SAPSCM/APO European Initiative: APO Overview Internal Training Demand Planning Overview

SAPSCM/APO European Initiative
APO Overview Internal Training Demand Planning Overview
March 2003
Training Agenda
Advanced Planner & Optimizer Overview Demand Planning Overview Supply Network Planning Overview Production Planning & Detailed Scheduling Overview Global Available-to-Promise Overview APO Integration & CIF Overview APO Implementation Considerations
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Objectives
Main Goals of This Section
To understand Demand Planning as an accurate forecasting tool in the APO context. To know Demand Planning main features, in concrete: Its architecture, data storage and representation attributes Its main tools (Planning Toolbox, Planning Environment, Accuracy Analysis) The different forecasting methods available To visualize how DP applies to a real case (Sara Lee). To be aware of main considerations and complexity factors when implementing Demand Planning. To get familiar with the look of DP and its basic functions through a demo and practising with simple exercises.
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Contents
1. 2. 3. 4.
Demand Planning Features & Capabilities Case Study: Sara Lee Key Aspects to Consider When Implementing DP DP Demo: Accelerated Supply Chain Integration APO Template DP Exercises
5.
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Demand Planning Features and Capabilities

Demand Planning Accurate Forecasting
A toolkit of statistical forecasting techniques Tightly linked to the R/3 System and the SAP BW SAP (data can be automatically transferred) Tree selection and drill-down capabilities facilitates navigation through multidimensional data structures Uses the Alert Monitor to report exceptions Planners Knowledge
Task-specific planning tools
Flexible views Graphics Promotional planning Life cycle management Cannibalization Accuracy reporting
Information
Collaborative forecasts Order & shipment actuals & history Cost POS data Nielsen / IRI data ...
Demand Planning Data Mart
Anticipation of Future Demand
Statistical Methods
Multi-model approach
Average models Exponential smoothing Causal factors Trend dampening Model combination Pick best
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APO Demand Planning within Supply Chain Planning
BUY
YEARS QUARTERS
DESIGN
New Product Development
MAKE
MOVE
Logistics Network Design
HOLD
SELL
S U P
Supply Contract Negotiations
Network Sourcing
Customer Service Territory Planning
Inventory Target Setting
Demand Planning APO DP

Product Allocation
C U S
Production Planning Materials Planning Material Requirements Planning Detailed Production Scheduling Manufacturing Execution System Production Activity Control Transport Planning
MONTHS
P L
Supply Demand Matching
T O M
WEEKS
I E R
Procurement
DAYS
Load Planning
Distribution Requirements Planning
Available to Promise
E R
HOURS
Material Inventory Tracking
In-transit & On-hand Inventory Tracking Order Management
B2B Exchanges
Contract Manufacturers
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3PLs / 4PLs
Channel Partners B2B Exchanges

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SAP APO Demand Planning Architecture
Demand Planning is composed of three layers: Graphical user interface Planning and analysis engine Data mart
GUI
Planning Views
Planning & Analysis Engine
OLAP Processor
Business Planning Library
Statistical Forecasting Toolbox
Data Mart
Planning Area
Time Series Catalog
Notes
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SAP APO Demand Planning Architecture (continued)
Performance is of vital importance in any demand planning solution if users are to fully benefit from available information DP architecture includes several features to ensure high performance: Dedicated server Multidimensional data mart based on the star schema that supports efficient use of storage space and of CPU cycles, minimizing query response time Batch forecasting so do not impede online performance The size of the information treated depends on: Number of characteristics: many characteristics will let the user more flexibility to define the planning level and to review the information but it makes the system works slower Number of key figures: many key figures will give the user a lot of information related to forecast but it makes the system works slower Number of characteristic combinations: the time consuming for any calculation (e.g. macros) depends directly on the number of characteristic combinations Number of planning versions: two planning versions needs double capacity than one Type and number of temporal periods
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Data Storage and Representation
Multidimensional Data Storage in the data mart allows to: View data and plan from many different perspectives Drill down from one level to the next Info Cubes: A multidimensional data structure The primary container of data used in planning, analysis and reporting Contains two types of data, key figures and characteristics (or dimensions): - Key figures are quantifiable values (e.g. sales in units, orders, shipments, POS) - Characteristics or dimensions determine the organizational levels at which you do aggregation and reporting (e.g. products and customers) Info Cubes also share master data and descriptive text, which are stored in different tables The Online Analytical Processing processor: Models the business rules considering the aggregational behavior of key figures (e.g. sales summed by product and time) Guarantees that all business rules are met and the computed views present valid results
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Data Storage and Representation (continued)
Hierarchies are modeled as combinations of characteristic values (e.g. product are grouped into product family hierarchies) using proportional and temporal factors, in order to be used as the basis for aggregation, disaggregation and drilling down. The DP planning level is based on the characteristics definition. In order to be more integrated with R/3 data, the dimensions and characteristics are usually based on R/3 hierarchies: Product dimension and characteristics are usually based on R/3 product hierarchy Customer dimension and characteristics are usually based on a R/3 customer hierarchy Geographic dimension and characteristics are usually based on the supply network
Dimensions
Aug.
Facts
W32 W33 W34 W35 W36 W37 W38 W39 W40 W41
Hierarchies
Regions
Cust P ome eri o rd
Sept.
time sequence
124
203
Material Product Groups
Attributes Life Cycle Promotion
Forecast
Time Series Management

