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Enterprise Systems Enterprise Systems Optimization Optimization Course Overview Course Overview EGN 5623 Enterprise Systems Optimization EGN 5623 Enterprise Systems Optimization (Professional MSEM) (Professional MSEM) Fall, 2011 Fall, 2011
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Page 1: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Enterprise Systems Enterprise Systems OptimizationOptimization

Course OverviewCourse Overview

EGN 5623 Enterprise Systems OptimizationEGN 5623 Enterprise Systems Optimization (Professional MSEM) (Professional MSEM)

Fall, 2011 Fall, 2011

Page 2: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

ContentContent

Course objective

Course organization

Introduction to Global Bike International Co. (GBI)

Page 3: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Course ObjectiveCourse ObjectiveSupply chain management (SCM) concepts,

modeling, configuration, integration, data transfer, and supply network planning and optimization.

With a focus on SAP implementation

Page 4: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SCM ScopeSCM ScopeSingle facility SCM

◦Increased planning capabilities for a single facility

◦Finite-capacity scheduling

Multiple facility SCM◦Integrated planning for the entire supply chain

network◦Multiple plants and distribution centers◦Multiple vendors◦Multiple customers◦Multiple transportation options

Page 5: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

ERP Operations related to SCMERP Operations related to SCM

Related ERP Modules◦Materials Management (MM) and Production

Planning (PP) modules◦Sales and Operations Planning (SOP)◦Forecasting◦Master Scheduling◦Material Requirements Planning (MRP)◦Capacity Requirements Planning (CRP)◦Order release and receipt

Page 6: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

ERP & SCM Basics (SAP View)ERP & SCM Basics (SAP View) SAP ERP:

◦ Holds master data for materials, plants, customers, vendors, purchasing information records

◦ Holds transactional data (e.g., sales orders, planned orders)◦ Is where plans get executed

SAP SCM:◦ Is where “advanced planning” happens◦ Imports master and transactional data from ERP◦ Sends plans back to ERP for execution

ERP SCMCore Interface (CIF)

Page 7: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SCM Exercises Plan with GBI v 1.0SCM Exercises Plan with GBI v 1.0 Section 1:

◦ Review and create Master data (Modules 1 – 3) Section 2:

◦ Configuration and Integration (Modules 4 – 9)◦ Create forecast in SAP ERP◦ Port master and transaction data from ERP to SCM◦ Add additional master data in SCM

Section 3: ◦ Planning in SCM (Modules 10-12)

Supply Network Planning (SNP) Heuristics Deployment and Transport Load Builder (TLB) Capable to Match (CTM)

Page 8: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Modules related to ECC and SCMModules related to ECC and SCM The products and modules involved in the SCM exercises

are:◦ ERP (ECC 6.0):

MM, PP, SD

◦ SCM 5.0: DP (Demand Planning), SNP, and Deployment

Page 9: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Exercise SequenceExercise Sequence

Section 1A: Planning in SAP

ERP

Section 2: Integrating ERP &

SCM

Section 3: Supply Network Planning in SCM

Section 1B v2: Prep for SAP

SCM

Page 10: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1A: Section 1A: Planning and Planning and Execution in ERPExecution in ERP

Objective: ◦ Introduction to the MM, PP, and SD modules in ERP

Focus on planning and control functions. ◦ Master Data I: Material Masters◦ Master Data II: BOMs and Routings◦ Forecasting and Sales and Operations Planning◦ Master Scheduling and Material Requirements Planning◦ Purchasing and Financial Accounting

Page 11: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1B: Section 1B: Prepping the Master Prepping the Master Data in SAP ERPData in SAP ERP

Objective: ◦ Prepare master data in ERP for transfer to SCM

Focus on planning and control. ◦ Module 0: Overview of the Global Bike Company.◦ Module 1: New Master Data for the Ridge Front Bike Family◦ Module 2: Change Master Data to Prepare for SCM◦ Module 3: Add Master Data to Prepare for SCM

Page 12: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 2: Configuration and Section 2: Configuration and IntegrationIntegration Objective:

◦ Transfer master Data from ERP to SCM and review transfer in SCM

Focus on data transfer and its for automation (especially with Modules 5-7)◦ Module 4: Creating forecast for finished products◦ Module 5: Master data transfer from ERP to SCM◦ Module 6: Production Data Structure in SCM◦ Module 7: Transfer of transactional data from ERP to SCM◦ Module 8: Maintain Supply Chain model in Supply Chain

