SAP SCM

Applications and Modeling for Supply Chain Management (with BW Primer)

Dan Wood

• Publisher: Wiley
• Year: 2012
• Print ISBN:
  9780471769910
• Edition: 1
• eBook ISBN:
  9781118429143
• Topic: Business
• Subtopic: Financial Accounting
• Index: Business

SAP SCM: Applications and Modeling for Supply Chain Management empowers you to capitalize on the sophistication of SAP APO. This book provides clear advice on the inevitable, critical decisions that can lead to project success or failure and shows you, wherever you are on the supply chain management staff—buyer, planner, ground controller or analyst—to fully exploit the agility SAP APO offers.

PART 1

CULTURAL BACKGROUND: THE BUSINESS AND TECHNICAL CONTEXT FOR SCM

CHAPTER 1

HOW TO USE THIS BOOK: APO AS A MIND MAP

As with most SAP applications, the best path through this text is not a straight one. SAP applications in general and SAP APO in particular are simply too multidimensional to be suited to a simple, linear decomposition. Just the same, we have undertaken great pains to make SAP SCM as navigable as humanly possible. SAP APO seeks to replace some work that until recently has been strictly limited to the aegis of the human intellect—yet it ultimately does not replace people as much as it elevates their purpose by providing better computation and leveraging more strongly on the human specialties of reason, interaction, and qualitative judgment. Where SAP APO expands the scope of the system in supply planning is when it computationally takes over as much as possible of what used to be exclusively a human analytical domain; in this respect APO may be said to “map a supply planner’s mind,” yet there is no simple way to lay out a map to the human mind. The mind, like APO, is nonlinear. In finding the best way through SAP APO we should think of the supply chain models created in it as models of all the objects, relationships, and dynamics that a human master scheduler, buyer, or production planner intellectually masters in order to employ his or her craft.

Our planner, as such, is concerned with certain components of the supply chain: locations of plants, customers, vendors; products, their components, the transportation lanes between them and methods of transport; the means of production. She is likewise concerned with different end-goals in analyzing the information about these supply chains: determining the best, most current picture of demand without respect to supply (demand planning), organizing the entire supply chain to work collaboratively—even collaborating outside organizational walls with suppliers and customers—to optimally meet known demand (supply network planning), and deriving the best schedule to fully utilize the resources of a specific plant (production planning/detailed scheduling).

To grapple with the complex and multidimensional organization of a mind that thinks about the supply chain, analyzes and master plans it, a straight line simply will not do. Instead we will employ the metaphor of a cookbook and divide our treatment into three major functional parts:

1. A contextual introduction, such as introduction to the cultural background that gave rise to a particular cooking genre such as Italian or Thai—in this case an introduction of the overall SAP APO architecture and its supply chain context, as well as “tips and tricks” for improving the critical strategic judgments and decisions of project managers, executives, and project sponsors that have so much impact on APO and SCM projects’ success or failure.

2. Ingredient stocks and bases that form the core of more sophisticated entree dishes, such as beef or vegetable stock, dressings, batters, and icings—but here with SCM our basis shall be supply chain master data and transactional data elements that form the basis of any manner of supply chain model (i.e., locations, products, orders, etc.).

3. Actual complete entrée recipes, which simply make reference to bases in the second section without redundantly reprinting them, as they may occur many times over in many different recipes—in our case recipes to deliver with SCM techniques for employing planning modules to work with master data, model supply chains, and forecast or produce operational schedules.

Unlike cooking, however, SAP’s SCM product is expansive, crossing boundaries into whole additional disciplines; so in addition to these three sections we must add a fourth to address the major disciplines with a direct impact on supply chain planning:

4. The SAP BW data basis and analytical adjunct to APO and the SCM ICH application, the latter of which enables sophisticated planning collaboration with customers and suppliers.

