scm500 master guide for procurement processes

Master Guide

mySAP™ SCM powered by SAP NetWeaver™

Using SAP® SCM 5.0, SAP® SCM ES 5.0, ERP 2005, and SAP® NetWeaver 2004s

Document Version 6.10 – December 2006

Material Number 50076015

SAP AG Dietmar-Hopp-Allee 16 69190 Walldorf Germany T +49/18 05/34 34 24 F +49/18 05/34 34 20 www.sap.com

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Master Guide: mySAP SCM

Contents

1 Getting Started ...............................................................................7 1.1 History of Changes ..........................................................................9 1.2 The Main SAP Documentation Types ..........................................10

1.2.1 Cross-Phase Documentation ........................................................... 10 1.2.2 Implementation.................................................................................. 11 1.2.3 Production Operation ....................................................................... 12 1.2.4 Upgrade.............................................................................................. 12

1.3 Related Information .......................................................................12 1.3.1 SAP Service Marketplace Links ....................................................... 13 1.3.2 SAP Solution Manager...................................................................... 13

1.4 Important SAP Notes .....................................................................14

2 Technical Landscapes for mySAP SCM.....................................15 2.1 Technical Landscapes...................................................................15 2.2 Installation Information .................................................................16 2.3 Technical Landscape and Installation Information for Enterprise Services..............................................................................18

3 Business Processes of mySAP SCM .........................................21 3.1 Demand and Supply Planning ......................................................21

3.1.1 Demand Planning & Forecasting ..................................................... 21 3.1.2 Responsive Demand Planning......................................................... 23 3.1.3 Safety Stock Planning....................................................................... 24 3.1.4 Distribution Planning ........................................................................ 25 3.1.5 Responsive Replenishment Planning ............................................. 25 3.1.6 Purchase Order Processing ............................................................. 27 3.1.7 Supplier Managed Inventory with Purchase Order Processing .... 27 3.1.8 Supply Network Planning ................................................................. 28

3.1.8.1 Supply Network Planning Heuristic..........................................................................29 3.1.8.2 Supply Network Optimization...................................................................................29 3.1.8.3 Multilevel Demand and Supply Matching ................................................................30

3.2 Warehousing ..................................................................................30 3.2.1 Inbound Processing and Receipt Confirmation without WM ........ 30 3.2.2 Inbound Processing and Receipt Confirmation with WM.............. 31 3.2.3 Inbound Processing and Receipt Confirmation with WM in SCM. 33 3.2.4 Outbound Processing with WM ....................................................... 34 3.2.5 Outbound Processing without WM.................................................. 34 3.2.6 Outbound Processing with WM in SCM .......................................... 35 3.2.7 Warehousing & Storage.................................................................... 36

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3.2.8 Warehouse & Storage in SCM.......................................................... 37 3.2.9 Cross-Docking................................................................................... 37 3.2.10 Physical Inventory on Storage Location Level ............................. 38 3.2.11 Physical Inventory on Storage Bin Level ...................................... 39 3.2.12 Physical Inventory on Storage Bin Level in SCM......................... 40

3.3 Transportation................................................................................40 3.3.1 Transportation Planning................................................................... 40 3.3.2 Transportation Execution................................................................. 41 3.3.3 Freight Costing.................................................................................. 41

3.4 Service Parts Planning ..................................................................42 3.4.1 Parts Forecasting .............................................................................. 42 3.4.2 Stocking List Determination............................................................. 42 3.4.3 Safety Stock Calculation .................................................................. 43 3.4.4 Distribution Requirements Planning ............................................... 43 3.4.5 Pull Deployment ................................................................................ 44 3.4.6 Inventory Balancing .......................................................................... 44 3.4.7 Parts Monitoring................................................................................ 45

3.5 Order Fulfillment ............................................................................45 3.5.1 Sourcing............................................................................................. 46 3.5.2 Supersession..................................................................................... 46

3.6 Manufacturing (Planning & Operations) ......................................47 3.6.1 Production Planning (Process Manufacturing) .............................. 47

3.6.1.1 MTS in ERP .............................................................................................................47 3.6.1.2 MTO in ERP.............................................................................................................48 3.6.1.3 MTS in SCM.............................................................................................................49 3.6.1.4 MTO in SCM ............................................................................................................49

3.6.2 Production Planning (Discrete Manufacturing) .............................. 50 3.6.2.1 MTS in ERP .............................................................................................................51 3.6.2.2 MTO in ERP.............................................................................................................51 3.6.2.3 CTO in ERP .............................................................................................................52 3.6.2.4 ETO in ERP .............................................................................................................53 3.6.2.5 MTS in SCM.............................................................................................................53 3.6.2.6 MTO in SCM ............................................................................................................54 3.6.2.7 CTO in SCM.............................................................................................................55 3.6.2.8 ETO in SCM.............................................................................................................56

3.6.3 Production Planning (Repetitive Manufacturing) ........................... 56 3.6.3.1 MTS in ERP .............................................................................................................57 3.6.3.2 MTO in ERP.............................................................................................................57 3.6.3.3 CTO in ERP .............................................................................................................58 3.6.3.4 MTS in SCM.............................................................................................................59 3.6.3.5 MTO in SCM ............................................................................................................60 3.6.3.6 CTO in SCM.............................................................................................................61

3.6.4 Production Scheduling ..................................................................... 62 3.6.4.1 Production Scheduling (Manual Scheduling)...........................................................62 3.6.4.2 Production Scheduling with Scheduling Heuristics..................................................63 3.6.4.3 Production Scheduling Optimization........................................................................63 3.6.4.4 Production Scheduling with Block Planning ............................................................64

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3.6.4.5 Production Scheduling with Production Campaigns................................................65 3.6.5 Manufacturing Execution ................................................................. 66

3.6.5.1 Manufacturing Execution (Process Manufacturing).................................................66 3.6.5.2 Manufacturing Execution (Discrete Manufacturing).................................................67 3.6.5.3 Manufacturing Execution (Repetitive Manufacturing)..............................................68

4 Software Components Overview ................................................70 4.1 Application Components...............................................................70

4.1.1 SAP Supply Chain Management Server (SCM Server)................... 70 4.1.2 SAP APO Optimizer (SCM Optimizer).............................................. 70 4.1.3 SAP SCM – Web Communication Layer (SCM WCL) ..................... 71

4.2 Technology Components ..............................................................71 4.2.1 SAP Exchange Infrastructure........................................................... 71 4.2.3 SAP liveCache (SCM LC) .................................................................. 71

5 Software Component Matrix........................................................73

6 References....................................................................................77

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1 Getting Started

1 Getting Started mySAP Supply Chain Management mySAP Supply Chain Management (mySAP SCM) can help your organization transform a linear supply chain into an adaptive supply chain network, allowing you to access the knowledge and resources of your peers, adjust intelligently to changing market conditions, and remain customer-focused. Giving your company a competitive edge.

mySAP SCM enables adaptive supply chain networks by providing companies with planning and execution capabilities for managing enterprise operations, as well as coordination and collaboration technology to extend those operations beyond corporate boundaries:

• Supply Chain Planning and Collaboration With mySAP SCM you can model your existing supply chain, set goals, and forecast, optimize, and schedule time, materials, and other resources. Supply chain planning functionality enables you to maximize return on assets and ensure a profitable match of supply and demand.

• Supply Chain Execution mySAP SCM enables you to carry out supply chain planning and generate high efficiency at the lowest possible cost. You can sense and respond to demand through an adaptive supply chain network in which distribution, transportation, and logistics are integrated into real-time planning processes.

• Supply Chain Visibility Design and Analytics mySAP SCM gives you networkwide visibility across your extended supply chain to perform strategic as well as day-to-day planning. The solution also enables collaboration and analytics, so you can monitor and analyze the performance of your extended supply chain using predefined key performance indicators (KPIs).

service.sap.com/scm.For more information about mySAP SCM, see

This Master Guide This mySAP SCM Master Guide provides a central starting point for the technical implementation of mySAP SCM. It contains all the information for the implementation of mySAP SCM business processes.

mySAP SCM consists of the following business process groups:

Demand and Supply Planning [page 21]

Warehousing [page 30]

Transportation [page 40]

Service Parts Planning [page 42]

Order Fulfillment [page 45]

Manufacturing (Planning & Operations) [page 47]

o Production Planning (Process Manufacturing) [page 47]

o Production Planning (Discrete Manufacturing) [page 50]

o Production Planning (Repetitive Manufacturing) [page 56]

o Production Scheduling [page 62]

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1 Getting Started

o Manufacturing Execution [page 66]

To facilitate the implementation and upgrade process, all information within this document is ordered by business processes and business process groups. You can choose from several generic business processes and find all the information that is relevant for the technical implementation of a specific business process in that section. Upgrade information for business processes is available in the Upgrade Master Guide for this mySAP Business Suite solution (available on SAP Service Marketplace at service.sap.com/instguides).

This Master Guide provides information about which components and guides are required during this process.

Getting Started• [page 7] contains valuable information about using this document and related information (documentation and SAP Notes) crucial to the installation and upgrade.

Technical Landscapes for mySAP SCM• [page 15] contains information about the technical landscapes that are needed by the business processes of mySAP SCM.

Information about the Business Processes• [page 21] contains the following information for all mySAP SCM business processes:

− Business process overview

− Information about the required technical system landscape

Software Components Overview• [page 70] contains a short description of the software components that are part of mySAP SCM.

• The software component matrix [page 73] provides the information about which business processes use which component and whether the corresponding component is mandatory or optional.

• Depending on the specific business process, different installation and master guides are required during the business process implementation. In References [page 77], you can find an overview of all required documentation referenced in this Master Guide.

You can find the most current information about the technical implementation of mySAP SCM and the latest installation and configuration guides on SAP Service Marketplace at service.sap.com/instguides.We strongly recommend that you use the documents available here. The guides are regularly updated.

The business processes that are presented here serve as examples of how you can use SAP software in your company. The business processes are only intended as models and do not necessarily run the way they are described here in your customer-specific system landscape. Check your requirements and systems to determine whether these processes can be used productively at your site. Furthermore, we recommend that you test these processes thoroughly in your test systems to ensure they are complete and free of errors before going live.

This Master Guide provides just one way to implement each business processes. This is the implementation valid for SAP SCM 5.0. For other ways to implement business processes, see the Scenario

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1 Getting Started

Component List Viewer in SAP Service Marketplace (service.sap.com/scl).

1.1 History of Changes The Master Guide is regularly updated on at SAP Service Marketplaceservice.sap.com/instguides.

Make sure you have the latest version of the Master Guide by checking SAP Service Marketplace before starting the installation.

The following table provides an overview on the most important changes that were made in the latest versions.

Master Guide Version Important Changes

1.00 December 2005

2.00 February 2006

3.00 May 2006 The component SAP SCM 5.0 – SAP liveCache has been removed as a mandatory component for the following processes:

• Purchase Order Processing • Supplier Managed Inventory with Purchase

Order Processing Inclusion of SAP SCM 5.0 SR1 and SAP Solution Manager 4.0 in the Media List

4.00 September 2006

5.00 November 2006 Exclusion of Media List

6.00 November 2006 Chapter 4.2.2 SAP Frontend GUIs has been been removed

6.10 December 2006 Addition of technical system landscapes and installation information for enterprise services (SAP SCM ES 5.0 add-on)

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1 Getting Started

1.2 The Main SAP Documentation Types The following is an overview of the most important documentation types that you need in the various phases of the SAP Solution lifecycle.