Engineer◦ Module 9: Setup of transactional data transfer from SCM

to ERP

Page 13: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 3: Planning in SNPSection 3: Planning in SNP Objective:

◦ Understand the different heuristics available in Supply Network Planning

Very dense material, with focus on tools for planning analysis.◦ Module 10: Interactive SNP planning- Heuristics◦ Module 11: Deployment and Transport Load Builder◦ Module 12: Capable to Match

Page 14: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Work Flow in SAP SCMWork Flow in SAP SCM

Page 15: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Work Flow for our ExercisesWork Flow for our Exercises

Page 16: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

Exercise Overview: GBI Supply ChainExercise Overview: GBI Supply Chain

It is set up to be a single platform for both ERP and SCM

GBI produces 1 brand of bicycle and sells 25 trading goods

GBI has operations in two countries (USA and Germany (DE))

◦ Supply chains in other countries could be added

The supply chain in each country is distinct and there is no collaboration between the two supply chains.

Page 17: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

Full View of the GBI Supply ChainFull View of the GBI Supply Chain

DE-Customer

DE-DC1

DE-Plant

DE-Vendor

US-Vendors

US-DC1

US-Customers

DE-DC2

US-DC2USA:2 vendors1 plant 2 DCs2 customers

Germany:1 vendors1 plant 2 DCs1 customers

One productOne work center per plantNo transportation links between US and Germany

Page 18: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

To Keep Things Simple:To Keep Things Simple:

DE-Customer

DE-DC1

DE-Plant

DE-Vendor

US-Vendors

US-DC1

US-Customers

DE-DC2

US-DC2USA:2 vendors1 plant 2 DCs2 customers

Germany:1 vendors1 plant 2 DCs1 customers

This simplifies our task dramatically

Page 19: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

North American Supply ChainNorth American Supply Chain

One plant (DL) Two DC’s (CA and FL) Two Vendors (NY and MI) Two Customers (WA and MS)

Page 20: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Introduction to SCM Introduction to SCM and SAP APO and SAP APO

Theories & ConceptsTheories & Concepts

EGN 5623 Enterprise Systems OptimizationEGN 5623 Enterprise Systems Optimization (Professional MSEM) (Professional MSEM)

Fall, 2011 Fall, 2011

Page 21: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

The APICS-Standard Planning The APICS-Standard Planning FrameworkFramework

Page 22: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Intro to Supply ChainIntro to Supply Chain

Materials ◦Any commodities used directly or indirectly in

producing a product or service. Raw materials, component parts, assemblies,

finished goods, and suppliesSupply chain

◦Flow of materials through various organizations from the raw material supplier to the finished goods consumer.

Page 23: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Supply Chain ManagementSupply Chain ManagementDefinition

◦All management functions related to the flow of materials from the company’s direct suppliers to its direct customers.

Functions included:◦purchasing, traffic, production control, inventory

control, warehousing, and shipping.Two alternative names:

◦Materials management◦Logistics management

Page 24: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Supply Chains DefinitionSupply Chains Definition• Supply Chain

– A supply chain is the network of organizations, people, technology, activities, information and resources involved in the production of a product or a service

– Includes suppliers, manufacturers, transporters, warehouses, retailers and customers

• Production System– A manufacturing subsystem that includes all functions

required to design, produce, distribute, and service a manufactured product.

• A Supply Chain consists of one or many production systems that work together in the fulfillment of a customer order

• Best viewed as a network

Page 25: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Supply Chain for Steel in an Automobile DoorSupply Chain for Steel in an Automobile Door

MININGMININGCOMPANYCOMPANY

Mines iron oreMines iron ore

STEELSTEELMILLMILL

Forms steel ingotForms steel ingot

STEELSTEELCOMPANYCOMPANY

Forms sheet metalForms sheet metal

IronIron

oreore

SteelSteel

ingotsingots

AUTOMOTIVEAUTOMOTIVESUPPLIERSUPPLIER

Makes doorMakes door

AUTOMOBILEAUTOMOBILEMANUFACTURERMANUFACTURER

Makes automobileMakes automobile

CARCARDEALERSHIPDEALERSHIP

Does preparationDoes preparation

CarCar

doordoor

CarCar

FINALFINALCONSUMERCONSUMER

Drives automobileDrives automobile

PreparedPrepared

carcar

SheetSheet

metalmetal

Page 26: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Supply Chain ManagementSupply Chain Managementin a Manufacturing Plantin a Manufacturing Plant

