02 - SNP Overview

Global Business Services
SCM APO
Training Course in Supply
Network Planning
Unit2: SNP Overview
deeper
© Copyright IBM Corporation 2010

Course Overview Diagram
Course Overview
Introductions 1 SNP Run Using Heuristics 8
SNP Overview 2 Deployment 9
Planning Area
Administration 3 Transportation Load Builder 10
SNP Profiles 4 SNP Run Using Optimizer 11
SNP Run Using CTM
Master Data 5 12
Supply Chain Cockpit /
Supply Chain Engineer 6 Advanced Topics 13
Interactive Planning and
Release of the Plan 7
2 © Copyright IBM Corporation 2010

APO and SNP Intro: Unit Objectives

At the conclusion of this unit, you should:
Understand the processes that APO supports
Be familiar with the APO architecture
Understand the SNP Business Applications
Be introduced to SNP functionality

The Supply Chain: Original Supply to Final

Consumption
INFORMATION FLOW
Transfer Transfer Transfer Transfer
Supplier Manufacturing Distribution Retail Outlet Consumer
CASH FLOW
Supply Chain Optimization
Increase Customer Responsiveness at Least Cost

To be competitive, increase revenues and market share and be

profitable
Companies need to …….

Have the right product at the right place at the right time
Improve replenishment cycle time
Improve Return on Inventory investment
Increase utilization of capacity/resources

APO
Stands for Advanced Planning and Optimization

It’s intent is to enhance global planning capabilities supported through
advanced heuristics and optimization algorithms
An Advanced Global Planning Tool
Not an Execution System
A Tool to control the entire Supply Chain
A Package focussed on Constraints (Material, Capacities)
A Tool capable to replace some current OLTP Functionality

APO Product Map
Monitor Supply Chain Cockpit
Strategic Network Design
Supply Network Planning

Tactical Demand
Production Transportation Planning
Distribution
Operational Purchasing
Planning Planning
Planning Collab.
& &
WorkBench &
Detailed Vehicle Planning
Scheduling Deployment
Scheduling Scheduling
BUY MAKE STORE MOVE SELL

Transaction Data Transmission
R/3
APO
Initial Transfer
Transaction Transaction
DATA DATA
Incremental transfer
The transaction data is transferred from SAP R/3 to APO in the beginning.
Subsequently, the Transport and Production orders are transferred from
SNP to SAP R/3 after each run, and data such as inventory status is passed
regularly from SAP R/3 to APO

APO Application Architecture
OLTP APO OLAP
Historical
Demand Planning Data
Sales External
Orders Production
Data
Planning and
detailed
(e.g. POs
Manufacturing Supply
Global Scheduling
Execution Network
ATP Key
updates Planning
Perform.
Inventory Deployment Indicators
Movements
TP/VS TLB

APO Platforms
Operating Systems
Windows NT
HP UX
IBM AIX
Sun Solaris
Compaq True64 Unix,
Siemens Reliant Unix

APO Platforms
Data Bases
Oracle
SQL-Server

Client Concept
Similar to R/3
APO
One APO client to n R/3 clients
Live cache‘ applications on client
– SNP
– PP/DS
– TP/VS live
– ATP Cache
BW Basis for Demand Planning
– Not on client
– Needs to be organized
DB
via dedicated infocubes

What is Supply Network Planning ?
A planning approach to create Tactical Plans and Sourcing Decisions

that takes the complete supply network into consideration
Supply Network
Planning
Transport
Deployment
Load Builder
Meet Forecast and Actual Demand by:

– Optimal use of Manufacturing, Distribution and Transportation Resources
– Consider all constraints in the supply chain

SNP Overview
SNP ensures the optimal Use of Manufacturing, Distribution, and

Transportation Resources to meet Forecasts and actual Demand while
considering all Constraints in the Supply Chain
SNP plans Production, Procurement and Transportation throughout the
entire Supply Network using Optimizing and Heuristic Approaches
Configurable Profiles determine on how the System generates Supply
and Demand within Short, Mid and Long-term Planning
SNP offers three competitive Algorithms: CTM, SNP Optimizer and SNP
Heuristics