Documentation Types in the Software Lifecycle

ImplementationImplementation

Master Guide

ConfigurationDocumentation Release Notes

ComponentInstallation Guide

ComponentUpgrade Guide

Upgrade Master Guide

OperationOperation UpgradeUpgrade

Solution ManagementGuide

Implementation Guide (IMG) Delta and Upgrade IMG

Security Guide

SAP Library

SAPterm

1.2.1 Cross-Phase Documentation SAPterm

SAPterm is SAP’s terminology database. It contains SAP-specific vocabulary in over 30 languages, as well as many definitions and glossary entries in English and German.

• Target group: Relevant for all target groups

help.sap.com• Current version: Located in the SAP Help Portal at → Additional Information → Glossary (direct access) or Terminology (as terminology CD); in the SAP system in transaction STERM

SAP Library

The SAP Library is a collection of function- and process-oriented documentation for SAP components. The SAP Library also contains the Business Scenario Descriptions.

• Target group: Consultants, system administrators, and project teams for implementations or upgrades

help.sap.com • Current version: Located in the SAP Help Portal at

Implementation Guide (IMG)

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1 Getting Started

1.2 The Main SAP Documentation Types

The Implementation Guide is a tool for configuring the SAP system to meet customer requirements. Its structure and documentation are component-oriented.

• Target group: Solution consultants and project teams for implementations or upgrades

• Current version: In the SAP menu of the SAP system under Tools → Customizing → IMG

Security Guide

The Security Guide describes the settings for a medium security level and offers suggestions for raising security levels. A collective Security Guide is available for the SAP NetWeaver technologies like SAP Web Application Server (SAP Web AS). This document contains general guidelines and suggestions about system security. Other technologies and individual applications have a Security Guide of their own.

• Target group: Technology consultants, solution consultants, and project teams for implementations or upgrades

• Current version: Located on SAP Service Marketplace at service.sap.com/securityguide

1.2.2 Implementation Master Guide

The Master Guide is the starting point for implementing an SAP solution. It lists the required SAP components and third party applications that are required for each Business Scenario. It provides scenario-specific descriptions of preparation, execution, and follow-up of an implementation. It also offers references to other documents, such as Component Installation Guides and SAP Notes.

• Target group: Technology consultants, system administrators, and project teams for implementations

SAP Service Marketplace at • Current version: Located on service.sap.com/instguides

Component Installation Guide

The Component Installation Guide describes the technical implementation of an SAP component, taking into account the combinations of operating systems and databases. It does not describe any business-related configuration.

• Target group: Technology consultants and project teams for implementations

• Current version: Located on SAP Service Marketplace at service.sap.com/instguides

Configuration Documentation in SAP Solution Manager

SAP Solution Manager is a tool with various functions. One of its main functions is the configuration of SAP solutions and Business Scenarios. It contains IMG activities, transactions, and so on, as well as documentation. Instead of the configuration documentation in SAP Solution Manager, there may be separate Business Scenario Configuration Guides on SAP Service Marketplace for earlier shipments of the Business Scenarios.

• Target group: Solution consultants and project teams for implementations

• Current version: In SAP Solution Manager

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1 Getting Started

1.3 Related Information

1.2.3 Production Operation Solution Operation Guide

The Solution Operation Guide is the starting point for operating an SAP solution. The guide refers users to the tools and documentation they need to carry out various tasks, such as monitoring, backup/restore, master data maintenance, transports, and tests. It also refers users to other documents, for example, the SAP Library, the Master Guide, and the Component Management Guides.

• Target group: System administrators, technology consultants, solution consultants, and project teams for implementations or upgrades

SAP Service Marketplace at • Current version: Located on service.sap.com/instguides

1.2.4 Upgrade Upgrade Master Guide

The Upgrade Master Guide is the starting point for upgrading the Business Scenarios of an SAP solution. It provides scenario-specific descriptions of preparation, execution, and follow-up of an upgrade. It also refers to other documents, such as the Component Upgrade Guides and SAP Notes. Instead of an Upgrade Master Guide, there may be several Business Scenario Upgrade Guides or a Solution Upgrade Guide for earlier shipments of the Business Scenarios of an SAP solution.

• Target group: Technology consultants and project teams for upgrades

Service Marketplace at • Current version: Located on SAP service.sap.com/instguides

Component Upgrade Guide

The Component Upgrade Guide describes the technical upgrade of an SAP component, taking into account the combinations of operating systems and databases. It does not describe any business-related configuration.

• Target group: Technology consultants and project teams for upgrades

• Current version: Located on SAP Service Marketplace at service.sap.com/instguides

Release Notes

Release Notes are documents that contain short descriptions of new features or changes in an SAP component since the previous release. Release Notes about ABAP developments enable the SAP system to generate delta and upgrade IMGs.

• Target group: Consultants and project teams for upgrades

• Current version: Located on SAP Service Marketplace at service.sap.com/releasenotes and in the SAP menu of the SAP system under Help → Release information


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1 Getting Started


1.3.1 SAP Service Marketplace Links The following list contains links to crucial information for implementing mySAP SCM.

List of Related Documentation

Content Location service.sap.com/pamInformation about technical and release

planning issues on SAP components

service.sap.com/instguidesInformation about the latest version of installation and upgrade guides for SAP components

service.sap.com/notesInformation about SAP Notes

service.sap.com/platformsInformation about released platforms

service.sap.com/sizingInformation about sizing, calculation of hardware requirements (such as CPU, disk and memory resource) with the Quick Sizer tool

service.sap.com/securityguideInformation about network security – SAP Security Guide

service.sap.com/networkInformation about network integration

service.sap.com/haInformation about high availability

service.sap.com/messageInformation about creating error messages

service.sap.com/performancemapPerformance Map

service.sap.com/installNW2004sInformation about installation of SAP NetWeaver 2004s

service.sap.com/upgradeNW2004sInformation about upgrade of SAP NetWeaver 2004s

help.sap.com/Documentation on SAP Help Portal

1.3.2 SAP Solution Manager SAP provides the SAP Solution Manager as a highly recommended platform to efficiently support the implementation of your solution. Using SAP Solution Manager significantly accelerates the implementation process and helps you achieve your business goals. At the same time, SAP delivers Support Services based on the business scenarios designed and documented in SAP Solution Manager. Implementation content for your solution may further accelerate the implementation process. For information about availability of content specifically tailored to your solution, see SAP Service Marketplace at service.sap.com/solutionmanager.

In the installation or upgrade process, an SAP Solution Manager system is required to generate the SAP Solution Manager Key. Without the SAP Solution Manager Key, you cannot continue the installation process. The generation of the required key is implemented into the SAP Solution Manager as of Release 3.2 SP8. For details, see SAP Service Marketplace at service.sap.com/notes → SAP Note 811923.

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1 Getting Started

1.4 Important SAP Notes

1.4 Important SAP Notes Read the SAP Installation Notes before you start the installation. These SAP notes contain the most recent information about the installation, as well as changes to the installation documentation.

Make sure that you have the up-to-date version of each SAP Note, which you can find on service.sap.com/notes.SAP Service Marketplace at

List of Related SAP Notes

SAP Note Number

Title

886898 SAP SCM 5.0 SP Stack 12/2005: Release & information

832393 Release Restrictions for SCM 5.0

826093 Additional Information on Upgrading to SAP SCM 5.0

986620 Release restrictions for SAP ES Add-Ons based on mySAP 2005

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2 Technical Landscapes for mySAP SCM

2.1 Technical Landscape

2 Technical Landscapes for mySAP SCM 2.1 Technical Landscape The following diagram provides an overview of a possible system landscape for the business processes of mySAP SCM.

liveCache

DB

SAP SCM 5.0 – SCM LC

SCM Server

RDBMS

SAP SCM 5.0 – SCM Server

XI Server

RDBMS

SAP NetWeaver 2004s usage type PI

BI Server

RDBMS

SAP NetWeaver 2004s usage type BI

CRM Server

RDBMS

SAP CRM 5.0 – CRM Server

SCM Optimizer

SAP SCM 5.0 – SCM Optimizer

ERP Server

RDBMS

SAP ERP 2005 – SAP ECC

We do not recommend installing all components on one host. Instead, you can distribute the components among several hosts, as displayed in the figure. The figure represents one of several ways of distributing the components. The distribution depends on many factors, such as sizing, security, available hardware, and so on. In practice, any distribution of components among hosts is possible.

Before you start installation, ensure that you know which components are required for the business process you plan to use. We do not recommend installing all components. Only install those components that are required for the business process you use. For more information about the required components, see the software component matrix for each business process.

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2.2 Installation Information

2.2 Installation Information The following tables describe the installation sequence for the different servers.

ERP Server For detailed information, see Installation of SAP ERP

2005 – SAP ECC Server service.sap.com/instguides → mySAP Business Suite Solutions → mySAP ERP → mySAP ERP 2005 → SAP ECC 6.0

SCM Server For detailed information, see Installation of SAP SCM 5.0

– SCM Server service.sap.com/instguides → mySAP Business Suite Solutions → mySAP SCM → Using SAP SCM 5.0

SAP liveCache For detailed information, see Installation of SAP SCM 5.0 –

SAP liveCache service.sap.com/instguides → mySAP Business Suite Solutions → mySAP SCM → Using SAP SCM 5.0

SCM Optimizer For detailed information, see Installation of SAP SCM 5.0 –

SCM Optimizer service.sap.com/instguides → mySAP Business Suite Solutions → mySAP SCM → Using SAP SCM 5.0

XI Server For detailed information, see Installation of SAP NW 2004s

usage type PI service.sap.com/installNW2004s

You can download the XI content for SAP SCM ES from SAP Service Marketplace at

Installation of XI Content for SAP SCM Basis 5.0 service.sap.com/swdc

→ Download → Support Packages and Patches → Entry by Application Group → SAP Application Components → SAP SCM → SAP SCM 5.0 → Entry by Component → XI Content → XI Content SCM Basis 5.0

BI Server For detailed information, see Installation of SAP NW 2004s

usage type BI service.sap.com/installNW2004s

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2.2 Installation Information

Depending on the data volume that your company handles, the integrated BI of the SCM server may be sufficient. In this case you do not need a separate BI server.

CRM Server For detailed information, see Installation of SAP CRM 5.0 –

CRM Server service.sap.com/instguides → mySAP Business Suite Solutions → mySAP CRM → SAP CRM 5.0

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2.3 Technical Landscape and Installation Information for Enterprise Services

2.3 Technical Landscape and Installation Information for Enterprise Services Technical Landscape Enterprise Services for SAP SCM Basis and SAP APO As a prerequisite for running enterprise services for mySAP SCM, you must install the same system landscapes as described in the previous chapters of this master guide. In addition, you must also install the add-on for mySAP SCM enterprise service enablement, SAP SCM ES 5.0, for SCM Basis and APO. The following diagram provides an overview of a possible system landscapes for SCM Basis and APO enterprise services.

Possible System Landscape for mySAP SCM Enterprise Services (SCM Basis and APO)

liveCache

DB


SCM Server

RDBMS


SAP SCM ES 5.0 Add-On

SAP NetWeaver Usage Type PI


The following software components are either mandatory or optional, as indicated below, for the technical implementation of enterprise services for SAP SCM Basis and SAP APO:

Component Mandatory Optional

SAP SCM 5.0 – SCM Server, SP07 X

SAP SCM ES 5.0 SP03 X

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Technical Landscape

SAP SCM 5.0 – SCM LC X

SAP NetWeaver 2004s usage type PI X

XI Content for SAP SCM ES 5.0 X

See also SAP Note 986620.

Enterprise Services for SAP Inventory Collaboration Hub (SAP ICH) As a prerequisite for running enterprise services for SAP ICH, you must install the same system landscapes as described in the previous chapters of this master guide. The following diagram provides an overview of a possible system landscapes for SAP ICH enterprise services.