ReceivingReceivingandand

InspectionInspection

RawRawMaterials,Materials,Parts, andParts, andIn-processIn-process

Ware-Ware-HousingHousing

ProductionProduction

FinishedFinishedGoodsGoodsWare-Ware-

housinghousing

Inspection,Inspection,Packaging,Packaging,

AndAndShippingShippingS

uppl

iers

Cus

tom

ers

Materials Management

PurchasingPurchasing ProductionProductionControlControl

Warehousing andWarehousing andInventory ControlInventory Control

ShippingShippingand Trafficand Traffic

Physical materials flowPhysical materials flowInformation flowInformation flow

Page 27: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

LogisticsLogistics

Logistics usually refers to management of:◦the movement of materials within the factory◦the shipment of incoming materials from

suppliers◦the shipment of outgoing products to

customers

Page 28: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Movement of Materials within Movement of Materials within FactoriesFactories

Incoming Incoming VehiclesVehicles

Incoming Incoming VehiclesVehicles

ReceivingReceivingDockDock

ReceivingReceivingDockDock

QualityQualityControlControlQualityQualityControlControl WarehouseWarehouseWarehouseWarehouse

Work Work CenterCenterWork Work CenterCenter

Other Work Other Work CentersCenters

Other Work Other Work CentersCenters PackagingPackagingPackagingPackaging FinishedFinished

GoodsGoodsFinishedFinishedGoodsGoods

ShippingShippingShippingShipping ShippingShippingDockDock

ShippingShippingDockDock

OutgoingOutgoingVehiclesVehiclesOutgoingOutgoingVehiclesVehicles

The typical locations from/to which material is moved:The typical locations from/to which material is moved:

Page 29: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Shipments To and From FactoriesShipments To and From FactoriesShipments To and From FactoriesShipments To and From Factories

Distribution Resource PlanningDistribution Resource Planning Distribution resource planningDistribution resource planning extends DRP so extends DRP so

that the key resources of warehouse space, that the key resources of warehouse space, workers, cash, and vehicles are provided in the workers, cash, and vehicles are provided in the correct quantities at the correct times.correct quantities at the correct times.

Page 30: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Analyzing Shipping DecisionsAnalyzing Shipping Decisions

The “Transportation Problem”◦Problem involves shipping a product from

several sources (ex. factories) with limited supply to several destinations (ex. warehouses) with demand to be satisfied

◦Per-unit cost of shipping from each source to each destination is specified

◦Optimal solution minimizes total shipping cost and specifies the quantity of product to be shipped from each source to each destination

Page 31: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

WarehousingWarehousing

Definition ◦Warehousing is the management of materials

while they are in storage.◦Viewed as distribution center (DC)

Warehousing activities:◦Accounting◦Ordering◦Storing◦Dispersing

Page 32: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

WarehousingWarehousing

Record keeping within warehousing requires a stock record for each item that is carried in inventories.

The individual item is called a stock-keeping unit (SKU).

Stock records are running accounts that show:◦On-hand balance◦Receipts and expected receipts◦Disbursements, promises, and allocations

Page 33: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Common Supply Chain ProcessesCommon Supply Chain Processes

Page 34: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Common Time Horizons for SCM Common Time Horizons for SCM ProcessesProcesses

Page 35: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Level of Detail and Time Horizon Level of Detail and Time Horizon for SAP APO Modulesfor SAP APO Modules

Page 36: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SCM Processes in SAP APO ModulesSCM Processes in SAP APO Modules

Page 37: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP APO System Structure and SAP APO System Structure and Integration with SAP ERPIntegration with SAP ERP

Page 38: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Example of a Supply Chain NetworkExample of a Supply Chain Network

Supplier ManufacturerDistribution

Center Customer

Delivery Time

Decoupling point

Cycle Time

Page 39: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Characteristics of the SC NetworkCharacteristics 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

The number of levels in a supply chain varies and depends on the complexity of the product

Flows can skip levels by that:• Supplier ships direct to DC• Manufacturer ships directly to customer

The decoupling point is the shift occurs from make-to-stock to make-to-order• The decoupling point is not fixed to one level of the supply chain

and is influenced by postponement strategies (e.g. Dell)

Page 40: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Characteristics of the SC NetworkCharacteristics 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

Page 41: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Example of Costs and Revenues in Example of Costs and Revenues in the Supply Chainthe 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

Page 42: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Example of ConstraintsExample 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

