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.