Possible System Landscape for mySAP SCM Enterprise Services (SAP Inventory Collaboration Hub)

liveCache

DB


SCM Server

RDBMS


ERP Server

RDBMS

SAP ERP 2005 – SAP ECC

SAP NetWeaver Usage Type PI


The following software components are either mandatory or optional, as indicated below, for the technical implementation of enterprise services for SAP ICH:

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Technical Landscape


SAP SCM 5.0 – SCM Server X

SAP SCM 5.0 – SCM LC X

SAP ERP 2005 – ECC Server X


XI Content for SAP SCM Basis 5.0 X

SAP SCM Enterprise Services Add-On: Installation Information Enterprise Services for SAP SCM Basis and SAP APO

SCM Server (with SAP SCM ES Add-On) For more information, see SAP Service Marketplace at Installation of SAP SCM 5.0

– SCM Server service.sap.com/instguides → mySAP Business Suite Solutions → mySAP SCM → Using SAP SCM 5.0

You can download the SAP SCM ES add-on from SAP Service Marketplace at

Installation of SAP SCM ES 5.0 service.sap.com/swdc →

Download → Installations and Upgrades → Entry by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0 → Installation

and

service.sap.com/swdc → Download → Support Packages and Patches → Entry by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0

For more information about the installation, see SAP Note 950881 and 968334.

You can download the XI content for SAP SCM ES from SAP Service Marketplace at

XI Content for SAP SCM ES 5.0 (optional) service.sap.com/swdc

→ Download → Support Packages and Patches → Entry by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0 → XI Content SCM SE 5.0

Enterprise Services for SAP Inventory Collaboration Hub (SAP ICH) See the previous chapter.

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3 Business Processes of mySAP SCM

3.1 Demand and Supply Planning

3 Business Processes of mySAP SCM This section contains short process descriptions and information about the technical landscape of the business processes.

A detailed process description and configuration documentation is part of SAP Solution Manager implementation content ST-ICO 150.

3.1 Demand and Supply Planning The process group Demand and Supply Planning contains the following business processes:

Demand Planning & Forecasting• [page 21]

Responsive Demand Planning• [page 23]

Safety Stock Planning• [page 24]

Distribution Planning• [page 25]

Responsive Replenishment• [page 25]

Purchase Order Processing• [page 27]

Supplier Managed Inventory with Purchase Oder Processing• [page 27]

Supply Network Planning Heuristic• [page 29]

Supply Network Optimization• [page 29]

Multilevel Demand and Supply Matching• [page 30]

3.1.1 Demand Planning & Forecasting Overview You can use this business process to perform your demand planning and forecasting in SAP Supply Chain Management (SCM). Demand Planning is often the starting point of the entire supply chain planning process and you can use it to create forecasts of market demand for your company's products.

The business process Demand Planning and Forecasting contains the following major planning processes:

• Consensus Demand Planning

• Forecasting and Lifecycle Planning

• Promotion Planning

Consensus Demand Planning Consensus Demand Planning brings together all available information and enables a collaborative planning process that includes all partners. It automatically includes forecasts and promotion plans. You can carry out various calculations to combine all information or to check for critical situations that are highlighted as alerts.

The result of consensus demand planning is a final demand plan that you can transfer to:

• Supply planning for further planning

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• Execution (in the ERP System and in SAP R/3) to trigger production or procurement

• SAP Business Intelligence (SAP BI) for archiving, reporting, or integrating to other systems and solutions

Forecasting and Lifecycle Planning A company’s product portfolio probably includes a variety of products that are in different stages of their lifecycle and have different demand types. Unfortunately, a single forecasting method that creates accurate statistical forecasts for mature, slow-moving or new products does not exist. Therefore, you have to use a number of methods to get the right answers. Forecasting and Lifecycle Planning offers a toolbox for practical, proven forecasting that can be divided into three methods:

• Statistical Forecasting

• Causal Forecasting

• Composite Forecasting

You can combine Lifecycle Planning with each of these methods.

Promotion Planning In Demand Planning, you can plan promotions or other special events separately. You can use Promotion Planning to record either one-time events, such as the millennium, or repeated events, such as quarterly advertising campaigns. Other examples of promotions are trade fairs, trade discounts, dealer allowances, product displays, coupons, contests, free-standing inserts, as well as non-sales-related events, such as competitors' activities, market intelligence, economic trends, strikes, and natural disasters, such as hurricanes or earthquakes.

Technical System Landscape The following software components are either mandatory or optional, as indicated below, for the technical implementation of this process.

The following table provides just one way to implement the business process. For other combinations, see service.sap.com/scl.



SAP SCM 5.0 – SAP liveCache X

SAP ERP 2005 – SAP ECC X

SAP NetWeaver 2004s usage type BI X

For more information about the installation of these components, see Technical Landscapes for mySAP SCM [page 15].

Depending on the data volume that your company handles, the integrated BI of the SCM server may be sufficient. In this case you do not need a separate BI server.

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3.1.2 Responsive Demand Planning Overview You can use this business process to promote close collaboration with your business partners in a short-term planning horizon. During this process, all data received from your customer are validated and the short-term baseline and promotion demands are planned accordingly. Thus, a company can respond very quickly to changes in the Distribution Supply Chain.

Responsive Demand Planning contains the following building blocks:

Controlled Data Import In the Data Import Controller, all incoming messages that are transferred from the customer to the vendor are validated and adjusted automatically or manually when appropriate. Where needed, this validation step checks and adjusts master data and transaction data before the system executes subsequent supply chain planning.

Responsive Forecasting In Responsive Forecasting, the Vendor Managed Inventory (VMI) Analyst develops an unconstrained forecast of future demand. To develop the unconstrained forecast, a number of statistical forecasting and extrapolation techniques are applied to the historical sales data transmitted by the customer. The majority of the process flow steps in Responsive Forecasting are automated; user intervention is only required when exceptional situations occur. Responsive Forecasting filters these situations and presents them in the Alert Monitor for subsequent (manual) processing by the VMI Analyst.

The goal of Responsive Forecasting is twofold: to capture the demand situation as accurately as possible, and to monitor short-term fluctuations in market demand closely, so that quick action can be taken, if necessary, to prevent stockouts.

Responsive Promotion Planning You can use this building block of the Responsive Demand Planning process to:

• Plan the promotional uplift as accurately as possible

• Monitor – and if necessary respond quickly to – changes in promotional demand during the replenishment period, with the goal of preventing stockouts

This use is particularly important because promotion items experience a significantly higher stockout rate than baseline items.

• Model cannibalization and post-promotion effects

Promotion planning fulfills a number of requirements, including the following:

• Correction of historical sales data by removing effects that are related to promotions alone. By correcting historical sales data, Responsive Promotion Planning enables the calculation of accurate historical data that can be used, in turn, as a foundation for forecasting.

• Inclusion, in the forecast, of changes in demand that are related to promotions and events alone. By including these changes, Responsive Promotion Planning enables sufficient supply to be secured.

• Rapid response to unforeseen changes, thus ensuring that promotion quantities are appropriately adjusted, optimal supply fulfilled, and stockouts prevented.

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3.1.3 Safety Stock Planning Overview You can use this business process to plan the quantity of additional stock to procure and hold in case of unexpectedly high fluctuations in demand. Safety Stock Planning allows you to meet a target service level while creating a minimum necessary amount of safety stock throughout your entire supply chain for all intermediate and finished products at their respective locations.

Two different groups of safety stock calculation methods are offered:

• Basic safety stock planning

• Extended safety stock planning

Basic Safety Stock Planning Method The easiest way to plan your safety stock is to define a time-dependent or time-independent safety stock level, or to define a number of safety days of supply values for given materials required at any stock holding location. The system applies these settings and calculates the resulting safety stock automatically. The safety stock is then considered during the following supply network planning runs and the production run.

Extended Safety Stock Planning Method The extended safety stock planning method can calculate and consider the variability on the demand and supply side. It can also perform simulations of the service level and the forecast error. Besides service levels the system also supports re-order cycle and re-order point strategies.

For more information about safety stock planning methods, see the SAP library under mySAP Business Suite → SAP Supply Chain Management (SAP SCM) → SAP Advanced Planning and Optimization (SAP APO) → Supply Network Planning → Safety Stock Planning.



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3.1.4 Distribution Planning Overview You can use this business process to plan distribution for your deployment run. When production is completed, deployment determines which demands the existing supply can fulfill. Deployment decides on an individual product basis where to transport available quantities. If there are insufficient quantities available to fulfill the demand, or the quantities available exceed the demand, deployment makes adjustments to the plan created by the SNP run.

The deployment run generates deployment stock transfers based on the SNP stock transfers that were created during the SNP run. The Transport Load Builder (TLB) then uses these deployment stock transfers to create transport loads, thus generating TLB shipments.

You cannot use deployment for stock transfers involving storage location MRP areas. For more information, see the SAP Library under mySAP Business Suite → SAP Advanced Planning and Optimization (SAP APO) → Cross-Application Topics → Supply Chain Planning Within a Plant → Stock Transfer with Storage Location MRP Areas.








3.1.5 Responsive Replenishment Planning Overview You can use this business process to plan responsive replenishment. Based on the results of the Responsive Demand Planning Process, Responsive Replenishment Planning plans the optimal shipments to the locations of a customer. During this process the netting takes place,

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then transport loads are created, and finally the orders are created. Promotion and baseline demands can be planned independently from another.

Responsive Replenishment Planning contains the following building blocks:

• Replenishment Planning (RP)

• Transport Load Building (TLB)

• Order Release and Publication (ORP)

Replenishment Planning You can use Replenishment Planning to calculate the quantities that are delivered to a customer location, for example, a distribution center, to satisfy customer demand and to maintain the desired service level. Starting with the demand forecast that is generated upon completion of Responsive Forecasting, Replenishment Planning determines the optimal short-term to medium-term plan that is required to fulfill the estimated demand. This plan covers the quantities that must be transported from the vendor’s distribution center (or production plant) to the customer’s distribution center (or store).

Transport Load Building You can use Transport Load Building to consolidate replenishment orders resulting from Replenishment Planning, and to create feasible transport units on the basis of business rules. These rules represent the constraints of the relevant means of transport, thereby remaining within the corresponding minimum and maximum capacities.

Order Release and Publication You can also use this business process to ensure that the Transport Load Builder (TLB) shipments – generated during Transport Load Building – are prepared for publication and then transferred to the vendor back-end system for subsequent sales orders and outbound delivery processing. Order Release and Publication also ensures that vendor-generated orders – representing the purchase order acknowledgements – are transferred to the customer back-end system for subsequent purchase orders and inbound delivery processing. In order to keep the planning and execution systems in a consistent and synchronized state, changes to sales orders in the back-end system are communicated to the planning component.







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3.1.6 Purchase Order Processing Overview You can use this business process to send out purchase orders (POs) to the supplier using the web-based application SAP ICH. POs are typically generated as part of the customer's MRP run or the customer creates them manually. The suppliers can view the POs by status, enter free text notes, and also print or download them. The supplier can enter confirmations or order responses indicating which date and quantity they can commit to. At the time of shipment, the supplier can create ASN messages as well, which together with the confirmations update the customer's ERP/MRP system.

The main business value is that the customer can communicate requirements accurately and in real-time, replacing older methods, such as phone, fax, or e-mail. Suppliers can find their requirements through a web browser only and are proactively alerted to exception situations, such as a new or changed PO, on-screen or by e-mail. Suppliers can respond to the requirements quickly and accurately via confirmations and ASNs.