99 01 00 02
N o t e s
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Data Storage and Representation (continued)
Time Series Management: Based on catalogs: time series data with related attributes (e.g. promotional patterns and life cycles) SAP DP allows to reuse time series saving time and ensuring consistency (e.g. reuse a past promotional pattern to estimate the impact of a similar future promotion) Notes Management maintains all notes entered by planners to create an audit trail of all demand planning activities, which is specially helpful when multiple sources and people are involved (such as in consensus forecasting)
Dimensions
Aug.
Facts
W32 W33 W34 W35 W36 W37 W38 W39 W40 W41
Hierarchies
Regions
Cust P ome eri o rd
Sept.
time sequence
124
203
Material Product Groups
Attributes Life Cycle Promotion
Forecast
Time Series Management

99 01 00 02
N o t e s
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Planning Environment
DPs rich planning and forecasting functions are based on the Statistical Forecasting Toolbox and the Business Planning Library. These functions include: Aggregate functions (sum, weighted sum, average) Disaggregate functions (quotas, proportional and equal distribution) Comparison functions (difference, ratio, percent, percent difference, share and correlation) Financial functions (conversion from units into revenue, currency conversion and business period conversion) Time-series functions (time-phased, average, and weighted average of time series)
A Planning Book is an easy-to-use tree control for selecting data and a frame with a grid and a graphical data display: Preconfigured planning books for promotional planning, causal analysis, statistical forecasting, life cycle management, etc These can be used as guides for customized planning books
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Planning Environment (continued)
You can use Advanced Macros to: Calculate deviations Make automatic corrections Calculate sales budgets Define your own exceptional situations Launch status queries Advanced Macros models the calculations based on the individual business tasks to perform principally: Build a macro consisting of one or more steps Control how macro steps are processed and how results are calculated Use a wide range of functions and operations Define offsets so that the result in one period is determined by a value in the previous period Restrict the execution of a macro to a specific period or periods Write macro results to a row, a column or a cell Create context-specific and user-specific planning views Trigger an alert in the Alert Monitor to inform of particular business situations Integration with Microsoft Excel
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Statistical Forecasting Toolbox
A Toolbox of all practical, proven forecasting methods Time Series Models: Uses past sales to identify level, trend, and seasonal patterns as a basis for creating future projections Nave models, moving average, simple linear regression, Browns exponential smoothing, HoltWinters, Box-Jenkins Stochastic Models: Accurate forecast with sporadic demand pattern Croston model uses exponential smoothing to estimate: - The size of demand during periods in which demand occur - The demand frequency Final forecast are determined by distributing the size of demand according to the demand frequency
Forecasting
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Statistical Forecasting Toolbox (continued)
Multiple Linear Regression: Technique for estimating the relationship between past sales and other causal factors Variety of options to model linear and non-linear trends: - Seasonal patterns - Life cycle patterns - Dummy variables and time lags Correlation analysis corrects variables Pick-the-Best, applies the best method among: All of the available forecasting methods, or The planner-specified forecasting methods S-Shaped Curves supports complete lifecycle forecasting (introduction/growth and end-of-life phases) Logistic and exponential functions First estimation based on similar products Adjusted over time when sales history is available
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Causal Analysis
Includes all significant causal factors (price, number of displays, number of stores, temperature, working days) in the models and determine how they affect customers behavior Simulate sales development according to the mix of causal factors (what-if analysis, marketing mix planning) Multiple linear regression to model the impact of causal factors
50F
65
75
85
60
Unit Sales
Feb.
Mar.
April
May
June
July
Aug.
Sept.
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Multi-Tier Forecasting
Integrates sell-in data (like POS data) into the process of forecasting sell-through data (like shipments) Causal model based on significant causal factors to forecast POS Second causal model is used to forecast shipments: Uses past POS data and the POS forecast as the main causal factor Takes the time lag between POS and shipments into account Considers other causal factors (forward buys, trade promotions)
Manufacturing
Sales History Sell Through Sell In
Retailer
POS Data
Consumer
sales
Consumer demand + Replenishment lead time
not o m r P i o
ne m st r ev d A ei
+ Forward buying = Retailer Demand
t ep m C o
time
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Data Analysis
Identifies missing values and outliers in the data to improve the quality of the statistical forecast. Through the outlier, an automatic correction of historical data is done taking into consideration out-ofrange data that may disturb the identification of historical pattern Identifies structural changes in established patterns: Level, trend, and amplitude changes Change from unstable to stable behavior Automatic detection via tracking signals Automatic outlier detection & correction Manual intervention
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Promotion Planning
Impact of promotions must be projected separately from standard forecast components that are based on historical sales data Takes prices into account when doing profitability analysis for promotional calendars Reporting capabilities allow to track promotional activities and related costs Archives a promotion pattern in a promotion catalog, so it can be reused Several techniques for estimating the effect of a promotion
Forecast simulation Sales
Profit Promotion Promotion patterns
-10%
97 Price
98
Planner
Quantity
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00
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Life Cycle-Management
A Demand Planning and Supply Network Planning both components function Planning strategies for a product depend on the stage of its life cycle: Should the product be introduced, and when? How should a product be promoted during the different stages? Should the product be deleted, and when? Should a successor product be introduced? Should a re-launch be started for a product, and when? What is the cannibalization effect of a new product with existing products? Etc.
DP can represent the launch, growth and discontinuation phases by using phase-in, phase-out and like modeling profiles (or combining them): A phase-in profile reduces demand history by ever increasing percentages during a specific period or periods (simulating upward sales curve launch and growth phases) A phase-out profile reduces demand forecast of a product by ever decreasing percentages (simulating downward sales curve discontinuation phase) Like modeling creates a forecast using the historical data on a product with a similar demand behavior (new products and products with short life cycles)
Product Launch End of Life
Aggregate
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Consensus-Based Forecasting
SAP DP supports consensus-based Sales & Operations Planning (S&OP) Multidimensional data structure of the InfoCubes enables to create multiple plans: Product levels for Marketing Sales areas and account/channel for Sales Distribution centers and plants for Operations Business units for Finance Synchronizes multiple plans into one Consensus Plan that drives business Composite Forecasting reconciles and combines different plans on same level and multi-levels Sales Forecast 1 Forecast
...
Marketing Forecast n
Combine & Reconcile
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Forecast Accuracy Analysis & Alert Monitor
Forecast accuracy reporting: Helps to assess the accuracy of past forecasts Integrates this knowledge into projections for the future Stores a series of forecasts for a particular period and compares each deviation of this series to the actual values for the same period (mean absolute deviation, error total, mean percentage error, ) Reports shoe forecast errors at any level and dimension: Actual versus forecast Actual versus time-lagged forecast Actual versus different planning versions Actual versus budget Alert Monitor informs in real time via e-mail or exception message if an exception occurs Exception conditions can be defined based on thresholds for special statistics and tracking signals Reports can be sorted: By forecast error Restrict them to products with a forecast error greater than a specified threshold
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Advantages of SAP APO Demand Planning
Global server with a BW infrastructure Integrated exception handling, creation of user defined alerts Integration with Production Planning (S&OP scenario) Main memory based planning Flexible navigation in the planning table, variable drill down Extensive forecasting technique Promotion planning and evaluation Collaborative planning via the internet Supports Sales Bills of Material (BOMs)
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Contents
1. 2. 3. 4.
5.
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Case Study: Sara Lee

