sapscm overview of the mysap scm solution ecc6.0

SAPSCMmySAP Supply Chain Management

OverviewmySAP Supply Chain Management

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Participant HandbookCourse Version: 2006 / Q2Course Duration: 3 DaysMaterial Number: 50079227

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About This Handbook SAPSCM

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ContentsCourse Overview ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Course Goals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ixCourse Objectives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Unit 1: mySAP Supply Chain Management Overview ..... . . . . . . . . 1mySAP Supply Chain Management Overview .... . . . . . . . . . . . . . . . . . .2

Unit 2: mySAP SCM: Planning ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Designing and Monitoring the Supply Chain ... . . . . . . . . . . . . . . . . . . . 16Demand Planning Overview... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Supply Network Planning Overview ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Production Planning and Detailed Scheduling .. . . . . . . . . . . . . . . . . . . 58

Unit 3: mySAP SCM: Execution ... .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77External Procurement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Manufacturing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104Sales and Distribution and Logistics Execution .. . . . . . . . . . . . . . . .132Radio Frequency Identification... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152

Unit 4: mySAP SCM: Visibility .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159Supply Chain Event Management Overview ... . . . . . . . . . . . . . . . . . .160Overview of Supply Chain Performance Management .. . . . . . . .168

Unit 5: mySAP SCM: Collaboration..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175Overview of Business Processes with the SAP InventoryCollaboration Hub ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176

Unit 6: Summary ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193Functional Overview .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194

Index ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

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Contents SAPSCM

vi 2006 SAP AG. All rights reserved. 2006/Q2

Course OverviewThe following topics provide an overview of mySAP Supply Chain Management(mySAP SCM) solution:

How does mySAP Supply Chain Management fit in?

This section provides a brief overview of the mySAP Business Suite.

It also explains how the mySAP Supply Chain Management solutionfits into the mySAP Business Suite and explains the integration of thesolutions mySAP Supply Chain Management and mySAP Product LifecycleManagement.

Overview of mySAP Supply Chain Planning

The following areas are discussed with regard to the Supply Chain Planning:

Designing and monitoring the supply chain

This section provides an overview of how a corporate group can be modeledin SAP systems.

You are given a demonstration of how to set up a company in SAP SCM.

Demand Planning

This section provides an overview of how demand planning can be executedin SAP systems for a corporate group.

You are shown how to execute SAP SCM Demand Planning based on salesdata from the last two years and how to release a demand plan.

Supply Network Planning

This section provides an overview of how supply network planning can beexecuted in SAP systems for a corporate group.

You are given a demonstration of how to execute an interactive SupplyNetwork Planning run in SAP SCM.

Production Planning and Detailed Scheduling

This section provides an overview of how production planning for aproduction plant can be modeled in SAP systems.

This planning is demonstrated in SAP SCM.

Overview of mySAP Supply Chain Execution

External procurement

This section provides an overview of how parts procurement can be modeledin SAP systems.

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Contents SAPSCM

You are given a demonstration of a complete procurement cycle in SAPECC, starting with purchase requisitions that are generated from SAP SCM.

Manufacturing

This section provides an overview of the manufacturing approachessupported by SAP systems.

You are given a demonstration of a typical production order process run inSAP ECC, showing how production orders converted from SAP SCM passthrough shop floor control, including packaging and storage of the producedgoods.

Sales and Distribution and Logistics Execution (Within OrderFulfillment)

This section provides an overview of how sales, deliveries, and billing canbe modeled in SAP systems.

You are given a demonstration of a typical sales and distribution cycle startingfrom an SAP ECC sales order, including Global Available-to-Promise,delivery, and billing.

Overview of Supply Chain Visibility

The Supply Chain Visibility area is made up of the Supply Chain EventManagement and Supply Chain Performance Management areas.

The Supply Chain Event Management enables you to monitor and evaluateevents through the entire supply chain. This can be performed within acompany but also across company boundaries; for example, to improvedelivery reliability.

The Supply Chain Performance Management enables you to evaluate keyfigures from the Supply Chain Event Management and thus optimize thesupply chain.

Overview of mySAP Collaboration

mySAP Collaboration is the inter-company planning and optimization of thesupply chain. It uses the Internet to integrate customers and vendors in oursupply chain. Processes with the Inventory Collaboration Hub are explainedas examples.

Summary

This section summarizes all the functions of the mySAP Supply ChainManagement solution.

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SAPSCM Course Overview

Target AudienceThis course is intended for the following audiences:

Managers and key users responsible for implementing or working withcomplex production networks, supply networks, and procurementnetworks (supply chain management) within their companies, who wantto gain an overview of the mySAP Supply Chain Management solution(mySAP SCM).

Course PrerequisitesRequired Knowledge

Windows application environment

Recommended Knowledge

Basic knowledge of supply chain management SAP01 (SAP Overview)

Course GoalsThis course will prepare you to:

Demonstrate an understanding of the functions and content of the mySAPSupply Chain Management solution (mySAP SCM)

Course ObjectivesAfter completing this course, you will be able to:

List the key component solutions of the mySAP Business Suite Reproduce typical mySAP Supply Chain Management scenarios Navigate the curriculum for mySAP Supply Chain Management

SAP Software Component InformationThe information in this course pertains to the following SAP Software Componentsand releases:

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Course Overview SAPSCM

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Unit 1mySAP Supply Chain Management

Overview

Unit OverviewThis unit provides an overview of:

The mySAP Business Suite and its solutions The mySAP Supply Chain Management solution (mySAP SCM) within

the mySAP Business Suite The mySAP SCM Solution Architecture The integration of the solutions mySAP Supply Chain Management und

mySAP Product Lifecycle Management.

Unit ObjectivesAfter completing this unit, you will be able to:

Describe the mySAP Business Suite and list its solutions Describe the mySAP Supply Chain Management solution (mySAP SCM)

within the mySAP Business Suite Understand the mySAP SCM Solution Architecture Describe the integration of the solutions mySAP Supply Chain Management

und mySAP Product Lifcycle Management

Unit ContentsLesson: mySAP Supply Chain Management Overview .... . . . . . . . . . . . . . . . . . .2

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Unit 1: mySAP Supply Chain Management Overview SAPSCM

Lesson: mySAP Supply Chain Management Overview

Lesson OverviewThis lesson introduces you to the main concepts and terminology of the mySAPenvironment.

Lesson ObjectivesAfter completing this lesson, you will be able to:

Describe the mySAP Business Suite and list its solutions Describe the mySAP Supply Chain Management solution (mySAP SCM)



Business ExampleThe Precision Pump company would like to improve their supply chainmanagement processes to identify bottlenecks sooner, optimize use of resources,and reduce costs.

They also want to improve customer service by reducing lead times andguaranteeing availability of materials and resources.

Project members from the Precision Pump company want to see if or how themySAP SCM solution can be used to fulfill these goals.

The mySAP Business SuiteThis section provides an overview of the mySAP Business Suite and its componentsolutions.

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SAPSCM Lesson: mySAP Supply Chain Management Overview

Figure 1: The mySAP Business Suite

The mySAP Business Suite is a family of solutions and services that empowerscustomers, business partners, and employees to collaborate successfully -anywhere, anytime.