3.1.7 Supplier Managed Inventory with Purchase Order Processing Overview You can use this business process to shift net replenishment planning and execution from the customer to the supplier. The supplier uses gross demand (dependent requirements) and stock balance to calculate a replenishment plan based on minimum-maximum inventory level logic, and subsequently converts the plan into purchase orders (POs) and ASNs at the time of shipment. The POs and ASNs are sent back to the customer's ERP system as an indication of a supplier commitment to deliver goods. POs are optional in the SMI process. The replenishment plan can be converted directly into ASNs if needed.

The main business value is that the customer no longer has to perform the MRP net planning and replenishment activities for the purchased components or raw materials, and the suppliers can better utilize their own capacity by conducting both the planning and execution pieces of the replenishment process.

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3.1.8 Supply Network Planning Supply Network Planning contains the following business processes:

Supply Network Planning Heuristic• [page 29]

Supply Network Optimization• [page 29]

Multilevel Demand and Supply Matching• [page 30]

Overview You can use this business process to integrate purchasing, production, distribution of demands, and transportation so that comprehensive mid-term to long-term tactical planning and sourcing decisions can be simulated and performed on the basis of a single, global, consistent model or sub-model.

Supply Network Planning offers three basic algorithms to carry out the planning:

• Heuristics (together with capacity leveling capability)

• Optimization

• Multilevel supply and demand matching (capable-to-match)

Starting from a demand plan, Supply Network Planning determines a permissible medium- to long-term plan for fulfilling the estimated and real sales volumes. The algorithms plan for all sources of supply from the customer, through distribution centers to the plants and their suppliers.

Each algorithm does the following:

• Distributes production over the plants

• Selects production options and alternatives

• Explodes the bill of materials

• Determines the procurement of semi-finished goods and raw materials

The algorithms differ when making decisions, and considering the constraints (for such factors as production, storage, or transportation). They also differ on which level of aggregation they perform the planning.

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The result is best – but not necessarily optimal – purchasing, production, and distribution decisions as well as reduced order fulfillment times and inventory levels, and an improved customer service level.

Supply Network Planning is based on a model of the supply network. The model represents a specific supply chain (or network) and consists of individual nodes, links, and other elements. The nodes represent different locations of the network, such as customer locations, distribution centers, plants, or suppliers. The transportation lanes represent the links between the nodes. Elements such as products, bills of materials, routings, and different kinds of resources are also essential parts of the supply network.

The supply network definition itself is not part of the ongoing Supply Network Planning process, but an important prerequisite. The structure of the model and the detailed settings influence the results of the planning run.

3.1.8.1 Supply Network Planning Heuristic Technical System Landscape The following software components are either mandatory or optional, as indicated below, for the technical implementation of this process.





SAP SCM 5.0 – SCM Optimizer X


3.1.8.2 Supply Network Optimization Technical System Landscape The following software components are either mandatory or optional, as indicated below, for the technical implementation of this process.







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3.1.8.3 Multilevel Demand and Supply Matching Technical System Landscape The following software components are either mandatory or optional, as indicated below, for the technical implementation of this process.







3.2 Warehousing The process group Warehousing contains the following business processes:

Inbound Processing and Receipt Confirmation without WM• [page 30]

Inbound Processing and Receipt Confirmation with WM• [page 31]

Inbound Processing and Receipt Confirmation with WM in SCM• [page 33]

Outbound Processing with WM• [page 34]

Outbound Processing without WM• [page 34]

Outbound Processing with WM in SCM• [page 35]

Warehousing & Storage• [page 36]

Warehouse & Storage in SCM• [page 37]

Cross Docking• [page 37]

Physical Inventory on Storage Location Level• [page 38]

Physical Inventory on Storage Bin Level• [page 39]

Physical Inventory on Storage Bin Level in SCM• [page 40]

3.2.1 Inbound Processing and Receipt Confirmation without WM Overview Your can use this business process for your inbound processing and receipt confirmation. Whenever a company procures a product from an external supplier, whether for use in production (raw materials) or for direct consumption (C-materials), the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time.

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3.2 Warehousing

For the delivered product an inbound delivery is selected and processed for putaway. The goods receipt posting can be processed prior to or after putaway of the materials.

You can control the physical receipt of materials at the warehouse or the receiving locations on different levels of detail. From controlling the process on a document level only by using purchase orders and stock transports orders, to inbound deliveries and shipments, and even to the pallet and material level, the receiving process is supported in different ways. Depending on customer-specific needs, it is optional to use inbound deliveries and advanced material flow and process control capabilities. These options include yard management, warehouse management with task and resource management controlling the process down to the pallet and package level using advanced strategies (see also Inbound Processing and Receipt Confirmation with WM).

Inbound processing and goods receipts are key steps in any procurement or replenishment process. These steps are not industry-specific, but common practice for any company procuring products, whether for production of its own or direct consumption.

Inbound processing reflects the receipt of materials that are delivered to a receiving location. This receipt can be processed based on purchase orders, stock transport orders, or even a returns order. It includes the notification of goods to be received, the putaway, goods receipt posting, and the proof-of-delivery message to the supplier. By viewing the goods receipt from the two perspectives you can follow the purchase order process and the physical material movements separately.

The processes described are goods receipt against a purchase order (MIGO) without using Warehouse Management and inbound processing using the inbound delivery, the ASN message and the POD of the customer.

If Handling Unit Management is used for packing, you need to use an inbound delivery to pack against. An inbound delivery is also required if the warehouse is implemented in a decentralized environment.








3.2.2 Inbound Processing and Receipt Confirmation with WM Overview You can use this business process for your inbound processing and receipt confirmation in conjunction with Warehouse Management (WM). Whenever a company procures a product from a supplier, whether for use in production (raw materials) or for direct consumption (C-

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3.2 Warehousing

materials), the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time. For the delivered product an inbound delivery is selected and processed for putaway. The goods receipt posting can be processed prior to or after putaway of the materials.

You can control the physical receipt of materials at the warehouse or the receiving locations on different levels of detail. From controlling the process on a document level only using purchase orders and stock transports orders, to inbound deliveries and shipments and even to the pallet and material level, the receiving process is supported in different ways. Depending on customer-specific needs, it is optional to use inbound deliveries and advanced material flow and process control capabilities.

Inbound processing and goods receipts are key steps in any procurement or replenishment process. These steps are not industry-specific, but common practice for any company procuring products, whether for production of its own or direct consumption.

Inbound processing reflects the receipt of materials that are delivered to a receiving location. This receipt can be processed based on purchase orders, stock transport orders, or even a returns order. It includes the notification of goods to be received, the putaway, goods receipt posting, and the proof-of-delivery message to the supplier. By viewing the goods receipt from two perspectives, you can follow the purchase order process and the physical material movements separately.

The processes described are good receipt against a purchase order (MIGO) using Warehouse Management and inbound processing using the inbound delivery, the ASN message and the POD of the customer. The good receipt posting can be processed prior to or after putaway of the materials. In this process a goods receipt for a purchase order or a goods receipt posting for inbound delivery after putaway is possible.

If Handling Unit Management is used for packing, you must use an inbound delivery to pack against. An inbound delivery is also required if the warehouse is implemented in a decentralized environment (BAPI connection between Warehouse Management and the ERP System).








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3.2 Warehousing

3.2.3 Inbound Processing and Receipt Confirmation with WM in SCM Overview You can use this business process for your inbound processing and receipt confirmation in conjunction with Extended Warehouse Management (EWM) in SAP Supply Chain Management (SCM). For this process variant – the logistics process of receiving goods in the warehouse – you must ensure a high degree of variability and flexibility. In the implementation, you can define different optional steps in order to ensure an efficient and streamlined receiving process.

Whenever a company requires a product to be procured from an external source of supply, the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of the goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time. For the delivered product, an inbound delivery is selected and processed for putaway. Once the goods are taken into stock, a goods receipt must be posted.

Inbound processing and goods receipts are key steps in any procurement or replenishment process. Using inbound processing in EWM in SAP SCM supports specific requirements for receiving goods in WM-managed warehouses for discrete industries, for example, for Service Parts Management.

The receiving process is divided into several process steps which ensure that the physical receiving process is reflected in system activities and documents. The basic concept is to differentiate between planned activities and notifications (for example, ASN, inbound delivery notification) and finalized documents after processing (inbound delivery).

If you use Handling Unit (HU) Management for packing, you must use an inbound delivery to pack against.








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3.2 Warehousing

3.2.4 Outbound Processing with WM Overview You can use this business process for your outbound processing with warehouse management (WM). Outbound processing comprises the preparation of goods to be delivered from a warehouse to a receiving location.

Outbound processing starts with an outbound delivery that has been created either on the fly, or that is more typically based on reference documents such as sales orders or stock transport orders.

Outbound processing in warehouse management typically comprises the following activities:

• The notification of goods to be supplied from a warehouse to a customer for which the outbound delivery serves as the reference document

• Picking (with the WM transfer order)

• Packing

• Physical goods issue in warehouse (movement to the goods issue zone)

• Loading

• Goods issue and goods issue posting to Inventory Management (IM)

• Advising of advanced shipping notifications to business partners

• Obtaining a proof of delivery (POD) from the receiving business partner








3.2.5 Outbound Processing without WM Overview You can use this business process for your outbound processing by implementing Lean Warehouse Management. When you implement the Warehouse Management System (WMS), you manage goods movements and stock changes in the warehouse at storage-bin level. However, if you implement Lean WM – in other words Outbound Processing without WM – inventory management runs at storage-location level. The system does not update the

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3.2 Warehousing

stock data at storage bin-level using the quants. For more information, see the ERP documentation on SAP Help Portal under Documentation → mySAP ERP → Logistics → Logistics Execution (LE) → Warehouse Management System → Warehouse Structure in the Warehouse Management System → Warehouse Management with Lean WM.

You use Lean WM solely for processing goods receipts and goods issues. Using Lean WM, you process the warehouse movements in basically the same way as if using the WMS: you work with deliveries and you create transfer orders for these deliveries. These transfer orders serve as pick lists. For more information about pick lists, see the ERP documentation in the SAP Help Portal under Documentation → mySAP ERP → Logistics → Logistics Execution (LE) → Warehouse Management System → Warehouse Movements → Transfer Order. We recommend that you implement Lean WM if you wish to pick deliveries in a warehouse that you are not managing using WMS.

Outbound processing typically comprises the following activities:

• Notification of goods to be supplied from a warehouse to a customer, for which the outbound delivery serves as the reference document

• Picking (here using TOs in Lean WM)

• Packing

• Physical goods issue

• Loading

• Goods issue and goods issue posting to Inventory Management (IM)

• Advising of advanced shipping notifications to business partners

• Obtaining a Proof of Delivery (POD) from the receiving business partner








3.2.6 Outbound Processing with WM in SCM Overview You can use this business process for your outbound processing with extended warehouse management (WM). Outbound processing comprises the preparation of goods to be delivered from a warehouse to a receiving location.

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3.2 Warehousing

Outbound processing starts with the creation of an outbound delivery that typically has been created based on reference documents such as sales orders or stock transport orders. The outbound delivery serves as the basis for the subsequent process steps.

Outbound processing in warehouse management typically comprises the following activities:

• Notification of goods to be supplied from a warehouse to a customer, for which the outbound delivery serves as the reference document

• Picking (with the WM warehouse task in this example)

• Packing

• Loading

• Goods issue and goods issue posting

• Finalizing the delivery process








3.2.7 Warehousing & Storage Overview You can use this business process to manage materials with the warehouse environment using SAP Warehouse Management (WM). In the context of the generic business processes for Supply Chain Management (SCM), this process begins where the Inbound Process ends and ends where the Outbound Processing begins.

