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In today’s modern enterprise world, companies strive to stay ahead of their competitors by constantly upgrading their supply chain management system with a degree of effectiveness. ERP has fastest growing market. The slogan goes “The Best-Run Businesses Run SAP”.

SAP Advanced Planning and Optimization is the heart of Supply Chain Management (SCM). SAP APO is a key component and forms basis for many SAP modules. It avails functionalities of planning and optimization in the various end to end business processes. APO enables forecasting, planning, and optimization. It seamlessly links all the processes, ranging from order generation, production planning, and transportation. It reduces costs by improving customer service. SAP APO is highly preferred after implementing R/3 module and provides a solid on-premise planning option. It enables synchronize business process of various departments. Planning and optimization algorithm provide solutions to several complex problems. It’s full palette of functions is used to plan and execute company’s supply chain processes. SAP APO supports:

  • Collaboration of business on an operational activity level.
  • Co-operation between partners at all stages of supply chain process.
  • Maintaining relationships between customer and business partners.

·         Optimization and evaluation of supply chain network’s efficiency.

Modules of SAP APO:

SAP APO is not a standalone product, but integrates with SAP ERP that supplies data in real time.

  • Demand Planning: Generates forecast and market research for products.
  • Supply Network Planning: Designs plans for distribution, production, and replenishment.
  • Production Planning and Detailed Scheduling: Evaluates detailed security check.
  • Global Availability: Replenishes and delivers on-time.
  • Transportation Planning and Vehicle Scheduling: Plans transportation routes.
  • SCC (Supply Chain Cockpit): controls and manages the supply chain with a graphical instrument panel. Demand, strategic and production planners use SCC.

Using APO

Optimizer is a bit difficult to use since after every usage as it depicts a different answer. So, optimizer must be restricted to changes in business components that are sourced quickly.


These are customizable calculations (create orders using specific parameters) based on underlying algorithms, to accomplish a particular task. They cope with APO readily. Automatic planning can be set each time a change happens.

When an order is raised on APO, it gets worked on core SAP. Optimizer can be set and given certain limited time to do applications.

APO Diagnostics:

It assesses from different angles so as to bring added value to the organization. APO enhances supply network through strategical, tactical and operational planning capabilities. It optimizes supply chain by integrating forecasting, manufacturing, distribution and transportation into a consistent model. Through integration, APO improves the flow of materials in the supply chain and ensures this network meets the needs of businesses.

CSC has designed an architecture termed as APO Diagnostics that unleashes the full potential of APO system.


SAP APO is by far the best component that supports Supply Chain Management. Because of its open architecture, it is open to future enhancements and improved optimization algorithms. Recently, newer application, namely Supply Network Collaboration (SCN) has made the collaboration of suppliers and customers possible.

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