As part of mySAP Supply Chain Management (mySAP SCM), the Supply Chain
Planning solution - with its key capabilities for collaborative demand,
supply, and distribution planning - offers a complete suite of tools for
strategic to operational planning. It is part of the SAP APO (Advanced
Planner and Optimizer), and includes collaboration and integration functionality.
The considerable flexibility of the mySAP
SCM Supply Chain Planning solution allows you to set up company-specific
business processes and planning rules. This enables you to reduce your
time to value.
mySAP SCM Supply Chain Planning includes
three main scenarios that represent the basic planning needs within the
supply chain. These are:
- Collaborative Demand Planning
- Collaborative Supply & Distribution Planning
- Sales & Operations Planning
Collaborative Demand Planning
Using collaborative demand planning, you can
leverage all available information to drive
forecasting, promotion planning, and demand
Historical data is consolidated in SAP R/3 and can be imported to an
SAP Business Information Warehouse (SAP BW) InfoCube. mySAP SCM Demand
Planning uses this information to create forecasts and carry out life-cycle
planning. For this, a catalog of methods exists, including:
- Statistical methods, like exponential smoothing or linear regression
- Causal analysis of influencing factors (like price or climate conditions)
using multiple linear regression
- Composite forecasting to combine different forecasts into one overall
The various methods can be assigned automatically
to different data subsets.
Valuable information from any partner can
be added via the Internet so you can come to agreement on a shared forecast.
Promotion planning is performed to include marketing activities, offering
further collaboration possibilities with retailers or distributors.
A demand plan is created using all available
information. Freely definable macros enable any kind of calculation on
the planning grid. This especially enables any kind of data check and
the triggering of alerts for planners.
You refine the demand plan in one of two
ways: by collaborative supply and distribution planning within SAP APO,
or by using SAP R/3 to execute the approved plans. SAP BW is used for
reporting of, for example, forecast accuracy measurements or market trends.
Collaborative Supply & Distribution Planning
With collaborative supply and distribution planning, partners within
the supply chain can concurrently plan procurement, manufacturing, and
transportation, while integrating all supply chain partners for collaboration.
Based on the demand plan, Safety Stock
Planning is carried out first. It enables you to assign optimal safety
stock and target stock levels to all inventories throughout the supply
network. The system bases safety stock calculations on lead times, forecast
and supply variability, and customer service levels.
Supply Planning tries to satisfy
the demands and safety stock requirements in an optimal way, makes decisions
about sourcing, spreads production among resources, explodes the bills
of material (BOMs), organizes the procurement of semi-finished goods or
raw materials, and creates allocations for customers and channels. You
can choose between three basic approaches:
- The Supply Planning heuristic calculates requirements for the sources
of the products while taking quota arrangements, lead times, calendars,
and lot-sizing rules into account. You can execute a capacity check
after the infinite requirements planning run is completed. This allows
you to quickly determine how planned orders affect your resources and
whether or not your plan is feasible. Capacity leveling can eliminate
- The Supply Planning optimizer generates a feasible supply plan with
minimal costs, considering all resources and constraints in the supply
network. It uses linear optimization and multi-integer linear programming
techniques based on simplex-based algorithms and branch and bound methods.
- Capable-to-Match matches a large set of prioritized customer demands
(forecasts or orders) to a set of categorized supplies, taking into
account the current production and transportation capabilities in a
multistage production environment. Capable-to-Match is based on constraint-based
propagation techniques and goal-oriented programming.
Distribution Planning consists of
deployment, which considers the available products and satisfies the real
demands based on flexible rules, and the transport load builder, which
fills transport vehicles in an optimal way.
Deployment uses push and pull logic to
recommend transports when the available-to-deploy quantity can adequately
cover the demand. If demand exceeds supply, deployment uses fair-share
logic to fulfill the open sales orders, safety stock, and forecast requirements
in an optimal way.
The transport load builder uses the results
of the deployment run to create transport orders for multiple products.
It ensures that your transportation vehicles are filled to their maximum
capacity (regarding volume, weight, and number of pallets) and that no
transportation vehicle is dispatched unless it is filled to at least its
Supply Chain Design allows the definition of the supply
chain network and infrastructures. The Supply Chain Cockpit
offers a graphical instrument panel for monitoring, navigating,
and controlling all the links in the supply chain. The Alert
Monitor enables management by exception and informs all planners
of every critical situation.
SAP APO can be directly integrated
with SAP R/3, SAP BW, and any legacy or external systems, so that
all necessary business data will be transferred and available in
each system for complete integration. This provides a continuous
planning cycle with consistent master data elements, like materials
or locations, and transactional data, like on-hand inventory or
Sales & Operations Planning
The point of origin in this scenario is the creation of a sales plan
in SAP Strategic Enterprise Management (SAP SEM), part of mySAP Business
Intelligence (mySAP BI). The sales plan allows you to create marketing
activities in the SAP Customer Relationship Management (SAP CRM) Marketing
Planner to support the fulfillment of these plans. The results are transferred
to SAP APO and can be taken into consideration during collaborative demand,
supply, and distribution planning.
By reviewing alerts and key performance
indicators, you can consolidate the sales plan and then re-plan marketing
activities accordingly. By using the simulation functions of SAP APO,
you can evaluate a variety of scenarios using the available sales and
By using mySAP Supply Chain Management to manage the complex and changing
flow of information, and by performing timely collaborative supply chain
planning, you can achieve several benefits. Changes in market requirements
can be absorbed by leveraging a partner network and adjusting business
processes quickly and easily, affording more flexibility to planners.
Supply chain partners gain insight into demand, inventory, and capacity
information across the extended supply chain network, delivering increased
visibility. Optimal plans and operational schedules based on Collaboration
can be created. Supply Chain activities can be synchronized internally
and externally with plan- and order-driven, real-time execution of supply
mySAP SCM Supply Chain Planning provides
multiple devices to help you match supply and demand and manage the entire
length of your supply chain. mySAP SCM Supply Chain Planning is:
mySAP SCM Supply Chain Planning has the tools you need, so you can avoid
assembling tools from multiple, specialized software packages. This mySAP
solution can improve planning quality, model consumer sales behavior and
market dynamics, integrate processes that drive planning, share information,
and enable collaborative planning with business partners.
Based on the proven expertise in the SAP R/3 client/server technology
and real-world business processes, mySAP SCM Supply Chain Planning addresses
the specific planning and information requirements of planners in all
industries, reliably and effectively.
With mySAP SCM Supply Chain Planning, Carlsberg, for example, achieved
a more than 30% reduction in stock and improved the ability to deliver
the correct items at the correct times to the correct customers by 20%.
This is just one of our many customer success stories.
For other examples of organizations that
have benefited from mySAP SCM Supply Chain Planning, registered users
can visit the SAP Service Marketplace (http://service.sap.com).
Further information on the robust features
and efficiencies of supply chain planning with mySAP Supply Chain Management
is available at www.SAP.com/solutions/scm
and by logging on to the Service Marketplace at http://service.sap.com.
Dr. Stefan Theis is the Product Manager for Supply Chain Planning
with SAP's Supply Chain Management GBU. He can be reached at email@example.com.