Planning Tool

in SAP
Planning Tool in SAP ECC

In SAP Planning can be done through:

1. Material Requirement Planning (MRP) – This is available within SAP ECC.

2. Advance Planning & Optimizer (APO) – Add on to SAP ECC, needs to be Integrated
SAP Material
Requirement
Planning
(MRP)
What is MRP?
The main objective of MRP is to guarantee material availability.
MRP is required to procure or produce the required quantities on time for internal purpose or for SALES.

WHY MRP ?
•Optimizing service level
•Minimizing costs and capital lockup.

MRP can be done in several ways:

MRP at plant or MRP Area level
•With MRP at plant level, the system considers stocks from the storage locations within the plant, excluding
the stocks already reserved.
•In case of MRP area level, the stocks from the storage locations belonging to this MRP area as defined can
be taken for planning to generate the requirements. This is done when one wants to restrict the planning to
certain storage locations.
Lot-Sizing and MRP Procedures
Different lot sizing can be combined with different MRP’s.
Automatic Planning Run
•This is done automatically wherein the requirements are generated.
•The system generates messages in case of critical situations which can be addressed later after the run.
MRP – Process flow
MRP – Process Flow

• S & D gives concrete customer requirements from the market.

• In Demand Management, sales are planned in advance via a sales forecast. The result is the
independent requirement, i.e., the requirement for the finished product.

• In order to cover these requirements, MRP runs and calculates procurement quantities and dates as
well as plans the corresponding procurement elements.

• If a material is produced in-house, the system also calculates the dependent requirements, that is, the
quantity of components required to produce the finished product or the assembly, by exploding the
BOM. If a material shortage exists, planned orders are created at every BOM level to cover
requirements.

• Production orders or Purchase orders are created.

MRP – Procedure
1. Material requirements planning
1. It uses current and future sales figures.
2. The system calculates the requirements based on the warehouse stock, receipts, etc.
3. If externally procured then procurement proposals; if internal production then it leads to creation of
planned orders, and also dependent requirements are calculated.

2. Master production scheduling

1. It is for used specifically for critical resources.
2. A separate run occurs for the MPS items, they are not included in the MRP run.
3. Basically, it ensures the availability of the critical resources which should not hamper the production by
maintaining the stock
4. It also provides the facility to work on the production plan interactively

3. Consumption based planning

1. It uses the past consumption data to calculate the future requirements.
2. It has no relation with the independent or dependent requirement instead it is triggered when the stock
falls below the reorder point or by forecast requirements.
3. It has three types of MRP procedures:
• Re-order point planning
• Forecast based planning
• Time phased planning.
Advance
Planning &
Optimizer
(APO)
Supply Chain Management
APO in the Supply Chain: Functionalities used

RM/PM Deployment
Collaborative
Planning Detailed Production Replenishment Demand
Demand
Replenishment Collaborative
Planning planning planning
And scheduling Planning planning planning
planning planning
TLB

SNP PPDS SNP- SNP DP

PPDS

APO

Physical
RAW COMMERCIAL RETAIL
MANUFACTURING CONSUMER
& PACKAGING

DP : Demand Planning
SNP : Supply Network Planning
PPDS : Production Planning and Detailed Scheduling
APO Architecture
Advantages of APO
• APO Advanced Planning and Optimization (APO) is the planning component within the mySAP SCM
solution. APO is an acronym for advanced planner and optimizer. This is a large component of SAP's new
dimension products.
• APO is an entire suite of supply chain planner applications that increase overall knowledge of the supply
chain and provide forecasting, planning and optimization.
• APO is not a standalone application and requires a backend ERP system such as SAP ECC for execution. SAP
ECC communicate with APO using the Core interface Functionality (CIF) which supplies SAP APO with the
master and the transaction data in real time
• High performance using liveCache technology
• Collaborative planning via the internet
• Simultaneous material and finite capacity requirements
• Cross-plant optimization of the resource load
• Sequence and setup time optimization of orders
• Transportation optimization with route planning
• Evaluation and analysis of orders
• Seamless integration between APO and ECC
SAP APO – Demand Planning (DP)

• APO - DP Architecture –
• Very fast data access based on characteristic value combinations with liveCache
• Allows easy Aggregation and Disaggregation
• Macro Functionality - The macro functionality in DP provides quick and user-friendly computations on
the transaction data
• Statistical Forecasting - the Statistical Forecasting toolset in APO-DP is more comprehensive than
available in ECC
• New Features in APO - Promotion planning and Life-cycle planning are some nice features in APO-DP
SAP APO Demand Planning – Features
Demand Planning
Planner’s Knowledge
Task-specific planning tools
 Flexible views
 Graphics
 Promotional planning
 Life cycle management Information
 Cannibalization  Collaborative
 Accuracy reporting forecasts
Anticipation of
Future Demand Demand Planning Data Mart  Order & shipment
actuals & history
 Cost
 POS data

Statistical Methods  Nielsen / IRI data

Multi-model approach  ...
 Average models
 Exponential smoothing
 Causal factors
 Trend dampening R

 Model combination
 Pick best
 SAP AG
Advantage of SAP APO – Supply Network Planning (SNP)

• Cross plant planning - APO offers planning cross-plant for a complete supply chain network
• Advanced planning Features - SNP in APO offers basic Heuristic-based planning (quite similar to R/3 DRP)
along with advanced planning features like Optimization and Capable-to-Match (order-based planning for
prioritised demand matching)
• Deployment Functionality – Provides automatic planning in case of short supply or demand is less than
supply.
• Truck Load Builder Functionality – Provides consolidation deliveries according to transportation capacity
SAP APO – Supply Network Planning – Features
Key Processes - Distribution Planning

 Supply and Distribution

C u s t o m e r s
D i s t r i b u t i o n C e n te r s
M a n u f a c t u r I n g U n i t s
Network Planning
 Supply Network Planning
and Optimization
 Supply/Demand balancing
 Vendor Managed Inventory
(VMI)

S u p p l i e r s
 SAP AG
Advantage of SAP APO – Production Planning & Detail Scheduling (PP/DS)

• Production Planning/Detailed Scheduling (PP/DS) is used to generate procurement proposals to meet the
production requirements. This component is also used for defining resource plan and order details. PP/DS can be
used to create executable plans and to achieve the following −
• Improve the on-time delivery performance for critical products
• Reduce lead times
• Improve coordination between resources and better procurement process
• Reduce the stock cost
• Uses two methods of performing planning : Capacity level & Capacity constraint
• Supports all standard manufacturing methods e.g. Make-to-Stock, Make-to-Order, Assemble-to-Order
• Used only for internal manufacturing
SAP APO – Production Planning & Detail Scheduling (PP/DS) – Features

• Used only for planning only internal manufacturing & not contract manufacturing
• The output of PP/DS is the production plan & the necessary planned production order which was sent to
execution system (SAP ECC)
• The production planning side performs the short & mid-range production planning, the detail scheduling
performs scheduling at the minute level (machine level).
Thank you