Logistics Engineering
Introduction to SCM
– SAP APO
EIN 5346 Logistics Engineering
Fall, 2015
Objective
1. Gain hands-on experience with SAP APO
(APO - Advanced Planner & Optimizer)
- Supply chain management concepts
- SCM master configuration
- SCM integration, data transfer
- Supply network planning and optimization
2. Gain hands-on experience with Magaya
(Magaya - A software for logistics industry)
- Basic activities in Warehouse set up and operations
- Shipments by air
- Shipments by ocean
- Wholesaler management (Process PO & Sales orders)
http://www.magaya.com/en-us/Solutions
SCM Scope
Multiple facility SCM
◦ Integrated planning for the entire supply chain
network
◦ Multiple plants and distribution centers
◦ Multiple vendors
◦ Multiple customers
◦ Multiple transportation options
ERP Operations related to SCM
Related ERP Modules and activities
◦ Materials Management (MM)
◦ Production Planning (PP)
◦ Sales and Operations Planning (SOP)
◦ Forecasting
◦ Master Scheduling
◦ Capacity Requirements Planning
ERP & SCM Basics (SAP View)
SAP ERP (Enterprise Resources Planning):
◦ Holds master data for materials, plants, customers,
vendors, purchasing information records
◦ Holds transactional data (e.g., sales orders, planned
orders)
◦ Is where SCM plans get executed
SAP SCM (Supply Chain Management):
◦ Is where “advanced planning” happens
◦ Imports master and transactional data from ERP
◦ Sends plans back to ERP for execution
ERP Core Interface (CIF) SCM
(APO)
Supply Network in SAP SCM (Domestic)
Customer
Vendor
Distribution center Plant
Supply Network in SAP SCM (International)
Common Supply Chain Processes
VMI: vendor managed
inventory
Characteristics of the SC Network
Each node may consist of a production
system of its own
Links in the network represent a business
relationship between two nodes
• e.g. transportation of a product between two nodes
Number of levels in a supply chain varies
and depends on the complexity of the product
Characteristics of the SC Network
• Multiple Products, each with possibly different Bills of
Material and multiple configurations
• Multiple Suppliers for raw materials, parts or
subassemblies
• Multiple Subcontractors
• Multiple Plants possibly containing a wide variety of
equipments
• Multiple Warehouses
– Distribution centers, local, regional and factory warehouses
• Different means of Transportation (air, sea, rail, FTL,
LTL) either leased, owned or contracted
• Different information systems and communication
channels
• People with various skills at all levels of the organization
FTL – Full Truck Load
LTL – Less than Truck Load
Example of Costs and Revenues in
the Supply Chain
• Costs
– Production and purchasing costs
– Setup or changeover costs
– Transportation and handling costs
– Hiring and firing costs
– Overtime costs
– Inventory costs
– Promotional and advertising costs
– Renting and leasing costs
– Subcontracting costs
– Overhead
– Capital investments and depreciation
– Taxes and duties
• Revenue
– Customer is the only source of revenue
• From sale of products, spare parts, materials or service
Example of Constraints
• Productivity constraints
• Equipment capacity constraints
• Labour availability
• Technological constraints
• Inventory constraints
• Purchasing, manufacturing and distribution
lead times
• Demand uncertainties and seasonalities
• Service requirements
• Budget
• Regulations and other constraints
Hierarchical Planning
• Hierarchical planning - a three level
management framework:
– Strategic or long-term planning
– Tactical planning (or management control) for
mid-term planning
– Operational planning for short term planning
• Results of one each level are considered as
an inputs to the lower level planning
• Effective implementation and control of the
plans requires:
– An execution layer
– Feedback loops at all levels
* R.N. Anthony, Planning and Control Systems: A Framework for Analysis, Cambridge. Mass., 1965
Hierarchical Planning Framework
Procurement Production Distribution Sales
-Material programs - Plant location - Physical distribution - Product program
Long term - Supplier selection - Production systems structure - Strategic sales
- Cooperation - Subcontractors - Transportation strategy planning
-- Personnel training -- Master production Scheduling
-- Contracts -- Capacity planning -- Distribution planning -- Mid-term sales planning
Mid term -- Material Requirements
Planning