With the mySAP Business Suite, SAP integrates its extensive business andindustry expertise into a comprehensive platform of business solutions, services,and technology. The mySAP Business Suite is based on SAP NetWeaver,a platform for open, flexible and inter-company cooperation. It supportsdatabases, applications, operating systems and hardware from almost everymajor vendor.

mySAP SCM OverviewThe main goal of the mySAP SCM solution is to support companies in planning,controlling, and optimizing their supply chains.

The following figure shows a typical supply chain with the associated flow ofgoods, capital, and information.



Figure 2: mySAP Supply Chain Management: Optimizing the Supply Chain

Supply chain management manages the flow of material, information, andcapital through a network of suppliers, manufacturers, distributors, andcustomers.

For effective supply chain management, this flow must be well-coordinated andintegrated within a company and across company boundaries.

Why manage the supply chain?

To reduce costs for procuring finished goods and raw materials To improve customer service To dramatically lower on-hand stocks To leverage all resources to bring substantial benefits to a company

The following figure provides an overview of the mySAP SCM solution and itscomponents:



Figure 3: Complete Solution Overview

The following figure provides an overview of the different SAP systems withinmySAP SCM, showing where the different components of the solution are based.

Parts of the mySAP SCM functionality are possible in both SAP SCM and SAPECC (or SAP R/3). The advantages or disadvantages of each are detailed in thesubsequent units of this course.

The mySAP Supply Chain Management SolutionArchitectureThe following graphic shows the mySAP Supply Chain Management solutionarchitecture:



Figure 4: mySAP SCM: Platform and Component Systems

SAP NetWeaver is the technical basis of the solutions from mySAP Business Suiteand the composite applications, SAP xApps. SAP NetWeaver is also the core ofthe Enterprise Services Architecture, the basic concept from SAP for Web servicesolutions. It is made up of the following areas:

People Integration

The People Integration level ensures that your employees have the necessaryinformation and functionalities to do their work as quickly and efficiently aspossible. The central functions are those of the SAP Enterprise Portal.

Information Integration

The Information Integration level provides access to all the information inyour company. The core component here is the SAP Business InformationWarehouse, which provides information from many different systems forevaluation. In addition, the Knowledge Management, a component of theSAP Enterprise Portal, and the Master Data Management provide functionsfor the central master data retention.

Process Integration

The Process Integration level ensures that business processes run in aheterogeneous system landscape across systems boundaries. XML datapackets and workflow scenarios are used to enable this. The SAP ExchangeInfrastructure (SAP XI) is central here.

Application Platform

With the SAP Web Application Server, the application platform has J2EEand ABAP runtime environments and thus supports Web applications andWeb services in an open development environment.



The mySAP SCM solution can be based on several technical component systems,such as the SAP systems SAP SCM and SAP ECC. SAP SCM usually providesthe planning functionalities and the areas mySAP Supply Chain Visibility andmySAP Supply Chain Collaboration. SAP ECC is usually the system in whichmaster data is managed and in which the planning results from SAP SCM areexecuted as part of external procurement, production, sales and shipping, aswell as Logistics Execution.

However, non-SAP systems can also be used as execution systems.

The system connection of the SAP SCM components is effected by:

the Core Interface (CIF) to the SAP component systems SAP ECC and SAPR/3

Business Application Programming Interfaces (BAPIs) to non-SAP systems

Figure 5: Technical Connection of SAP SCM to Execution Systems

The Core Interface is used to transfer master data and transaction data relevantto planning.

From the master data point of view, the Core Interface is a "one-way street":The data is transferred within integration models exclusively from the executionsystem to SAP SCM, where other SCM-relevant data may be added to it. Thistransfer can be carried out as an initial transfer or an incremental data transfer.

Transaction data relevant to planning, on the other hand, is usually exchanged inreal time between SAP SCM and the execution systems SAP ECC or SAP R/3.



Figure 6: CIF: Transferring Master Data and Transaction Data

When the master data is transferred, there is some conversion and renaming,especially:

The plant, distribution center, customer and vendor become locations withthe location types: plant, distribution center, customer, vendor

The materials become products The work center and capacities become resources

In SAP SCM you can select various models for planning the production:

Based on the production version of a material master, you can use the routing andthe BOM in SAP SCM as either a production data structure (PDS) or a productionprocess model (PPM).

The PDS cannot be changed in SAP SCM, while the PPM can either be createdfrom the routing and the BOM of the SAP ECC or can be created in SAP SCMand can be changed there.

In integrated scenarios (SAP ECC SAP SCM), it is recommended to use thePDS, and to use the PPMs for pure planning scenarios.

SAP ECC and SAP R/3 users from the discrete manufacturing industry sector whouse the basic data model "integrated product and process engineering" can transferthe data directly from this to SAP SCM.



Typical mySAP Supply Chain Management ScenariosDepending on the complexity desired / required, different SCM scenarios arefeasible, including:

1. Planning in SAP SCM, execution in SAP ECC or SAP R/3

This variant is particularly suited to large companies with a number of plantsand possibly with different OLTP systems.

2. Planning and execution in SAP ECC or SAP R/3

This variant is particularly suited to small companies with fewer plants andto companies with less complex production planning scenarios.

3. Demand planning in SAP SCM, remaining planning and execution in SAPECC or SAP R/3

The classic variant for starting in the "advanced" SCM world.

4. ...

Figure 7: mySAP Supply Chain Management: Different Scenarios

The Integration of the Solutions mySAP SupplyChain Management und mySAP Product LifecycleManagementThe following figure provides an insight into how mySAP SCM and mySAPPLM are integrated:



Figure 8: Integration of mySAP PLM and mySAP SCM

mySAP PLM provides the product and process data for mySAP Supply ChainManagement.

You manage the product and process data within mySAP PLM. This data canbe accessed by every user from the first planning stages through to productdiscontinuation.



Lesson Summary

You should now be able to: Describe the mySAP Business Suite and list its solutions Describe the mySAP Supply Chain Management solution (mySAP SCM)




Unit Summary SAPSCM

Unit SummaryYou should now be able to: Describe the mySAP Business Suite and list its solutions Describe the mySAP Supply Chain Management solution (mySAP SCM)




Unit 2mySAP SCM: Planning

Unit OverviewSupply chain planning within mySAP SCM contains the supply chain design andcollaborative demand and supply planning key capabilities.

Supply chain design is used for planning or designing your own business strategy.You mainly use it to:

Design the supply chain infrastructure Support your strategic decision-making process when choosing the most

cost-effective and efficient vendors, production locations, distributioncenters, supply relationships, distribution concepts, and transportationnetworks.

You use collaborative demand and supply planning, in particular, to:

Forecast market trends (using a variety of forecasting techniques) Plan promotions Plan sales volume and demand, considering historical buying and selling

behavior Plan requirement coverage for various sources of supply Constantly update and synchronize supply plans based on dynamically

exchanged information Determine production requirements for producers across the entire supply

network and notify partners of production progress

Functions such as multilevel planning, lifecycle management, causal and capacityanalyses, quota arrangement, product allocation, and ATP checks are integratedwithin collaborative demand and supply planning.


Unit 2: mySAP SCM: Planning SAPSCM

To introduce you to collaborative demand and supply planning, this course hasindividual lessons on the following components:

Demand Planning

In this lesson, you learn how to use historical data from the SAP BusinessInformation Warehouse to create a demand plan for the demo company.