Page 43: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Categories and Attributes of a Categories and Attributes of a Supply ChainSupply Chain

- Reproduced from Fleischmann B., Meyr H, Hierarchy and Advanced Planning Systems, Handbooks in OR and MS, Chapter 9, Elsevier, 2003, pp 457-523

Page 44: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Types of Production SystemsTypes of Production Systems

1. Pure Inventory Systems– Simplest form of logistic system– Only procurement activities with no production or complex distribution

processes– Example: wholesale or retail operations where items are purchased

2. Continuous production Systems– Manufacturing of a few families of technologically related products in

large quantities– Example: Assembly lines or fabrication lines

3. Intermittent production Systems– Batch production of many products which share several processing

centers4. Project based systems

– Production of a unique complex product such as a ship or a bridge

Page 45: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Production StrategiesProduction Strategies

Make to Stock◦Production is based on forecasted amounts for

stocked itemsMake to Order

◦Production of a product is made for a customer order in the quantity specified by the order

Page 46: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

2. Hierarchical Planning2. Hierarchical Planning• Hierarchical planning was first introduced by

Robert Anthony in 1965* as a three level management framework that consists of:– Strategic or long-term planning– Tactical planning (or management control) for mid-term

planning– Operational planning for short term planning

• The 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 that captures the events as they occur– Feedback loops at all levels

* R.N. Anthony, Planning and Control Systems: A Framework for Analysis, Cambridge. Mass., 1965

Page 47: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Hierarchical Planning FrameworkHierarchical Planning Framework

Long term-Material programs- Supplier selection- Cooperation

- Plant location- Production systems- Subcontractors

- Physical distribution structure- Transportation strategy

- Product program- Strategic sales planning

-- Personnel training-- Contracts-- Material Requirements Planning

-- Master production Scheduling-- Capacity planning -- Distribution planning -- Mid-term sales planning

Mid term

-- Personnel scheduling-- Material ordering

-- lot-sizing- operations scheduling- shop floor control

- Warehouse replenishment- Transportation planning -- Mid-term sales planning

Short term

EXECUTION

Information FeedbackFlow of goods

Page 48: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Differentiating Factors by Planning LevelsDifferentiating Factors by Planning LevelsFactor- Level Strategic Tactical Operational

Purpose Supply chain design, resource acquisition

Planning resource utilization

Operation scheduling and

execution

Implementationinstruments

Policies, objectives, capital investment

Budgets Schedules, procedures and

reports

Planning horizon Long: 3-5 years Medium: 6-18 months

Short: daily, weekly, monthly

Scope Broadcorporate level

Mediumplant level

Shortfloor level

Level of Management

Top Middle Low

Frequency ofre-planning

Low: every few years Medium: monthly or quarterly

High: weekly, daily or as required

Source of information

Largely external External and internal Largely internal

Level of aggregation- product data- time

HighProduct families

years

MediumProduct groups

Month

Lowindividual products

continuous

Degree of uncertainty

High Medium Low

Degree of risk High Medium Low

Page 49: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Introduction to SCM Introduction to SCM and SAP APO and SAP APO

SAP Implementation SAP Implementation

EGN 5623 Enterprise Systems OptimizationEGN 5623 Enterprise Systems Optimization (Professional MSEM) (Professional MSEM)

Fall, 2011 Fall, 2011

Page 50: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP Business SuiteSAP Business Suite

SAP NetWeaverSAP NetWeaver

SAP SCMSAP SCM

SAP PLMSAP PLM

SAP SAP SRMSRM

SAP SAP CRMCRM

SAP SAP ECCECC

Page 51: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

ERP & SAP (Solutions)ERP & SAP (Solutions)

Solutions for large companies - SAP ERP - SAP CRM - SAP PLM - SAP SCM - SAP SRM - SAP Analytics - SAP Manufacturing - SAP Service - SAP Mobile Solutions - SAP xApps

Small & Medium Size Solutions- SAP Business One - SAP Business by Design- SAP Business All-in-OnePlatforms - Enterprise Services Architecture- SAP NetWeaver technology platform

Page 52: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Planning with SAP ERP & SCMPlanning with SAP ERP & SCM

SAPECCERP

SAP SCM(includes SAP BW)Core Interface (CIF)

• Demand Planning • Supply Network Planning and optimization• Production Planning with capacity considerations• ATP• CTP• Detailed Scheduling• Deployment• Transportation planning• Vehicle routing and scheduling

