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Monday, September 27, 2021

2021 SAP Production Planning Solutions



SAP, began as an Accounting Software in 1973; initially marketed as "RF" but later changed its name to "SAP R/1". It is not until 1979 and early 80s, when SAP R/2 expanded the capabilities of the system to Materials Management (MM) and Production Planning & Execution (PPDI) for Discrete Manufacturing.

Joseph Orlicky developed the concept of MRP in the 1960s, computerized Materials Requirements Planning (MRP) system grew from 700 to 8000 in the 70s; most if not all of them running on Mainframe computers then. In the 1980s, Oliver Wight developed MRP into Manufacturing Resource Planning (MRP II). Joe Orlicky's MRP with the basic purpose of Material Plan Calculations from the Bills of Materials evolved into Oliver Wight's MRP II system which now includes extending Material Planning to Master Scheduling and Capacity Requirement Planning. Oliver Wight also introduced Sales and Operations Planning (S&OP) to the MRP II system in 1983. It is in the 1980s, with SAP R/2 that introduced the MRP II system connecting to the company's Accounting System. 

From SOP - Master Production Scheduling (MPS) - MRP - Discrete Manufacturing Production Execution, the crux of the Production module was also its integration to Material Management, Sales, and the Financial System; and MRPII system became popular in the 1980s via both Mainframe and Mid-range computers, and later Personal Computers. By the end of the 1980s, there are maybe 3000 or more MPRII commercial solutions with 1/3 or more sold to American businesses. It is also not until mid 1990's that SAP expanded from Discrete Manufacturing (PPDI) to Process Manufacturing (PPPI) with Recipe and Process Management integration. But for 20 years from 1980s to before 2000 (from R/2 to R/3), SAP PP module runs in an "Infinite Capacity" engine where there were no Optimization. Capacity Plan is calculated as a 2nd step after the Material Plans are calculated in step 1. Planners review any "overloads" in the Capacity Plan and change the "Master Plans" iteratively until a Feasible Production Plan were derived through the iteration process. 


Traditional production planning and scheduling systems (such as manufacturing resource planning) use a stepwise and iterative procedure to obtain a feasible material and production capacity plan, that is what SAP R/3 is offering via its PPDI and PPPI modules with its Infinite Capacity Engine. SAP's APO is the SAP's APS solution that offers "Finite Capacity and Scheduling" and more.

The solution to the cumbersome iterative nature of "Finite Capacity" based MRP II solutions was the Advanced Planning and Scheduling solution (APS) with Finite Engine or Optimization capability to generate "Optimal" or "Near Optimal" Production Plans and Schedules. The 1990s saw significant computing power increases as well as data storage capacity, and this is where APS solutions starts emerging in the market to address issues MRP II systems were facing then. 

SAP's answer to this requirement is the introduction of "Advanced Planner and Optimizer" (APO) in 1999-2000s. This is possible due to the SAP liveCache technology as part of the APO solution, significantly increases the speed of the algorithmically complex, data-, and runtime-intensive functions of of the Optimization engines. 

While the data source and target of R/3's S&OP is Info Structures, APO's Demand Planning (DP) now uses the Info Cubes from its new SAP Business Warehouse (BW) system. APO DP improves upon the R/3 SOP with advanced Forecasting, better Macro, and interfaces for mid-term and long-term Planning. APO also introduced SAP solution to Optimize Supply and Deployment Planning for the company's Supply Chain "effectively replacing" R/3's Distribution Requirement Planning (DRP) which never really got any attention or even development attention! (the DRP node is no longer found in S/4 systems)

In the R/3 or ECC system, both the S&OP and Long-term Planning (LTP) can be in Simulative modes with S&OP versions and LTP Scenarios. In the APO system, whether it is DP, SNP, or PPDS, all of these Planning modules can be executed via Active (000) or non-Active Versions (other than 000). R/3's LTP, MPS, and MRP can be done via PPDS (with its Active and Non-Active Versions). Both SNP and PPDS offers Optimization logics to obtain a Plan with Finite Capacity being considered in the Planning runs. 