Supply Network Planning

In this lesson, you learn how to use the results of Demand Planning to planthe supply network for your demo company.

Production Planning and Detailed Scheduling

In this lesson, you learn how to use the results from Supply Network Planningto plan plant-specific requirements and capacity for a production plant.


Demonstrate an understanding of how to model the supply chain networkof a corporate group

Name the main functions of the Supply Chain Cockpit List the main functions of the Alert Monitor Display a simple enterprise model and navigate within it. List the main requirements for Demand Planning Outline the different options for planning on different planning levels, such

as sales organization level or product level (consistent planning) Describe how the Business Information Warehouse is integrated in Demand

Planning Create a simple forecast Describe the Supply Network Planning process flow Describe the Supply Network Planning methods Demonstrate an understanding of how Production Planning fits into mySAP

SCM Planning List the differences between the production planning in SAP ECC and

SAP SCM. Use material and capacity planning in SAP SCM. Verify the planning results in SAP ECC and SAP SCM.

Unit ContentsLesson: Designing and Monitoring the Supply Chain .. . . . . . . . . . . . . . . . . . . . . . 16

Exercise 1: Supply Chain Design ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21


SAPSCM Unit 2: mySAP SCM: Planning

Lesson: Demand Planning Overview ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Exercise 2: Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Lesson: Supply Network Planning Overview... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Exercise 3: Supply Network Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Lesson: Production Planning and Detailed Scheduling.. . . . . . . . . . . . . . . . . . . . 58Exercise 4: Production Planning and Detailed Scheduling .. . . . . . . . . . . 69



Lesson: Designing and Monitoring the Supply Chain

Lesson OverviewThis lesson provides an overview of the different options available for designingyour supply chain.

The main topics covered are:

Designing the supply chain infrastructure Supporting your strategic decision-making process when choosing the most

cost-effective and efficient vendors, production locations, distributioncenters, supply relationships, distribution concepts, and transportationnetworks


Demonstrate an understanding of how to model the supply chain networkof a corporate group

Name the main functions of the Supply Chain Cockpit List the main functions of the Alert Monitor Display a simple enterprise model and navigate within it.

Business ExampleBefore you can implement and test supply chain scenarios, the first project step isto model the enterprise structure of the Precision Pump company.

This provides the basis for the supply chain definition:


SAPSCM Lesson: Designing and Monitoring the Supply Chain

Figure 9: Designing the Supply Chain

Several SAP and often non-SAP systems have to be connected to run mySAPSupply Chain Management. For example, when creating supply chains, it isessential to maintain master data for the following:

Plant Customer Vendor

This data is maintained in SAP ECC or in a similar OLTP system and thentransferred via the Core Interface or via a BAPI to SAP SCM.

The following figure provides an overview of the different constituent parts ofthe supply chain:



Figure 10: Objects in the Supply Chain Network

In SAP SCM, a location can be a distribution center, manufacturing plant, supplierlocation, customer, transportation service provider (TSP), transportation zone,or MRP area.

Transportation lanes are used for modeling material flow between locations. Youuse locations and transportation lanes to model your supply chain.

A transportation zone can be used to group together customers - within a locationhierarchy, for example. The transportation zone is used in the Transport LoadBuilder (TLB), and in transportation planning. Transportation service providersand stock transfer points are only used in transportation planning. Parts of amanufacturing plant can be planned separately in MRP areas.

Product master records, resources, and production process models (PPMs) orproduct data structures (PDSs) or data from the integrated product and processengineering (IPPE) are assigned to locations:

You can use resources to model production capacities, storage capacities,transportation capacities, and handling capacities.

You can use DP, SNP, and PP/DS production process models and PDSs andIPPEs to define bills of material (BOMs) and routings.

Usually, the fundamental supply chain problem is that the product-to-customerdelivery time has to be significantly shorter than the manufacturing time or leadtime. To achieve this and guarantee good delivery service, stocks and safety stocksof components or finished products have to be built up at plants or distributioncenters (DCs).



You use postponement strategies to specify to what extent the sales orderinfluences the supply chain; that is, where make-to-stock production (MTS,push strategies) becomes separated from make-to-order production (MTO, pullstrategies).

The term 'bullwhip effect' is used when small fluctuations in a (constant) demandpattern lead to large fluctuations at the manufacturer or supplier, triggered bylot size creation.

You cannot solve supply chain problems simply by implementing an advancedplanning system. You might also need to consider organizational restructuring.

You can use integrated exception handling (the Alert Monitor) to monitor yoursupply chains, as shown in the following figure:

Figure 11: Integrated Exception Handling

The role of the Alert Monitor is to inform you of exceptions that have occurred inyour plan. Every situation that has to be adjusted in planning is an exception.

The Alert Monitor in Supply Network Planning enables you to display and removealerts for resources and location products. An alert is triggered when the resourceis overloaded (when the utilized capacity is over 100%), not sufficiently loaded



(utilized capacity less than 50%), or when there is a requirements shortage, or ashortfall of safety stock, or an excess or shortfall of the target days' supply. Thereare also customer-specific alerts.

The alerts that you can define and send by e-mail allow you to maintain constantcontrol over your supply chain network. As a planner or manager, you will beprepared for any problems that occur. You will always be informed in time so thatyou can take the necessary precautions.

The Supply Chain Cockpit is a tool for supply chain monitoring. See the followingfigure:

Figure 12: Supply Chain Cockpit

You use the Supply Chain Cockpit to monitor your supply chains.

After you have made your initial settings and definitions, you also have the optionof redesigning your supply chains at a later stage of operation.



Exercise 1: Supply Chain Design

Exercise ObjectivesAfter completing this exercise, you will be able to: Perform the main steps involved in designing the supply chain for the

Precision Pump demo company

Business ExampleBefore you can implement and test the various supply chain scenarios, the firstproject step is to check the enterprise structure of the Precision Pump companythat was modeled in SAP APO.

Task:Familiarize yourself with the enterprise structure of the Precision Pump companythat is used in all the subsequent exercises.

1. In SAP APO, display the (enterprise) model used in this course(transaction: /SAPAPO/SCC07)

Input data:

Model 000

Work Area PUMP_SCM

Logical View PUMP

2. Go to the detail views for Supplier, Plant, Distribution Center, andCustomer.

3. Select pump T-F2## and display the transport net.



Solution 1: Supply Chain DesignTask:Familiarize yourself with the enterprise structure of the Precision Pump companythat is used in all the subsequent exercises.

1. In SAP APO, display the (enterprise) model used in this course(transaction: /SAPAPO/SCC07)

Input data:

Model 000

Work Area PUMP_SCM

Logical View PUMP

a) Menu path

User menu for SAPSCM-## Modeling Display Model

Input data:

Model 000Work Area PUMP_SCM

Settings Logical View

Logical View PUMP

2. Go to the detail views for Supplier, Plant, Distribution Center, andCustomer.

a) Choose the relevant location type.

3. Select pump T-F2## and display the transport net.

a) Select the pushbutton Location Products

b) Using the right-hand mouse button, choose product T-F2##.

c) Menu path:Queries Transport net (map).



