Important components of SAP APO used in Supply Chain

A) APO Demand Planning

To run successful business, market forecasting and planning is an important factor. “Demand Planning” is the art of understanding customer’sfuture demand and execution of such demand by corporate supply chain and business management. It provides advance forecasting and demand planning tools that help companies to identify changes in demand as early as possible. Marketing and promotion is also done on the basis of the forecast of market demand.

B) APO Supply Network Planning

SNP (Supply Network Planning) integrates information on purchasing, manufacturing, distribution and transportation so that tactical planning and decision can be made and implemented based on a single consistent model. Based on heuristic and mathematical optimization methods, SNP ensures that organization or company meets the demand and performs activities like transportation, production and warehousing resources.

C) Production Planning and Detailed Scheduling (PP/DS)

It allows manufacturing units to plan material and critical resources in optimal fashion.  A frequent demand of manufacturing units is to produce with limited resources.

PP/DS helps to analyze the lead time and resources required for production.  You can reduce the inventory cost, increase on-time delivery performance, and reduce lead time for the product using PP/DS.

D) Global available-to-promise (global ATP)

The purpose of “Global available-to-promise” is to determine whether the requested product by the customer would be available on given or promised date.  The process deals with improving, on time delivery performance, planning system integration and sufficiently increasing stock to buffer inventories.

E) Transport Planning and Vehicle Scheduling (TP/VS)

By opting for best and short route of transportation, company can save time, money and fuel spent for transporting and delivering goods. TP/VS provides transportation planner and schedules the routes at lower transportation cost. It offers functions like shipment consolidation, route determination, carrier selection, multi-pick and multi-drop etc.

Benefits of using SAP APO
Increase in revenue
Improve profit margins
Reduce purchasing costs
Reduce production and logistic costs
Improved inventory management
Improved Management

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