SNP Business Applications:
Inventory planning and deployment taking into account logistics and

sales variability.
High level capacity planning and macro global scheming to aid with
capital equipment decision making based on sales runs.
Visibility for planning with confidence. System provides cost- trend
analysis for control on manufacturing expansion, Out-sourcing, 3rd
party supply, etc.
Support system for modeling what if scenarios that would impact the
bottom line.
Stores, DCs and VMI stock leveling with ability to build transport loads
with predetermined constraints

SNP Business Applications (Continued)

Match supply to demand
Integrate purchasing, manufacturing, distribution and transportation in one
consistent model (PPM)
Model the entire supply network and related constraints
Synchronize activities and plan material flow throughout the supply chain
Create feasible plans for purchasing, manufacturing, inventory and
transportation

Beyond Traditional “DRP”
Production Process
Model
Manufacturer
Plant
Manufacurer
DC
Customer DC
Supplier Plant
Supplier WH

APO Planning Functionality Sequence
Planning Horizon
Demand Planning (DP)
Supply Network Planning (SNP)
Production Planning (PP)
Detailed Production Scheduling (DPS)
Deployment
Transport Load Builder (TLB)
Transportation Planning and Vehicle

Scheduling (TPVS)

SNP Process
Demand Planning
Forecast
Supply Network Pl.

Recommended
Planned TransportOrders
Orders
Production Planning
Detailed Scheduling
Deployment
Confirmed
Transport Orders
Transport Load
Builder
Transportation Planning Transport

& Vehicle Scheduling Orders

Data Objects:
Distribution Network
Customer
Demands
Distribution
Centers
Plants
Suppliers
Transport Order Planned Order Purchase Order

Supply Chain Cockpit
Graphical instrument panel for modeling,

navigating and controlling the supply chain
Provides the insight and control needed to

effectively manage the entire supply chain
It is highly configurable to conditions within a

wide variety of industries and business
situations

Supply Chain Engineer
Used to create and maintain supply chain

network models
The network model represents a specific
supply chain and consists of individual
nodes and links
A model can have different planning
versions
Several models, each with different
versions can be created for simulation
purposes

Objects in the Supply Chain Network

Objects include:
Locations
Products
Resources
Production Process Models
Transportation Lanes provide links between
objects in a supply chain model

SNP Planning Functionality
Supply Network Planning Strategies

– Heuristics
– Optimization SNP
– Capable to Match
Deployment PP/DS
– Faire share, push rules and deploy to order
Deploy-
– Optimization
ment
Transport Load Builder
– Leveling in transport loading
TLB

SNP Strategies
SNP Heuristics: repair-based planning

– Quota arrangements
– Production capacity check
– Capacity leveling
SNP Optimization: cost-based optimization
– Selection of best production site
– Optimization of production, transportation, and inv. costs
– Mixed Integer Linear Programming
– Metaheuristics
– Feasible solutions
– Calculation of quota arrangements
Capable to Match: supply to demand match
– Matches supply to available demand via production
and transportation capacity check

Deployment
Fair share
– Proportional
– Target fulfillment
– Deploy to order Montreal
Push deployment
Calgary
Pull-push deployment Winnipeg
– Demand fence Montreal
– Supply fence
SAPCO Customer
Philadelphia
Chicago
New Orleans

Transport Load Builder
Plan for loading of transportation vehicles

– Maximum range of coverage
– Minimum/maximum load weight
– Maximum volume
– ATP check

Vendor Managed Inventory
MANUFACTURER RETAILER
APO
Inventory Inventory
Plant (integrated)
Warehouse (EDI 852)
Distribution
Center
Forecast Forecast
(integrated) (EDI 830)
SNP VMI
R/3, Sales order

Legacy Order (EDI 855)

SNP Process Flow
Planning Area Administration
APO Master Data Setup
Model/Version Creation
Supply Chain Model Setup
Release of Demand Plan to SNP
Planning Method Determination

& Profile Settings
Transport Load Supply Network
Building Planning Run
Simulation
Deployment Run Interactive Planning