Lesson Summary

You should now be able to: Demonstrate an understanding of how to model the supply chain network

of a corporate group Name the main functions of the Supply Chain Cockpit List the main functions of the Alert Monitor Display a simple enterprise model and navigate within it.



Lesson: Demand Planning Overview

Lesson OverviewWithin mySAP SCM, Demand Planning is used for forecasting market trends(using a variety of forecasting techniques), and promotion planning. You use it toplan sales volume and demand, considering historical buying and selling behavior.


List the main requirements for Demand Planning Outline the different options for planning on different planning levels, such


Planning Create a simple forecast

Business ExampleThe Precision Pump company would like to use consistent planning to create amonthly forecast for their finished products.

Consistent planning allows you to maintain forecasting data on different planninglevels; this data is automatically aggregated/disaggregated to other levels.

Demand Planning can be executed in either SAP ECC (Flexible Planning) orSAP SCM (Demand Planning).

It creates the input data for either SAP ECC Demand Management or SAP SCMSupply Network Planning:


SAPSCM Lesson: Demand Planning Overview

Figure 13: Demand Planning Overview

The system demo shows a simple Demand Planning process in SAP SCM.

The following figure provides an overview of the different planning horizonswithin the mySAP SCM planning key functional area:

Figure 14: Demand Planning



Demand Planning (DP) enables you to predict future sales based on historicaldata and statistical forecasting techniques. Demand planning data is usuallybucketed with no constraints. The forecast data is then released to Supply NetworkPlanning to create feasible production and distribution plans.

Supply Network Planning is usually a bucketed and medium-term planningprocess.

Production Planning and Detailed Scheduling is used for short-term,order-based planning according to sequences and setup times. In addition,a complete BOM explosion is possible in Production Planning and DetailedScheduling.

Deployment and Transport Load Builder (TLB) are parts of the SNP modulefor short-term replenishment planning. Deployment and TLB adjust stocktransfers according to short-term changes in demand or supply.

Transportation planning optimizes routes and the capacity utilization of meansof transport.

The SAP SCM Demand Planning pallet of statistical forecasting and advancedmacro techniques allows you to create forecasts based on both sales history aswell as any number of causal factors, and to use a consensus-based approach toconsolidate the results.

Market intelligence and management adjustments can be taken into accountusing promotions and forecast overrides.

Aggregated actual data can be extracted from the SAP ECC system in exactlythe same way as it can be imported from SAP BW, Excel, and legacy systems.

The following figure provides an overview of Demand Planning:



Figure 15: Demand Planning

The SAP Netweaver SAP Business Information Warehouse usually provides theaggregated key figures for sales planning in the mySAP SCM solution:

Figure 16: Integration of the SAP Business Information Warehouse in themySAP SCM Solution

There are various techniques for creating forecasts of future demand basedon aggregated historical data. An agreed version (consensus-based forecast) isreleased after the results have been discussed with the different departments.



The planned independent requirements that are created from this can be consumedagainst incoming customer demands using a variety of strategies.

Incoming customer demands are updated in aggregated form and used as thebasis for future plans.

The following figure clarifies this:

Figure 17: The Demand Planning Process Flow

Consistent planning is used to keep planning data consistent at all planning levels.Data is aggregated and disaggregated automatically, as shown in the followingfigure:



Figure 18: Consistent Planning

Consistent planning throughout the entire enterprise allows detailed plans tobe automatically consolidated.

You can decide between:

Top-down planning:

Proportional factors are used to automatically distribute an aggregated plandown to the detail levels (product, customer, sales area, and so on)

Middle-out planning:

Mid-level planning data is summarized for the entire plan and distributeddown to the detail levels.

Bottom-up planning:

Detailed data is automatically summarized for the entire plan.

Consistent planning can be used to simulate several different planning scenarios.

The following figure details the different forecasting techniques:



Figure 19: Forecasting Techniques

You can use macros to perform complex calculations quickly and easily. Theextreme flexibility of macros allows the planner to model his or her planningenvironment based on individual business tasks.

Figure 20: Demand Planning Calculations

To conclude this lesson, the following figure compares the demand planningfunctionality of SAP ECC with that of SAP SCM:



Figure 21: Differences in the Demand Planning in SAP ECC and SAP SCM



Exercise 2: Demand Planning

Exercise ObjectivesAfter completing this exercise, you will be able to: Execute a simple Demand Planning process and release it.

Business ExampleThe Precision Pump company would like to use consistent planning to create amonthly forecast for their pump T-F2##.

Task:Execute a simple Demand Planning process, release, and display the results fromthe view of the affected locations.

1. In SAP APO, run interactive Demand Planning (transaction/SAPAPO/SDP94):

Data to enter in selection screen:

Show APO ProductAPO Planning version 000APO Product T-F2##

Data to enter in the Planning book/data view screen

Planning book SALESData view SALESPLAN

2. Verify that the forecast data saved is relevant to planning. To do this,call the product view in the locations 2400, 2500, 1000 or 2300, forexample (transaction /SAPAPO/RRP3):

Input data:

Planning version 000Product T-F2##Location 2400 and 2500, 1000, or 2300

3. Release your demand plan. This generates planned independentrequirements for the different locations (transaction /SAPAPO/MC90):

Continued on next page



Data to enter in the Data Source field group:

planning area SALESPlanning version 000Key figure FINFOR

Data to enter in the Target field group:

Planning version 000

Data to enter in the Horizon field group:

From date todayTo date Today + 6 months

Data to enter in the Object Select. field group:

Product T-F2##

4. In SAP APO, display the results in the product view (transaction/SAPAPO/RRP3):

Input data:

Planning version 000Product T-F2##Location 2400, 1000

5. In the current stock/requirements list (transaction MD04), show thatthese planned independent requirements have not automatically beentransferred from Demand Planning in SAP APO to the connected SAPECC system (transaction MD04):

Input data:

Material T-F2##MRP Area 2400 or 1000Plant 2400 or 1000



Solution 2: Demand PlanningTask:Execute a simple Demand Planning process, release, and display the results fromthe view of the affected locations.

1. In SAP APO, run interactive Demand Planning (transaction/SAPAPO/SDP94):








a) Menu path:

User menu for SAPSCM-## Demand Planning Access Supplyand Demand Planner

Choose Selection screen





Load the data. To do this, choose the Load data button in theright-hand window

Run the forecast. To do this, choose the Univariate forecastbutton in the header line.

Save the forecast and choose the green arrow to return to DemandPlanning

Save your demand plan.

2. Verify that the forecast data saved is relevant to planning. To do this,call the product view in the locations 2400, 2500, 1000 or 2300, forexample (transaction /SAPAPO/RRP3):

Input data:





a) Menu path:

User menu for SAPSCM-## Demand Planning Product View

Input data:


No planned independent requirements are displayed as forecastrequirements yet. This means that the forecast requirements are notyet relevant to planning. They have to be released in an additionalprocess step.