Warehousing and Storage processes include multiple processes throughout the warehouse, from the time materials enter the warehouse via Goods Receipt until they exit with a Post Goods Issue. The Warehousing and Storage Process is one example of how materials might be effectively managed within the warehouse environment using SAP WM, but is not inclusive of all warehouse functionality.

It is possible to manage materials within Inventory Management at a storage location level or within Warehouse Management at a bin location level. A bin is the smallest addressable unit in the warehouse and is associated with a material to show the physical location of where a material is stored.

With Warehouse Management, customers can define their physical warehouse characteristics, including separate storage areas with different strategies for storing and retrieving materials from specific bins. Customers also have more control over the warehouse

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3.2 Warehousing

processes, including which materials are recommended for picking based on different strategies, and which resources are available to process which tasks within the warehouse.






3.2.8 Warehouse & Storage in SCM Overview You can use this business process to efficiently manage materials and processes in a complex warehouse environment. Goods movements and all logistic processes within the warehouse are planned and executed efficiently. This scenario begins with the creation and confirmation of a warehouse order (WO), and includes the optional processes of confirming warehouse orders via the desktop (rather than using radio frequency) as well as the optional processes of slotting, warehouse rearrangement, resource management, and monitoring.








3.2.9 Cross-Docking Overview You can use this business process to move materials directly from the goods receipt area to the shipping area without storing them first. You can execute Cross-Docking in one step (directly from GR to GI) or in two steps (for example, going first to a specified Cross-Docking storage type for repacking or labeling). For more information , see the SAP Library under SAP R/3 Enterprise → Logistics → Logistics Execution (LE) → Warehouse Management

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3.2 Warehousing

System (WMS) → Cross-Docking (LE-WM-DCK)→ Cross-Docking Execution → Two-Step Cross-Docking.

Cross-Docking implies moving materials directly from the incoming to the outgoing physical areas of the warehouse. To process these materials without first putting them into storage, the warehouse must be aware of which deliveries are coming in and which deliveries are going out.

In the two-step Cross-Docking method, you have to set a configuration setting indicating that two-step Cross-Docking is applicable. Then, all cross-docking is executed in two steps. For more information on Cross-Docking with the one or two-step method see the SAP Library under SAP R/3 Enterprise → Logistics → Logistics Execution (LE) → Warehouse Management System (WMS) → Cross-Docking (LE-WM-DCK) → Cross-Docking Execution.






3.2.10 Physical Inventory on Storage Location Level Overview You can use this business process to manage your physical inventory if you have stocks or special stocks in your warehouse.

There are several kinds of physical inventory that you can manage, for example:

• Periodic inventory

• Continuous inventory

• Cycle counting

• Inventory sampling

The process of taking the inventory remains the same, whichever method of physical inventory you choose.

Physical inventory is the process of counting materials in your storage location, whether these stocks are your own materials or special stocks. You can conduct it annually or continuously, and for legal reasons, balance sheet purposes, or internal controlling reasons. The process of taking a Physical Inventory involves preparation, execution, and review.

For more information about inventory management and the physical inventory, see the SAP Library under SAP R/3 Enterprise → SAP ERP Central Component → Logistics → Materials Management (MM) → Inventory Management (MM-IM) → Inventory Management and Physical Inventory (MM-IM) → Physical Inventory.

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3.2 Warehousing






3.2.11 Physical Inventory on Storage Bin Level Overview You can use this business process to manage your physical inventory if you have stocks or special stocks in your warehouse.

There are several kinds of physical inventory that you can manage, for example:

• Periodic inventory

• Continuous inventory

• Cycle counting

• Inventory sampling

The process of taking the inventory remains the same, whichever method of physical inventory you choose. Alternatives that can help you manage your inventory balances are Zero Stock Check, and Continuous Inventory Based on Stock Placement. For more information, see the SAP Library under SAP R/3 Enterprise → SAP Retail → Merchandise Logistics → Logistics Execution → Physical Inventory → Physical Inventory Methods, and mySAP ERP → Logistics → Logistics Execution (LE) → Warehouse Management System (WMS) → Inventory → Annual Inventory → Zero Stock Check.

Physical Inventory can be conducted annually or continuously and for legal reasons, for balance sheet purposes, or for internal controlling. The process of taking a physical inventory involves planning, execution, and review.






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3.3 Transportation

3.2.12 Physical Inventory on Storage Bin Level in SCM Overview You can use this business process to set up physical inventory on the storage bin level with SCM. With the functions in Extended Warehouse Management (EWM), a customer can perform physical inventory for a product or handling unit whether at a single storage bin, multiple storage bin, or a grouping of several storage bins.






3.3 Transportation The process group Transportation contains the following business processes:

Transportation Planning• [page 40]

Transportation Execution• [page 41]

Freight Costing • [page 41]

3.3.1 Transportation Planning Overview You can use this process to create optimized shipments and transfer these shipments to the connected system for execution. To do this, SAP R/3 Transportation Planning/Vehicle Scheduling (TP/VS) first reads transportation-relevant business documents (for example, sales orders, purchase orders, or stock transfer orders) from the connected SAP R/3 system, then assigns the loads represented by these documents to resources (for example, trucks or railcars) to create planned shipments, assigns carriers to these shipments, and finally tenders the shipments to the assigned carriers.





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3.3 Transportation



3.3.2 Transportation Execution Overview You can use this process to create a shipment, print required shipment documents, and set statuses, in particular . Shipment end








3.3.3 Freight Costing Overview You can use this business process to manage your freight costing.

A shipment can have costs that represent the charges from the Transportation Service Provider (TSP), possible handling charges, surcharges such as fuel, and other additional or direct transportation costs. The shipment cost document lets you calculate the shipment costs for any given shipment. You can analyze the cost components and the rules that were applied for the components.

You also need to settle these costs against the TSP’s invoice.






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3.4 Service Parts Planning

3.4 Service Parts Planning The process group Service Parts Planning contains the following business processes:

Parts Forecasting• [page 42]

Stocking List Determination• [page 42]

Safety Stock Calculation• [page 43]

Distribution Requirements Planning• [page 43]

Pull Deployment• [page 44]

Inventory Balancing• [page 44]

Parts Monitoring• [page 45]

3.4.1 Parts Forecasting Overview You can use this business process to capture historical demand, model that demand according to the structure of the service parts supply chain, and perform forecasts for determining future demand. Demand planning is done in an adaptive way which continuously analyses past forecast performance and adjusts forecast models and parameters accordingly.






SAP CRM 5.0 – CRM Server X

SAP NetWeaver 2004s usage type BI X


3.4.2 Stocking List Determination Overview You can use this business process to determine the optimal stocking points of a product within the service parts supply chain, by considering the characteristics of the product, its demand, and the supply chain structure.

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3.4.3 Safety Stock Calculation Overview You can use this business process to simultaneously optimize the safety stock and an economic order quantity. It uses forecast demand information and its standard deviation to determine the amount of safety stock to be kept at each stocking point in the supply chain. This enables you to handle demand and supply uncertainty according to a target service level. Service levels are determined dynamically and differentiated based on demand, demand frequency, product classification, or the cost of a product at the given location.







3.4.4 Distribution Requirements Planning Overview You can use this business process to determine rounded net requirement needs throughout the service parts supply chain. These requirements are aggregated along the hierarchical supply chain structure, resulting in supply proposals which are covered either by the supply of re-manufactured parts or by purchase requisitions or schedules to one or more suppliers. The Distribution Requirements Planning calculation considers full interchangeability to use up existing inventory of a preceding product, minimum net demand for slow-moving items, schedule adjustments for seasonal demands and inventory build-up, as well as supplier schedule stability rules.

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3.4.5 Pull Deployment Overview Pull Deployment is triggered based on a material need of a subordinate location in the supply chain. It determines a prioritized fair share distribution among all subordinate locations of the same level, but only creates stock transfer requisitions to the triggering locations. Pull Deployment uses the current inventory situation within the supply chain network as the basis for decision making.








3.4.6 Inventory Balancing Overview You can use this business process to manage the need for material movement lateral to the otherwise hierarchical structure of the service parts supply chain. Triggered by a number of events, such as an unfulfilled Pull Deployment requisition, it determines excess and shortage locations within a predefined balancing area. Stock transfers are suggested based on a cost-

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3.5 Order Fulfillment

benefit analysis, which compares the additional cost of a lateral transfer with the evolving inventory, warehouse, and service benefits.








3.4.7 Parts Monitoring Overview You use this process to provide visibility for all planning-related processes and for potential follow-up activities.





SAP SCM 5.0 – SPA liveCache X


3.5 Order Fulfillment The process group Order Fulfillment contains the following business processes:

Sourcing• [page 46]

Supersession• [page 46]

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3.5 Order Fulfillment

3.5.1 Sourcing Overview You can use this business process to answer the critical question “Do I have stock to sell?” in all its complexities. In most businesses, across all industries, it is not an easy question to answer. Some customer orders may have priority over others. A material may be maintained in some locations, but not in others. So the simple question “Do I have stock to sell?” quickly evolves into “Do I have stock to sell in the location closest to the customer, and if not, can I find stock somewhere else in my supply chain?” or “Do I have stock that has been promised to another customer that I would be willing to sell to this other customer instead?”

This process enables better visibility of material activity, clearly showing and guiding the processes of material sales, transfers between internal locations, and use of materials in manufacturing processes. With clear visibility, you can make better business decisions, answering other key questions, for example: “Are we selling too many products to one-time customers while neglecting our established customer base?”

The benefits of being able to intelligently and knowledgeably answer these questions are felt through-out the supply chain, often resulting in higher customer-satisfaction ratings, higher fill-rates, and lower shipping costs.








3.5.2 Supersession Overview You can use this business process to enable chains of product substitution. In many business scenarios, particularly those in manufacturing, it is common that parts are discontinued and replaced by one or more other parts. Part B replaces Part A, and eventually, Part C replaces Part B. Using supersession chains in mySAP SCM, it is possible to create and maintain this relationship among parts. When an ATP check is performed in gATP (from a sales order) for Part A, after Part B has replaced it, Part B will be the part sold.



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3.6 Manufacturing (Planning & Operations)






3.6 Manufacturing (Planning & Operations) The process group Manufacturing (Planning & Operations) contains the following areas:

Production Planning (Process Manufacturing)• [page 47]

Production Planning (Discrete Manufacturing)• [page 50]

Production Planning (Repetitive Manufacturing)• [page 56]

Production Scheduling• [page 62]

Manufacturing Execution• [page 66]

3.6.1 Production Planning (Process Manufacturing) The area Production Planning (Process Manufacturing) contains the following business processes:

Production Planning (Process Manufacturing) MTS in ERP• [page 47]

Production Planning (Process Manufacturing) MTO in ERP• [page 48]

Production Planning (Process Manufacturing) MTS in SCM• [page 49]

Production Planning (Process Manufacturing) MTO in SCM• [page 49]

3.6.1.1 Production Planning (Process Manufacturing) MTS in ERP Overview You can use this business process to carry out make-to-stock production in SAP ECC. Make-to-stock production is carried out without reference to a sales order.

This business process is used in process industries. This includes the chemical and pharmaceutical industries, food and beverage industry, and the process-oriented electronics industry.

You can use the order to plan material requirements across all BOM levels, based on the customer requirements for the finished products and components. These orders represent receipt elements for in-house production and external procurement.

This business process includes analysis, planning according to MRP logic, and evaluation of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.

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3.6.1 Production Planning (Process Manufacturing)






3.6.1.2 Production Planning (Process Manufacturing) MTO in ERP Overview You can use this business process to carry out make-to-order production in SAP ECC.

