Firmedstock transportrequisitions

??Deployment determines which demands can be fulfilled by the existing supplies. If the produced andprocured quantities as well as the demands match SNP planning, the result of deployment is a

confirmation of the SNP plan. If the available quantities are not sufficient to meet the demand, thesystem makes the necessary adjustments according to whether you are executing the deployment

heuristic or deployment optimization.

??The Transport Load Builder (TLB) then groups these confirmed quantities together into stock

transport orders.

??Deployment and the TLB confirm the OLTP stock transport requisitions and can convert them into

stock transport orders or VMI sales orders. Via Customizing -> APO -> Supply Chain Planning ->Supply Network Planning (SNP) -> Basic Settings -> Configure Transfer to OLTP Systems you can

configure if transfer should take place using deployment or the TLB.

??Deployment and TLB are simply used to confirm stock transfers. Everything beyond this, such asroute planning, selection of carriers and generation of deliveries and transportations in the OLTP

system, is planned in TP/VS (Transportation Planning and Vehicle Scheduling).



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Heuristic

Optimization

Deployment: Heuristic versus Optimization

?

Heuristic? Started for one plant

? Product by product

? Optimization

? Focus on network

? Product by product

? Coverage maximization

? Cost-based optimization

??The deployment function in SNP determines how and when inventory should be deployed todistribution centers, customers, and vendor-managed inventory (VMI) accounts. It produces

optimized distribution plans based on constraints (such as transportation capacities) and businessrules (such as minimum cost approach, or replenishment strategies).

??A variety of deployment strategies are used depending on the current situation (e.g., fair share, push

deployment, pull-push deployment, and minimum cost flow optimization).

??The Heuristic has a hierarchical view of the supply chain network: Deployment is always carried out

from one delivery location to the receiving locations (DCs or customers).

??The deployment heuristic calculates a replenishment plan for a product in a delivery location. If the

available quantities are not sufficient to fulfill the demand, the system determines the distributionplan based on fair share rules. If on the other hand supply exceeds demand, the system uses push

rules to determine the distribution plan. Fair share and push rules are defined in the deploymentprofile.

??Deployment optimization has the integrated view of the receipt situation of all delivery locations and

the demand situation of the receiving locations.??The deployment optimization run calculates a replenishment plan for a product in all locations within

the network. If the available quantities are not sufficient to fulfill the demand or supply exceeds

demand, the system uses minimum cost flow optimization to determine an optimum distribution planfor the whole network at once.

??Deployment optimization works like SNP optimization except that the production and procurement

quantities are not changed.



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DC2

DC1

Plant

Deployment adjusts the stock transfers for short-term changeson both the supply and demand side (distribution detailed planning).

Deployment

? Fair Share

? Proportional allocation

according to demands

? Proportional allocationaccording to target stocklevel

? Quota arrangements

?

Push deployment? Based on future demands

? Quota arrangements

??There are several deployment and allocation strategies: fair share, push deployment, pull-pushdeployment, and minimum cost flow optimization.

??If demand exceeds supply, use a fair share allocation.

??If demand is less than supply or excess inventory exists, use a push strategy to be able to transfer

stock as early as possible.

??When excess inventory exists, surplus stock can be distributed according to push logic.

??For pull/push deployment rules, the demand horizon restricts the future demands that can bedelivered early.

??Set the pull horizon on the demand profile; set the push horizon on the supply profile.



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Deployment Results

Plant to DC1

Plant to DC 2

Plant to DC 1

Plant to DC 2

Date: ATD Quantity: Requirements:

Detailed requirements per DC:

Today

S u p p l y

D e m a n d

Deployment Result: Fair Share Rule A

05.01.200106.01.2001

07.01.2001

1000900

400

100 (DC1)500 (DC2)

800 (DC1+2)

DC1

DC2

200

600

100

500100300

05.01.2001

06.01.200107.01.200107.01.2001

??The slide shows the result of a deployment heuristic using the fair share rule A that is issued afterplanning in the background: Today, 1000 units are available in the plant for distribution. The stock

transfer for the current demand from DC1 can be confirmed. The stock transfer for tomorrow canalso be confirmed. The day after tomorrow, the demand exceeds the remaining quantity in the plant,

so the 400 units are distributed using the defined fair share rule A.

??You use the ATD (Available to deploy) quantity to describe the quantity that is determined in the

delivering plant for distribution and according to ATP rules. You configure the category groups inCustomizing and assign them to the locations. Receipts (ATR) are, for instance, stock, production

orders, purchase orders, etc. Issues (ATI) are reservations, etc.



© SAP AG AP010

? SAP AG 2001

Objective:Collective conversion of stock transport requisitionsinto stock transport orders in R/3

Transport Load Builder

? Grouped according to

? Products (transportation planner)

? Time (pull-in horizon)

? Transportation zones

? Ensures that minimum requirementsare met for:

? Volume

? Weight

? Number of pallets

??The primary purpose of the Transport Load Builder (TLB) is to use the results of the deployment run(single product transport recommendations) to create multi-product transport orders in a time period

for a transportation zone. It should be ensured that:

??The transportation methods are filled to maximum capacity

??No transportation method is dispatched that is not filled to minimum capacity

??For stock transport orders that could not be satisfied during the TLB run due to specified

constraints, you can build transport orders manually

??You can create transportation zones for the TLB or transfer them from R/3. You can thereby

consolidate your transportation capabilities (for example, use one truck to deliver orders to severallocations). You can group several locations together using transportation zones (and thereby create a

zone). TLB orders for several locations are regarded as one order for a large location, although

individual purchase orders do actually exist for separate locations.

??If you want to use transportation zones, you create a location as a transportation zone in the location

master. (From the APO Easy Access menu choose Master Data -> Location. Use the input help (F4)

in the Loc.typefield of the location master and choose 1005 - transportation zone). You then assignthe relevant locations in the hierarchy master to this transportation zone (choose Master Data ->Hierarchy). You can display these location hierarchies in the TLB interactive planning shuffler.



© SAP AG AP010

? SAP AG 2001

1

Building Consolidated Loads

Days

2 3

Half-fulltruck

Full truck

(best price) Minimum capacity

??In the Interactive Planning table for the TLB, you can view transport orders generated automaticallyby TLB for a specific day. If the load does not meet the minimum capacity requirements specified

for a full transport load within the specified pull-in horizon, you can manually create transport ordersthat are planned for later shipment and ship them early in order to build a full truck load.



© SAP AG AP010

? SAP AG 2001

You are now able to

Supply Network Planning: Unit Summary

? Describe the Supply NetworkPlanning distribution network

? Explain the Supply NetworkPlanning process flow

? Identify master data that is requiredto run Supply Network Planning

? Describe and compare Supply

Network Planning planning methods

? Explain the function of deployment



© SAP AG AP010

Exercises

Unit: Supply Network Planning


At the conclusion of this exercise, you will be able to:

?? Open interactive planning in SNP, run the heuristic and view the

capacity situation for a resource

Once a forecast has been generated at Precision Pump Company, theLogistics Planner uses the SNP heuristic to create a rough distribution

plan and checks for capacity overloads at the production plants.

1-1 Open interactive planning of Supply Network Planning.Open the selection window and, under “Show”, select “APO Location product”.

Version 000 is already displayed automatically. In the next row, enter APO -Product once again, and on the right-hand side enter your product T-F2##. Load the

data for the product at location 2400 into the planning table.

1-2 Look at the future periods and check if the planned independent requirements you

released for the distribution centers 2400 and 2500 and the plant 1000 aredisplayed. Analyze in which key figure the planned independent requirements areshown.

Make sure that no distributed demands and production orders exist for theproduction plants 1000 and 2300.

1-3 Run the network heuristic and check the situation for your product T-F2## for thedistribution center 2400.

Verify that there are now values in the Total receipts row.

Which plants are supplying the receipts?_______________



© SAP AG AP010

1-4 Check the capacity situation for resources WT-L##_1000_001 and WT-L##_2300_001 in the Capacity View. Switch data views by dragging the grey bar

upwards on the left and double-clicking on data view SNP94(2) “CAPACITYCHECK”.

Open the selection window and, under “Show”, select “APO Resource”. Version

000 is already displayed automatically. In the next row, enter “APO Resource” onceagain, and on the right-hand side enter your resources WT-L##*. Load the data fora resource into the planning table sequentially. If there are any capacity overloads,run “Capacity Leveling”.

Is there any capacity overload for these resources?_________

If so, when do the violations occur?____________________

1-5 Run optimization for your product T-F2## at all locations. Load all locationproducts with product T -F2## into the planning table. Start the Optimizer with the

optimizer profile DISCRETE and the cost profile MASTER. Check the capacitysituation again.

1-6 Check if the receipts have been transferred to the connected R/3 System. Log on to

the R/3 System and call the stock/requirements list for your product T_F2## inplant 1000.



© SAP AG AP010


Topic: Deployment

At the conclusion of this optional exercise, you will be able to:

?? Describe deployment’s functionality and how it is used in APO

Precision Pump’s products are distributed to their distribution centers andcustomers on a daily basis.

Deployment checks the quantity that is available in the next few days for

distribution and confirms stock transports that can be made.

1-1* Run deployment for the location 1000 for the next 100 days using mass processing.Reduce SNP transport orders. Write down the result of the deployment run:

_______________________________________________________________

_______________________________________________________________


Version 000

Planning book 9ASNP94

Data view SNP94(1)

Location 1000

Product T-F2##

Deployment horizon indays

100

If you select Orders: Do not change the system will not change theSNP transport orders.