Management
by Exception
Conversion into Release of SNP

PP/DS orders Plan to DP
PP/DS Planning

POWERTASTIC, Co. Scenario
Vendor I
Tampa, FL
ER_TD_VTA DC I
Battery, Motor Los Angeles, CA
Mfg Plant I
Raleigh, NC ER_TD_DLO
ER_TD_PRA
Vendor II
San Francisco
ER_TD_VSF
Battery,Chuck
DC II
Newark, NJ
ER_TD_DNE
Vendor III
Phoenix, AZ Mfg Plant II
ER_TD_VPH Chicago, IL
Steel ER_TD_PCH
VMI Customer
Vendor IV
ER_TD_VHO
Portland, OR
Houston, TX
ER_TD_VPO
Polypropylene
Direct Links
Casting Supply
Steel Supply
Interplant Handle Transport

Current BOM
Auto Screwdriver
Level I
Handle Consumer Motor Consumer Battery Bits Chuck
ER_TD_SHA ER_TD_SMQ ER_TD_SBA ER_TD_SBI ER_TD_SCH
Manufactured Procured Procured Manufactured Procured
Level II
Polypropylene Steel
ER_TD_RPQ ER_TD_RST
Procured Procured

Manufacturing Layout
Manufacturing Layout
Shipping
Assembly
Injection Casting
Raw Mat Warehouse
*Not that manufacturing plant in Chicago does not have a casting operation, casting requirements are sourced from Raleigh

SNP Overview: Unit Summary
You are now able to:

Describe the supply chain process
Describe how SNP fits into APO planning
Describe the Supply Chain Cockpit
Identify and describe the use of SNP’s key components

02 - SNP Overview

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Global Business Services

© Copyright IBM Corporation 2010

Course Overview Diagram

2 © Copyright IBM Corporation 2010

APO and SNP Intro: Unit Objectives

3 © Copyright IBM Corporation 2010

The Supply Chain: Original Supply to Final

Transfer Transfer Transfer Transfer

Supplier Manufacturing Distribution Retail Outlet Consumer

Supply Chain Optimization

Increase Customer Responsiveness at Least Cost

4 © Copyright IBM Corporation 2010

To be competitive, increase revenues and market share and be

Companies need to …….

5 © Copyright IBM Corporation 2010

Stands for Advanced Planning and Optimization

6 © Copyright IBM Corporation 2010

APO Product Map

Monitor Supply Chain Cockpit

Strategic Network Design

Supply Network Planning

BUY MAKE STORE MOVE SELL

7 © Copyright IBM Corporation 2010

Transaction Data Transmission

8 © Copyright IBM Corporation 2010

APO Application Architecture

OLTP APO OLAP

9 © Copyright IBM Corporation 2010

10 © Copyright IBM Corporation 2010

11 © Copyright IBM Corporation 2010

12 © Copyright IBM Corporation 2010

What is Supply Network Planning ?

A planning approach to create Tactical Plans and Sourcing Decisions

Meet Forecast and Actual Demand by:

13 © Copyright IBM Corporation 2010

SNP ensures the optimal Use of Manufacturing, Distribution, and

14 © Copyright IBM Corporation 2010

SNP Business Applications:

Inventory planning and deployment taking into account logistics and

15 © Copyright IBM Corporation 2010

SNP Business Applications (Continued)

16 © Copyright IBM Corporation 2010

Beyond Traditional “DRP”

17 © Copyright IBM Corporation 2010

APO Planning Functionality Sequence

Supply Network Planning (SNP)

Production Planning (PP)

Detailed Production Scheduling (DPS)

Transport Load Builder (TLB)

Transportation Planning and Vehicle

18 © Copyright IBM Corporation 2010

Supply Network Pl.

Transportation Planning Transport

19 © Copyright IBM Corporation 2010

Transport Order Planned Order Purchase Order

Supply Chain Cockpit

Graphical instrument panel for modeling,

Provides the insight and control needed to

It is highly configurable to conditions within a

21 © Copyright IBM Corporation 2010

Supply Chain Engineer

Used to create and maintain supply chain

22 © Copyright IBM Corporation 2010