Make-to-order production is carried out with reference to a sales order, that is, the items in a manufacturing order are only manufactured for a certain customer.









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3.6.1 Production Planning (Process Manufacturing)

3.6.1.3 Production Planning (Process Manufacturing) MTS in SCM Overview You can use this business process to carry out make-to-stock production in SAP SCM. Make-to-stock production is carried out without reference to a sales order.


The requirement quantities for the finished products are determined in demand planning. Incoming sales orders are delivered from the warehouse.

You can use the order to plan material requirements across all BOM levels, based on the requirements for the finished products and components from the forecast and demand plan, or when the threshold value for the available stock falls short (reorder point). These orders represent receipt elements for in-house production and external procurement.

In process industries, make-to-stock production is frequently used at the bulk ware level (unpackaged goods), whereas finished products are normally manufactured with make-to-order production.

This business process includes analysis, planning according to MRP logic, and evaluation of the planning results. It is normally carried out in Production Planning and Detailed Scheduling (PP/DS) in SAP SCM. Extensive planning steps, such as material planning (MRP), normally run in the background, in the production planning run; although they can also be carried out manually.








3.6.1.4 Production Planning (Process Manufacturing) MTO in SCM Overview You can use this business process to carry out make-to-order production in SAP SCM.

Make-to-order production is carried out with reference to a sales order, that is, the items in a manufacturing order are only manufactured for a certain customer.

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3.6.2 Production Planning (Discrete Manufacturing)



In the process industry, make-to-order production is frequently used for finished products only (such as packaged goods), while raw materials and unpackaged goods (bulk ware) are often produced with make-to-stock production. After the sales order has been received, the bulk ware is packaged for the customer. In some cases, the bulk ware is packaged using customer-specific packing materials.

This business process includes analysis, planning according to MRP logic, and evaluation of the planning results. It is normally carried out in Production Planning and Detailed Scheduling (PP/DS) in SAP SCM. Extensive planning steps, such as product planning (MRP), normally run in the background in the production planning run; although they can also be carried out manually.








3.6.2 Production Planning (Discrete Manufacturing) The area Production Planning (Discrete Manufacturing) contains the following business processes:

Production Planning (Discrete Manufacturing) MTS in ERP• [page 51]

Production Planning (Discrete Manufacturing) MTO in ERP• [page 51]

Production Planning (Discrete Manufacturing) CTO in ERP• [page 52]

Production Planning (Discrete Manufacturing) ETO in ERP• [page 53]

Production Planning (Discrete Manufacturing) MTS in SCM• [page 53]

Production Planning (Discrete Manufacturing) MTO in SCM• [page 54]

Production Planning (Discrete Manufacturing) CTO in SCM• [page 55]

Production Planning (Discrete Manufacturing) ETO in SCM• [page 56]

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3.6.2.1 Production Planning (Discrete Manufacturing) MTS in ERP Overview You can use this business process to carry out make-to-stock production in SAP ECC.

Make-to-stock production is carried out without reference to a sales order.

This process is designed to meet the requirements of discrete industries. This includes the consumer products industry, machine construction, metal and paper production, and the electronics industry.


This process includes analysis, planning according to MRP logic, and evaluation of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.






3.6.2.2 Production Planning (Discrete Manufacturing) MTO in ERP Overview You can use this business process to carry out make-to-order production in SAP ECC.

Make-to-order production is carried out with reference to a sales order, that is, the items in a manufacturing order are only manufactured for a certain customer. This business process is used in discrete industries. This includes the consumer products industry, machine construction, metal and paper production, and the electronics industry. You can use the order to plan material requirements across all BOM levels, based on the customer requirements for the finished products and components. These orders represent receipt elements for in-house production and external procurement.


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3.6.2.3 Production Planning (Discrete Manufacturing) CTO in ERP Overview You can use this business process to carry out configure-to-order production in SAP ECC.

Configure-to-order production is carried out with reference to a sales order, that is, the items in a manufacturing order are only manufactured for a certain customer.

This business process is used in discrete industries. This includes the machinery and plant engineering and construction industry, the electronics industry, and in particular the automotive industry.

You can use the orders to plan material requirements across all BOM levels, based on the customer requirements for the configured finished products and components. These orders represent receipt elements for in-house production and external procurement.

The business process includes analysis, planning according to MRP logic, and evaluation of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.






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3.6.2.4 Production Planning (Discrete Manufacturing) ETO in ERP Overview You can use this business process to carry out engineer-to-order production in SAP ECC.

Engineer-to-order production is carried out with reference to a project from the project system, that is, the items in a manufacturing order are manufactured for a specific project.

This business process is used in discrete industries. This includes the machinery and plant engineering and construction industry, and the aerospace industry.

You can use the order to plan material requirements across all BOM levels, based on the requirements for the finished products and components required in the project. These orders represent receipt elements for in-house production and external procurement.







3.6.2.5 Production Planning (Discrete Manufacturing) MTS in SCM Overview You can use this business process to carry out make-to-stock production in SAP SCM.

Make-to-stock production is carried out without reference to a sales order. The requirement quantities for the finished products are determined in demand planning. Incoming sales orders are delivered from the warehouse.

This business process is used in discrete industries. This includes the consumer products industry, mechanical engineering, metal and paper production, and the electronics industry.


This business process includes analysis, planning according to MRP logic, and evaluation of the planning results. It is normally carried out in Production Planning and Detailed Scheduling (PP/DS) in SAP SCM. Extensive planning steps, such as product planning (MRP), normally

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run in the background in the production planning run; although they can also be carried out manually.








3.6.2.6 Production Planning (Discrete Manufacturing) MTO in SCM Overview You can use this business process to carry out make-to-order production in SAP SCM.

In make-to-order production, the in-house production or procurement of products is only started when the sales order has been received.

This business process is suitable for products with short replenishment lead times for the finished product and all incoming assemblies and components.

This business process is useful if the costs of procurement and production of assemblies and components is very high. With this business process, additional storage costs can be avoided if incorrect forecasts have been made.

In case of long replenishment lead times for assemblies and components and low costs, forecasting for assemblies is useful in order to reduce the delivery time for the sales order.

This business process is used in discrete industries. This includes the consumer products industry (high-quality consumer products), machine construction, metal and paper production, and the electronics industry. You can use the generated orders to plan material requirements across all BOM levels, based on the sales orders. These orders represent receipt elements for in-house production and external procurement, and can be displayed according to the customer. The material flow between the BOM levels can be harmonized.




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3.6.2.7 Production Planning (Discrete Manufacturing) CTO in SCM Overview You can use this business process to carry out configure-to-order production in SAP SCM.

In configure-to-order production, the in-house production or procurement of products is only started when the sales order has been received. The product characteristics are determined when creating the sales order.

This business process is suitable for identical products with characteristics that the customer can define when creating the sales order. Therefore, it is not useful to plan at the finished product level. You can implement planning at the assembly level for the assemblies that are not influenced by customer requirements. This affects assemblies that contain a large number of finished products.

This business process is used in discrete industries. This includes the machinery and automotive industries, the aerospace and electronics industries, and component supplier industries. You can use the generated orders to plan material requirements across all BOM levels, based on the sales orders. These orders represent receipt elements for in-house production and external procurement, and can be displayed according to the customer. The material flow between the BOM levels can be harmonized.









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3.6.3 Production Planning (Repetitive Manufacturing)

3.6.2.8 Production Planning (Discrete Manufacturing) ETO in SCM Overview You can use this business process to carry out engineer-to-order production in SAP SCM.

Engineer-to-order production is carried out with reference to a project from the project system, that is, the items in a manufacturing order are manufactured for a specific project.

This business process is used in discrete industries. This includes the machinery and plant engineering and construction industry, and the aerospace industry.

You can use the order to plan material requirements across all BOM levels, based on the requirements for the finished products and components required in the project. These orders represent receipt elements for in-house production and external procurement.









3.6.3 Production Planning (Repetitive Manufacturing) The area Production Planning (Repetitive Manufacturing) contains the following business processes:

Production Planning (Repetitive Manufacturing) MTS in ERP• [page 57]

Production Planning (Repetitive Manufacturing) MTO in ERP• [page 57]

Production Planning (Repetitive Manufacturing) CTO in ERP• [page 58]

Production Planning (Repetitive Manufacturing) MTS in SCM• [page 59]

Production Planning (Repetitive Manufacturing) MTO in SCM• [page 60]

Production Planning (Repetitive Manufacturing) CTO in SCM• [page 61]

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3.6.3.1 Production Planning (Repetitive Manufacturing) MTS in ERP Overview You can use this business process to create a production plan for Repetitive Manufacturing.

You use Repetitive Manufacturing as a make-to-stock production, based on a run schedule header. This means that production is controlled without a direct reference to a sales order.

This business process is designed to meet the requirements of discrete industries. This includes the consumer goods industry, the machine construction and automotive industries, the electronics industry, and the component supplier industries.

Run schedule quantities determine the production quantity and the date. The requirements are generated by demand management (from forecast or demand planning) or when stock levels fall below reporting point levels. Sales order quantities are delivered from stock and consume the planned independent requirement quantities in Demand Management, according to the planning strategy you select.

This business process includes analysis, material requirements planning, and evaluation of the planning results. You can carry out extensive planning steps, such as the MRP run, in the background or manually.

Various planning tools are available, such as the planning table and sequencing, which you can use separately or in combination, depending on your business requirements.

A product cost collector is used to collect actual data and to settle costs. You can create a product cost collector for one run schedule header or for multiple run schedule headers. Backflush and settlement are carried out periodically, not for an individual product or for a sales or production order.






3.6.3.2 Production Planning (Repetitive Manufacturing) MTO in ERP Overview You can use this business process to create a production plan for Repetitive Manufacturing.

You can use Repetitive Manufacturing in a make-to-order production environment. The system creates one or several planned orders which directly reference the sales order item. The material is manufactured on the basis of these planned orders. Production is only triggered when the sales orders are received.

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This business process is designed to meet the requirements of discrete industries. This includes the machine construction and automotive industries, the electronics industry, and the component supplier industries.

Requirements are not generated until sales orders have been created. Demand management, the result of which is the demand program, made up of a forecast or demand planning, is not used here. Run schedule quantities determine the production quantity and the date.

You can implement planning at the assembly level for the assemblies that are not influenced by customer requirements. This affects assemblies that contain a large number of finished products.

The production planning process includes analysis, planning according to MRP logic, and evaluation of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they may also be planned manually.








3.6.3.3 Production Planning (Repetitive Manufacturing) CTO in ERP Overview You can use this business process to create a production plan for Repetitive Manufacturing.

The main aims of Repetitive Manufacturing are to evenly distribute the use of production lines, to simplify order processing in production, and to reduce setup times. It is possible to harmonize the material flow between the low level codes.

You can use Repetitive Manufacturing in a configure-to-order production environment. The system creates one or several planned orders which directly reference the sales order item. The material is manufactured on the basis of these planned orders. Production is only triggered when the sales orders are received.

In the sales order item, the required components are selected from a number of possible variants of configurable material by evaluating the relevant characteristics and are combined to form a concrete material variant. Selecting a characteristic value can involve the automatic selection of other characteristics, for example dependent components or operations. The

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relationships between the components and the operations are saved as dependencies in variant configuration.

This procedure is suitable for products of the same type with characteristics which the customer can define when placing the order. Therefore, it is not useful to plan at the finished product level. You can implement planning at the assembly level for the assemblies that are not influenced by customer requirements. This affects assemblies that contain a large number of finished products.

The business process is designed to meet the requirements of discrete industries. This includes the machine construction and automotive industries, the electronics industry, and the component supplier industries.