3. Release your demand plan. This generates planned independentrequirements for the different locations (transaction /SAPAPO/MC90):











Product T-F2##

a) Menu path:

User menu for SAPSCM-## Demand Planning Transfer PlannedIndependent Requirements








Product T-F2##

Set the indicator for Results Log. Choose Execute F8

4. In SAP APO, display the results in the product view (transaction/SAPAPO/RRP3):

Input data:





a) Menu path:

User menu for SAPSCM-## Demand Planning Product View

Input data:


All requirements have this category: IndReq

5. In the current stock/requirements list (transaction MD04), show thatthese planned independent requirements have not automatically beentransferred from Demand Planning in SAP APO to the connected SAPECC system (transaction MD04):

Input data:


a) Menu path:

User menu for SAPSCM-## Demand Planning DisplayStock/Demand Situation

Input data:




Lesson Summary

You should now be able to: List the main requirements for Demand Planning Outline the different options for planning on different planning levels, such


Planning Create a simple forecast


SAPSCM Lesson: Supply Network Planning Overview

Lesson: Supply Network Planning Overview

Lesson OverviewWithin mySAP SCM, Supply Network Planning (SNP) integrates procurement,production, distribution, and transportation so that comprehensive tacticalplanning and sourcing decisions can be simulated and implemented on the basisof a global model.

Starting from a demand plan, Supply Network Planning determines a feasible shortto medium-term plan for fulfilling estimated sales quantities. This plan coversboth the quantities that must be transported between two locations (for example,distribution center to customer or production plant to distribution center), and thequantities to be produced and procured. When making a recommendation, SupplyNetwork Planning compares all supply chain activities with the available capacity.


Describe the Supply Network Planning process flow Describe the Supply Network Planning methods

Business ExampleThe Precision Pump company is implementing Supply Network Planning (SNP)to plan the material flow of critical parts for the entire supply chain over themedium to long-term planning horizon. It is also to take into account storage andproduction resources. You use this type of planning to guarantee procurement ofparts with a long delivery time, to use resources effectively, to improve customerservice, and to minimize inventory and lead times.

Supply Network Planning plans over the medium to long-term planninghorizon. It creates a quantity-based, cross-location production anddistribution plan with its own rough-cut bills of material (BOM) and routings.

The SNP bill of material contains critical products that are produced onbottleneck resources and products with a long replenishment lead time.

SNP ensures that the correct quantities of finished product and parts areavailable on the correct day without overloading critical resources. Themaximum scheduling accuracy lasts days.

The following figure shows where SNP fits into the planning horizon:



Figure 22: Planning Horizons in mySAP SCM

Supply Network Planning is usually a bucketed and medium-term planningprocess.

The following figure shows the different planning scenarios within SupplyNetwork Planning:

Figure 23: Overview of the Different SNP Scenarios



The following can provide the initial data for SNP:

Requirements from demand management (SAP ECC) Planned independent requirements from Demand Planning (SAP SCM)

The results of the SNP can be:

Requirements for stock transfer between plants (stock transport requisitions) Planned orders Purchase requisitions

The following figure provides an overview of this:

Figure 24: Overview of SNP Transaction Data

The following figure shows a list of the main aspects of cross-plant SupplyNetwork Planning within SAP SCM:



Figure 25: Main Aspects of Supply Network Planning

Supply Network Planning supports the following planning scenarios:



Figure 26: SNP Planning Functions

Supply Network Planning creates feasible medium-term procurement,production, and distribution plans.

Deployment distributes stocks and available receipts to distribution centersand Vendor-Managed Inventory (VMI) customers.

The following figure shows the individual steps of the SNP planning run:



Figure 27: The Supply Network Planning Process Flow

Planned independent requirements are generated for SNP or PP/DS when thedemand plan is released from Demand Planning. This step is usually carriedout in the background.

An SNP run using the SNP heuristic, SNP optimization, or Capable-to-Matchresults in a medium-term production and distribution plan.

You check the alerts after the SNP run and solve any problems that have occurred.

The final SNP plan consists of SNP stock transfers and SNP planned orders. Youcan automatically convert SNP planned orders into PP/DS planned orders withinthe production horizon. Production Planning and Detailed Scheduling (PP/DS)then processes these PP/DS planned orders to remove detailed constraints andbottlenecks and to create a feasible production plan.

The final SNP plan can also be released back to Demand Planning so that theunconstrained demand plan can be compared with the feasible SNP plan. If thedeviation between these two plans is too large, you can use a macro to triggeralerts so that the demand planner re-plans his/her forecasts.

After production planning is complete, the deployment run confirms the SNPstock transfers based on current receipts and requirements.

The Transport Load Builder (TLB) run groups the deployment stock transfersresulting from the deployment run into TLB shipments.

For deployment stock transfers that could not be satisfied during the TLB run dueto specified threshold values, you can manually build TLB shipments.



The Different Supply Network Planning MethodsThis section introduces you to the different Supply Network Planning methods:

Heuristic Capable-to-Match Optimizer

The following figure shows a typical heuristic scenario:

Figure 28: Heuristic Scenario

The heuristic's job is to:

Plan the supply to fulfill demand without taking into account constraints suchas available capacity and material availability (infinite scheduling)

Plan receipts (across plants and on a time bucket basis) for purchasing,production, and distribution over the entire supply network

Synchronize activities and plan material flow throughout the entire supplychain



Explanation of the above figure:

1. There is demand at a distribution center. The net requirements calculationdoes not find any stock. The product is procured externally. The systemanalyzes the possible transportation lanes. Demand is split according to thequota arrangement and distributed to plants by stock transfers.

2. There is no stock at the plants, so SNP plans (PPMs) are exploded andplanned orders are created for the finished product and dependent demandsare created for the parts. The planned order in the plant with the higherquota arrangement is not feasible from a capacity point of view. An alert isgenerated and the supply chain planner must intervene.

3. Parts are then procured over the possible transportation lanes accordingto quota arrangements or priorities. The vendor with the highest prioritycannot deliver enough. An alert is generated and the supply chain plannermust intervene.

Therefore, the heuristic can be used for fast cross-plant distribution andprocurement planning, if constraints are not usually relevant.

The following figure shows a typical Capable-to-Match scenario:

Figure 29: CTM Scenario

Capable-to-Match (CTM) is a rules-based cross-plant planning method that takesconstraints such as available capacity and material availability into account duringthe planning run (finite scheduling).



The feasibility of receipts is checked successively according to priorities or quotaarrangements. The first feasible solution is scheduled.

Capable-to-Match (CTM) sequentially matches prioritized customer demandsand forecasts with feasible receipts in the network, taking into account currentcomponent availability and production capacities on a multilevel basis. CTM plansthe first feasible solution. This must not be the optimal solution for subsequentdemands. CTM uses constraint-based propagation techniques.

CTM is an order-based planning method that enables orders to be tracked back toindividual demand using pegging procedures. Thus, strictly speaking, CTM is notan SNP planning method, since SNP provides quantity-based and not order-basedplanning. After the optimization (or heuristic) run, planned production orders orpurchase requisitions cannot be uniquely connected back to the original sales order.

Explanation of the previous figure:

1. There is demand at a distribution center. The net requirements calculationdoes not find any stock. The product is procured externally. The systemanalyzes the possible transportation lanes. CTM checks to see how muchof the finished product and parts can be procured from the plant with thehighest quota arrangement. The full amount cannot be procured. Therefore,procurement is split according to feasibility and distributed to plants bymeans of stock transfer.