The horizons in the training system are not realistic. In practice,deployment is used to confirm stock transports for the next few days.But in the course we cannot wait until the orders reach the short-term

horizon.



© SAP AG AP010

Solutions



1-1 Open interactive planning of Supply Network Planning.

Open the selection window and, under “Show”, select “APO Location product”.Version 000 is already displayed automatically. In the next row, enter APO -

Product once again, and on the right-hand side enter your product T-F2##. Load thedata for the product at location 2400 into the planning table.

Supply Network Planning? Planning ? Interactive Supply Network Planning

The selection window is the second icon in the top left. Open the selection

window and, under “Show”, select “APO Location product”. Version 000 is already displayed automatically. In the next row, enter APO -Product once

again, and on the right-hand side enter your product T-F2##. Select “Adopt”, and your selection will be adopted by the selection window.

Double-click on your product T-F2## for the distribution center 2400. The data

for this selection is now displayed in the planning table.

1-2 Look at the future periods and check if the planned independent requirements youreleased for the distribution centers 2400 and 2500 and the plant 1000 are

displayed. Analyze in which key figure the planned independent requirements areshown.

Make sure that no distributed demands and production orders exist for theproduction plants 1000 and 2300.

Display the weeks in the next month and you will see the quantities in the key figure “Total demand”. Only forecasts outside of the forecast horizon contribute to the total demand.

Double-click on the “Total demand” row. The released data is displayed in the key figure "Forecast". All six key figures (forecast, sales order, dependent

demand, distributed demands) contribute to the total demand.

Double-click on your product T-F2## for the distribution center 2500. Ensure

that demand is displayed.

Double-click on your product T-F2## for the plant 1000. Forecasts are displayed but no production quantities and distributed demand.



© SAP AG AP010

1-3 Run the network heuristic and check the situation for your product T-F2## for thedistribution center 2400.

Verify that there are now values in the Total receipts row.

Which plants are supplying the receipts?_______________

Click on the Heuristic (network) button to run the heuristic.

Double-click on your product T-F2## for the distribution center 2400.

Double-click on the “Total receipts” row.

The stock transports created by the heuristic are displayed in the key figure“DistrReceipt (Planned)”. Right-click on this key figure and select “Display

details” to display the receipts from the plants in the lower window.

The production plants 1000 and 2300 supply the distribution center 2400

according to the quota arrangement for the product T-F2##.

1-4 Check the capacity situation for resources WT-L##_1000_001 and WT-

L##_2300_001 in the Capacity View. Switch data views by dragging the grey barupwards on the left and double-clicking on data view SNP94(2) “CAPACITYCHECK”.

Open the selection window and, under “Show”, select “APO Resource”. Version000 is already displayed automatically. In the next row, enter “APO – Resource”once again, and on the right-hand side enter your resources WT-L##*. Load thedata for a resource into the planning table sequentially. If there are any capacityoverloads, run “Capacity Leveling”.

Is there any capacity overload for these resources?_________

If so, when do the violations occur?____________________

Double-click on the data view SNP94(2) “CAPACITY CHECK”.

Double-click on your resource in the selection window to load data for the resource into the planning table.

The aggregated available resource is calculated from the available capacity perworkday.

If capacity overloads occur, select “Capacity leveling”; “Capacity leveling by

backward scheduling”; “Time-based capacity leveling w/o priority rule”;“Maximum load as a % :100%”, “Ignore firmed quantity”. Save the result and

select again.



© SAP AG AP010

1-5 Run optimization for your product T -F2## at all locations. Load all locationproducts with product T -F2## into the planning table. Start the Optimizer with the

optimizer profile DISCRETE and the cost profile MASTER. Check the capacitysituation again.

Double-click on the data view SNP94(1) “SNP PLAN”. Open the selectionwindow and, under “Show”, select “APO Location product”. Version 000 is

already displayed automatically. In the next row, enter APO -Product once again, and on the right-hand side enter your product T-F2##. Select “Adopt”, and your selection will be adopted by the selection window.

Press the “Select all” symbol above the selection window and load the data by pressing the “Load data” symbol.

Start the optimization run by pressing the “Optimizer” symbol.

Enter DISCRETE for the optimizer profile and MASTER for the cost profile and

press “Execute”. When the Optimizer has finished the calculation, the resulting costs are displayed. When you have analyzed the costs, select the green arrow BACK to return to the planning table. Now you can check the resource loads

again.

1-6 Check if the receipts have been transferred to the connected R/3 System. Log on tothe R/3 System and call the stock/requirements list for your product T_F2## inplant 1000.

SAP standard menu?

Logistics?

Production?

MRP?

Evaluations?

Stock/Reqmts List

Enter your product T-F2## and the plant 1000, for example, and confirm.

The SNP planned orders and releases for the stock transport requisitions are in R/3. The planned independent requirements are not transferred back via CIF butvia mass processing in Demand Planning.



© SAP AG AP010


Topic: Deployment

1-1* Run deployment for the location 1000 for the next 100 days using mass processing.Reduce SNP transport orders. Write down the result of the deployment run:

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

Supply Network Planning? Planning? SNP in the Background ? Deployment


Version 000Planning book 9ASNP94

Data view SNP94(1)

Location 1000

Product T-F2##

Deployment horizon indays

100

Select “Orders: Reduce”, and “Log”.

If you select Orders: Do not change the system will not change theSNP transport orders.

The horizons in the training system are not realistic. In practice,deployment is used to confirm stock transports for the next few days.But in the course we cannot wait until the orders reach the short-term

horizon.



© SAP AG AP010

? SAP AG 2001

Contents:

Production Planning / Detailed Scheduling (PP/DS)

? Consumption of planning by sales orders for forecast-controlled products in make-to-stock and make-to-orderproduction

? Simultaneous material and capacity requirements planning atoperation level in the production plant

? Tools for production planning and production scheduling

? Schedule optimization in PP/DS

? Transfer of planning results to the execution system



© SAP AG AP010

? SAP AG 2001

Course Objectives

At the conclusion of this course, you will be able to

? Describe how sales orders consume planning inmake-to-stock and make-to-order production

? Use simultaneous material and capacityrequirements planning at operation level

? Use the production planning and productionscheduling tools

? Describe schedule optimization in PP/DS

? Transfer the planning results to the executionsystem



© SAP AG AP010

? SAP AG 2001


444

222 Integration and Technology

111

66

Course Overview

555

333

66777

888999


Demand Planning

Supply Network Planning


Transportation Planning


Conclusion



© SAP AG AP010

? SAP AG 2001

Business Scenario

? In Demand Planning, a demand planning forecast

was generated and transferred to the distributioncenter as planned independent requirements.

? After SNP has transferred the requirements via the

stock transfer to the production plant, theproduction quantities and capacities must beplanned in the production plant.



© SAP AG AP010

? SAP AG 2001

Production Planning & Detailed Scheduling inAPO: Advantages

? Simultaneous material and capacity requirements planning for in-houseproduction, external procurement, and stock transfers in a production plant at

operation level: Fast generation of feasible plans

? Immediate and automatic planning (for example, to trigger production from theplant) - close integration with plant

? Planning with exact times, even for dependent requirements (for example, aprerequisite for material staging by shift)

? Dynamic exception messages in real-time and based on order linking (pegging)across the whole supply chain

? Multi-level capacity requirements planning possible: automatic, multi-level, bi-directional propagation of order changes

? Planning of alternative resources

? Available capacity: time, volumn, length ...

? Consideration of restrictions in planning (for example, supplier capacity)

? Schedule optimization (order sequencing, lead time, etc.)

??Simultaneous material and capacity requirements planning: You can define resources as finite

resourcesin the resource master (resources critical for planning). At these resources, operations of

orders are only created if there is enough capacity available for the order quantity on the order date.If there is not enough capacity available, the system searches for a new date, taking the capacity

situation into account.

??Automatic planning immediately: If you set this indicator for a product (PP/DS tab in the product

master), the system starts a single-level planning run for this product for each change made that isrelevant to planning (for example, a new sales order). At the same time (immediately) a multi-level

ATP check is performed for the product and for the assembly/components for which automatic

planning immediately is defined.

??Planning with exact times: Dependent requirements and orders are created with a time.

??Bi-directional propagation of order changes: If you make time-related changes to orders at, forexample, finished-product level, you can specify that the system is to automatically move the

assembly orders. If, however, there is not enough capacity at that time for the assembly orders, an

exception message can be generated or the order is not moved at finished product level. In the otherdirection, moving assembly orders can have an effect on finished product orders.

??Planning alternative resources: If not enough capacity is available at a resource, the operation can

be rescheduled at alternative resources (maintained in the PPM).

??Schedule optimization: During planning, it may be that orders were generated whose order

sequence is not optimum. Therefore, you can change the sequence and resource assignment of

existing orders in the optimization run.



© SAP AG AP010

? SAP AG 2001

Interaction Between SNP and PP/DS

Create,change

Create,change

PP/DS

Today

Create,change

Create,change

SNP

Order

4713

Order

4714

Order

4715

Order

4716

Order

4717

Production horizon(per product)

Time

Receipts

Reqmts in plant

Mo Tu We Th

50

Order

4712

100 40 210 160 35

? Capacities and material are planned

based on exact times (to the second)

? Consideration of order sequences

? Optimizer: Can optimize the sequenceof existing orders and operations

? Capacities are planned in time bucket

profiles in an aggregated manner

? Order sequences not considered

? Optimizer: Optimizes lot sizes,determines source of supply

??If you decide to plan using both Supply Network Planning (SNP) and Production Planning andDetailed Scheduling (PP/DS), the production horizon is used to separate the areas of responsibility

for these two planning functions:

??Supply Network Planning is used for medium-term to long-term planning across the wholelogistics chain (especially if several plants and distribution centers are available). Requirements

for a defined bucket (for example, day) are aggregated. In this case, it is irrelevant whether a

requirement is in an early shift or late shift since the requirements are only roughly planned, andeven the time positions of breaks are not taken into account. Furthermore, you are not only able to

perform time aggregated planning in SNP, but also period aggregated planning (if desired). You

can define bucket resources to be used for SNP which can represent, for example, the availablecapacity of a whole warehouse. Since you create separate PPMs for SNP (which are usually

copied from PP/DS-PPMs), you can describe production at these bucket resources. Order

sequences play no role in the time area of SNP planning.