Requirements are not generated until sales orders have been created. Demand management, the result of which is the demand program, made up of a forecast or demand planning, is not used here. Run schedule quantities determine the production quantity and the date.

The Production Planning process includes analysis, planning according to MRP logic, and evaluation of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.








3.6.3.4 Production Planning (Repetitive Manufacturing) MTS in SCM Overview You can use this business process to create a production plan for Repetitive Manufacturing.

Repetitive Manufacturing is suitable for companies that manufacture similar products in large quantities which are not based on sales orders. The requirement quantities for the finished products are determined in demand planning. Incoming sales orders are delivered from the warehouse.

This business process is used in discrete industries. This includes the consumer goods industry, the machine construction and automotive industries, the electronics industry, and the component supplier industries.

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The system generates orders for finished products and components to cover the requirements across all BOM levels, based on planned independent requirements such as forecast values, demand plan, or when the stock level falls short. These orders represent receipt elements for in-house production and external procurement.

The main aims of Repetitive Manufacturing are to evenly schedule resources and to simplify order processing in production. The material flow between the BOM levels can be harmonized.

This business process includes procurement planning, analysis, and evaluation of planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.








3.6.3.5 Production Planning (Repetitive Manufacturing) MTO in SCM Overview You can use this business process to create a production plan for Repetitive Manufacturing.

In make-to-order Repetitive Manufacturing, the in-house production or procurement of products is only started when the sales order has been received. This business process is suitable for products with short replenishment lead times for the finished product and all incoming assemblies and components. This business process is useful if the costs of procurement and production of assemblies and components is very high. With this business process, additional storage costs can be avoided if incorrect forecasts have been made. In case of long replenishment lead times for assemblies and components and low costs, forecasting for assemblies is useful in order to reduce the delivery time for the sales order.

This business process is used in discrete industries. This includes the machine construction and automotive industries, the electronics industry, and the component supplier industries. The system generates orders based on the sales orders to cover the requirements across all BOM levels. These orders represent receipt elements for in-house production and external procurement, and can be displayed according to the customer.

The main aims of Repetitive Manufacturing are to evenly schedule resources and simplify order processing in production. The material flow between the BOM levels can be harmonized.

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This business process includes procurement planning, analysis, and evaluation of planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.







3.6.3.6 Production Planning (Repetitive Manufacturing) CTO in SCM Overview You can use this business process to create a production plan for configurable products that are manufactured with Repetitive Manufacturing.

In make-to-order Repetitive Manufacturing with configurable products, the in-house production or procurement of products is only started when the sales order has been received. You define the product characteristics when creating the sales order. This business process is suitable for identical products with characteristics that the customer can define when creating the sales order. Therefore, it is not useful to carry out forecasting at the finished product level. You can implement forecasting at the assembly level for the assemblies that are not influenced by customer requirements. This affects assemblies that contain a large number of finished products. This business process is used in discrete industries. This includes the automotive industry, the electronics industry, and the component supplier industries.

The system generates orders based on the sales orders to cover the requirements. These orders represent receipt elements for in-house production and external procurement. The main aims of Repetitive Manufacturing are to evenly schedule resources, to simplify order processing in manufacturing, and to reduce setup times. The material flow between the BOM levels can be harmonized.

This business process includes procurement planning, and takes into account the capacities, and the analysis and adjustment of the planning results. Extensive planning steps, such as material requirements planning, usually run in the background, although they can also be planned manually.



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3.6.4 Production Scheduling





3.6.4 Production Scheduling The area Production Scheduling contains the following business processes:

Production Scheduling (Manual Scheduling)• [page 62]

Production Scheduling with Scheduling Heuristics• [page 63]

Production Scheduling Optimization• [page 63]

Production Scheduling with Block Planning• [page 64]

Production Scheduling with Production Campaigns• [page 65]

3.6.4.1 Production Scheduling (Manual Scheduling) Overview In production planning, procurement planning is followed by detailed scheduling. You can use detailed scheduling to adjust capacity requirements from manufacturing orders to the available production capacity. You can combine different planning methods and strategies with one another depending on what the user requires.

You can use detailed scheduling with manual scheduling for all industries. You can also be combine it with other variants in detailed scheduling, such as optimization.

This business process includes problem analysis, scheduling and creating orders and operation sequences, and analysing and evaluating of planning results. This business process is carried out in the component Production Planning and Detailed Scheduling in SAP APO.







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3.6.4.2 Production Scheduling with Scheduling Heuristics Overview In production planning, procurement planning is followed by detailed scheduling. You can use detailed scheduling to adjust capacity requirements from manufacturing orders to the available production capacity. You can combine different planning methods and strategies depending on what the user requires.

Heuristics are planning functions that carry out scheduling for selected objects (products, resources, operations, or line networks for each planning focus) based on rules that are stored in the function. This includes sort and priority rules. In detailed scheduling, planning mostly focuses on resources and operations.

You can use detailed scheduling with heuristics for all industries. You can also be combine it with other variants in detailed scheduling, such as optimization. For special planning problems, branch-specific heuristics are available (for example, for the metal and paper industries).

This business process includes problem analysis, scheduling in detailed scheduling, and analysing and evaluating of planning results. It is executed in the component Production Planning and Detailed Scheduling in SAP APO.







3.6.4.3 Production Scheduling Optimization Overview In production planning, procurement planning is followed by detailed scheduling. You can use detailed scheduling to adjust capacity requirements from manufacturing orders to the available production capacity. You can combine different planning methods and strategies depending on what the user requires.

Heuristics are planning functions that carry out scheduling for selected objects (products, resources, operations, or line networks for each planning focus) based on rules that are stored in the function. This includes sort and priority rules. In detailed scheduling, planning mostly focuses on resources and operations.

You can use detailed scheduling with heuristics for all industries. You can also be combine it with other variants in detailed scheduling, such as optimization. For special planning

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problems, branch-specific heuristics are available (for example, for the metal and paper industries).

This business process includes problem analysis, scheduling in the detailed scheduling planning board, and analysing and evaluating of planning results. It is executed in the component Production Planning and Detailed Scheduling in SAP APO.







3.6.4.4 Production Scheduling with Block Planning Overview In production planning, procurement planning is followed by detailed scheduling. You can use detailed scheduling to adjust capacity requirements from manufacturing orders to the available production capacity.

Detailed scheduling with block planning completes the different types of detailed scheduling (detailed scheduling with manual scheduling, heuristics, and optimization). Detailed scheduling with block planning entails forecasting or preassigning resource capacities for products with certain properties for a better utilization of capacities. In different branches of industry, such as the metal and paper industry, orders are not just scheduled on a production unit according to their dates, their priority, and their availability, but often predefined planning is carried out for these units. This includes defining which product types and products are combined according to their properties for a production unit. The reason for this is that processing of these combined products requires the same setup status for the production unit, and that a change requires large-scale setup activities. Specified product sequences and maintenance required in fixed intervals are important, especially for block durations. Blocks can also represent production cycles and periods in which only certain products can be manufactured (planning at characteristics level). Block definitions are determined by technical conditions for production, for example, steel type A is only manufactured every first week, and steel type B every second week. Block planning has no effect on a sequence defined by a setup key. It runs in the blocks.

Detailed scheduling with block planning is normally used in the metal-processing and paper industries, but can also be used in all other industries where products with certain characteristics must be grouped into predefined periods (such as processing food).

This business process covers block definitions, scheduling, and analyzing and evaluating planning results. The business process is carried out in the component Production Planning and Detailed Scheduling in SAP APO.

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3.6.4.5 Production Scheduling with Production Campaigns Overview In production planning, procurement planning is followed by detailed scheduling. You can use detailed scheduling to adjust capacity requirements from manufacturing orders to the available production capacity.

A production campaign is a combination of orders that are required to manufacture products on a production line without having to perform major setup activities. Generally, setup and clean-out activities are required on the production resources between two campaigns.

In SAP APO, the planned and manufacturing orders are combined to manufacture one or more products.

Detailed scheduling with production campaigns is mostly used in the process industries (for example, in the chemical, pharmaceutical, and food industries). However, you can also use it in industries in which several orders are grouped together based on certain criteria, and must be maintained together.

This business process includes pre-processing setup and clean-out orders, creating the production plan, campaigns, setup and clean-out orders, analyzing and evaluating planning results, and managing the production campaigns. It is carried out in the component Production Planning and Detailed Scheduling (PP/DS) in SAP APO.







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3.6.5 Manufacturing Execution

3.6.5 Manufacturing Execution The area Manufacturing Execution contains the following business processes:

Manufacturing Execution (Process Manufacturing)• [page 66]

Manufacturing Execution (Discrete Manufacturing)• [page 67]

Manufacturing Execution (Repetitive Manufacturing)• [page 68]

3.6.5.1 Manufacturing Execution (Process Manufacturing) Overview You can use process manufacturing with process orders in process industries for batch-oriented manufacturing based on recipes. This business process is used in industries such as the chemical and pharmaceutical industries, food and beverage industries, and the process-oriented electronics industry, where production control, and internal activity planning and accounting for products is carried out using orders. As soon as a planned order or another request is generated from material requirements planning, the information is passed on to shop floor control. The order-relevant data is also added to ensure complete order processing.

You use process orders to monitor production and control cost accounting within a company.

Process manufacturing supports the following:

• Production campaigns (equal distribution of setup and clean-out costs)

• Joint production

• Mass processing of process orders

• Active ingredient management and material quantity calculation (cost and quantity calculation is dependent on batch characteristics such as concentrations)

• HTML-based PI sheets (integrated interface for creating and processing various production-relevant data)

• Electronic batch records to continuously document the production process (to meet FDA/GMP regulations)

• In-process monitoring (inspection results in quality management)

• Integration at field device level (such as barcode scanners)







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3.6.5.2 Manufacturing Execution (Discrete Manufacturing) Overview You can use this business process to carry out work-to-order manufacturing based on bills of material and routings. This business process is used in industries with discrete manufacturing (such as the automotive industry and mechanical engineering), where production control, and internal activity planning and accounting for materials and assemblies is carried out using orders.

As soon as a planned order or other request is generated from material requirements planning, the information is passed on to shop floor control. The order-relevant data is also added to ensure complete order processing.

Production orders are used to control and monitor production within a company and also to control cost accounting.

Production order processing supports the following:

• Collective orders (planned orders or production orders that are linked to one another over several production levels)

• Joint production

• Batch-specific material unit of measure (product quantity management)

• Assembly orders (the system can create an assembly order automatically when you create a sales order)

• Order split

• Mass processing of production orders

• In-process monitoring (inspection results in quality management)








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3.6.5.3 Manufacturing Execution (Repetitive Manufacturing) Overview You can use Repetitive Manufacturing for production planning and control within repetitive manufacturing and flow manufacturing environments. The main areas of use are industries with discrete manufacturing such as the automotive industry, or industries with continuous production processes, such as the chemical industry.

The aims of Repetitive Manufacturing are:

• Creation and revision of production quantities on a period and quantity basis (reduction in individual lot and order-specific processing)

• Reduction of work in production control and simplification of the backflush

You can implement Repetitive Manufacturing if the following applies to your production process:

• You produce the same or similar products over a lengthy period of time.

• You do not manufacture in individually defined lots. Instead, you produce a total quantity over a certain period of time, for example, at a certain rate per part-period.

• Your products always follow the same sequence through the machines and work centers in production.

• Routings tend to be simple and do not vary much.

• The costs are settled per material or per version using a product cost collector (product cost by period), and you do not need to use implement controlling based on production orders.