2. There is no stock at the plants, so SNP plans (PPMs) are exploded andplanned orders are created for the finished product and dependent demandsare created for the parts. The planned orders in the plants are feasible from acapacity point of view. The supply chain planner does not need to intervene.

3. Parts are then procured over the possible transportation lanes according toquota arrangements or priorities. The suppliers are able to deliver enough.The supply chain planner does not need to intervene.

CTM takes the following into account:

Individual demands Production capacity No handling, storage, or transportation capacities Component availability Location priority and demand priority Pegging ATP rules for product substitution and splitting of production over multiple

resources

The following figure shows a typical optimizer scenario:



Figure 30: Optimizer Scenario

The SNP optimizer is a cost-based cross-plant planning method that takesconstraints such as available capacity and material availability into account duringthe planning run (finite scheduling).

Feasibility of receipts is checked globally and the most cost-effective feasiblesolution is scheduled. The prioritizing is controlled by what are called steeringcosts, which are maintained in SAP SCM. Quota arrangements are ignored by theoptimizer, although they can be optimized and created during the planning run.

The optimizer uses linear programming to take into account all the relevantfactors at the same time, meaning that products are planned simultaneously ratherthan sequentially. The optimizer finds the optimal solution by minimizing thetransport, production, storage and handling costs, taking the ancillary conditionsinto consideration.

Like the heuristic run, the optimization run is a quantity-based planning methodwithout pegging. It is not possible for planned production orders or purchaserequisitions to be uniquely assigned back to the original sales order.



Explanation of the above figure:

1. There is demand at a distribution center. The net requirements calculationdoes not find any stock. The product is procured externally. The systemanalyzes the possible transportation lanes. The optimizer globally checksfor the most cost-effective way of procuring the finished product andparts. The full amount cannot be procured from the most cost-effectiveplant. Therefore, procurement is split according to feasibility and costs anddistributed to plants by means of stock transfer.

2. There is no stock at the plants, so SNP plans (PPMs) are exploded andplanned orders are created for the finished product and dependent demandsare created for the parts. The planned orders in the plants are feasible from acapacity point of view. The supply chain planner does not need to intervene.

3. Parts are then procured over the possible transportation lanes according toquota arrangements or priorities. The suppliers are able to deliver enough.The supply chain planner does not need to intervene.

The optimizer takes into account the following:

Bucketed total demands Production, handling, storage, and transportation capacities Component availability Receipt and demand priority through steering costs Splitting of production over several resources

The following table shows a comparison of the three planning methods:

Figure 31: SNP Planning Methods: a Comparison



In terms of performance, the heuristic is the fastest method, the optimizer theslowest and most complex, and CTM is in between. However, this is only ageneral rule of thumb. If you plan a large quantity of orders for each bucket andlocation product, the performance of CTM and the optimizer might be comparable,since CTM is an order-based planning method.

In terms of quality, the heuristic's planning results are the weakest (infinite),followed by CTM (rules-based), and the optimizer is expected to provide the bestresults, since this algorithm weighs up all possible options.

The optimizer and CTM consider production resources as finite, whereas theinfinite planning results from the heuristic have to be reworked interactively afterthe planning run.

The optimizer can consider transportation, storage, and handling resourcesglobally as finite, whereas the infinite planning results from CTM and the heuristiccan be reworked interactively after the run.

All the methods can automatically plan over all the bills of materials.

Costs are only relevant for the optimizer.

Priorities control CTM. There are product priorities, location priorities, orderpriorities, due date priorities, procurement priorities, and stock transfer priorities.To set priorities for the optimizer, you use penalty costs for late and non-deliveryof location products.

Both the heuristic and CTM use quota arrangements. The optimizer can be usedto optimize these quota arrangements.



Exercise 3: Supply Network Planning

Exercise ObjectivesAfter completing this exercise, you will be able to: Perform a simple network heuristic run within Supply Network Planning.

Business ExampleAfter Demand Planning has been run and the plan released, Supply NetworkPlanning uses it as a basis to plan the supply network of the entire company.

Task:Perform a simple network heuristic run within Supply Network Planning. Displaythe results of the SNP run.

1. In SAP APO, call up interactive Supply Network Planning in the SCMtraining system (transaction /SAPAPO/SNP94).

Input data:

Show APO Location ProductAPO Planning version 000APO Product T-F2##

2. Perform a network heuristic run.

3. Display the results of the SNP run in the product view in the trainingsystem (transaction /SAPAPO/RRP3).

Input data:

Planning version 000Product T-F2##Location 2400

or

1000

4. Display in the current requirement/stock list in SAP ECC the plannedorders created in the SNP run in APO and transferred to SAP ECC(transaction MD04):

Input data:




Solution 3: Supply Network PlanningTask:Perform a simple network heuristic run within Supply Network Planning. Displaythe results of the SNP run.

1. In SAP APO, call up interactive Supply Network Planning in the SCMtraining system (transaction /SAPAPO/SNP94).

Input data:


a) Menu path:

User menu for SAPSCM-## Supply Network Planning SNP:Interactive Planning

Choose Selection Screen

Input data:



Planning book 9ASNP94Data view SNP94(1)

Select the Location 2400 row and load the data by choosing Loaddata in the right-hand window.

2. Perform a network heuristic run.

a) Switch to change mode and choose Network Heuristic

The network heuristic is a single level, cross-plantMRP run.

3. Display the results of the SNP run in the product view in the trainingsystem (transaction /SAPAPO/RRP3).

Input data:





or

1000

a) Menu path:

User menu for SAPSCM-## Supply Network Planning ProductView

Input data:

Planning version 000Product T-F2##Location 2400 or 1000

You find the purchase requisitions in location 2400 and thecorresponding releases for the stock transport requisitions in location1000.

4. Display in the current requirement/stock list in SAP ECC the plannedorders created in the SNP run in APO and transferred to SAP ECC(transaction MD04):

Input data:


a) Menu path:

User menu for SAPSCM-## Supply Network Planning DisplayStock/Demand Situation

Input data:




Lesson Summary

You should now be able to: Describe the Supply Network Planning process flow Describe the Supply Network Planning methods



Lesson: Production Planning and Detailed Scheduling

Lesson OverviewWith Production Planning and Capacity Planning (detailed scheduling), youcan plan and optimize production.

Production planning and capacity planning are two different procedures, wherebythe capacity planning is optional.

Above all, production planning and detailed scheduling (PP/DS) in SAP SCM isused to plan critical products, such as products with a long replenishment leadtime or products to be produced on bottleneck resources.

PP/DS can:

Reduce lead times Improve on-time delivery performance Increase the throughput of products and reduce the stock costs through better

coordination

PP/DS is a planning tool. Shop floor control functions, such as confirmations,must be performed in SAP ECC or in another OLTP system.


Demonstrate an understanding of how Production Planning fits into mySAPSCM Planning

List the differences between the production planning in SAP ECC andSAP SCM.

Use material and capacity planning in SAP SCM. Verify the planning results in SAP ECC and SAP SCM.

Business ExampleIn Demand Planning, a sales forecast was created that was then transferred to thedistribution centers and production plants as planned independent requirements.After SNP has transferred the requirements through stock transfers to theproduction plants, the production quantities and production capacities must nowbe planned in the production plant.