Demand Planning (DP) - obtains sales history from SAP and non SAP systems via BW Info Cubes, store in LiveCache and with Advanced Forecasting techniques to obtain Product or Product Group forecast for mid-term and long-term planning. APO introduced Promotion Planning, Life-Cycle Planning (new model introduction and old model obsolesce), Macros are some of the tools available in the DP interactive planning book. 

DP results are then transferred to Supply Network Planning (SNP) for Supply Chain Planning. SNP Optimization engines with Capacity Constraints and Capable-to-Promise (CTM) ensures the optimal uses of Manufacturing, Distribution and Transportation of Resources to fulfill Customer Requirements. 

The traditional ATP in R/3 or ECC are Local (Plant-Specific) Available-to-Promise Logic; APO introduced rule-based Global Available-to-Promise (GATP) with multiple location ATP Logic. R/3 or ECC Sales Orders can now "CIF-ted" (send to) to APO for GATP to determine the "Optimal" Supplying Plant, and return this result for Order-Promising with the Customer. 

Our classic Exception Messages found in MRP List or S/R List in R/3 or ECC are now configurable in APO via its Advanced Alert Messages available for DP, SNP, and PPDS. 

Two more modules worth mentioning in the APO system is the EWM and TPVS. SAP WM was the company's first foray into a specific Warehouse Management Solution, first in R/2 (1992) and later a more complete version in R/3 (1995). SAP recognize the need to extend its Logistics solution to the outside world; hence the transportation module (initial for Outbound) was developed and later became a standard for SD as the standard Outbound Delivery process. 1998 is where Logistics Execution (LE) become a separate module, initially with WM, Outbound Delivery, and Transportation. From 2000 to 2005, SAP introduce Radio Frequency (RF) for LE-WM, and then Task and Resource Management (T&RM) to map the Warehouse processes in more detail. Then came Direct-Store-Delivery (DSD) and Yard Management (YM); these are the Initial developments of the EWM solution in the SAP Back-end systems (from R/3 to 4.7, 5.0, then ECC6.0). SAP moved its entire Extended Warehouse Management (EWM) development to the APO system to take advantage of its LifeCache Technology and its capability to also used by both SAP and non-SAP backend solutions. On the other hand, if you look at the R/3 or ECC LE-Transportation module which continue development as a Transactional module to manage both Inbound and Outbound Processes with integration to Vendor Invoice and Customer Billing for Transportation costs incurred. SAP Transportation Planning and Vehicle scheduling (TPVS) is used to Plan, Optimize, Shipments and transfer to ECC for execution to complete the transportation process between companies in a detailed manner.
  • APO 2.0 (1999)
  • APO 3.0, 3.1
  • SCM 4.0, SCM 4.1
  • SCM 5.0
  • SCM 2007 / SCM 5.1 (2007) (APO, SNC, SPP, EWM, TM, EM)
  • SCM 7.0 EhP4 (2016) last known release
 


And beyond the ECC and APO solutions for Classic and Advanced PP Planning, SAP introduced S/4 HANA in 2015 offers both the Classic as well as Advanced Planning in a single system. 

SAP S/4 HANA, offers both the Classic Planning (SOP - LTP - MPS - MRP) except DRP (which is now obsolete in S/4). With the HANA technology, APO PPDS from Advanced Planning (APO) has been included in the S/4 system. All in a single login, meaning there is no need to Core-Interface (CIF) data between 2 systems. Planning can now be either via the Classic SOP - LTP - MRP - MPR or the PPDS advanced Planning in the same HANA database. More over, the introduction of MRP Live allows Planner to combine both Classic MM-CBP, PP-MRP and APO-PPDS for different parts of the BOM within a single system. The S/4 All-in-One "Improvised Classic Planning" and "Advance" Planning Architecture for PPDI and PPPI and its continuous fine-tuning and development certainly make PP Planning Solutioning very exciting. 

