SAP APO


Supply Chain Management: SAP APO

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

What is SAP APO?

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

SAP APO has four key capabilities:

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

Benefits of an SAP APO implementation are:

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

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

Key considerations for SAPinsiders are:

Supply Chain Management: SAP APO

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

What is SAP APO?

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

SAP APO has four key capabilities:

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

Benefits of an SAP APO implementation are:

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

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

Key considerations for SAPinsiders are:

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

27 results

  1. Leverage Control and Lower Procurement Costs by Exploiting the Subcontracting Process in PP/DS with Third-Party Provision of Components

    Published: 21/August/2017

    Reading time: 11 mins

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

  2. Manage a Distribution Plan in a Supply Chain Model in SAP APO When Demand Exceeds Supply

    Published: 24/May/2017

    Reading time: 9 mins

    Learn the process flow and understand the various strategies you can use to deploy supply elements (receipts) in SAP Advanced Planning and Optimization (SAP APO) when the total demand is greater than the available supply. Key Concept Deployment determines which distribution requirements can be met by the supply (receipt elements). Deployment strategies to be used...…

  3. How to Manage a Distribution Plan in a Supply Chain Model in SAP APO When Supply Exceeds Demand

    Published: 08/May/2017

    Reading time: 20 mins

    Learn the process flow and understand the various strategies you can use to carry out deployment of supply elements (receipts) in SAP Advanced Planning and Optimization (SAP APO) when the total supply is greater than the available demand. Key Concept Deployment basically determines which distribution requirements can be met by the supply (receipt elements). Deployment...…

  4. A Step Toward Understanding SAP S/4HANA Embedded PP/DS

    Published: 17/January/2017

    Reading time: 11 mins

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

  5. Enable Global ATP to Provide Differential Customer Service

    Published: 22/September/2016

    Reading time: 23 mins

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

  6. How to Carry Out Data Extraction from a Planning Area in SAP APO

    Published: 20/September/2016

    Reading time: 15 mins

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

  7. How to Optimize SAP APO Capable to Match for Process Industries

    Published: 28/July/2016

    Reading time: 17 mins

    Learn how to meet key design challenges in the process industry for supply planning and how to overcome these challenges when the preferred engine for implementation is SAP Advanced Planning and Optimization (SAP APO) Capable to Match (CTM). Key Concept Generating a supply plan considering material and production capacity constraints is crucial to effective supply...…

  8. How to Reduce the Bullwhip Effect by Following a Demand-Driven Supply Chain Strategy

    Published: 08/June/2016

    Reading time: 26 mins

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

  9. Manage Promotion Planning in SAP APO

    Published: 27/May/2016

    Reading time: 13 mins

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

  10. Manage Lifecycle Planning in SAP APO

    Published: 18/May/2016

    Reading time: 13 mins

    Learn how lifecycle planning can be configured in SAP Advanced Planning and Optimization (SAP APO) to forecast a new product, manage the introduction of the new product (phase-in), phase out the old product being replaced, and integrate it with forecasting techniques. Follow a step-by-step procedure to configure and run the associated master data objects, run...…