ERP supports the following variants:

• You can use Repetitive Manufacturing only for make-to-stock production. This means that production is controlled without a direct reference to a sales order. Run schedule quantities determine the dates and quantities. The requirements are generated by Demand Management. Sales order quantities are delivered from stock and consume the planned independent requirement quantities in Demand Management, according to the planning strategy you select. A product cost collector is used to collect actual data and to settle costs.

• You can use Repetitive Manufacturing in a make-to-order production environment. The system creates one or several planned orders which directly reference the sales order item, on the basis of which material is manufactured. Production is therefore triggered via sales orders. If you are a repetitive manufacturer and work in a make-to-order environment with valuated sales order stock, create a product cost collector for the material controlled by individual requirements, that is, for the material that is delivered to the sales order stock. The costs incurred for the production of the individual requirements inventory are collected in the product cost collector and can be analyzed there.


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4 Software Components Overview

4.1 Application Components

4 Software Components Overview This section provides additional information about the most important software components of mySAP SCM.

Only a subset of these components is required for the installation of a specific business scenario. For a scenario-specific overview of components, see the section “Business Scenario Overview”.

4.1 Application Components 4.1.1 SAP Supply Chain Management Server (SCM Server) SAP Supply Chain Management Server (SAP SCM Server) is part of the mySAP Supply Chain Management solution suite. It is an advanced planning and scheduling tool that enables real-time decision support and collaborative network optimization across the extended supply chain. SAP SCM Server helps companies synchronize supply chain activities with their partners and excel at customer service and order fulfillment.

Embedded SAP BW SAP SCM Server is shipped with an embedded SAP BW 7.0 that, together with the liveCache, contributes to efficiently perform Forecasting & Replenishment tasks.

SAP SCM Server uses the embedded SAP BW architecture to plan for technical reasons (such as using info cubes), that is, the SAP BW embedded in SAP SCM Server is not meant to be used for the reporting purposes of your company.

4.1.2 SAP APO Optimizer (SCM Optimizer) SAP has developed an innovative and flexible APS optimization solution which opens SAP SCM's advanced planning and scheduling capabilities to an external optimization technology: The Optimization Extension Workbench. This strategy enables mySAP SCM customers to take advantage of both the mySAP SCM existing set of optimizers and company-specific optimization software. The optimization technology integrates different planning methods in one planning system to fulfill optimization requirements:

• Optimizers guided by global objective functions based on key performance indicators. In case of highly complex planning scenarios, optimization results improve with increasing CPU time.

• User-specific optimizers, such as external optimizers. External optimizers can be called as batch job from the SAP SCM Server.

You can use SAP APO Optimizer for Detailed Production Scheduling, Supply Network Planning, Transportation Planning and Vehicle Scheduling, and Sequencing. SAP APO Optimizer is an optional part of the SCM business scenarios.

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4.2 Technology Components

4.1.3 SAP SCM - Web Communication Layer (SCM WCL) SAP front end which offers information access and full supply chain visibility for SAP EM via the Internet.

4.2 Technology Components 4.2.1 SAP Exchange Infrastructure (SAP XI) Based on a native Web infrastructure that leverages open standards, SAP Exchange Infrastructure (SAP XI) makes it possible to manage the broad diversity of highly heterogeneous components from a multitude of vendors and to run in various technology environments. The integration capabilities capture shared business semantics and act as a mediator between the services and their technical implementations. It includes technical functions, such as Web service discovery, queuing, mapping, and routing. It also establishes an infrastructure for business process management and high-performance execution within and across organizational boundaries.

Exchange-based process integration removes the problems of direct connections by extracting shared collaboration knowledge. These shared business semantics ease the integration of both external and internal components. Instead of directly coding point-to-point interfaces for each new component, the exchange infrastructure allows instant plug-in of new components once per component. This provides the flexibility needed in today’s fast-changing business world, and it reduces integration costs compared to the direct connection approach.

4.2.2 SAP liveCache SAP liveCache for SAP SCM SAP liveCache is based on SAP DB technology and ensures the highest mySAP SCM performance. SAP liveCache is SAP's state of the art memory-based computing technology for real-time, high-speed processing of very large data volumes. The main capabilities of SAP's new memory-resident object oriented technology are the following:

• Application logic execution right where the data is stored in order to avoid network overload

• Aggregation of relational data structures retrieved from the database into application-specific optimized data representations in main memory. As a result, optimization and planning tasks can be performed in minutes or seconds.

• Built-in business functionality in the form of C++ object methods

• Semantic synchronization with the SAP database

• Ready to exploit 64-Bit technology

For more information about liveCache technology infrastructure, requirements, and performance recommendations, see SAP Service Marketplace at service.sap.com/scm.

SAP liveCache is available on Windows 2000 (or higher) and on 64-Bit UNIX (as of SAP APO 3.0A).

LCA Routines for SAP SCM ABAP programs and the SAP APO optimizers use native SQL for communicating through the standard SAP database interface to liveCache. SAP liveCache has an SQL interface that is

November 2006 71



used to communicate with the SAP instances. With native SQL, ABAP programs call stored procedures in the SAP liveCache that point to Component Object Model (COM) routines written in C++. An SQL class provides access from the LCA routine (formerly known as COM routines) to the SQL data.

The LCA routines are part of a dynamic link library that runs in the process context of the SAP liveCache instance.

The LCA routines have direct access to the objects stored in the SAP liveCache and can change them. This includes creation and deletion of objects in the SAP liveCache.

72 November 2006

5 Software Component Matrix


5 Software Component Matrix This section provides an overview of which business process of mySAP SCM uses which component.

Please note that there are software requirements for each component below, which are not explicitly mentioned in this documentation. They are documented in the relevant installation guides.

This Master Guide provides just one way to implement each business process. This is the implementation valid for SAP SCM 5.0. For other ways to implement business processes, see the Scenario Component List Viewer in SAP Service Marketplace (service.sap.com/scl).

mySAP SCM Business Processes Software Component Key: X = mandatory; (X) = optional

Process Group

Business Process

SAP

SCM

5.0

– S

CM

Opt

imiz

er

SAP

SCM

5.0

– S

AP

liveC

ache

SAP

NW

200

4s u

sage

type

BI

SAP

NW

200

4s u

sage

type

PI

SAP

CR

M 5

.0 –

CR

M S

erve

r

SAP

SCM

5.0

– S

CM

Ser

ver

ERP

2005

– E

CC

Ser

ver

Demand Planning & Forecasting X X (X) X

Responsive Demand Planning X X

Safety Stock Planning X X

Distribution Planning X X (X)

Responsive Replenishment Planning X X

Purchase Order Processing X X X

SMI with Purchase Order Processing X X X

Supply Network Planning Heuristic X X (X)

Supply Network Optimization X X (X)

Dem

and

and

Supp

ly P

lann

ing

Multilevel Demand and Supply Matching X X (X)

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Process Group

Business Process

SCM

Opt

imiz

er

SAP

liveC

ache

usag

e ty

pe B

I

usag

e ty

pe P

I

CR

M S

erve

r

SCM

Ser

ver

ECC

Ser

ver

Inbound Processing & Receipt Confirmation without WM (X) (X) X

Inbound Processing & Receipt Confirmation with WM (X) (X) X

Inbound Processing & Receipt Confirmation with WM in SCM X X X

Outbound Processing with WM (X) (X) X

Outbound Processing without WM (X) (X) X

Outbound Processing with WM in SCM X X X

Warehousing & Storage X

Warehousing & Storage in SCM X X X

War

ehou

sing

Cross Docking X

Physical Inventory on Storage Location Level X

Physical Inventory on Storage Bin Level X

Physical Inventory on Storage Bin Level in SCM X X

Transportation Planning X X

Transportation Execution (X) (X) X

Tran

spor

tatio

n

Freight Costing X

Parts Forecasting X X X X

Stocking List Determination X X

Safety Stock Calculation X X

Distribution Requirements Planning X (X) X (X)

Pull Deployment X (X) X

Inventory Balancing X (X) X

Serv

ice

Part

s Pl

anni

ng

Parts Monitoring X X

74 November 2006



Process Group

Business Process

SCM

Opt

imiz

er

SAP

liveC

ache

usag

e ty

pe B

I

usag

e ty

pe P

I

CR

M S

erve

r

SCM

Ser

ver

ECC

Ser

ver

Sourcing X X (X)

Ord

er

Fulfi

llmen

t

Supersession X X (X)

Production Planning (Process Manufacturing) MTS in ERP X

Production Planning (Process Manufacturing) MTO in ERP X

Production Planning (Process Manufacturing) MTS in SCM X X X

Production Planning (Process Manufacturing) MTO in SCM X X X

Production Planning (Discrete Manufacturing) MTS in ERP X

Production Planning (Discrete Manufacturing) MTO in ERP X

Production Planning (Discrete Manufacturing) CTO in ERP X

Production Planning (Discrete Manufacturing) ETO in ERP X

Production Planning (Discrete Manufacturing) MTS in SCM X X X

Production Planning (Discrete Manufacturing) MTO in SCM X X X

Production Planning (Discrete Manufacturing) CTO in SCM X X X

Production Planning (Discrete Manufacturing) ETO in SCM X X X

Man

ufac

turin

g (P

lann

ing

& O

pera

tions

)

Production Planning (Repetitive Manufacturing) MTS in ERP X

Production Planning (Repetitive Manufacturing) MTO in ERP X

Production Planning (Repetitive Manufacturing) CTO in ERP X

Production Planning (Repetitive Manufacturing) MTS in SCM X X X

November 2006 75



Process Group

Business Process

SCM

Opt

imiz

er

SAP

liveC

ache

usag

e ty

pe B

I

usag

e ty

pe P

I

CR

M S

erve

r

SCM

Ser

ver

ECC

Ser

ver

Production Planning (Process Manufacturing) MTS in ERP X X X

Production Planning (Repetitive Manufacturing) CTO in SCM X X X

Production Scheduling (Manual Scheduling) X X

Production Scheduling with Scheduling Heuristics X X

Production Scheduling Optimization X X

Production Scheduling with Block Planning X X

Production Scheduling with Production Campaigns X X

Manufacturing Execution (Process Manufacturing) (X) (X) X

Manufacturing Execution (Discrete Manufacturing) (X) (X) X

Man

ufac

turin

g (P

lann

ing

& O

pera

tions

)

Manufacturing Execution (Repetitive Manufacturing) (X) (X) X

76 November 2006

6 References

6 References List of referenced documentation for mySAP SCM and its business processes.

Title Purpose Where to Find

Installation Guides

service.sap.com/instguides Installation Guides of SAP ECC 6.0

Installing the ERP Server

→ mySAP Business Suite Solutions → mySAP ERP → mySAP ERP 2005 → SAP ECC 6.0

Installation Guide – SAP Supply Chain Management 5.0 <Operating System>:<Database>

Installing the SCM Server

service.sap.com/instguides → mySAP Business Suite Solutions → mySAP SCM → Using SAP SCM 5.0

Installation Guide – SAP liveCache

Installing the SAP liveCache Server

Installing the XI Server

service.sap.com/installNW2004sInstallation Guide – SAP NetWeaver 2004s <Operating System>:<Database> Installing the BI

Server

service.sap.com/instguides Installation Guide – SAP Solution Manager on <Operating System>:<Database>

Installing Solution Manager

→ SAP Components → SAP Solution Manager

Master Guides

service.sap.com/erp-instmySAP ERP 2005 → mySAP ERP 2005

service.sap.com/installNW2004sSAP NetWeaver 2004s

service.sap.com/instguides mySAP Customer Relationship Management

→ mySAP Business Suite Solutions → SAP CRM 5.0 → mySAP Customer Relationship Management 5.0

November 2006 77

scm500 master guide for procurement processes

Documents