??PP/DS is used for short-term planning in which orders must be scheduled to the minute and order

sequences must be taken into account (sequence planning and optimization).

??As soon as a requirement is within the production horizon, it is no longer planned in the SNPplanning run, but rather in the production planning run in PP/DS. Orders can be manually created or

changed in PP/DS across the complete time axis, irrespective of the production horizon. During

automatic planning (the production planning run) in PP/DS, only orders within the productionhorizon are created. In SNP, however, orders cannot be created or changed in the production horizon.

Orders that are in the production horizon and thus planned by PP/DS are still displayed in SNP asaggregated requirements for the defined bucket.



© SAP AG AP010

? SAP AG 2001

100

Today

Production horizon

SNPCreate

100

Today

Production horizon

DeletePP/DS

100

Today

Production horizon

Create againPP/DS

Scheduling accordingto the PPM for SNP

Scheduling accordingto the PPM for PP/DS

Interaction Between SNP and PP/DS (2)

??In this graphic, an order is created in Supply Network Planning using the production process modeldefined in SNP. Production process models are created (the SNP-PPM can be copied from PP/DS-

PPM, which is generated via the R/3-APO interface from the R/3 routing/BOM). Bucket resources(used only in SNP) or mixed resources (which can be used both in PP/DS and SNP-PPM) are

planned in Supply Network Planning. Orders are aggregated for each defined bucket.

??As soon as the start date of the order enters the production horizon, the SNP order is no longer

planned by SNP. The SNP order must be converted into a PP/DS order so it can be planned byPP/DS. To do this, background conversion is available in the PP/DS menu, which can be used to

schedule periodically. The conversion creates the order again in PP/DS using the production process

model defined there. Before the conversion, the aggregated requirements are displayed in SNP asplanned production. After the conversion in PP/DS, the orders are still displayed as aggregated

requirements in SNP.

??The production horizon is defined as a number of days from the current day into the future in which

PP/DS is to be used to plan. The production horizon can be defined in Customizing for Supply Chain

Planning, in the IMG activity, Display Global Parameters and Default Values. You may also define

a production horizon for each product per location in the product master. This definition takespriority over the Customizing definition.



© SAP AG AP010

? SAP AG 2001

Requirementsstrategies

Quantity 100Date 05/10

Quantity ?Date ?

Requirements Strategies

Sales

order

SDSD

Planned

indep.reqmts

CustomerProduction /

Purchasing

? How does SAP process independentrequirements?

??A requirement is the quantity of a material required at a certain time in a plant.

??Independent requirements do not refer to the requirements of other materials. Planned

independent requirements and sales orders are independent requirements.

??A requirements strategy specifies a possible procedure for material planning.

??Some requirements strategies support make-to-stock production. You could, for example, plan

production or purchasing based on a forecast and then cover the sales orders from the stock.

??Some requirements strategies support make-to-order production. In this case, you may not startproduction or purchasing, for example, until a sales order has been received.

??Some requirements strategies support a combination of make-to-stock and make-to-order production.

You could produce the subordinate assembly, for example, based on a forecast. You would not startthe final assembly until a sales order is received.



© SAP AG AP010

? SAP AG 2001

Requirements Strategies

? Make-to-stock production of the finished product by planning at

the finished product level

? Sales order-related final assembly:

? Make-to-stock production of assemblies by planning atassembly level, final assembly in make-to-stock or make-to-order production when sales orders are received.

? Make-to-stock production of assemblies by planning atfinished product level, but final assembly is not triggered until

the sales order is received. Final assembly in make-to-stockor make-to-order production.

?

Make-to-order production only, without planning

??Requirements strategies represent the business procedure for planning production quantities and

dates. A wide variety of requirements strategies are available offering a number of differentpossibilities for planning, ranging from make-to-order production to make-to-stock production.

Depending on the strategy you select, you have the following options:

??Make-to-stock production based on sales orders and/or planned independent requirements at

finished product level

??Planning specifically for the assembly, if you can plan more easily at component level. Final

assembly takes place in make-to-stock or make-to-order production.

??Stocking up of assemblies by planning at finished product level, but final assembly is not triggered

until the sales order is received. Final assembly takes place in make-to-stock or make-to-order

production.

?? Make-to-order production only, without planning the finished product or the components

??Furthermore, you can combine requirements strategies. This allows you to plan a finished productwith a requirements strategy for make-to-stock production as well as plan an important assembly thatis also sold as a spare part.

??The planning strategies available for a material can be found in APO Customizing for Master Data

(in step Determine Requirements Strategies). You can assign a requirements strategy to a material inthe Requirements strategy field. Each requirements strategy contains important control parameters

for the consumption of sales orders (or dependent requirements) and planning.



© SAP AG AP010

? SAP AG 2001

Overview of the Complete Production PlanningRun Process

Dependentrequirements

Order

Sched. agree.

del. schedule

Sales orders,Planned ind. reqmts

Purchase

requisition

Convert

External procurementIn-house

production

ProductProductplanning runplanning run

Sched. agree.del. schedule

Convert

Planned order

Productionorder

Processorder

Plnd order forrepetitive man.

Planning

Execution

??Material requirements planning deals with current and future requirements. The plannedrequirements quantities trigger planning (in consumption-based planning, for example, planning is

triggered when the reorder point is not reached). Requirements elements for material requirementsplanning are, for example, sales orders, planned independent requirements, dependent requirements.

??If the production planning run discovers shortage quantities, procurement proposals are generated:

purchase requisitions and planned orders are internal planning elements which can be changed,

rescheduled or deleted at any time.

??In the case of in-house production the system creates planned order for planning production

quantities. When planning is complete, planned orders are converted to production orders.Dependent requirements for the planned order are converted to reservations for the production

order.

??In external procurement, the system generates a purchase requisition for planning externalprocurement quantities. When planning is complete, the purchase requisition is converted to an

order. If a material exists for a scheduling agreement, scheduling agreement delivery schedules

can also be generated directly during the production planning run.

??When planning is complete, in-house production or external procurement must be triggered. For this,

??Planned orders are converted to production orders if you are working with discrete manufacturing

(order-based production)

??Planned orders are converted to process orders if you are working with process manufacturing

??Planned orders are used as a basis for production if you are working with repetitive manufacturing

(period-based instead of order -based)

??Purchase requisitions are converted to purchase orders



© SAP AG AP010

? SAP AG 2001

Time Elements in Scheduling

Finishedproduct

Assembly ofa different

plant

Stock transferto a different

plant

Time

Availability date

Start date

Reqmts date

10 3020

End date

GR processing time 10

10 20

GI processing time GR processing time

10

GR processing time

GR processing time

Operations

??When the lot size of the planned order has been determined and the PPM has been exploded, theproduction planning run calculates the dates of the planned orders.

The dependent requirement dates of the planned orders are moved to the dates of the assignedoperations (PPM). A material order appropriate for the operation is then possible.

??The system assumes material staging according to component assignments in the PPM to the

operations in the PPM. The dependent requirement dates of the BOM components are moved to the

production start dates of the operations to which they are assigned.



© SAP AG AP010

? SAP AG 2001

Production Planning Run Overview: SimultaneousMaterial and Capacity Requirements Planning

Time

Resource 3 (finite)

Resource 2 (infinite)

Resource 1 (finite)

Sales order with desireddate and quantity

30

20

10

30

20

Confirmed

qty/date

Available

Occupied

1st Loading attempt

Final loading

Today

Resource availability

Raw material Delivery time Delivery time

Possible ALERTS:Resource Overload

Supplier-supplier time violatedSupplier-resource overload

10

Uninterruptible operation, according to PPM

??If a product is not available, the requirement (the sales order or dependent requirement, for example)triggers production directly: If it triggers an order for in-house production, APO creates a planned

order for the desired quantity in PP/DS. All of the operations of the PPM are scheduled at theresources of the PPM, and the system takes the capacity restrictions into account (available capacity

and orders that may have already been scheduled).

If the capacities are already exhausted on the desired date, the system uses simultaneous material andcapacity requirements planning to find a date on which the planned order can be created. You use the

strategy profile to define how the system is to schedule (search for a slot, infinite planning ...).

??Prerequisite:

??Maintain resources critical to planning as finite resources in the resource master. At these

resources, operations of orders are only created if there is enough capacity available for the order

quantity on the order date.

??Maintain the strategy profile with which you want to trigger the scheduling of planned orders in

planning under Global Settings in Customizing for PP/DS, in the Strategy profile field. The

default strategy profile in the delivery system is SAP002 (search for a slot backward).