Production Planning is possible in SAP ECC and in SAP SCM. The followingfigure provides an overview of the various scenarios:


SAPSCM Lesson: Production Planning and Detailed Scheduling

Figure 32: Overview of Production Planning

On the basis of the demand program in the producing plant, which consists ofplanned independent requirements, sales orders and stock transport requirements,the material and capacity planning plans the production and the externalprocurement. It can be performed in SAP ECC or in SAP SCM. Production, thatis, the processing of manufacturing orders (production orders or process orders), isexecuted in the Supply Chain Manufacturing area in SAP ECC.

The following figure shows how Production Planning is positioned in mySAPSCM:



Figure 33: Planning Horizons in mySAP SCM

Production Planning and Detailed Scheduling is used for short-term, order-basedplanning according to sequences and setup times. In addition, a complete BOMexplosion is possible in Production Planning and Detailed Scheduling.

SNP orders have be converted into PP/DS orders to be able to plan the receiptscreated in Supply Network Planning (SNP) in detail in Production Planning andDetailed Scheduling (PP/DS). This normally happens within the PP/DS Horizon.The system creates PP/DS orders from the SNP orders and deletes the SNP orders.For the conversion, you can choose one of the following:

Carry out a mass conversion of SNP orders that start in the PP/DS horizon Convert individual SNP orders specifically within and outside the PP/DS

horizon

The roles and aims of production planning are explained in the following figure:



Figure 34: Production Planning

Production Planning is used for short-term, exact planning of in-house productionand external procurement in the production plant. In Production Planning,requirements are fulfilled by creating planned orders (for planning in-houseproduction) and purchase requisitions or scheduling agreement schedule lines(for planning external procurement). Unlike medium-term planning in SNP,production planning in the plant is detailed and uses exact times. Therefore, theexact production dates/times are defined for production of the materials.

The demand program is the sum of the planned independent requirements,sales orders and stock transport requirements. It provides the data for demandmanagement:



Figure 35: Demand Program in the Production Plant

Planned independent requirements are stock requirements that are derived froma forecast of the future requirement situation. In make-to-stock production, youwant to start procurement of the affected materials without waiting for specificsales orders. Sales orders (customer independent requirements) are entered fromSales and Distribution. Customer requirements can go directly into requirementsplanning. This is particularly desirable if you want to plan for specific customers.

Stock transfer requirements, that is, requirements from other locations in thesupply chain (such as distribution centers) can be included in the demand programalong with the independent requirements entered in the production plant.

The forecast defines what requirements types are planned and which planningdemands are settled with which customer demands. A number of options areavailable for this. The various effects of planned independent requirements arecontrolled by what is known as the strategy. If you use make-to-stock productionstrategies, production usually takes place without there being sales orders for therespective material. If sales orders are then received, these can be fulfilled fromstock at the warehouse, which means that delivery times can be kept short. Withmake-to-stock production, it is also possible to implement a steady productionprocess, independent of the current demand.

Make-to-stock production can also be executed for assemblies. In this case, it isnot the finished products that are produced for stock; it is the required assembliesthat are procured. A sales order for a finished product can usually be fulfilledquickly because only final assembly remains to be carried out and the assembliesrequired for this already exist.



There is no planning as such in make-to-order production; production starts oncean actual sales order has been received. Make-to-order production is often usedin connection with subassembly planning for the components, to keep deliverytimes as short as possible.

The most important strategies in planning are:

Make-to-stock productionThe sales orders are not relevant for the production planning and donot affect the quantity produced.Sales orders are not offset against the forecast. The forecast is reducedwhen a delivery is made from the warehouse stock.

Planning with final assemblyThe sales orders are relevant for the production planning and theydo affect the quantity produced.Sales orders are offset against the forecast and are fulfilled from thewarehouse stock.

Planning without final assemblyThe forecast controls the production as far as the assembly level. The(end-) product is only produced after the sales order is received.Sales orders are offset against the forecast and are fulfilled from themake-to-order warehouse stock.

Requirements planning converts the demand program into planned orders,purchase requisitions, or scheduling agreement schedule lines:



Figure 36: Results of Requirements Planning

Requirements planning creates new procurement proposals in the event of ashortage situation. Planned orders are basically created for materials producedin-house, while purchase requisitions or scheduling agreement schedule lines canalso be created directly for materials procured externally.

The procurement type is used to define if a material is to be produced in-house orprocured externally. If both procurement types are permitted by the procurementtype, requirements planning starts with in-house production.

In in-house production, planned orders are converted into manufacturing orders orused directly for repetitive manufacturing. They can be converted into purchaserequisitions for the in-house production and then converted into purchase ordersin Purchasing.

In addition to material masters, BOMs and routings are also required to planproduction of a material:



Figure 37: In-House Production: BOMs and Routings Using a Pump as anExample

A BOM specifies which assemblies or components are involved in the productionof a material. These assemblies or components are therefore required so thatthe finished product can be produced.

The assemblies of a BOM themselves can also be produced from components.These components are contained in the assembly BOM.

The process steps required for producing a material are defined in a routing. Itcontains the times for the individual operations and the work centers where theyare to be executed.

Multilevel single-item planning affects the entire BOM structure of the relevantmaterial; that is, all dependent requirements below the material are covered byprocurement proposals.

The dependent requirements are created in the form of dependent requirements.The dependent requirements are attached to a planned order and specify whichcomponents are required to complete this planned order.

Only one material is planned in single-level individual planning. Since theprocurement proposals are created, for example, in the form of planned ordersfor this material, the dependent requirements are derived from the single-levelplanning at least for the materials directly below the finished product.

In the material requirements planning that you can run in SAP ECC (ECC MRP:Material Requirements Planning) or in SAP SCM (APO PP/DS ProductionPlanning and Detailed Scheduling), the procurement dates for the requiredassemblies and components are determined based on the requirement dates for thefinished product (for example, a sales order).



Material requirements planning uses backward scheduling in which the requiredstart dates are determined from a predefined finish date.

Material requirements planning responds to the requirements for the finishedproduct (for example, sales orders). Procurement is scheduled for productsproduced in-house based on the routing. The production operations to be executedand the length of the individual operations are specified in the routing. Theassemblies (from the BOM) required for production must be available whenproduction of the finished product is started. Procurement of these assembliesmust therefore be started earlier. Starting with the dependent requirements date asavailability date, the order dates of the components are determined in backwardscheduling using the in-house production time or the planned delivery time.

Figure 38: Multilevel Backward Scheduling

You can evaluate the planning situation or the results of a planning run in SAPECC using the current stock/requirements list and the MRP list. You have thechoice of individual access or collective access.

The current stock/requirements list is a dynamic list that shows the current statusof stock, requirements, and receipts. Changes are visible immediately when youaccess the current stock/requirements list or when you choose Refresh in thecurrent stock/requirements list display to read elements directly from the database.



The MRP list displays the result of the last planning run and is static: Changesmade after the planning run are not visible. You can set whether you want an MRPlist to be created during the planning run.

The basic structure of both lists is the same:

On the left (optional) is the worklist of the MRP controller in the form of atree.

The header with the material number is above the list. More information isdisplayed above the header details.

The list itself contains the individual MRP elements and the correspondingavailable quantities.

User-specific settings enable you to adjust the list to suit your personalrequirements.