As with a cookbook, the introduction sets the stage for the subject of the text, it explains backgrounds and starting requirements (i.e., kitchen appliances, tools, materials), and sets expectations. From there many cookbooks include a section for making common stock materials that are found as ingredients to recipes for entrees or side dishes, but which are not usually served alone, for example, vegetable stock, gravies, dough, batters, and dressings. The recipes for these stock food components are used repeatedly as parts of other recipes and there is no point in repeating them each time they are used, so they are stated independently in their own section and then referred to whenever they come up later on. The last section of the cookbook may then contain recipes to make the actual entrees, sides, deserts, and dishes that are the business of dinner, which each may or may not refer back to stock recipes as a prerequisite.

Our text closely follows this model. We begin with a basic background in supply chain management that is essential to understanding the use, applications, and power of SAP SCM. Without a solid background in the basics of supply chain management, users run the risk of repeating many of the mistakes made with legacy tools when they deploy the product, using it the same way they used much more primitive tools. One would not purchase a modern rice cooker if one meant only to steam up Uncle Ben’s from time to time. One buys the modern rice cooker because there are 6,000 years of multicultural history of rice and thousands of ways to prepare it. Don’t get stuck with ordinary, fluffy white rice—learn the basics of supply chain management so that you can deploy the full power of APO!

Second, there are two kinds of data used in APO, as in almost any business-oriented computer system: master data and transactional data. Master data is the architectural or skeletal data that forms the infrastructure of the system: things like product and location setup. Transaction data is data that is put to use describing actual events, like 100 units of plastic cups that a factory means to build on Tuesday. So much master data in APO is used in every module that there is no use in repeating the steps for setup of locations and products in both the SNP and PP/DS modules, for example. The master data section will list instructions for setting up each element of master data.

Like a cookbook, Part Three contains “recipes” for using the actual planning modules of APO to plan and manage the various aspects of the supply chain: demand planning, supply network planning, production planning and detailed scheduling, global available to promise, and transportation planning and vehicle scheduling. Wherever master data elements are called on as prerequisites by these modules, their recipe will be referenced so that readers can go to the appropriate section in Part Two for details of how to set them up.

Finally, in order to empower users, developers, and their respective organizations to employ the full power of APO, we include an additional section that explores two other, major integrated applications found within the SAP SCM platform in versions 4.1 and 5.0: SAP BW and SAP SCM ICH. The Business Information Warehouse (BW) forms both the data basis of SCM, including and especially APO, as well as provides mature, first-class reporting and analytics that are actually integrated with and manifested in Microsoft Excel. SAP SCM ICH, the Inventory Collaboration Hub, comes as a separate application in SAP SCM with APO, but empowers users of SAP R/3 to collaborate directly with external suppliers and customers—either outsourcing materials replenishment to suppliers or including them in the planning process or both. Together, BW and ICH are like height and depth to APO’s length: exponentially increasing its power to provide value-return to organizations that adopt it.

ONE BOOK, MANY CURRICULUMS: CUSTOM RECOMMENDATIONS FOR READING ORDER

As indicated earlier, this book will not make for a good straight-line read. Because of its cookbook-like organization, it will not make sense for most users to read this text from cover to cover as most users will not need or interact with all the modules of APO or all the applications of SCM; and even if they did, it still would not make sense to read Part Two in its entirety before reading Parts Three or Four, for example. Readers will need the SCM foundations established in the first section. We always recommend starting there and reading Part One in its entirety. Failure to read this first part may result in an unintentional underutilization of the full power of APO simply by way of ignorance of all the different business and information domain spaces it covers and its depth of integration.

From there, however, end-users should skip to Part Three and focus only on the module or modules they expect to use in the course of their work, referring back to chapters in Part Two whenever the planning module “recipe” of their interest instructs them to do so. Even readers who mean to absorb the entire scope of APO’s planning modules may wish to skip to Part Three, as this will lead to the most orderly and nonrepetitive coverage of Part Two. For example, if your organization has deployed DP and PP/DS, skip Part Two and read only the DP and PP/DS sections of Part Three. Wherever necessary, those sections will instruct you to go back and read master data sections in Part Two and you will have the option to read only those sections specified, and when you do so it will be in the mental context of how they will be used for the tool you are interested in.