© SAP AG AP010

? SAP AG 2001

Detailed Scheduling Planning Board

Diagram areaTable area

Graphical object(operation, order)Message bar

Res.Res.

type

Short

descrip-tion

Res03

Res02

Res01 P

P

P

Loc 01

Loc 01

Loc 02

Resource chart03/15/1999 03/16/1999

00 02 04 06 08 10 12 14 16 18 20 22 00 02 04 06 0822

OrderNo Products

000001357

000001335

000001294 P

P

P

Order Chart03/15/1999 03/16/1999

00 02 04 06 08 10 12 14 16 18 20 22 00 02 04 06 0822

Product

Product 01

Product histogram

03/15/1999 03/16/1999

00 02 04 06 08 10 12 14 16 18 20 22 00 02 04 06 0822

300200

100

Order No: 000001294

Differentcharts

Lines

Chart objects

Columnheading

??Schedules are displayed graphically in the planning board.

??The planning board is used for interactive planning, for example, for interactive processing and

dealing with Alerts.

??You can call the planning board directly from the Production Planning/Detailed Scheduling menu or

from order processing.

??You can define the layout of the planning board, for example:

??The different charts (such as a resource chart and an order chart):

??The field selection and sorting for the columns in the table section of a chart

??The format of the rows in the table section

??The objects displayed in the diagram section of a chart, for example:

Operations or orders (graphical objects)

Histograms (product stock curves or resource load curves)

Network views of operations and orders that display the time and pegging relationships betweenoperations and orders

??The layout of operations and orders in the diagram section.



© SAP AG AP010

? SAP AG 2001

Optimization Concept in PP/DS

Objective function

W1* Total lead time

+ W2* Sum of setup times

+ W3* Sum of setup costs

+ W4* Maximum delay costs

+ W5* Sum of delay costs

+ W6* Sum of mode costs

= MINIMUM

? Optimization: Change of production dates/sequences and resource

assignments of existing operations/activities with regard to the following criteria(no creation or deletion of orders):

??Use: Optimization allows you to optimize the production dates/sequences and the resourceassignment of existing operations/activities which were generated by the production planning run or

manual planning. The optimizer does not create or delete orders.The purpose of optimization is to generate feasible production plansand increase the efficiency of

production.Several optimization parameters (such as setup times, due date violations) can be

weighted in such a way that the optimized schedule comes as close to the desired results (forexample, minimum setup times) as possible. The following parameters can be taken into account in

optimization:

??Total lead time (from the start of the first operation to the end of the last operation in a schedule

within the optimization horizon). The total lead time makes a statement about the compactness of

the orders within the optimization horizon.

??Sum of setup times

??Sum of setup costs

??Maximum delay costs (maximum delay of an order compared to its requirements or due date).

??Sum of delay costs (delay compared to requirements or due dates)

??Sum of mode costs



© SAP AG AP010

? SAP AG 2001

Non-working timesFixed operationsOperations, that may be rescheduled

RelationshipsOptimization range

Transferred resources: B, C, D

Start EndResource A

Resource B

Resource C

Resource D

Resource E

Optimization Window: Time and Resources

Earliest start for optimized schedule

??When you call up optimization you set the optimization horizon (start and end) and the start datefor the optimized schedule. The optimization function reschedules orders and operations that are:

??Completely within the optimization horizon (defined by a start and an end date)

??Not fixed

??At resources which were transferred to optimization

If you have selected resources in the planning board, only these selected resources aretransferred to the optimizer. If you have not selected any resources in the planning board, thesystem transfers the resources that you specified in the work area for the planning board and the

optimizer.In particular, the system can only reschedule an activity to alternative resources during

optimization when these resources are included in the resource selection for optimization.

??The relationships of the fixed orders and operations to the non-fixed orders and operations determineif and by how much these orders and operations can be shifted during optimization. The optimized

schedule is, therefore, adjusted to accommodate the fixed orders and operations.

??The system does not change planning outside of the optimization window during planning. Activities

outside of the optimization window are fixed during optimization. However, the fixed activitiesdetermine by their relationships to the non-fixed activities in the optimization range, whether and

how far these activities can be rescheduled during optimization. The optimized schedule is,

therefore, adjusted to accommodate the fixed activities.

??Earliest start date for the optimized schedule: Before the optimization, you specify the earliest

date on which the optimization function can schedule the activities. You cannot enter an earliest startdate that lies in the past.



© SAP AG AP010

? SAP AG 2001

Conversion to Fixed Procurement Elements

Productionorder

Planned

order

Plannedorders

Productionorders

Individual conversionIndividual conversion

Collective conversionCollective conversion

OrderPurchaserequisition

Purchaserequisitions Orders

??You can trigger the conversion of planned orders and purchase requisitions to production orders ororders directly in APO. You set the conversion indicator in APO for the orders you want to convert.

The orders are transferred to the OLTP system and converted automatically. The converted ordersare sent back to the APO System with a different ATP category (purchase requisition to purchase

order). If a planned order is converted to a production order, the dependent requirements of the

components are converted to reservations.

??You can convert planned orders and purchase requistions in one of the following two ways:

??Individually in interactive planning: In the product view and the product planning table, you can

select orders to be converted and then choose Set conversion indicator . When you save theplanning results, the orders to be converted are transferred to the R/3 System, where the

conversion will be automatically triggered. The converted orders are sent back to the APO System

with a new ATP category.

??Using mass conversion and selection criter ia (Choose Production Planning -> Manufacturing

Execution -> Conversion of Orders/Purchase Requisitions): You can set the conversion indicators

for a large number of orders or for several products. You can restrict the selection of orders to beconverted by entering the product, location, production planner and the offset for the openingperiod. The opening period, which is defined in the product master on the PP/DS tab, controls

which orders are to be converted. The opening period is a number of workdays starting from the

current date. The APO System only sets the conversion indicators for orders whose order startdates are within this period. The opening period is used both for in-house production orders and

external procurement orders.

??Prerequisites: On the PP/DS tab in the product master, you have maintained an opening period for

each product at the location level.



© SAP AG AP010

? SAP AG 2001

Mass Conversion - Time-Based

Order headerOrder header

Operations

Materialcomponents

Production resource/tool

Costs PlanKPlndActual

2050

100

Orders

Production orders/

process orders

Today x days later

Offset time

Time

Planned orders and

purchase requisitions

PlanningPlanned order

Purchase requisitionOpening

period

Productionfinish

Productionstart

Creationdate

In-house

production

External procurement

??APO orders contain three dates: production start, production finish, creation date. The creation date is the date on which a planned order is to be converted to a production order or a purchase requisition

to an order. This date is based on the opening period defined in the R3 material master (SchedMargin

key field). The opening period from the SchedMarginkey of the R/3 material master is transferred to

the APO product master in the R/3 APO interface (Opening field in the Horizons group box).

??As soon as the creation date of a planned order is passed on to a time horizon selected in mass

conversion, it can be converted in mass conversion. The time interval (offset time) entered in massconversion is always valid as of today's date. Planned orders whose creation dates are in the past are

automatically selected too.

??Planned orders are usually converted to production orders (in-house production), purchase

requisitions to purchase orders (external procurement).

??In in-house production, the order type in R/3 determines whether it is a production order or a

process order. The order type is taken (in the sequence of highest priority) from the production

scheduling profile in the R/3 material master, the MRP group in the R/3 material master, and the

plant parameters in R/3-Customizing. The R/3 System decides whether a production order or aprocess order is to be generated for the product.

??When the pla nned order is converted to a production order or process order, the planned order is

deleted. The related dependent requirements (material components) and any capacity requirements

are redirected to the newly created production order. The dependent requirements becomereservations.



© SAP AG AP010

? SAP AG 2001

Production Planning / Detailed Scheduling (PP/DS):Unit Summary

You are now able to

? Describe how sales orders consume planning in make-

to-stock and make-to-order production

? Use simultaneous material and capacity requirementsplanning at operation level

? Use the tools for production planning and productionscheduling

? Describe schedule optimization in PP/DS

?

Transfer the planning results to the execution system



© SAP AG AP010

1-2 Execute a production planning run to schedule the production of the pumps. In thisexample, planning should not be triggered from the product view; rather, theproduction planning run should be used.

1-2-1 Exit the product view and follow the menu path for the production planningrun. In the production planning run, in plant 1000, you plan all products forwhich you have planned the production planner.

In the production planning menu, select the following variant:

SAP_MRP_001.

After making this selection, choose Selection criteria .Now select the following values:

Field Values

Product

Location 1000

Production planner 0##

Planning file entry created X

Choose Execute.

1-3 In the Product View in APO, look at the planning result for the APO product T-F2## at location 1000 (production plant Hamburg).

1-3-1 Look at the situations of the planned order for product T-F2## and check the

requirements/receipt situation for all components.Were all requirements planned in planning?

_____________________________________________________

1-3-2 Now check the planned order details:

Look at the component list of the latest planned order within the production

horizon: Double -click on the latest planned order within the productionhorizon to go to the planned order.After double-clicking, you can see the detailed data (header data) of the

planned order on the right, and the complete structure of the planned orderon the left. On the left you can recognize the receipts, components

(requirements) and operations of the planned order.

When are the start and end dates of the planned order for the final assemblyof pump T-F2##?

_____________________________________________________



© SAP AG AP010

How many operations have been scheduled in the planned order on the

various resources?

_____________________________________________________

Which assemblies (and also dependent requirements) are contained in theplanned order for the pump T-F2##?

_____________________________________________________

Have the components T-B1## (casing), T-B22## (fly wheel), T-B3##(hollow shaft) and T-B4## (electronic turbo-drive) also been planned?To find this out, double-click on the corresponding product number in the

component list of the planned order and look at the requirements/stock situation for the corresponding assembly on the right of the screen.

Are there any alerts for the components of the planned order?

_____________________________________________________



© SAP AG AP010

Optional exercise (not part of the standard course–can be used by the course participants after the course)

Unit: Production Planning and Detailed

Scheduling(Machine Scheduler’s Tools)


?? Visualize and process orders in the detailed scheduling

planning board

After you have executed the planning run for your plant 1000 inHamburg, you must then reschedule the sequence of the existing

orders.

