Integration of SAP systems to enhance

the Functional performance of SCM

Adopting ERP systems resulted in dramatic change in many Intra company information architecture in 1990’s

SAP With R3 products gas emerged as the result in the segment and has become the market leader in the software vendor firms

The integration scenario includes Frame work Between

•Manufacturing and financials

•Manufacturing and order management

•‘Manufacturing and billing

•Manufacturing and purchasing and shipping

•Customer service and ERP etc

Software support for Supply Chain Management

Importance of IS for business Processes

Every element of in the value chain needs and generate information . Is is important for coordination of the divisions and companies cooperating in SC : they are crucial in bridging the traditional boundaries between the members of the chain

We can assign systems that support SCM to different levels

•The lowest level lists those function areas that we regard as element of intra company value chains

•The middle contains Planning, Scheduling , and monitoring functions . In SAP environment these gets implemented through its APO

Over view of SAP SCM applications •Supply chain cockpit

•Collaborative Planning , Forcasting and Replenishment (CPFR)

•Demand Planning

•Supply network Planning

•Production planning and detail scheduling

•Availability to Promise (ATP) Function

•Logistics execution system

•Alert Monitoring

Components of SAP Environment

• Advanced Planner and Optimizer

• Business – to – business

Procurement

• Logistic Execution system

SCM solution Components in sap

• Business Information Warehouse (SAP BW)

• Material Management (SAP MM)

• Production Planning (SAP PP)

• Sales and distribution (SAP SD)

Advanced Planner and Optimizer• APO provides functions for intra and inter

company planning of SC and for scheduling and monitoring of associated processes

Architecture of APO

Supply chain Cock pit

It provides advanced visualization capabilities for planning and controlling both intra- and inter organizational logistical networks it covers following components

•Network designs that permit modeling of logistic network network

• It is possible to evaluate different scenarios and apply optimization algorithms

•Navigation component enables to look at features of network

•Monitor informs mangers of unusual states , According to seriousness of problem , Sap distinguishes it as informative , Warning and error messages

Screen of supply chain Cockpit in SAP

Typical users of the SCC

•Network Planners who support establishment of new supply net work or modify existing one

•Demand planners who access demand forecasts , Receive messages from Alert monitoring and react appropriately

•Sales planners

•Controllers to analyze the elementary data

Demand Planning

Demand planning component of APO is used to forecast the products sold .

The APO component generates the sales plan of business area which serves as starting point for the subsequent planning activities

Basis of demand Planning Demand planning involves interaction b/w DO and BW(Business information ware house )

•Online Analytical processing (OLAP) servers provide the end users with powerful aggregation and retrieval functions for data analysis

Datasets in DP and BW

Forecasting methods

• APO provides comprehensive forecasting capabilities than what is available in R3/SD module

• APO contains following extensions of R3• Correlation and regression• Option of including Casual factors like Advt

actions and marketing budgets • Consideration to sporadic demand

Collabrative Planning Forecasting Technique (CPFR)

• This is business model involving several companies in SC it starts with joint agreement on business conditions ends with largely automated stock warehouses

• It is directed at improving the inter organizational partnership and customers through jointly administered information and cooperatively managed process to achieve win –win situation

Divisions of CPFR process

• Planning

• Forecasting • Replenishment and

comprises of nine steps

CPFR Process model

Advanced Planning Scheduling (APS)

SAP uses APS for product offers

Functions of vendors groups in APOSupply network Planning Deployment Production planning and detail Scheduling

APS CYCLE

APS functions include customization capabilities that can be used routinely applied planning procedures

• Use of optimization procedures

• Task specific user interfaces

• Different aggregation levels and planning accuracy

• Alert mechanism to deal with exception situations

Supply network planning

(SNP)

This APO model determines Procurement, distribution schedule at tactical level SNP is based on periods whose length is often week or a day

SNP provides three different planning methods

• SNP optimizer

• SNP heuristic

• SNP CTM• PP/DS

Phases in organization of SNPOptimizer Phase• Here sales plans are developed in R3/SD module

in APO , This plan is released in SNP where it is used as in put for further planning steps

• Mid term production &distribution schedule is determined by SNP Following procedures are in use

• Use of Linear or mixed integer models • Aggregate models , aggregation of products in

groups , individual order in order groups

SNP Heuristics Adds all planned demands for product at certain

location to determine the supply capability of corresponding quantities using predefined quotas for each source of supply

Capable to match (CTM)CTM considers order priorities and categorized

sources of Supply

Purchase planning and demand Scheduling

• It is used to plan the sequence and to schedule orders. Its tasks are

• Planning of Material supply• Best use of Scarce resources ‘• Determination of sequence that minimise set up

cost• Consideration of unexpected events that might

disrupt internally determined schedule and schedule of SC partners

PP &DS heuristics • PP &DS provides following two heuristics

1. CP Scheduler : Constraint propagation designed for complex problems where dependencies and constraints are considered, so it is difult for planners to solve problems. CP solves combinatorial problems by quickly the solution space with which optimum can occur and limit time required for computing

Genetic Algorithm (GA) Scheduler

• Tis uses the procedure like selecting ,mutation, and crossover that are recoznises widely to find improved solution for planning problems .

• GA application considers the set up cost in order to determine the suitable sequence of work steps to be performed

Transport Planning and vehicle Scheduling (TP/VS)

• TP/VS allows simultaneous consideration for transport constraints for use of companies own fleet or carriers for inbound and out bound replenishment

• This enables companies to liaise via internet and enable synchronization of transpot decisions ad activities

Functions of TP/VS

• Load consolidation and vehicle Scheduling

• Route determination

• Carrier Selection

Out bound process integration of APO , LES and R/3

Vehicle Scheduling

• It is integral part of SCM process , it focuses short-term decisions on vehicle resource allocations

• Considers constraints such as time windows for delivery and vehicles ,vehicle capacity, handling capacity for loading and un – loading

Available-to-promise (ATP)

• ATP investigates weather a promised delivery can be made and if so when

ATP considers following aspects

1. Whether existing order confirmation satisfied with regard to both qty and date or dates can be promised in response to request

2. Does check available to stocks existing or do planned fluctuation also have to be considered

3. Are reservations sacrosanct or they be changed to favor a privileged customer

4. Is check restricted to one ware house location or other location to be considered

ATP considers following aspects

5 . Does query apply only to end products or also to availability of intermediate products

6. Can or should items not currently available be supplied by date promised or to be promised

ATP test Example