Session 4808

Using APICS Body of Knowledge to Prepare for APO

Stephen Desirey, CFPIMDuPont Company

Session Code: 4808

Session 4808

ERP Is Only An IT Project

Headlines we want to avoid

Integration Testing Starts With Go-Live

Data Accuracy Measured At 45%

Do It Yourself Software

30 Day Install Without Changing Work Practices

Vendor Implemented ERP

Session 4808

With APO, “Failure is not an Option”

Session 4808

Start with a solid foundation

Session 4808

Preparation:

APICS Body of Knowledge

Detailed Scheduling

and Planning

Basics ofSupply ChainManagement

Execution and Control of Operations

Master Planning of Resources

StrategicManagementof Resources

Session 4808

Traditional supply side thinking

These are questions of priority and capacity

What do we already

have?What must

we get?What are we going to make?

What does it take

to make it?

DataAccuracy

DataAccuracy

Session 4808

But first, demand side thinking

These are questions to justify the business purpose

Will we make money on this sale?

Where will we deliver

this?

Why are we selling

this?

Why will they

buy this?

DataAccuracy

DataAccuracy

Session 4808

Will demand and supply be balanced?

Sales &OperationsPlanningProcess

Session 4808

Sounds simple

Logistics SupportAnalysis

Pump/Motor RunTime

Work OrderSystem

Catalog

Accounts Payable

DisbursementsSecurity

Real Property

DOE FIMS

DOE DISCAS

Purchasing

General Ledger

Bench StockControl

Bar Coding

Fixed Assets

Inventory ControlSystem

Off-site VendorCustody

PayrollPersonnel

PaperRecords

JournalEntry

RequestPaper

Paperreceivers

PaperInvoices

Paperpartsorder

PaperPurchaseRequisition

Legacy System

Legend

Centra EDM/PDM

EngineeringChange Control

Log

PaperECP

PaperContract

MRP Models

batch file

batch filebatch file

batch file

PaperStocklevel

decision

Training

Paperchecks

Artemis ProjectFund Accounting

PrimaveraSchedules

Papermilestonedefnitions

HumanGlue

SuppliersCustomers &Consumers

Sell, Buy, Make,and Deliver

Integration of systems becomes the critical operating task

Session 4808

Managing Process

Sales and OperationsPlanning

Business Strategy

SupplyChain

Define Offering

Define Marketand End Uses

EstablishValue Pricing

AccountsReceivables

Demand Planning

Order Entry

New ProductDevelopment

CompetitiveKnowledge

DemandChain

SupplyChain

© S.T. Desirey 2002

MasterScheduling

ProcessImprovement

Logisticsand Delivery

CapacityPlanning

Productionand Toll Mfg

MaintenancePlanning

MaterialsPlanning

DetailedScheduling

BusinessStrategy

BusinessPlanning

FinancialPlanning

Session 4808

Managing Process in APO

Sales and OperationsPlanning

Business Strategy

SupplyChain

Define Offering

Define Marketand End Uses

EstablishValue Pricing

AccountsReceivables

Demand Planning

Order Entry

New ProductDevelopment

CompetitiveKnowledge

DemandChain

SupplyChain

© S.T. Desirey 2002

MasterScheduling

ProcessImprovement

Logisticsand Delivery

CapacityPlanning

Productionand Toll Mfg

MaintenancePlanning

MaterialsPlanning

DetailedScheduling

BusinessStrategy

BusinessPlanning

FinancialPlanning

Session 4808

Process Data Management Technology

Sales and OperationsPlanning

Business Strategy

SupplyChain

Define Offering

Define Marketand End Uses

EstablishValue Pricing

AccountsReceivables

Demand Planning

Order Entry

New ProductDevelopment

CompetitiveKnowledge

DemandChain

SupplyChain

MasterScheduling

ProcessImprovement

Logisticsand Delivery

CapacityPlanning

Productionand Toll Mfg

MaintenancePlanning

MaterialsPlanning

DetailedScheduling

BusinessStrategy

BusinessPlanning

FinancialPlanning

Managing Process

Data Accuracyand Completeness

for Recipes, BOMs, andPlanning Parameters

Keystone

BW

R/3

Transaction Process

Session 4808

Single most important lesson

APO (or other APS tool) will reveal the faults and gaps in the demand and supply chain management processes more than will be uncovered in the transaction (R/3) process.

Sales and OperationsPlanning

Business Strategy

SupplyChain

Define Offering

Define Marketand End Uses

EstablishValue Pricing

AccountsReceivables

Demand Planning

Order Entry

New ProductDevelopment

CompetitiveKnowledge

DemandChain

SupplyChain

MasterScheduling

ProcessImprovement

Logisticsand Delivery

CapacityPlanning

Productionand Toll Mfg

MaintenancePlanning

MaterialsPlanning

DetailedScheduling

BusinessStrategy

BusinessPlanning

FinancialPlanning

Managing Process

Process Data Management Technology

R/3

Transaction Process

Sales and OperationsPlanning

Business Strategy

SupplyChain

Define Offering

Define Marketand End Uses

EstablishValue Pricing

AccountsReceivables

Demand Planning

Order Entry

New ProductDevelopment

CompetitiveKnowledge

DemandChain

SupplyChain

MasterScheduling

ProcessImprovement

Logisticsand Delivery

CapacityPlanning

Productionand Toll Mfg

MaintenancePlanning

MaterialsPlanning

DetailedScheduling

BusinessStrategy

BusinessPlanning

FinancialPlanning

Managing Process

Data Accuracyand Completeness

for Recipes, BOMs, andPlanning Parameters

BW

This brings on excitingopportunities for game changing improvements.

Session 4808

Master data accuracy

• Material number (local or global?)• Location of plants and storage locations• Recipes• Resources (including personnel staffing)• Customer names and locations• Bills of material• Demonstrated capacity• Required capacity• Lead times• Service levels required• Others

Requires 98% or better accuracy

Yes, inventoriesmust be accurate

to 95%

Session 4808

10 APO Critical Success Factors

1. Identify the gaps between that future state and where you are today– Specify local, country, regional, and global business

changes 2. Quantify the business opportunities possible with this

integrated design3. Move this concept to the specific ownership of the senior

leadership– Involve them in a measurable way to validate vision and

ownership4. Develop scope of the project, “what is in and what is out”5. Establish project team, sponsors, business process owners

Session 4808

10 APO Critical Success Factors(continued)

6. Recognize that planners generally prefer their current system, APO is not a replacement for the current legacy systems…it brings on a new more robust approach

7. Recognize that APO requires master data at the beginning of realization not at the end as does R/3

8. Identify what is required for views, planning, and transactions– Identify the new behaviors and roles for the future state

9. Finalize the project plan (timeline) and commitment of total resources

10. Execute to WIN for the bottom line results…“failure is not an option”…. recognize that this is more than an IT project…it is your business modernization

Session 4808

APO integrated community

liveCache

APO

Optimizer

Core R/3

BusinessWarehouse

APO

R

Sales

Mfg

CustService

Distribution

Customer

Session 4808

Any questions?

Whatadditional questions

do you have?

Session 4808

Thank you for attending!Please remember to complete and return your evaluation form following this session.

Session Code: 4808