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How to Master Demand and Supply Planning with SAP APO
If you are looking for a comprehensive guide on how to plan your demand and supply using SAP APO, you have come to the right place. In this article, we will show you how to use SAP APO's powerful features and functionalities to optimize your planning processes and achieve better business outcomes.
SAP APO is a component of SAP SCM (Supply Chain Management) that provides advanced planning and optimization capabilities for various aspects of the supply chain, such as demand planning, supply planning, production planning, transportation planning, and network design. SAP APO consists of several modules, but in this article we will focus on two of them: Demand Planning (DP) and Supply Network Planning (SNP).
What is Demand Planning and Supply Network Planning
Demand Planning (DP) is the process of forecasting customer demand and capturing demand patterns for different products, markets, channels, and segments. DP helps you to align your supply chain with the market needs and reduce uncertainty and variability in your demand. DP also enables you to perform what-if scenarios, promotion planning, customer segmentation, and collaborative planning with your customers and suppliers.
Supply Network Planning (SNP) is the process of determining the optimal supply plan to meet the demand forecast generated by DP. SNP helps you to balance supply and demand across your global supply chain network, taking into account various constraints such as capacity, inventory, lead time, transportation, and costs. SNP also enables you to use advanced optimization techniques such as the SNP optimizer, Capable-to-Match (CTM), and inventory optimization.
How to Configure and Use SAP APO for Demand and Supply Planning
To configure and use SAP APO for demand and supply planning, you need to follow these steps:
Set up the master data for your products, locations, resources, calendars, transportation lanes, etc. in SAP APO or transfer them from SAP ERP using Core Interface (CIF).
Create a planning version that contains a copy of the master data and transaction data (such as sales orders, purchase orders, stock levels, etc.) for your planning scenario.
Create a planning area that defines the characteristics (such as product, location, customer, etc.) and key figures (such as demand quantity, supply quantity, inventory level, etc.) that you want to use for your planning.
Create a planning book that contains one or more data views that display the characteristics and key figures in a spreadsheet-like format. You can also create macros that automate calculations or actions in your planning book.
Use the interactive planning functionality in SAP APO-DP to enter or modify your demand data manually or import it from external sources. You can also use statistical forecasting methods or machine learning algorithms to generate baseline forecasts based on historical data. You can also apply various adjustments or corrections to your forecasts based on business knowledge or market intelligence.
Use the collaborative planning functionality in SAP APO-DP to share your demand data with your customers or suppliers via web-based interfaces or email notifications. You can also use the characteristic-based planning functionality to plan at a more granular level based on attributes such as color, size, style, etc.
Use the SNP heuristic or the SNP optimizer to generate a feasible supply plan that meets your demand forecast while minimizing costs or maximizing profits. You can also use the CTM functionality to generate a supply plan that considers business priorities such as service level agreements or customer preferences. You can also use the inventory optimization functionality to determine the optimal safety stock levels or target service levels for your products.
Use the reporting functionality in SAP APO to analyze your demand and supply data using various charts, graphs, tables, or dashboards. You can also use the alert monitor functionality to identify and resolve any issues or exceptions in your planning process.
Transfer your demand and supply plan from SAP APO to SAP ERP using CIF or other integration methods. You can also use the SAP APO Add-on for SAP ERP to access some of the SAP APO functionalities directly from SAP ERP.
How to Improve Your Demand and Supply Planning with SAP APO
To improve your demand and supply planning with SAP APO, you can leverage some of the latest enhancements and innovations that SAP offers:
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