• Mater data•Materials•Locations•Partner•Plants•Info records

• Transactional data• Customer orders• Production orders• Purchasing orders

• Execution

Basic Components of SAP SCM

Page 53: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Planning at Supply Chain Planning at Supply Chain LevelLevel

SAPECC 1

SAPSCM

SAPECC 2

SAPECC n

- Each SAP ECC component covers one or more locations In the network

- Planning may be done centrally

Page 54: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP SCM FunctionalitySAP SCM Functionality

THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal

Page 55: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP SCM ModulesSAP SCM Modules

THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal

Page 56: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Two planning Scenarios for SAP Two planning Scenarios for SAP SCMSCM

CIFControls data transfer between ERP and SCM

SAP ERP ECC 6.0

SCM 5.0

Master Data Transactional Data

DPForecast based on

data from BW

SNPSupply Network

Planning

Deployment& Load Building

BW

Aggregates data from varous sources

Data from flat file

SOP / DM / PP

Alternative Scenario Base Scenario

Page 57: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SNP Location HeuristicsSNP Location HeuristicsIf you select Location (heuristic), the

system plans the specified products at the specified location.

The system explodes dependent demand for one BOM level at the production location in the planning direction.

However, dependent demand is neither fulfilled nor further propagated through the supply chain.

The system only uses this information to generate planned orders.

Page 58: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Network HeuristicNetwork HeuristicIf you select Network (heuristic), the system

plans the specified products at all specified locations in the network to which the selected product is assigned.

The system explodes dependent demand for one BOM level at the first production location encountered in the planning direction.

However, dependent demand is neither fulfilled nor further propagated through the supply chain.

The system only uses this information to generate planned orders.

Page 59: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Multi-Level HeuristicsMulti-Level HeuristicsIf you select Multi-level (heuristic), the system

plans all products specified at all locations, whether they are finished, intermediary, or purchased goods from the highest level down to the lowest BOM level.

In other words, the system plans all products specified, including all dependent demand.

The multi-level heuristic is performed across all locations to which the selected products are assigned, as well as across all locations to which dependent products are assigned.

Page 60: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Cost-Based OptimizationCost-Based OptimizationCost or price drivenMixed integer programmingMust define all sourcing, production,

transportation, inventory costs and constraints

Page 61: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Supply Planning Tasks and Output Supply Planning Tasks and Output for SCMfor SCM• Tasks

– Identify sources for finished products

– Plan and consider 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

• Outputs– Purchase requisitions– Stock transport

purchase requisition– Planned production

orders

Page 62: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP APO ArchitectureSAP APO Architecture

Page 63: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

PDS/PPM and ResourcesPDS/PPM and Resources

Page 64: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1A: Planning and Section 1A: Planning and Execution in ERPExecution in ERPEmphasis on walking through much of the

standard APICS planning framework

Good “refresher” to get everyone on the same supply chain page◦ Intermediate-term goal: seamless integration with ERP

and SCM labs.

Page 65: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1B: Prepping the Master Section 1B: Prepping the Master Data in SAP ERPData in SAP ERP

First step in getting ready to plan in SAP SCM◦ Takes place entirely in SAP ERP◦ Assumes some SAP ERP familiarity◦ Intermediate goal: integrate with 1A to remove

duplication.

Module 0: Overview of the Global Bike Int. Company◦ Reviews supply chain of GBI◦ No data entry◦ Eliminated from documentation: detailed review of GBI

master data in view mode

Page 66: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1B: Prepping the Master Section 1B: Prepping the Master Data in SAP ERPData in SAP ERPModule 1: New Master Data for the Ridge Front Bike

Family◦ Enter master data on Ridge Front Bike family

Copy existing data to speed things up

◦ Duplicates first two modules of 1A When 1A is tested with SAP SCM, optional if starting with 1A

Module 2: Change Master Data to Prepare for SCM◦ Some master data elements must be set to work with SCM

Workcenter capacities Material type Transportation zones

Page 67: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Section 1B: Prepping the Master Section 1B: Prepping the Master Data in SAP ERPData in SAP ERPModule 3: Add Master Data to Prepare for SCM

◦ Create “production version” for each manufactured material BOM-routing combo – feeds into product data structure of SCM

◦ Add APO capacity parameters for workcenter◦ Create finished products at DCs◦ Create purchasing information records

Link vendors to plant – basis of transportation lanes

Page 68: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

GBI Locations in ERPGBI Locations in ERP Each company has the following locations:

