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Basic Guidelines for a Smooth SAP SCM Implementation

by The Tip Doctor

May 25, 2010

By Tip Doctor, Insider Learning Network

Here’s a tip from Wolfgang Eddigehausen of Fujitsu Australia, and an excerpt from SCM Expert.

As an SAP SCM consultant, Eddigehausen says he is asked many questions regarding implementations. However, he finds that the same three questions come up time and again:

  • What is the time frame required to implement SAP SCM 5, particularly Demand Planning (DP) and Supply Network Planning (SNP)?
  • What is the team size to implement these capabilities?
  • Do we need to have an SAP Advanced Planning & Optimization (SAP APO) optimization server as a separate system or does it run on the SAP APO box?

We’ll allow Eddigehausen  to pick it up from here:

Due to the regularity of these questions, I have decided to answer them in a very simple guide to help anyone else struggling with the same questions, Eddigehausen begins.

“To do so, I need to make two assumptions. First I nee d to assume that the company uses SAP R/3 or SAP ERP Central Component (ECC) with the modules Sales and Distribution (SD), Materials Management (MM), and Production Planning (PP) already, and that they do not use any SAP industry solutions.

“My next assumption is that there won’t be any major process changes as part of the project and thus this would be a technical implementation only,” Eddigehausen says.. “Two more important assumptions need to be made with regards to the organization’s size. For DP, the estimate assumes one central Demand Plan is created for the entire supply chain. This might encompass having one or multiple distribution sites, but demand planning is central. For SNP I assume an average supply network with no more than about ten production or distribution sites.”

Eddigehausen  adds that a team of three to four SAP APO specialists complemented by the in-house IT team (to take over Basis-related work) can implement DP and SNP in about six months under these conditions. You then also need two or three subject matter experts (SMEs) part time (about 30% of time) to conduct process- and solution-related workshops and feedback sessions. These SMEs are the vital link to the business, ensuring the solution covers user requirements and is accepted by the business.

You only need an SAP optimization server if you use the SNP Optimizer. Optimization servers in an SAP APO landscape are dedicated servers that are not used for the main APO instance. Note that you can use the same optimization server for the SNP Optimizer and, for example, the Production Planning/Detailed Scheduling (PP/DS) Sequence Optimizer.

You use the SNP Optimizer to plan the supply network planning demands based on supply cost and non- or late delivery penalties (constrained model). It is thus not complementing the S NP Heuristic, but replacing it.

The SNP Heuristic, Eddigehausen says, is an unconstrained planning algorithm similar to the traditional Materials Requirements Planning (MRP) or Distribution Resource Planning (DRP) and runs in R/3. Whether to use the SNP Optimizer or not is a business decision and affects the time line described above. The main impact on implementing the SNP Optimizer is the definition of a cost/penalty model that lines up with business requirements. This is typically a trial-and-error, time-consuming process. Most companies use the SNP Optimizer as a phase-2 implementation only, as the cost model implementation requires a good understanding of optimization planning algorithms and overwhelms users new to SAP APO.

For more information, you can contact Wolfgang Eddigehausen at For information on how to subscribe to SCM Expert, click here.


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