SAP APO or SAP PP

[Former Member]

Experts,

I am working on assessment project and the objective of the project is to identify the suitable module for the clients business requirements.

Thier planning process is to gather the requirements globally from distributors and validate the requirement by considering existing stock and aggregate the requirements at product level and allocate it to various factories.

For Example

Gather Global Requirement of all Products (All Bajaj Motor Cycles like Pulsar 150, Pulsar 180, Pulsar 220, Discover, Platina, CD100 etc..,) ---> Aggregate the Requirements at Product Level (Total requirement of Pulsar 150) ---> Allocate to the various Plants for Manufacturing (Execution at factories X, Y, Z).

Kindly suggest me this process is feasible with which module of SAP? Whether SAP APO or SAP PP?

Please reply with details.

Thanks in advance.

Regards,

Ram

[keiji_mishima · Accepted solution]

Hi Ram

Since the requirements require aggrregation and multi location functionaloty, I think APO-DP and APO-SNP fits to the requirements.

Best Regards

Keiji

[Former Member]

Hi Nitin Thatte,

To my understanding about transport lane, " it represents the connection in a supply chain network between source of supply and thier destinations and contains informations like; the means of transport, which products may be used by that means of transport, transport capacity and cost" - Am i Correct?

"But for allocation of the total requirements to various factories (Plants)" - how transportland functionality will do? Please explain in detail.

If possible also explain at T.Code level on how to aggregate requirements in APO and how to allocate the requirements to Plants in APO.

Thanks in advance.

DB49 : Yes, your point is valid interms of cost of the project. Thanks.

Regards,

Ram

[nitin_thatte]

Dear Krishnan,

When you have multiple sources of supply, SNP optimizer will select best allocation which will incur least cost of transportation (including taxes). Thus after optimization you can determine quotas like Distribution centre 1 should source 70% of pulsar 150 from Plant 1 & 30% from plant 3 etc. You can also include diffferences of production costs in different plants if you maintain plant wise PPM costs.

SNP optimiser has objective function

Minimise sigma (transportation costs + PPM costs + delay costs + non delivery penalties + storage costs + other penalties)

Subject to sigma (capacity consumption plant 1) < X

Sigma capacity consumption in plant 2 < Y etc....

Bye,

Nitin Thatte

[Former Member]

Hi Nitin Thatte,

If possible also explain at T.Code level on how to aggregate requirements in APO and how to allocate the requirements to Plants in APO.

Thanks in advance.

Regards,

Ram

[nitin_thatte]

Dear Krishnan,

You neither have to aggregate nor allocate the products.Sye

Come On Krishnan, I can't explain t code wise on SDN.

Try yourself. If needed post messages I will reply.

Nitin Thatte

[Former Member]

Krishnan,

Read the first post on this forum.. R/3 Vs APO. multiple perspectives. This will answer majority of your implicit questions.

Now coming to the literal translation of your requirements that mandate choosing PP over APO and vice versa, heres my take.

- Assuming you have the need to only forecast and plan, procure and ship at end SKU level.. model wise. PP can do a good job on that. A sequential approach of netting for final procurement and production (assembly)... shipping ?? (depends on lot of things)..so your aggregation thing is captured well within PP. when you say Allocation.. you are talking a lot of things. Allocation of products to a plant to a DC, to a geography, customer groups. etc. Allocations again will have lot of backward effects (on procurments from vendors and subcons)..so you need to more precise on this.

- Assuming there are no complex if's and buts wrt the supplying plant to DC business rules. i,e Supplying plants (factories) are predtermined for a gievn set of DC's. a simple DRP-MPS-MRP scenario of PP can address this with planning run at MRP areas. e.g. one supplying plant x 4 DC's x 10 products can make one MRP area. You can run your DRP (for end SKU's), MPS (at supplying plant for end SKU's) and MRP (for prod. orders and Purchase requirement of components and assemblies with BOM explosion and routing) can manage the business of fulfillment easily albeit with slighly higher inventory levels. Thats a scientific debate on why inventories could be higher with PP vis a vis APO. Its a subject of many more Phds in the decades to come.

-If you havent worked out the cost and capacity, this can be one as a one time exercise on spreadsheets too. These figures need to be agreed for chooing (fixing) the right supplying plant for a set of DC's and also as where to make (NOT make) which product.

-If you also need to take into account your suppliers inventories, the vendor can be mapped as plant and an additional MRP can run after the MRP at the supplying plant level. This time the MRP area would the vendor (single) and the supplying plant.