1-4 Until now, we have only created requirements and orders for pump T-F2## (whitepump). Now, create some more planned independent requirements for pump T-F4## inplant 1000.

To demonstrate that planned independent requirements can be created not only using

APO Demand Planning, but also using R/3 Program Planning, create the plannedindependent requirements manually in R/3.

Note: Creation of planned independent requirements in R/3 is useful if you areperforming demand planning in R/3, or are not performing demand planning and wishto maintain the planned independent requirements manually.

1-4-1 Enter the independent requirements for material T-F4## in plant 1000 in the

R/3 program planning. In the initial screen of the transaction, enter T (dayformat) in the planning period field, to select day schedule lines as the period

schedule line.In the planning table, select the first row of the table and choose the delivery

schedule tab.

Enter the following independent requirements for pump T-F4## in plant 1000:

Friday in aweek

Friday intwo weeks

Friday inthree weeks

Friday infour weeks

5 5 5 5

Save your entries.



© SAP AG AP010

1-5 Check the sequence of the planned orders for both product pump T-F2## (white pump)and T-F4## (blue pump). To do this, use the detailed scheduling planning board.

1-5-1 Call up the variable view of the Detailed Scheduling Planning Board. Choosethe “ Pump ## ” overall profile and confirm using Enter.

You see that the work area “Pump ##” was selected automatically when you

selected the overall profile “Pump ##”. This includes all resources for the finalassembly of the pumps.

Enter the detailed scheduling planning board using the selection criteriaspecified above and then navigate in the planning board.

1-5-2 Look for the first orders for products T-F2## (white pump), and T-F4## (bluepump) by selecting the respective product numbers one after the other in the

Product chart and then right-click to select " begin with first graphical object".

Look in the Resources chart to see which resources the pumps occupy. To findout which capacity loads belong to which order in the resources chart, select thefirst planned order for the product T-F2## and then right-click to select “Mark

objects for the same order”. All capacity requirements belonging to the order are then shown in color.

1-5-3 In the Detailed Scheduling Planning Board, you can now manually rescheduleorders/operations using Drag & Drop, or you can start the Optimizer for

automatic sequence planning.

However, only observe the planning result here, and then exit the Detailed

Scheduling Planning Board without saving.



© SAP AG AP010

Solutions

Unit: Production Planning and Detailed Scheduling

1-1 APO menu path: Production Planning ? Interactive Production Planning ?

Product View

1-1-1 Why have no planned orders been created, in the near future, for the planned

independent requirements?For product T-F2##, a production horizon of a certain number of days has

been maintained in the product master, on the SNP2 tab. Requirements

outside this production horizon are covered by the SNP planning run.

Requirements within the production horizon are covered by the PP/DS planning run. As only an SNP planning run was executed in the last

exercise, but not a PP/DS planning run, no planned orders are available for

any requirements within the production horizon.

1-2 APO menu path: Production Planning? Automated Production Planning and

Optimization ? Production Planning Run

1-3 APO menu path: Production Planning? Interactive Production Planning ?

Product View

1-3-1 Look at the situations of the planned order for product T-F2## and check therequirements/receipt situation for all components.Were all requirements planned in planning?

After the production planning run, all the planned independent

requirements were planned.

1-3-2 When are the start and end dates of the planned order for the final assemblyof pump T-F2##?

Take the dates from the planning order header.

How many operations have been scheduled in the planned order on the

various resources? In total, the six different PPM operations have been scheduled in the planned order.

Which assemblies (and also dependent requirements) are contained in theplanned order for the pump T-F2##?The components T-B1##, T-B22##, T-B3## and T-B4## are contained in the

planned order for the pump.



© SAP AG AP010

Are the components T-B1## (casing), T-B22## (fly wheel), T-B3## (hollow

shaft) and T-B4## (electronic turbo-drive) also planned automatically andimmediately? Are there any alerts for the components of the planned order?Only the dependent requirements of the hollow shaft are planned

immediately; the other dependent requirements were not planned. However,

these are partially covered by storage location stock .Solutions



© SAP AG AP010

Optional exercise (not part of the standard course–can be used by the course participants after the course)

Unit: Production Planning and Detailed

Scheduling (Machine Scheduler’s Tools)

1-4

1-4-1 R/3 menu path: Logistics ? Production Planning ? Program Planning

? Planned Independent Requirement ? Create

1-5

1-5-1 APO menu path: Production Planning? Interactive Production Planning

? Detailed Scheduling Planning Board

1-5-2

1-5-3



© SAP AG AP010

? SAP AG 2001

Contents:

Transportation Planning & Vehicle Scheduling(TP/VS)

? Route optimization

? Transportation consolidation

? Carrier selection

? Shipment tendering



© SAP AG AP010

? SAP AG 2001

Unit Objectives

At the conclusion of this unit, you will be able to:

? Describe the tasks of Transportation Planning &

Vehicle Scheduling, and how it is applied in APO

? State the differences between the Transport LoadBuilder, and Transportation Planning & Vehicle

Scheduling.



© SAP AG AP010

? SAP AG 2001


444

333

Integration and Technology

111

77

Course Overview

555

666

77

222

888999


Demand Planning





Conclusion



© SAP AG AP010

? SAP AG 2001

Business Scenario

? The Precision Pump Company is usingTransportation Planning & Vehicle Scheduling tomake optimum usage of available capacities in

trucks, trains, ships, and aircraft . Their aim is toplan more efficiently and reduce costs.

? During optimization, both optimum routes, andoptimum vehicles will be identified (using R/3freight costs, for example).

??The Precision Pump Company is using Transportation Planning to make optimum usage of availablecapacities in trucks, trains, ships, and aircraft . Their aim is to perform planning more efficiently and

reduce costs.

??They are using Vehicle Scheduling to analyze and modify the plan that was generated duringTransportation Planning. For example using carrier selection manually to fix planning results, and

transfer them to the OLTP system for transportation execution (LES).



© SAP AG AP010

? SAP AG 2001

TP/VS, LES, and BW provide an integrated solution fortransportation management within the Supply Chain

Transportation Management

LES BW

APO TP/VS (Planning)

(Execution) (Monitoring)

? Is integrated with the APO

components DP, SNP,PP/DS, and ATP

? Evaluates the planning inBW

? Plans for both short, andlong term horizons

??The TP/VS component has the following functions:

??Transportation planning and transportation consolidation

??Vehicle Scheduling and route determination in a dynamic environment

??Transportation mode and carrier selection

??Multi-pick up and multi-drop functions

??Management by exception

??The APO system includes the tactical and operational planning area from the SAP TransportManagement solution, which is complemented for transportation execution by the SAP component

from Logistics Execution Systems (LES) .



© SAP AG AP010

? SAP AG 2001

Transport LoadTransport Load

BuilderBuilder

Supply NetworkSupply Network

PlanningPlanning

Demand PlanningDemand Planning

PP/DSPP/DS

TP/VSTP/VS

Stock transfers

ForecastForecast

Deployment

Planned

orders

Planneddeliveries

Planned

shipments

Unconstrained

Aggregated planning

Constrained

Mid-term planning

Constrained

Detailed planning

Constrained

Route planning andtransportation consolidation

APO Planning Process

??Supply Network Planning is used for long-term and mid-term planning. A big advantage of thiscomponent is the sourcing which determines where and how a product will be procured. Sourcing is

optimized by functions such as the Transport Load Builder (TLB). Bucket capacities are used inSupply Network Planning to plan products. These bucket capacities show the most detailed level of

daily planning.

??Vehicle Scheduling (VS) is a short-term planning component. You can define planning horizons for

both the Supply Network Planning component and the VS component here. These horizons are allindependent of one another and have to be planned as such.

??In Vehicle Scheduling, resources and transportation processes are maintained in detail, so thatplanning will be performed as precisely as possible. When orders from Supply Network Planning

become VS orders, the following happens:

??the orders are received in a specific sequence

??the exact transportation time is specified

??information and processes that were still outstanding are added (data and processes that are not

necessary for Supply Network Planning, but are for Vehicle Scheduling such as loading anddelivery activities)



© SAP AG AP010

? SAP AG 2001

Created transportation lane

Generated transportation lane

Inbound

Outbound

ReplenishmentTransportation

zones

TP/VS Supply Chain Modeling

??Customers or suppliers can be grouped into transportation zones to reduce the complexity of TP/VSproblems.

??The unbroken line is modeled and the broken lines are generated by the optimizer.

??If a transportation zone is loaded with customers from the R/3, an associated hierarchy is generated

automatically.



© SAP AG AP010

? SAP AG 2001

Transportation planning & Vehicle Scheduling(TP/VS)

Sales orders,

stock transfers,forecasts

Simultaneous routeplanning and transportationconsolidation

Selection of

transportation provider

Vehicleresources

TLB orders

Express orders

Objective:

Deliveries andtransportation orders in R/3

Optimizer

??Optimization in TP/VS is for optimizing transportation schedules with the assignment of vehicleresources to orders. It takes into account the following:

??Travel from and back to the depot

??Loading and unloading time

??Order consolidation

??Reduce transportation time costs

??Reduce distance costs

??Costs for being too early/delayed

??Costs for non-delivery

??Transportation fixed costs

??Optimization can be simulated or used in the active planning version 000.

??

You can use transportation allocation to??define the maximum transportation capacity of a carrier per day and per transportation lane

??fix a specific minimum service acceptance to define the minimum of shipments that must be made.