Also the entire APO-EWM system is now within the S/4 backend. This means that within an S/4 system, we can have either choice of MM Rough Storage via Storage Location, the Classic WM, as well as Extended Warehouse Management (EWM). The APO Advanced Alerts are also now available in S/4 for both PPDS and the EWM system. 

APO's Global ATP (GATP) is now called Advanced ATP (AATP) in S/4 HANA. Not just Rule-Based ATP check, AATP also provides Advanced Rule-based Back-Order-Processing (BOP) for SD Sales Order and some other functionalities. APO's TPVS is now called S/4 Transportation Management (TM). TM offers 2 deployment option: one is the Embedded scenario in S/4HANA, and another is Standalone scenario in S/4HANA ) (ie: A dedicated Transport management system for multiple ERP instances or multiple S/4HANA systems). The same deployment options are also TRUE for the S/4 EWM system. 

The previous release of S/4 is called "SAP S/4HANA 1909", with a nomenclature of "YYMM" where "19" of "YY" means 2019 and "09" or 'MM" means September which means Release "1909" came out in 2019 September. And interesting to note the last Release was called "SAP S/4HANA 2020" where the new nomenclature is now "YYYY" instead of "YYMM", "SAP S/4HANA 2020" was Released in year 2020 October!
On the other hand, the last release of SAP S/4 HANA Cloud is called "SAP S/4HANA Cloud 2011" with nomenclature of "YYMM" thus was available in November 2020.


APO DP and SNP were not included in SAP HANA S/4 backend. Both these Planning levels are now offered in the SAP Cloud-based Integrated Business Planning (IBP) solution. 

There are 5 modules offered via the SAP Cloud IBP Solution and the main Planning interface is via "IBP Add-in" in EXCEL while access to Web-Based Planning, Analytics and IBP setup are via SAP Fiori. The main advantage of using Excel is user familiarity of the tool as well as providing What-If Scenario Planning and Simulations capabilities. Once the Planning area is loaded, user can work Offline and once planning is completed can Online again to synchronize the planned data to the IBP Cloud database.

IBP for Demand - "enhances and complements" the APO DP planning step. And this is the starting point of the Planning scenario. And everything is done via an EXCEL spreadsheet with IBP Add-in, taking historical sales data and uses forecasting technique to obtain a demand plan. Not just a tool for mid-term and long-term horizon forecasting but IBP for demand also offers "demand sensing" tools to response to stock and demand changes in the short term. 

IBP for S&OP - Provides a sales plan to maximize business results according to your corporate strategy. 

IBP for Inventory - is a tool to calculate optimal Safety Stock. Fundamentally to obtain an Optimized Inventory that balances the Service Level, Inventory levels, and Stock holding costs (that familiar EOQ mathematics). SAP IBP for Inventory offers advance Global (Multi-Echelon) Inventory Optimization operator to calculate recommended safety stocks across all products and locations of the supply chain.

IBP for Response & Supply - "enhances and complements" the APO SNP planning step to obtain an optimal supply (both finite and infinite supply planning) and deployment plan in the mid-term and short-term horizon. enables an enterprise to adapt and react quickly to changes and fluctuations in demand, by taking into account the impact on the entire supply chain, including production, procurement, and distribution in order to better fulfill customer needs.

IBP Control Tower - Monitoring tool for Supply Chain Analytics in Real time. It creates an end to end visibility of the supply chain along with a real time integration with SAP HANA Cloud IBP data sources.

The first release of SAP IBP was probably somewhere late 2018 or 2019; and the latest release of SAP IBP was August 2021 called "SAP IBP 2108", "YYMM" nomenclature, with the first two digit means the year of the release which is 2021 and last two digits means the month of the Release which is August. 

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