Remember the more the complexity of business decisions and more frequently you need to adapt and implement those real time, PP cannot handle this. APO models all this... costs, capacities, quotas, agreements, business rules. The momemt you start saying.. the pulsat 150 COULD ALSO HAVE BEEN SHIPPED from Location X instead of Location Y, you are talking of APO.

Read the APO vs R/3 debate on this forum (the first one) to get more pointers. As others pointed out decisions for implemting such software needs to a very clear and strong business case.else its a waste of money. Many imelementaions (as i gather) ultimate turn APO into an expensive spreadsheet app.

Technology wise APO is faster and can we say more interactive..Planner (planning ?) rich features. Thats later.

Regards,

Loknath

[Former Member]

Ram,

Although I will agree with my learned colleagues that the APO DP/SNP solution will work nicely, there is nothing in your requirements that makes it clear that APO is the best solution in your problem. The selection of APO over PP is a fundamental one, and should not be taken on such a small bit of info.

Depending on the details, APO may be the ONLY solution available (APO has a much richer suite of tools). However, the implementation will be more expensive. An SAP PP solution might be perfectly adequate if your detailed requirements are not too complex. The overall cost-to-benefit ratio is one piece of information your company should be able to present to your client to help him make his decision.

Go to your client's sites with your experts, gather the rest of the requirements, in detail, and only then can you present the choices and recommendations to the sponsors.

Regards,

DB49

[Former Member]

Hi Keiji / Others,

Could you explain in detail how the aggregation and allocation is happening in APO module?

Thanks in advance.

Regards,

Ram

[nitin_thatte]

If you want to generate forecast based on past history, you can do so in APO-DP. You can generate Distribution centrewise forecast in DP.

For aggregating and allocation of total demand to different plants, you can create different transportation lanes and maintain products in those lanes according to where product is produced and where it can be transported. In the transportation lanes you can maintain cost of moving products from a plant to a distribution centre. After maintaining data in this way you can take SNP optimizer run to determine optimum distribution of products fro different plants.

This is quite a simple scenario to map in SNP.

Hope this answers your query. Do you want any further information?

Bye,

Nitin Thatte

[keiji_mishima]

Hi Ram

Sorry I have not realized your update on this topic.

As far as I understand and as I mentioned, I think, DP and SNP seems to fit to your

requirement.

In DP, you can define characteristic combination and key figures.

And based on its, characteristic combination and key figure, you can create forecast.

Characteristic is like product group/ product/location/brand/model etc...what ever you want.

Key figure is like forecast / sales history / stock etc... what ever you want.

Generally APO is used togather with ERP PP to enhance R/3 planning functions.

And DP module play a role like SOP, PP-DEM in ERP PP module.

Compared to PP SOP, DEM, APO DP has more user friednly screen and provides more flexible

planning.

Fore example in planning screen(/SAPAPO/SDP94) you can drill down, your planing data,

fore example, you create rough forecast to product group

and this is going to disaggregated into product, location level. And in planning screen

you can show just product group level, or location level, or all detail level also.

So in the planning screen you can do some king of forecasting by slice and dice.

And in DP, you can create your own macro very easily (copy, calculation etc). So

you can adjust your forecast data easily.

And in SNP module, you can create procurement or production plan. (you can send

created forecast from DP to SNP). And SNP can do multilevel location planning.

In R/3, as a planning method, it only provide MRP (Infinite planning). But in SNP,

it provides 3 types of planning method. Heuristic, SNP optimizer, and CTM.

Heuristic provides inifinite planing. So its like MRP.

SNP optimizer provides finite planning based on cost.

CTM provides inifinite/finite planning based on priority.

And same as DP, you can use planning screen /SAPAPO/SDP94 that can provide multi level location data.

So more easily you can see each products situation with multi location point of view.

In R/3, there is stock requirement list (MD04). But it only show 1 plant data. So

if the product is used in multi location, you cannot easily see the situation of multi location.

But in SDP94, you can show location product data as a sum and as a deail or specific location level.

So you can have global view and detail view.

I hope this information help you.

If you need more detail inforamtion about APO and PP, I really recommend you to read following

two books.

APO (This book provides over view of APO and detail information of each APO module like DP, SNP, PPDS)

http://www.amazon.com/Supply-Chain-Management-APO-Implementation/dp/3540260293/ref=pd_bbs_sr_1?ie=UT...

PP

http://www.amazon.com/Production-Plannning-Control-Thomas-Dickersbach/dp/1592291066/ref=pd_sim_b_6

If you read both book, I think you can compare both module very clearly.

Best Regards

Keiji