Transportation allocations are maintained as time-dependent

??The capacity utilization (in percentage terms) of a carrier, plays an important role, and should be

computable (also refer to the Business Share Strategy used in carrier assignment).

??It is a particularly good idea to use carrier transportation capacities if you are working with prioritiesfor various carriers.



© SAP AG AP010

? SAP AG 2001

The Vehicle Scheduling Procedure

Select carrier

Shipment tenderingPublication of

deliveries

Create/transferdeliveries

Configuration

Backorder processing

Master data Modeling

Optimization(Route planning and

transportation consolidation)

Create/transfershipments

??You use interactive planning in Vehicle Scheduling to:

??perform transportation planning manually or automatically

??display, change, confirm, or reject optimization results

??execute carrier selection manually

??fix planning results and transfer them to the OLTP system for transportation execution



© SAP AG AP010

? SAP AG 2001

Create deliveries

Publish

Release for execution

Accept / Refuse

Business scenario:Internet tendering

Business scenario:Internet tenderingBusiness scenario:Internet tendering

Business scenario:Internet tendering

TP/VS Tendering

XML

EDI

HTMLService agentService agent

Transportation plannerTransportation planner



© SAP AG AP010

? SAP AG 2001

You are now able to:

Unit Summary

? Describe the tasks of Transportation Planning &Vehicle Scheduling, and how it is applied in APO

? State the differences between the Transport LoadBuilder, and Transportation Planning & VehicleScheduling



© SAP AG AP010

? SAP AG 2001

Contents:

Global Available-to-Promise (Global ATP)

? Global ATP and Integration with OLTP

? Integration with PP/DS

? Rules-based ATP

? Product Allocations



© SAP AG AP010

? SAP AG 2001

Unit Objectives

At the conclusion of this unit, you will be able to

? Describe how Global Available-to-Promise(ATP) integrates with OLTP andAPO applications

? Define the features and functionalityof Global Available-to-Promise

? Identify benefits of using GlobalAvailable-to-Promise



© SAP AG AP010

? SAP AG 2001


444


111

88

Course Overview

555

666

88777

999

333 Modelling and Evaluation in APO

Demand Planning




Global Available-to-PromiseConclusion



© SAP AG AP010

? SAP AG 2001

Business Scenario

? Precision Pump company intends to use rules-based ATP to be able to carry out a multi-plantsearch for products requested by its customers. If

the pumps are not available, the feasible deliverydate can be determined, taking account ofresource availability.

? SAP AG



© SAP AG AP010

? SAP AG 2001

Global

ATP

Historicaldata

Historical

dataDemand Planning

Salesorders

Shop floorcontrol

Inventorymanagement

Supply

NetworkPlanning

Supply Chain Cockpit

Deployment

ProductionPlanning and

DetailedScheduling

AP0 Application Architecture and Global Available-to-Promise (ATP)

Transportation PlanningTransportation

processing

LIS, CO/PAHR, FI

Keyperformance

indicators(KPIs)

R/3 APO BW

??In the R/3 APO interface you can define that the ATP check of products (ATP check, ATP =Available-to-Promise) should not be carried out in R/3 but in APO, as soon as a sales order is

created.

??Sales orders created in the OLTP system (for example, R/3 System) automatically trigger theavailability check in APO in this case. Depending on the system settings, a check can be carried out

against inventory, production plans and distribution plans.

??Planned orders that are created via ATP integration with PP/DS can be sent back directly to the

OLTP systems.



© SAP AG AP010

? SAP AG 2001

Global Availability Check in APO: Benefits

? Rules-based availability check (multi-step availability check):check of multiple locations and products

? Better integration between sales and distribution andproduction: triggering of production when there is noavailability (integration PP/DS)

? Multilevel component and capacity check (real-time operation)

? Check against aggregated, memory-resident data

??Rules-based ATP (multi-step availability check): When there is no availability, you can configure inAPO that the system should carry out the availability check for the product in another location or

else for an alternative product.

??Integration between sales and distribution and production: You can also define that the salesorder triggers production directly if a product is not available. If it triggers an order for in-house

production, APO creates a planned order for the desired quantity in PP/DS (Production Planning &

Detailed Scheduling).

??In addition, component availability can be checked (multi-level components and capacity check).

??Check against aggregated data: Planned orders and production orders are aggregrated and

represented in a time series, which can be used to evaluate the incoming requests from the salesorders. This means that better system performance is then available.



© SAP AG AP010

? SAP AG 2001

Salesorders

R/3

? Global ATP: multi-site, real-time

? Rules-based, multi-level ATP

? Alternative locations

? Alternative products

? Alternative PPMs

? Integrated with Production Planning

? Checks against actual production plan

? Consideration of capacity constraints

?

Integration of legacy systems

Articlestructure

ATP request

40 pieces

Confirmation

Global ATP

Customer

APO

??Global ATP is embedded in Supply Chain Management (SCM) processes for any kind of orderprocessing.

??Availability checks are triggered as events in the OLTP system - either R/3 or legacy systems - and

an ATP request for product availability is sent over to APO.

??An Available-To-Promise (ATP) check is an online search to verify the company's ability to provide

the requested product, in the requested quantity, and on the date requested by the customer.

??In many OLTP systems, ATP functionality is limited or not possible at all. In older versions of R/3,an ATP check searched local inventories only for available products and assumed infinite capacity

when a product had to be produced. For this reason, ATP checks are carried out in APO on the basis

of time series, either in real-time or in simulation mode.

??When it comes to production, ATP makes use of PP/DS (Production Planning and Detailed

Scheduling) functionality to check against the actual order network including all constraints.

??Applying rules-based ATP is the basis for checks of alternative products in alternative locations as

well as for production.



© SAP AG AP010

? SAP AG 2001

Receipts

Issues

Time

PlannedPlanned

orderorderStockStock

PurchasePurchase

requisitionrequisitionProductionProduction

orderorder

Further sales-Further sales-

relatedrelated

requirementsrequirementsReservationReservation

Issues & Receipts

??In accordance with ATP settings in APO, you can take into account various stock, requirements andreceipts in the availability check. You can define which requirements and receipts to use as a basis

for a sales order confirmation that you want to give the customer.

??The scope of check is configured in APO Customizing.



© SAP AG AP010

? SAP AG 2001

Aggregation of Time Series

? Aggregate each receipt (issue) per:

? Category

? Time unit

? High performance because

? Cumulative quantities are checked,not individual goods movements

??The data sent from the OLTP system is aggregated and represented in a time series consisting of thecorresponding ATP objects that are then used to evaluate the incoming ATP requests.

??The time series display (see picture above) shows the receipt elements above the line. The issue

elements are below the line.

??If the stock is zero or negative, a new order can only be confirmed for a later date.

??To differentiate between the various levels of probability with which a specific product will be in

stock in the future, there is a time series for each type of ATP category.

??Examples of ATP categories: firm planned order, consignment stock, released production order.

??To improve your system performance, ATP gives you the option to aggregate orders by reorganizing

time series'. All receipts and issues within one period are cumulated. The ATP check checks againstthese aggregated quantities.

??ATP performance is reduced if you process incoming orders in individual checks.



© SAP AG AP010

? SAP AG 2001

Alternative location(s)

A l t e r

n a t i v e

p r o d

u c t ( s )

End item ofsales order

P P M e x p l o s i o n

Problem:Insufficient number of pieces in stock

Possible solution:Step 1: Alternative productStep 2: Procurement from another location

Step 3: Production (PPM explosion)

Rules-based ATP: Example

??Rules-based availability checking is an iterative process. The rules stored in the system determine thenext checking step in each case.

??Possible next steps are as follows:

??Substitution (alternative product)

??Sourcing (alternative location)

??Capable-To-Promise (triggering production = creating an order)

??All of these span the three-dimensional space shown in the picture.

??The search stops when an acceptable result is provided by the check (if any number of substitution

steps is permitted).

??In the rule strategy settings, however, only one substitution can be selected. In this case the system

completes the rule evaluation. Without customer-specific coding (= customer exit) the system

chooses the first result that covers the requirement completely. By activating the customer exit youcan decide which selection is appropriate and if a dialog should be displayed. Only one result is

permitted.

??The rule strategy forms the actual rule-base for a specific check. In the simplest case, this search

strategy defines the sequence in which the system reads the individual rules.

??Each access of this sequence is performed using a combination of characteristics. When an order is

to be checked, the characteristics of the order are passed over to APO from the OLTP system.

??You can thereby define, for example, that sales orders for different sales organizations, sold-toparties, and so on, are checked using different ATP rules. Depending on these values, the

corresponding rule is evaluated.



© SAP AG AP010

? SAP AG 2001

Sales order

Sales orderSales order

R/3 APO

Sales (SD)Sales (SD) ATP checkATP checkATP request

Production Planning/Detailed Scheduling


For non-availability Produce

Planned order

MRP

Confirmation

Update time series

Save sales order

Planned orderPlanned order

Availability Check (ATP Check) in Sales Orders

??In the R/3-APO interface, you can specify in the integration model that the availability check (ATPcheck) in the sales order is not to be performed in R/3, but rather in APO ( Availability check

indicator). If you create a sales order in the R/3 System, the system first checks whether there isenough stock available for this product. It can also check whether receipts (such as production orders

or planned orders) are scheduled before the desired date.

??For non-availability, you can specify in APO that the system is to perform an availability check for

the product in a different location or for an alternative product. Furthermore, if a product is notavailable, you can define that the sales order can trigger production directly. In this case, it triggers

an order for in-house production and APO creates a planned order for the desired quantity in PP/DS.