Depending on whether one comes to APO and this text as a first-time learner or seasoned system analyst or consultant, one may go about exploring and reading this book differently. In contrast to end-users, analysts, consultants, and engineers will usually do best to work through the book from cover to cover in a nearly strict 1, 2, 3, 4 order. Executives interested in APO but involved in direct delivery may be interested only in Part One and overviews of modules in Parts Three or Four. Project managers will have a similar scope as executives but should also familiarize themselves to some degree with the use of master data and the CIF in Part Two. Seasoned developers directly involved in construction and deployment may start with Part One, skip to Part Three, and only refer to Part Two in reference. Furthermore, tool experts specializing in DP and/or BW should cover all of Part One but may wish to limit further reading to Chapter 6, on analytical master data, and Chapters 8 or 11, DP and BW. Supply chain planning specialists, however, may start with the same foundation in Part One but cover supply chain master data in Chapter 5 and SNP and PP/DS in Chapters 9 and 10. (See Exhibit 1.1.)

EXHIBIT 1.1 CURRICULUMS BY BUSINESS ROLE AND EXPERIENCE

Role-based Curriculum/Common Roles	Recommended Reading Order
Executive/Project Manager	Part I (Chs. 1–4, architecture, strategy)
Executives Project Managers	Section: Use of Profiles in APO Chapter 11: BW and strategies Optional—Chapter 12: ICH
Demand Planning	Part I (Chs. 1–4, architecture, strategy)
Demand or forecast analyst Supply/demand analyst	Chapter 5: Supply chain master data Chapter 6: Analytical master data Chapter 8: (UI section) Chapter 9: Demand Planning Chapter 11: BW and strategies
Supply Network Planning and External Collaboration	Novice:
Sales/operational planner Master scheduler Business analyst Buyer (medium-range)	Part I (Chs. 1–4, architecture, strategy) Chapter 5: Supply chain master data Chapter 8: (UI section) Chapter 9: Supply Network Planning Advanced:a Chapter 7: Core interface Chapter 6: Analytical master data Chapter 11: BW and strategies Chapter 12: ICH and other collaboration
Production Planning/Detailed Scheduling	Novice:
Production planner Production scheduler Ground controller Buyer (tactical/short-range) Site scheduler (i.e.; factory, warehouse, distribution center, port)	Part I (Chs. 1–4, architecture, strategy) Chapter 5: Supply chain master data Chapter 8 (whole chapter): Production Planning/ Detailed Scheduling Advanced: Chapter 7: Core interface Chapter 6: Analytical master data Chapter 11: BW and strategies
Developer	General:
Business analyst/application consultant System analyst Software/SC engineers Other developers	Part ⇒ Part II ⇒ Part III

a Advanced users are also counseled to rely on cookbooks wherever possible, selectively dipping into textual explorations only when necessary, thereby avoiding the necessity of digesting all the verbal detail that is required to bring novices up to pace with the tool.

INCLUDED AND EXCLUDED: SCOPE OF THIS TEXT

APO and the wider SAP SCM suite of tools including BW and the Inventory Collaboration Hub that are now included in the SCM package form a truly deep and vast body of software applications—there are more than 4,300 transactions in SCM! It is simply impossible within one volume to do instructional justice to this mighty corpus of tools and it is not our intent to attempt so. In principle, this book is scoped to focus on supply chain planning and its direct support in data management, analytics, and external collaboration (Exhibit 1.2). Specifically we include detailed, modular, and step-by-step...

Table of contents

• Cover
• Contents
• Title
• Copyright
• Dedication
• Preface
• Acknowledgments
• Table of Abbreviations
• Part 1: Cultural Background: The Business and Technical Context for SCM
• Part 2: Stocks and Bases: Master Data SCM
• Part 3: Entrees: APO Planning Modules
• Part 4: Beyond Planning: Analytics, Collaboration, and Keys for Success
• Index