-- Personnel scheduling -- lot-sizing - Warehouse replenishment
-- Material ordering - operations scheduling - Transportation planning -- Mid-term sales planning
- shop floor control
Short term
EXECUTION
Flow of goods Information Feedback
Differentiating Factors by Planning Levels
Factor- Level Strategic Tactical Operational
Purpose Supply chain design, Planning resource Operation scheduling
resource acquisition utilization and execution
Implementation Policies, objectives, Budgets Schedules,
instruments capital investment procedures and
reports
Planning horizon Long: 3-5 years Medium: 6-18 Short: daily, weekly,
months monthly
Scope Broad Medium Short
corporate level plant level floor level
Level of Top Middle Low
Management
Frequency of Low: every few Medium: monthly or High: weekly, daily
re-planning years quarterly or as required
Source of Largely external External and internal Largely internal
information
Level of aggregation High Medium Low
- product data Product families Product groups individual products
- time years Month continuous
Degree of High Medium Low
uncertainty
Degree of risk High Medium Low
Introduction to SCM
and SAP APO
SAP Implementation
SAP Business Suite
SAP PLM
SAP
SAP SAP
SRM
ERP Central Component CRM
(ECC)
SAP SCM
SAP NetWeaver
SCM – Supply Chain Management
SRM – Supplier Management
CRM – Customer Relationship Management
PLM – Product Lifecycle Management
Planning with SAP ERP & SCM
Basic Components of SAP SCM
SAP SAP SCM
(includes SAP BW)
ECC Core Interface (CIF)
ERP (APO)
• Mater data • Demand Planning
•Materials • Supply Network Planning and
•Locations optimization
•Partner • Production Planning with capacity
•Plants considerations
•Info records • ATP (Available-To-Promise)
• Transactional data • CTP (Capable-To-Promise)
• Customer orders • Detailed Scheduling
• Production orders • Deployment
• Purchasing orders • Transportation planning
• Execution • Vehicle routing and scheduling
Planning at Supply Chain Level
SAP
ECC 1
Core Interface
SAP SAP
ECC 2 SCM
(APO)
- Planning may be done
centrally
SAP
ECC n
- Each SAP ECC component covers one
or more locations
In the network
Supply Planning Tasks and Output
for SCM
• Tasks • Outputs
– Identify sources for – Purchase requisitions
finished products – Stock transport
– Planned production
– Plan and consider orders
safety levels in any
location
– Distribute production
over plants
– Choose production
resources in plants
– Explode bill of materials
in plants
– Identify sources for
supply of raw materials
and components
SAP Access through SAPGUI
SAPGUI Download
The latest SAP GUI release posted on SAP
@CSU, Chico web server
http://worker.cob.csuchico.edu
User = sap; Password = sapgui4me.
This GUI works on Windows 7 and 8
systems.
SAPGUI Download Instruction
SAP SCM ERP/APO server, Clients,
Userid, Password
SAP SCM ERP Server: BRISTOL
Client: 420
Userid: gbi-051 to gbi-074
Initial password: SAP4US
SAP SCM APO Server: RIGA
Client: 420
Userid: gbi-051 to gbi-074
Initial password: SAP4US
SAPGUI Setup SAP ERP
SAPGUI Setup SAP SCM
Teams
No. Name Userid Password Group
1 Martinez,Diego Hernan gbi-051 SAP4US 1
2 Fan,Yuhan gbi-052 SAP4US 1
3 Reyes,Evis gbi-053 SAP4US 1
4 Suarez,Rolando gbi-054 SAP4US 1
5 Espinoza Acosta,Sigfredo Alejandro gbi-055 SAP4US 2
6 Ahmad,Mohamed Nathmi gbi-056 SAP4US 2
7 Deonarinesingh,Parvesh gbi-057 SAP4US 2
8 Poosti,Mehrnoosh gbi-058 SAP4US 2
9 Lucia,Francesca gbi-059 SAP4US 3
10 Duran Arboleda,Edith Estefania gbi-060 SAP4US 3
11 Quezada Rivera,Rosirys Elena gbi-061 SAP4US 3
12 Velez Gonzalez,William-Jose gbi-062 SAP4US 3
13 Samson,Pierre- Richard gbi-063 SAP4US 4
14 Antonio,Joao R gbi-064 SAP4US 4
15 Beatty Jr,John Lowell gbi-065 SAP4US 4
16 Escobar,Isabel gbi-066 SAP4US 4
17 Decker,Andrew Phillip gbi-067 SAP4US 5
18 Moacys, Paulo gbi-068 SAP4US 5
19 Zhao,Yi gbi-069 SAP4US 5
20 Hodgson, Evelyn gbi-070 SAP4US 5
21 Castillo,Richard Alexander gbi-071 SAP4US 6
22 Bellini,Alejandro gbi-072 SAP4US 6
23 He,Jiamu gbi-073 SAP4US 6
24 Hegazy,Khaled Ahmed Mohamed Hasan gbi-074 SAP4US 6
Exercises: (Due date 11/28/2015)
(Access SAP SCM ERP server: Bristol, client 420)
1. Overview of Global Bike International (GBI) company.
2. Change data in ERP to prepare for SCM
1) Distribution centers
2) Material types
3) Assign transportation zone to customers
3. Add & change data to prepare for SCM
1) Create production version for materials in ERP
- Define distribution key
- Create production version