All of the operations of the PPM are scheduled at the resources of the PPM, and the system takes thecapacity restrictions into account (available capacity and orders that may have already been

scheduled). In addition, the availability of the components can be checked ( Automatic planning

indicator in the product master of the components). If the capacities are already exhausted on thedesired date, the system uses simultaneous material and capacity requirements planning to find a date

on which the planned order can be created.

??The availability date of the newly created planned order (finish date) is passed back to the R/3 salesorder and copied as the internal confirmation date. Delivery scheduling is used to determine the date

in the sales order on which the customer can receive the product. The sales employee can find this

delivery date in the R/3 sales order. When you confirm this proposed date in the sales order and saveit, the APO planned order, which was only simulated, is transferred back to R/3 and is visible there.



© SAP AG AP010

? SAP AG 2001

Time

Resource 3 (finite)Resource 3 (finite)



Sales order

Desired dateand quantity

30

20

1010

30

20

Confirmedqty/date

Available

Occupied

1st Loading attempt

Final loading

Today

Integration of Availability Check and Sales Order -Production

Resource availability

??If a product is not available, the sales order can trigger production directly: If it triggers an order forin-house production, APO creates a planned order for the desired quantity in PP/DS. All of the

operations of the PPM are scheduled at the resources of the PPM, and the system takes the capacityrestrictions into account (available capacity and orders that may have already been scheduled).

If the capacities are already exhausted on the desired date, the system uses simultaneous material and

capacity requirements planning to find a date on which the planned order can be created. You use thestrategy profile to define how the system is to schedule (search for a slot, infinite planning ...).

??Prerequisite:

??In the "rules-based availability check", define that production is to be triggered directly for non-availability (this function can be used in connection with all requirements strategies in planning).

??Maintain the strategy profile with which you want to trigger the scheduling of planned orders from

the ATP integration and maintain them under Global Settings in Customizing for PP/DS, in the

Strategy profile for ATP integration field. The default strategy profile in the delivery system is

SAP001 (search for a slot backward).

??You define in APO how the availability of a sales order is checked in APO (for example, checkingagainst stock, checking against forecasting, checking against allocation, or checking using rules-based ATP (also checking against alternative products/locations or triggering production from the

sales order). Here, depending on the R/3 requirements class and the business event (for example,

A = sales order, AE = make-to-order sales order, B = delivery), you can define which check if anyshould be performed (check against stock, against forecasting, against allocation or rules-based

ATP). If you use rules-based ATP, the corresponding rules are selected according to material,sales organization, sold-to party, plant, etc (condition technique).



© SAP AG AP010

? SAP AG 2001

ReceiptReceiptDemandDemand Jan Feb Mar Apr

? Managing demand against constrained supply

Product Allocation

??Product allocation functionality allows you to manage the supply of scarce products to customers, sothat each customer receives an allocated amount.

??Product allocations are applied to a product allocation object. The product allocation object is the

reason for allocating quantities. It could be any one of the following:

??A product (personal computer) or a product group

??A component (processor)

??A season (summer, winter)

??A production line

??The reason for product allocations may vary in different phases of the product life cycle.



© SAP AG AP010

? SAP AG 2001

June July Aug. Sept.

Checking horizon/ Replenishment lead time = 2 periods

Time

June TimeJuly Aug. Sept.Stock

Planned order

Sales order

Sales order confirmations -

Before

Sales order confirmations - by

priority

Backorder Processing

??Backorder processing is one of the new availability check tools that enables you to analyze and editbackorders and to overwrite confirmed quantities as the result of the previous ATP check. You can

redistribute the confirmed quantities of one or more products via selected customer requirements.

??Backorder processing can be executed

??In interactive mode

??In batch mode (including simulation)

??As a combination of both

??The orders to be processed are determined via a filter that is to be defined. This filter definition can

be configured by the user or you can use the standard filters provided by SAP, which filter according

to locations in which the planning situation has changed (netchange filter). They must be taken intoaccount again within backorder processing.

??After the orders have been selected once via the filter, they can be sorted via specific configurablecriteria.

??The orders whose delivery date now lies in the past can be scheduled in the future, if desired.



© SAP AG AP010

? SAP AG 2001

You are now able to

Global Available-to-Promise: Unit Summary

? Describe how Global Available-to-Promise (ATP)integrates with OLTP and APO applications

? Define the features and functionalityof Global Available-to-Promise

? Perform a simulation of rules-basedusing Global Available-to-Promise

? Identify benefits of using GlobalAvailable-to-Promise



© SAP AG AP010

Exercises

Unit: Global Available-to -Promise (Global ATP)


?? Create a sales order in R/3

?? Run the ATP check

?? Understand why you got this specific ATP check result

The Precision Pump Company receives a customer inquiry for theproduct T-F2##. The customer Jashanmal Trading, Dubai wants a

confirmation regarding when Precision Pump Company is able to deliverthe product.

1-1 Create a sales order in R/3 and perform the ATP check.


Order type OR

Sales organization

Distribution channel

Division

2400

10

00

In the sales order screen you enter the following data:


Sold-to party 2402

Purch. order no. Group ##

Material T-F2##

Order quantity 5

You get a dialog box with the ATP check result.



© SAP AG AP010

How many units of the products can be delivered?

___________________________________________

___________________________________________

Save the order. The order is transferred directly to APO after saving in R/3.

In the APO system, check the planning situation for the product T-F2## (pump) inthe locations 2400 (Milan), 2500 (Rotterdam) and 2300 (Barcelona).



Product T-F2##

Location 2400

Then check the planning situation in locations 2500 and 2300.



© SAP AG AP010

In the APO system, check the planning situation for the product T-F2## (pump) in

the locations 2400 (Milan), 2500 (Rotterdam) and 2300 (Barcelona).

Production Planning? Interactive Production Planning? Product View



Product T-F2##

Location 2400

Then check the planning situation in the locations 2500 and 2300.



© SAP AG AP010

? SAP AG 2001

APO SCM Implementation

? ASAP SCM Implementation Philosophy

? ASAP SCM Methodology

? Objectives

? Deliverables

? Tools

? ASAP for APO

Contents:



© SAP AG AP010

? SAP AG 2001

Unit Objectives

At the conclusion of this unit, you will be able to:

? Explain the philosophy behind the ASAP SCMimplementation methodology,

? List the various phases of the ASAP SCMmethodology,

? Describe the objectives, deliverables, and the useof tools of each phase of the ASAP SCMmethodology.



© SAP AG AP010

? SAP AG 2001


444


111

99

Course Overview

555

666

99

777

888

101010


Demand Planning





333

Conclusion

APO SCM Implementation



© SAP AG AP010

? SAP AG 2001

The SAP Supply Chain Implementation Philosophy:

A supply-chain diagnostics approach that will enable SAP to

evaluate a customer's supply chain, identify significant issues,estimate benefits that APO could deliver, and develop a tailored implementation plan that enables customers to realize these benefits

in a short period of time



© SAP AG AP010

? SAP AG 2001

The Supply Chain Implementation Tool Kit

Projectplans

APOprocess flows

Supply Chaincase studies

APO activitymatrix

Analyticaltools

R/3 ValueanalysisQuestionnaires

& surveys

? Built-in tools, templates &

techniques

? Models

? Templates

? Questionnaires

? “How-to’s”

? Case studiesID T a s k N a m e

1 S a m p l e S c he dule

2 P r o je ctP r e p a r a ti o n

3 BusinessBlueprint

4 Simulation

5 Validation

6 Fin a lP r e p a r a ti o n

7 G oL i ve & S u p p o r t

8

9

10

N o v D e c J a n F e b M a rA p r M a y J u nN o v e m b e rD e c e m b e rJ a n u a r yF e b r u a r yM a r c hA p r i lM a y J u n e

ID TaskName1

Sample Schedule 2

ProjectPreparation3

BusinessBlueprint

4 Simulation

5Validation

6FinalPreparation

7GoLive&Support

89

10

N o v De c J a n F eb M ar A p r M a y J u nNovemberDecemberJanuaryFebruaryMarc h A pr il M ay J un e



© SAP AG AP010

? SAP AG 2001

Business blueprint

Project preparation

Final preparation

Realization Go live and

support

D3

D2

ACME

Taiwan

SemiconductorDistributor

S1

P2

P1

P4P3

M4 D1

CustomersACME

A C M EL a p t o p

Producti on

(SanJose)

A C M ELaptop

Producti on

(SanJose)

A C M EL a p t o p

Distribution(SanJose)

P4

Semiconduct orM anufacturer

S1D2

Customer’s

Customer

LaptopD i st r i bu t o r L ap topRetailer

S1

P2

D1S1 D1

P1

P2

Customers

Supplier’s

Supplier

P1

No n-R/ 3 R/3

SAPBusiness

InformationWarehouse

SAP Advanced

Planner &Optimizer

R/3R/3 NonR/3

PeopleLearning

Opportunities

ProcessesInnovation

Strategy

ProductsIndustry Practices

I mp l emen tati o n s

ASAP SCM Methodology Phases



© SAP AG AP010

? SAP AG 2001

Phase 1: Project Preparation - Objectives

? Organize the ASAP SCM Implementation Project

? Set customer and SAP team expectations

? Establish a technical infrastructure



© SAP AG AP010

? SAP AG 2001

Phase 2: Business Blueprint - Objectives

? Identify specific ways of improving the supply chain

management and strategies of the customer

? Benchmark the Supply Chain

? Align SAP and 3rd party solutions to realize theseopportunities

? Develop business solution design and implementationplans

? APO process blueprint



© SAP AG AP010

? SAP AG 2001

Phase 2: Business Blueprint - Tools

? APO for ASAP

? Strategic blueprint

? Case studies

? Question & Answer database (QAdb)