The results of material requirements planning or the current requirements situationcan be clarified using the MRP list and the stock/requirements list:

Figure 39: Stock/Requirements and MRP List

The product view is equivalent to the current stock/requirement list in SAP SCM.



Production Planning is therefore possible in both SAP ECC and SAP SCM. Thefollowing overview explains a number of advantages of Production Planningand Detailed Scheduling in SAP SCM:

To-the-minute material requirements planning, also for dependentrequirements

Multilevel material and capacity availability check (ATP) for sales orders Multilevel forward scheduling of a sales order Optimization algorithm within the limits of detailed scheduling

(minimizing setup times, setup costs, date delays, alternative selectionof resources, ...)

Dynamic alerts Capacity categories: Time, service, volume, piece

The following illustration should help you decide whether a material (or a product)should be planned in SAP ECC or in SAP SCM.

Figure 40: Production Planning/Detailed Scheduling



Exercise 4: Production Planning andDetailed Scheduling

Exercise ObjectivesAfter completing this exercise, you will be able to: Perform a simple production planning run in SAP APO.

Business ExampleIn Demand Planning, you have created a sales forecast that was then transferred tothe distribution centers as planned independent requirements. In SNP, after youhave transferred the requirements in the form of stock transfers to the productionplants, you have to plan the production quantities and production capacities in theproduction plant.

Task:Gain an overview of the requirements situation in the production Plant 1000.

Then perform a production planning run.

Display the results in SAP APO and SAP ECC.

1. In SAP APO, demonstrate production planning for pump T-F2## inproduction plant 1000 (transaction /SAPAPO/CDPSB0).

2. In SAP APO, call up the product view for pump T-F2## in productionplant 1000, to check the results (transaction /SAPAPO/RRP3).

Input data:


3. In SAP APO, call up the product view for flat gasket T-T2## inproduction plant 1000, to check the results of the planning run(transaction /SAPAPO/RRP3).

Input data:

Planning version 000Product T-T2##Location 1000




4. In the current stock/requirements list in SAP ECC (transaction MD04),show the purchase requisitions for the flat gasket that were generated bythe SAP APO PP/DS run and then transferred to SAP ECC.

Input data:

Material T-T2##MRP Area 1000Plant 1000



Solution 4: Production Planning andDetailed SchedulingTask:Gain an overview of the requirements situation in the production Plant 1000.

Then perform a production planning run.

Display the results in SAP APO and SAP ECC.

1. In SAP APO, demonstrate production planning for pump T-F2## inproduction plant 1000 (transaction /SAPAPO/CDPSB0).

a) Menu path:

User menu for SAPSCM-## Production Planning ProductionPlanning Run

Get variant: MYSAPSCM by choosing Goto Variant Get...then double clicking on the variant you want.

To display the products and locations that are to be planned,choose the Select.crit. pushbutton for Step 01.

Enter the production planner 0## Start production planning and detailed scheduling and choose

Execute F8.

2. In SAP APO, call up the product view for pump T-F2## in productionplant 1000, to check the results (transaction /SAPAPO/RRP3).

Input data:





a) Menu path:

User menu for SAPSCM-## Production Planning Product View

Input data:


In the production horizon, you see the planned orders for fulfilling theplanned independent requirements.

3. In SAP APO, call up the product view for flat gasket T-T2## inproduction plant 1000, to check the results of the planning run(transaction /SAPAPO/RRP3).

Input data:


a) Menu path:

User menu for SAPSCM-## Production Planning Product View

Input data:


The purchase requisitions for this item are displayed.

4. In the current stock/requirements list in SAP ECC (transaction MD04),show the purchase requisitions for the flat gasket that were generated bythe SAP APO PP/DS run and then transferred to SAP ECC.

Input data:





a) Menu path:

User menu for SAPSCM-## Production Planning DisplayStock/Demand Situation

Input data:




Lesson Summary

You should now be able to: Demonstrate an understanding of how Production Planning fits into mySAP




SAPSCM Unit Summary

Unit SummaryYou should now be able to: Demonstrate an understanding of how to model the supply chain network

of a corporate group Name the main functions of the Supply Chain Cockpit List the main functions of the Alert Monitor Display a simple enterprise model and navigate within it. List the main requirements for Demand Planning Outline the different options for planning on different planning levels, such


Planning Create a simple forecast Describe the Supply Network Planning process flow Describe the Supply Network Planning methods Demonstrate an understanding of how Production Planning fits into mySAP




Unit 3mySAP SCM: Execution

Unit OverviewSupply chain execution within mySAP SCM consists of external procurement,manufacturing, and order fulfillment.

External procurement covers the entire procurement process from purchaserequisition through source determination, purchasing, goods receipt, invoiceverification, and inventory management. It integrates direct Internet buyingcapabilities, use of e-market places, catalogs, and rule-based procurementprocesses for automated procurement.

Manufacturing supports discrete manufacturing (order-based and time-based)and process manufacturing from planning through to execution. It creates feasible,optimized production schedules, takes material and capacity constraints intoaccount, and takes into account production resource and tool availability.

Sales and distribution and logistics execution (within order fulfillment)support sales order management with quotation creation, delivery datedetermination, Global Available-to-Promise (Global ATP), picking, financialreporting, transportation management, including Transportation Planning andVehicle Scheduling, and tracking of individual shipments.


Perform the main steps involved in external procurement: Purchaserequisition, purchase order, vendor confirmations, goods receipt, and invoiceverification

Explain the main concepts of the various manufacturing methods SFC(shop floor control), REM (repetitive manufacturing), and PI (processmanufacturing)

Execute a typical SFC scenario Create a sales order Explain the features of the global availability check (Global ATP) Perform Global ATP for a sales order Describe the tasks of transportation planning


Unit 3: mySAP SCM: Execution SAPSCM

Deliver a sales order Create a billing document for the sales order Describe the main features of the RFID technology. Explain the integration of RFID into the SAP world. List the RFID processes supported by SAP.

Unit ContentsLesson: External Procurement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Exercise 5: External Procurement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Lesson: Manufacturing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104

Exercise 6: Manufacturing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121Lesson: Sales and Distribution and Logistics Execution ... . . . . . . . . . . . . . . .132

Exercise 7: Sales Process ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145Lesson: Radio Frequency Identification ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152


SAPSCM Lesson: External Procurement

Lesson: External Procurement

Lesson OverviewWithin mySAP SCM, external procurement covers the entire procurement processfrom purchase requisition through source determination, purchasing, goodsreceipt, invoice verification, and through to inventory management. It integratesdirect Internet buying capabilities, use of e-market places, catalogs, and rule-basedprocurement processes for automated procurement.


Perform the main steps involved in external procurement: Purchaserequisition, purchase order, vendor confirmations, goods receipt, and invoiceverification

Business ExampleThe Precision Pump company would like to purchase the components it needsfor production from various vendors.


Unit 3: mySAP SCM: Execution SAPSCM

A Typical Procurement Cycle

Figure 41: A Typical Procurement Cycle


SAPSCM Lesson: External Procurement

The main steps in external procurement are:

Determination of requirements:

The relevant department can manually inform Purchasing of a materialsrequirement using a purchase requisition. If you have defined an MRPprocedure for a material in the material mas

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