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Very often I come across the opinion that SAP ERP Sales & Operations

Planning does not work or can not be used effectively. Nothing could be further

from the truth. It is a very powerful, fully functional, bug free planning tool

which perfectly integrates into your ERP operational systems. It is just

documented very poorly and requires a lot of figuring out. But you own the

license… so use it! Even SAP says “we don’t support those info structures

anymore”. And thank you SAP, but I don’t need support anymore, because

you did a great job making it run perfectly and without glitches.

One of the things that APO can do over and above S&OP is

a global ATP check, but if you are ok with the fact that your China plant does

not ship immediately to your customer in Nashville when you don’t have the

product immediately available there, you should be fine. (besides… if you use

the graphical distribution network tool in ERP DRP, and you set your MTS and MTO

ATP checks correctly, you should be able to avoid that situation altogether. But

more to that later…). Sometimes I hear the complaint that the planning process

with ERP info structures is slow and cumbersome. In all those cases, the client

was using flexible planning with their own info structures – because they did

not think standard S&OP would work for them, but in all cases it would have.

In every single case these newly defined info structures were set up with

planning method “consistent planning”. “consistent planning” means that when you

have a multi level planning hierarchy and you edit a planning number on the

middles level, the system runs off aggregating and disaggregating throughout the

entire hierarchy. And it does so every time you call up the planning table. That

takes up a lot of resources and takes a long time. Standard S&OP info

structure S076 uses “level-by-level” planning (and so should your own info

structures) and you can plan quickly and efficiently on any level before you

explicitly aggregate or disaggregate to the level which you want to transfer to

demand management. Honestly, do you really want to aggregate and disaggregate

constantly while you are planning your 12 months forecast? Or do you want to

plan until your done and then disaggregate and transfer the demand to the

operational system? As you can see, very often the discontent with the planning

system does not derive from a lack of functionality, but rather from inefficient

use of the existing tools and functions… and of course, from a lack of education

about the use of these tools. Standard ERP S&OP has all the functions for

the generation of a forecast based on many inputs inside or outside the SAP

system and it does so with very sophisticated parameter profiles. With planning

hierarchies and planning tables you have full control over future events, past

consumption smoothing or any other adjustment functions. You can then aggregate

or disaggregate from the planning level to the execution level and automatically

transfer to ERP demand management. Here, the strategy group comes into play (one

of the least understood elements in the SAP supply chain) and automatically sets

all parameters necessary to distinguish between MTS, MTO, ETO, CTO or ATO during

execution. But before you transfer the demand you can even perform rough-cut

capacity checking, which is based on the planned available capacity in the

plant, so that the planner already executes some smoothing in the preliminary

stages. Big integration going on here! There is much more, but I don’t want to

miss out talking about the info structure S075 which is the one used by ERP DRP.

It is another standard info structure (this time with “consistent planning”, so

the planning structure should not be too big) but this one allows you to combine

it with the graphical distribution network in ERP (yes, ERP has very efficient

graphical planning tools). Here you can plan on an aggregated level and, as with

S076, transfer the result to demand management. In the graphic you are able to

maintain lead times and quotas between plants and DC’s, monitor inventory levels

in the locations as well as what’s in transit, and deploy superfluous plant

stock with a push rule to the warehouse or transfer insufficient inventory with

a fair share rule. All this stuff is usually not touched on during the

implementation. And how many of you have started a exploration program to make

better use of SAP ERP functionality? More often, the system is judged to be

lacking functionality and either a work-around is developed or an add-on system

is purchased to deliver the functionality – with big integrational and monetary

sacrifices.

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