SAP is constantly modernizing its products to help customers implement industry best practices, respond to ever-changing market conditions, and stay ahead of their competition. One of those products is the SAP Advanced Planning and Optimization (APO) supply chain planning system.

SAP APO is a suite of supply chain planning applications that provide forecasting, planning, and optimization tools. In this article, we’ll break down the different application levels within SAP APO and explain the benefits you’ll experience with the solution. Let’s dive in.

Core Components of SAP APO 

SAP APO is one of the most important components of SAP Supply Chain Management. APO also integrates with SAP Enterprise Resource Planning (ERP), which supplies it with master, transaction production, sales, and material data in real time. Let’s examine each component in APO a bit more closely. 

Demand Planning

Demand Planning (DP) helps you better understand your customers’ future demands so that you can deliver from a supply chain and business management standpoint, and includes advanced forecasting and demand planning tools. With the demand planning library of statistical forecasting and advanced macro techniques, it’s easier than ever to create forecasts based on demand history and other factors, test forecast models and results, and adopt a consensus-based approach to reconcile the demand plans of different departments. Marketing and promotion can also be executed by forecasting market demand using this application. 

Supply Network Planning

Supply Network Planning (SNP) integrates manufacturing, purchasing, distribution, and transportation, allowing you to use a consistent model for tactical planning and sourcing. SNP also uses advanced optimization techniques based on penalties and constraints to make it simpler to plan product flow throughout the supply chain, resulting in optimized production, purchasing, and distribution. By taking advantage of both heuristic and mathematical optimization methods, you can ensure that your company meets demands and that transportation, production, and warehousing resources and operating at peak performance. 

Production Planning and Detailed Scheduling

Production Planning and Detailed Scheduling (PP/DS) allows manufacturing units to plan material and other critical resources by analyzing the lead time and resources needed for production. For example, the application can plan for products that require a long replenishment lead time or products produced on bottleneck resources. The results? Reduced inventory costs, increased on-time delivery performance, and lessened lead times (not to mention happier customers).

Global Availability to Promise

This application is used by companies that manufacture and sell products on a global scale. An availability check is performed on required items, existing product allocations, and a forecast check. The availability check on required items is performed on the available to promise quantity, which is then calculated from the current stock, planned receipts, and planned requirements. The tool automatically checks stock and planned goods movements, as well as for products that require longer shipping times due to certain region requirements. This forecast check allows you to identify if there are enough planned independent requirements available for the sales order, something that might get missed otherwise.

Supply Chain Cockpit

Supply Chain Cockpit (SCC) consists of a graphical instrument panel for managing and controlling the supply chain, one that can be configured to conditions within many different industries and business situations. SCC now only allows you to view the entire supply chain from every angle, but you can drill down to the smallest detail. It can also be used to minimize the complexity of relationships among supply chain components and makes dealing with a complicated supply chain much easier and far more manageable. 

Benefits of Using SAP APO

SAP APO is used throughout every industry around the world. Here are some of the benefits companies gain by using SAP APO:

  • Enhanced supply and demand planning for internal and external supply chains
  • Improved forecast accuracy and fewer inventory buffers
  • Increased revenue and improved profit margins
  • Optimized production planning for all of your factories
  • Reduced purchasing, production, and logistics costs
  • Reliable sales order confirmation dates

Getting Started with SAP APO

SAP APO is one of the best solutions that supports supply chain management, and our US-based SAP consulting team can help you take advantage of all its features to gain more out of your solution. We’ve worked with many different companies in a wide variety of industries on their APO setup, giving us plenty of unique insights we’re ready to share with your team.  Let us help you with your SAP APO success and contact us today.