1

2
 What is an adaptive supply chain network?
Adaptive refers to the ability to rapidly sense and respond to changing internal and
external conditions.
Network refers to the ability to have real-time collaboration and coordination
across all partners in the supply chain.
An adaptive supply chain network is a community of customer-focused companies that
share knowledge and resources to intelligently adjust to changing market conditions.
Within the adaptive supply chain network, a customer can control business processes
from end to end, allowing seamless collaboration with partners, suppliers, distributors,
and customers. This allows them to:
Increase business visibility,
Accelerate response velocity,
Increase the ability to manage variability,
Raise operational flexibility.
All these changes result in sustainable value creation.

3
 In real life, a supply chain takes the form of supply network rather than a linear chain.
This network can be very complex. It can include many plants and distribution centers
as well as tens of thousands of customers, materials, and resource items.
Often there are different SAP or other systems for each task in the supply chain.
One goal is to map such a network to a relational data structure, but this is difficult.
Another goal is to enable fast navigation between objects. These goals cannot be
achieved with the classical SQL methods.

4
 In the 1980s and 1990s, companies focused on areas like quality and manufacturing
throughput. Buyers purchased products in large lots and assumed the responsibility for
transporting them and warehousing them until they were needed.
Since then, the market has changed and become more demand-driven. Buyers want
just in time delivery of high quality products that are more diverse and often custom-
made. This requires seamless integration of corresponding systems.
Advanced Planning and Scheduling (APS) has been developed to overcome
disadvantages in early solutions, such as MRP.
The APS is a separate system that stores planning data in main memory and includes
optimization for logistic planning.
With an APS system, a company can reduce its inventory and become more flexible,
thus gaining a competitive edge.
Immediate challenge: APS depends on ERP, so there are two systems and two data
pools, therefore an interface is needed between APS and ERP.

5
 The SAP component Advanced Planner and Optimizer (APO) is the SAP solution for
SCM in general and APS in particular.
SAP APO is based on the SAP Basis System and SAP Business Intelligence
Warehouse with the additional components of liveCache and optimizers. The planning
data and mechanisms are represented by objects and held in main memory.

6
 Demand Planning (DP) forecasts future demand for products on the basis of historical
and current sales data. DP uses sophisticated statistical models (like time series). DP
identifies and analyzes patterns and fluctuations in demand and creates accurate,
dynamic demand forecasts.
Supply Network Planning (SNP) matches purchasing, production, and transportation
processes to demand, and balances and optimizes your entire supply network. SNP
makes use of advanced heuristics, constraint based programming, and optimization
techniques such as mixed integer linear programming to simultaneously optimize
distribution, production, and procurement.
Production Planning (PP) and Detailed Scheduling (DS) optimizes the use of
resources and creates accurate plant-by-plant production schedules in order to shorten
production life-cycles and respond rapidly to changes in market demands.
Transportation Planning / Vehicle Scheduling (TP/VS) helps to optimize use of
transport resources (vans, trains, ships, airplanes) to perform deliveries as punctually
and economically as possible. TP/VS is used for short-term, order-based planning (on
a scale of days).

7
 The planning horizons of modules may differ totally from customer to customer
DP for example can be run with monthly time buckets for an horizon of 36 months or
for example with weekly time buckets and an horizon of 3 months.
SNP can for example calculate on daily basis from 4 weeks up to 1 year depending on
the lead time of planning relevant materials.
PP/DS normally runs on a very detailed level ( 6 minutes frames for example ) up to
nearly the maximum lead time of planning relevant materials.

8
 Global Available To Promise (ATP) matches supply to demand on a worldwide scale,
and gives your customers reliable delivery commitments by means of:
Real-time checks against the current production plan
Sophisticated simulation methods, taking capacity constraints into account
Global ATPs multi-level, rule-based availability checking considers allocations,
production, transportation capacities, and costs in a global environment. It takes
alternative locations, products, or components into consideration.
The example shows three areas from a supply chain: customer, sales department, and
plant. The processing steps are:
A customer calls to order some goods
The salesman who is answering the call enters the order temporarily, without
saving it (1)
The availability is checked in the APO system; possible problems are solved by
the salesman in dialog (2)
The salesman creates the sales order permanently (3)
The APO system triggers the creation of a production order in the production
system (4)
The product is shipped to the customer (5).

9
 Supply Chain Cockpit (SCC) is a tool that models, monitors, and manages a supply
chain with a specially designed graphical user interface like an instrument panel. The
SCC provides users with a visual overview of all activities and applications.
The supply chain engineer builds a graphical model of the supply chain.
Through the alert monitor, exceptions are visible as alerts. Settings for alerts can be
defined using profiles (for ATP, PP/DS, VS,...).