◦ One plant ##A1 (USA) with 1 assembly lines in the plant:

◦ Two vendors: US - 1000(##+1) Great Lakes Bike Supply – Mount Pleasant (Michigan – MI) US - 1001(##+1) International Bike Supplier – Albany (New York – NY)

◦ Two customers: US – ##+1 Mt Baker Biking Company – Bellingham (Washington – WA) US – 1(##+1) King Bike Company – Tupelo (Mississippi – MS)

◦ Two DCs: US - ##A2 Bike DC1 – San Diego (California – Ca) US - ##A3 Bike DC2 – Miami (Florida – Fl)

Example: for dataset 23In ERP vendor Great Lakes will be 100024In SCM vendor Great Lakes will be 0000100024

Page 69: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

Finished and semi-finished Finished and semi-finished productsproducts

The plant ##A1 (USA) and ##D1 (DE) of Global Bike is introducing a new model of finished products, the Ridge Front bike.◦ FG – 0020 – ##Ridge Front Std◦ FG – 0021 – ##Ridge Front Komfort

These semi-finished products are used in the process:◦ SF – 0010 – ## Front Wheel◦ SF – 0020 – ## Rear Wheel◦ SF – 0030 – ## Saddle◦ SF – 0031 – ## Komfort Saddle◦ SF – 0040 – ## Handle ◦ SF – 0050 – ## Handle Bar

Page 70: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

Components bought from vendorsComponents bought from vendors

Raw material list has been simplified but is still long◦ RM – 0011 – ## Front Wheel Assembly ◦ RM – 0022 – ## Rear Wheel Assembly◦ RM – 0090 – ## Post◦ RM – 0100 - ## Seat ◦ RM – 0101 - ## Komfort Seat ◦ RM – 0110 - ## Clip ◦ RM – 0120 - ## Bell ◦ RM – 0130 - ## Clasp ◦ RM – 0140 - ## Hi bar ◦ RM – 0150 - ## Pedal ◦ RM – 0160 - ## Break Kit

Page 71: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

Storage locationStorage location Plant

◦ For each type of material we have a separate storage location: 10 Raw materials 20 Semi finished products 30 Finished products

DC level◦ For each DC center a storage location is defined for the

finished products and trading goods: 30 Finished products

Page 72: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

SalesSales

There are two distribution channels:◦ Internet Sales ◦ Wholesale

The pricing is different in each distribution channel.

Material Description Internet Sale Wholesale

FG-0020-## Ridge Front Std 390 USD 399 USD

FG-0021-## Ridge Front Komfort 450 USD 549 USD

Page 73: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Author:

BOM for FG-0010-00BOM for FG-0010-00

Page 74: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP Access through SAPGUI SAP Access through SAPGUI SAPGUI DownloadSAPGUI DownloadThe 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 systems, as well as Vista and Windows XP.

Page 75: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAPGUI Download InstructionSAPGUI Download Instruction

Page 76: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAPGUI Setup SAP ERPSAPGUI Setup SAP ERP

Page 77: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAPGUI Setup SAP SCMSAPGUI Setup SAP SCM

Page 78: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

SAP ERP/SCM Clients, Userid, SAP ERP/SCM Clients, Userid, Password Password

SAP ERPClient: 785Userid: gbi-001 to ides-027Initial password: 123456

SAP SCMClient: 185Userid: gbi-001 to gbi-027Initial password: 123456

Page 79: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Website of UA (University Alliance)Website of UA (University Alliance)www.sdn.sap.com

Page 80: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Exercises:Exercises:1. Overview of the Global Bike Company (GBI):

• GBI Supply Chain• GBI Dataset

• Company• Location• Materials• Bill of materials• Workcenter• Storage locations

• Distribution Channels and proces

2. Module 1 (Section 1B)Create material masters

Create ridge front StdCreate ridge front komfortCreate ridge front komfort saddleCreate komfort seatCreate front wheel assemblyCreate real wheel assembly

Page 81: Enterprise Systems Optimization Course Overview EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2011.

Exercises:Exercises:Create bills of material

Create BOM for ridge front stdCreate BOM for ridge front komfortCreate BOM for komfort saddle

Create routingsCreate routing for ridge front stdCreate routing for ridge front komfortCreate routing for komfort saddle

Change customer informationChange customer information for Mt. Baker BikeChange customer information for King Bike Company

3. Module 2 (Section 1B)Change work centerChange distribution centers

Change of node type


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