? Process description

? Questionnaires

? Roadmap / project plan



© SAP AG AP010

? SAP AG 2001

Phase 3: Realization - Objectives

? Develop plans for model specification

? Configure and validate baseline and final models

? Perform and resolve functional gap analysis

? Conduct configuration workshops

? Develop conversion and interface programs

? Develop reports and enhancements

? Final integration testing

? Prepare end user documentation and training material



© SAP AG AP010

? SAP AG 2001

Phase 4: Final Preparation - Objectives

? Prepare for "live" solution implementation

? Anticipate and plan for contingencies



© SAP AG AP010

? SAP AG 2001

Phase 5: Go Live and Support - Objectives

? Identify and resolve post go-live issues

? Validate "live" SCM solution results

? Perform a project review



© SAP AG AP010

? SAP AG 2001

You are now able to:

APO Implementation: Unit Summary (2)

? Explain the philosophy behindthe ASAP SCM implementation methodology

? List the various phases of the

ASAP SCM methodology

? Describe the objectives, deliverables, and use of

tools of each phase of the ASAP SCM methodology



© SAP AG AP010

? SAP AG 2001

Conclusion

444333

Integration and Technology222

1010

Course Overview

555

666

1010

777

888

999

Supply Chain Cockpit

Demand Planning


Production Planning /Detailed Scheduling

Deployment



111

Conclusion



© SAP AG AP010

? SAP AG 2001

Course Goals

At the conclusion of this course you will able to

? List the fundamental planning scenarios of theAdvanced Planner and Optimizer (APO)

? Explain the functions and interplay of theindividual APO components

? Describe the integration with the execution systemand information systems

? SAP AG



© SAP AG AP010

? SAP AG 2001

Planning Horizon

Demand Planning (DP)


Production Planning (PP)

Detailed Scheduling (DS)

Deployment

Transportation Planning &Vehicle Scheduling (TP/VS)

APO Planning Sequence

??APO is used to make strategic, tactical, and operational decisions:

??DP is used for long-term demand planning

??In SNP there is mid-term production, distribution and procurement planning

??PP/DS is used for short-term production planning

??Deployment plans short-term replenishment planning

??In Transportation Planning, routes are optimized and transportation methods are loaded as near to

capacity as possible



© SAP AG AP010

? SAP AG 2001

The Demand Planning Concept

Aggregated actual data Future demand

forecast

R/3

Excel

Non-SAP system

? Incoming orders

? Quantities

? Values

? Billing document? Quantities

? Values

? …

? Statistical forecasting

? Collaborative forecasting

?

Promotions

Sold-to partyProduct hierarchy

Location

Region

Sales organization

BW

??The APO DP library of statistical forecasting and advanced macro techniques allows you to createforecasts based on sales history as well as any number of causal factors, and use a consensus-based

approach to consolidate the results.

??Marketing intelligence and management adjustments can be added by using forecast overrides andpromotions.

??Aggregated actual data can be extracted from the R/3 system in exactly the same way as it can beimported from BW, Excel, and legacy systems.



© SAP AG AP010

? SAP AG 2001

Supply Network Planning Scenario

? SNP plans the material flow along the supply chain

? Mid- to long-term, finite, cross-plant planning

? Prioritization of demands; supply optimization

? Result: Feasible plans

Demand Plan

Supplier Plant DCCustomer

??The role of Supply Network Planning involves:

??Planning supply to meet demand

??Integrating purchasing, production, and distribution in one consistent model in the entire supplynetwork

??Synchronizing activities and planning material flow along the supply chain



© SAP AG AP010

? SAP AG 2001

Comparison of Mid- and Short-Term Planning

Productionhorizon

ForecastsSales ordersForecastsSales orders

Supply Network PlanningProduction Planning /Detailed Scheduling

? SNP planned orders

? Purchase requisitions

? Stock transfers

?PP/DS planned orders

?Purchase requisitions

?Stock transfers

?SNP BOM and routing

?Cross-plant finite planning

?Distribution and procurement

?Quantity and bucket-oriented

?No pegging

? PP/DS BOM and routing

? Finite, detailed planning per location

? Sequences and setup times

?Continuous and order-related

? Pegging

Time

??SNP integrates purchasing, manufacturing, distribution, and transportation so that comprehensivetactical planning and sourcing decisions can be simulated and implemented on the basis of a single,

global consistent model.

??SNP uses advanced optimization techniques, based on constraints and penalties, to plan product flowalong the supply chain. The result is optimal purchasing, production, and distribution decisions,

reduced order fulfillment times and inventory levels, and improved customer service.

??Pegging is the link between receipts and issues along the supply chain. When an order is shifted, all

dependent orders can be adjusted automatically.



© SAP AG AP010

? SAP AG 2001

Customer

Functions of Production Planning / DetailedScheduling (PP/DS)

? Plans production, externalprocurement, and stock transfer

within the production plant to-the-minute

? Plans simultaneous materialrequirements and schedules finitecapacity at operation level for the

short-term horizon

? Takes order sequences intoaccount

? Optimizes machine schedules(sequences, lead times)

? Transfers the planning results toan execution system (such as the

R/3 Shop Floor Control)

Time

Resource 3

Resource 2

Resource 1

30

20

10

Resource 1

Resource 2

Resource 3

??Production Planning and Detailed Scheduling (PP/DS) is used mainly for short-term to-the-minute planning (both for in-house production and external procurement) in the production plant.

PP/DS schedules and plans all operations of an order that are relevant for planning at the differentresources. PP/DS has the following functions:

??It generates planned orders (to plan in-house production), and purchase requisitions or scheduling

agreement schedule lines (to plan external procurement) in the event of product shortage. It uses simultaneous material and capacity requirements planning to do this: You can defineresources as “finite” resources (planning-critical resources) in the resource master. Order

operations are only created at these resources if there is sufficient capacity for the order quantity

on the corresponding date. When there is no available capacity, the system searches for a date onwhich the order operation can be carried out, taking account of the capacity situation.

??Takes order sequences into account: when new in-house production orders are created, the setuptimes in the new order can be determined automatically from the setup status of the resources

(depending on the preceding order).

??It is possible to display the orders in graphic format (in the detailed scheduling planning board),and to sequence from there. Alternatively you can use the optimizer to execute a sequencing.

??Machine scheduling optimization: during planning, it is possible for orders to be generated that

do not have an optimum order sequence. Therefore, you can change the sequence and resource

assignments of existing orders using the optimization run.

??PP/DS is a planning tool. Execution functions such as confirmations and goods receipts are

performed in the execution system (for example, R/3). Therefore, the planning results are transferredto the execution system.



© SAP AG AP010

? SAP AG 2001

Transportation Planning & Vehicle Scheduling(TP/VS)

Sales orders,stock transfers,

forecasts

Simultaneous routeand load/weightplanning

Selection oftransportation provider

Vehicle

resources

TLB ordersExpress orders

Goal:

Deliveries andtransportation orders in R/3

Optimizer



© SAP AG AP010

? SAP AG 2001

Sales order

Planned orders

R/3 APO

SD ATPATP request


No ATP Make

Plannedorders

MRP

Confirmation

Update time series

ATP Integration with PP/DS and R/3

??Event-driven: In the R/3 APO interface you can define that the ATP check in the sales order shouldnot be carried out in R/3 but in APO, as soon as a sales order is created. If you create a sales order in

R/3, the system first checks if there is enough stock available for the requested product. The systemcan also check if receipts (for example, production orders and planned orders) have already been

planned by the requested date.

??Time series: Planned orders and production orders are aggregrated and represented in a time series,

which can be used to evaluate the incoming requests from the sales orders.

??Rules-based ATP: When there is no availability, you can configure in APO that the system should

carry out the availability check for the product in another location or else for an alternative product.

??Integration with PP/DS : You can also define that the sales order should trigger production directlyif a product is not available. If it triggers an order for in-house production, APO creates a planned

order for the desired quantity in PP/DS. All of the operations are scheduled on the resources, and thesystem takes the capacity restrictions into account (available capacity and orders that may have

already been scheduled). In addition, component availability can be checked. If the capacities are

already exhausted on the desired date, the system uses simultaneous material and capacityrequirements planning to find a date on which the planned order can be created.The availability date of the newly-created planned order (end date) is returned to the R/3 sales order

and adopted as an internal confirmation date. Using shipment scheduling, the date on which the

product reaches the customer is determined in the sales order. In the R/3 sales order the salesemployee recognizes these proposed delivery dates.



In dieser Dokumentation verwendete Abkürzungen

APO Advanced Planner and Optimizer

APS Advanced Planning System

ATP Verfügbarkeitsprüfung (Available -to-Promise)

BBP Business to Business Procurement (B2B)

BAPI Business Application Programming Interface

BW SAP Business Information Warehouse

CIF Core Interface (Schnittstelle für Stamm- und Bewegungsdaten R/3-APO)

CPFR Collaborative Planning, Forecasting and Replenishment

CRM Customer Relationship Management

CTM Capable -to-Match (Multi-Level Supply and Demand Matching (SDM))

DC Distributionszentrum (DZ)

DP Absatzplanung (Demand Planning)

DS Feinplanung (Detailed Scheduling)

iPPE integriertes Produkt- und Prozeß- Engineering

LES Logistics Execution System (=LE, Warehouse Management (WM))

KPI Key Performance Indicator

MLR Multiple lineare Regression

MRP Material Requirements Planning

MRPII Manufacturing Resource Planning

OLTP Online Transaction Processing SystemOLAP Online Analytical Processing System

overview ii

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