10
 This example shows the usage of some major planning modules in APO, especially
Demand Planning (DP).
DP forecasts future demands for products based both on historical and current sales
data. Sales order information can be received from the OLTP system, BW, or legacy
systems.
DP supports collaborative planning among business partners. Collaboration partners
provide inputs to the forecasting run, and perform interactive consensus on forecasting
results.
Before the final forecast is confirmed, it can be released to SNP for rough-cut capacity
planning and then released to the OLTP system (or legacy ERP systems) for MRP
planning.

11
 The SNP module plans supply throughout the entire supply network to meet the
forecasted demands.
In this scenario, the SNP planning run creates or updates planned purchase
requisitions, planned production orders, or planned transport orders. These orders are
created for the end items and for the components modeled in the SNP PPMs.
The independent and dependent requirements of these orders are transferred to the
OLTP system, where confirmed SAP purchase requisitions, planned orders, and
transport orders are created. In the OLTP system, MRP planning explodes the BOMs
and creates the dependent requirements for the remaining components that are not
planned in APO.
In addition, the SNP planning result can be distributed to the supplier for review and
update. The feedback from the supplier allows for additional adjustments of the SNP
planning results.

12
 The PP planning run includes automatic planning, manual planning, and order
processing. The DS planning run includes schedule sequence and optimization. For
products requiring in-house production, APO planning results are transferred to the
SAP OLTP system as confirmed planned orders. In the OLTP system, the confirmed
orders are converted to production orders. During order creation or order release, an
ATP check at component level is activated. PP routines are used to process the orders
through their production life cycles.
In this scenario, planned orders can be created in the OLTP system from MRP runs or
in APO from PP/DS planning. The planner adjusts the planning results against
capacity constraints in APO and updates the planned orders in the OLTP system.
When the planned orders are converted to production orders in the OLTP system, the
APO planned orders are deleted and replaced with production orders.
Before the production order is released in the OLTP system, an ATP check is executed
in APO for component availability. The order release updates statistics in the BW
system. Once the order is released, components are issued against the order. The
goods issue posts material costs to general ledger accounts, and updates inventory
level, material requirements, and BW statistics. Upon completion of the production
process, the order is confirmed and the capacity load is relieved.

13
 As traditional supply chains evolve into supply networks, collaboration becomes
increasingly critical. For manufacturers and their suppliers, successful collaboration
starts with making sure that everyone has easy access to inventory information, so
suppliers know what their customers need and when they need it.
The SAP Supply Network Collaboration (SAP SNC) as an application component of my
SAP SCM solution is an Internet-based software application designed to help you to
enhance visibility and collaborate more effectively with suppliers. With SAP SNC, you
can share your supply network partners inventory information easily and seamlessly.
SAP SNC is based on the SAP Supply Network Collaboration application, formerly
known as SAP ICH (Inventory Collaboration Hub).
Please obey : for the SNC scenario a PI system is mandatory.
SAP SNC is a completely web-based solution
Browser-based GUI
WSDL-based web APIs.

14
 With SAP Event Management, customers manage processes, inventories, assets, and
partners by defining and monitoring event handlers across the supply chain enabling
everything from simply tracking shipments to sophisticated monitoring of complex
business flows within major processes. SAP Event Management (SAP EM) allows you to
track goods movements and to query the process status of the movement flows at any
time.
You can specify reactions to critical situations. For example, SAP EM can send a warning
as an e-mail.
SAP EM is an application component of my SAP SCM solution.

15
 SAP Forecasting and Replenishment optimizes the internal logistics of retail companies by
improving the replenishment processes.
It aims to:
Optimize the internal logistic of retail companies
Cut surplus stock
Reduce stockouts
Minimize manual activities
Increase transparency.

16
 Extended Warehouse Management (EWM) offers you flexible, automated support for
processing various goods movements and for managing stocks in your warehouse complex.
The system supports planned and efficient processing of all logistics processes in your
warehouse.
If you manage your warehouse stocks using the application component Inventory
Management (MM-IM), then you manage the material stocks based on quantity and value in
several storage locations.
In contrast, EWM gives you the option of mapping your entire warehouse complex in detail in
the system, down to storage bin level. Not only do you gain an overview of the entire quantity
of a material in the warehouse, you can also always determine exactly where a certain
material currently is in your warehouse complex. With EWM, you can optimize the use of
various storage bins and stock movements, and can store together material stocks from
several plants in random storage areas. Using EWM, you can control and optimize various
processes in the warehouse.
EWM is completely integrated into Inventory Management and Delivery Processing. Business
processes, which you trigger in other application components, lead to physical goods
movements in your warehouse. You organize, control, and monitor these goods movements
using EWM.

17
18
19