Introduction
Main objectives of Demand Planning for Sara Lee: S&OP purposes: Provide the essential input for S&OP monthly cycle (forecast) and create consensus within the OpCo. Demand Forecast should contain the required detail in order to compare with Business/Sales targets Supply Planning purposes: Provide updated forecast from different OpCos (in weekly buckets) to Supply Planning in order to base Supply Planning on consolidated forecast from each OpCo Benefits of Demand Planning for Sara Lee: Improve the communication and transparency from all OpCos to CoE Provide to Supply Planning short and long term volume estimation for capacity planning Create consensus in the OpCo (together with S&OP) Understanding the demand of each OpCo through deep analysis (KPIs, market intelligence,) Move from Reaction on toward Plan Activities Improved customer service level Lower obsolete and safety stocks
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Project Approach
A template has been developed in order to align, cover and support all the processes performed in the Sara Lee Opcos in Europe. In different phases, the Opcos will start to use the new template, changing their actual procedures and/or systems (local roll-outs). There will be a central team responsible of maintaining the basic and common applications. In every roll-out a local team will be assigned to check that the requirements of the Opco are covered, to conduct the trainings, etc. Communication between local and central teams: Either in the central and in the local teams, there will be a member responsible of the communication between them. The communication link will be one-to-one. CUSTOMIZING: The local team will ask the central for customizing new structures. Every local roll-out will have a different copy of the Implementation Guidelines. GAPS: The local team will detect functionality not covered by the template, then, these gaps must be written down in a document called EuRoPe fit. Both teams will have a meeting to determine how each issue in the EuRoPe fit must be solved.
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Project Approach (continued)
Procedure for the EuRoPe fit Analysis and Development:
Initial training
(central to local)
EuRoPe fit sessions

(local)
EuRoPe fit analysis

(central & local)
GAP estimation
(central)
GAPs approval
(project management)
Local GAPs design

(local)
Central GAPs design

- Template development (central)
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Demand Planning Processes
Demand Planning Processes are divided into three cycles: AOP/Outlook generation: Provide volumes taken from APO DP as a starting point for the AOP/Outlook generation Monthly cycle: Update Demand Forecast for the following 24 fiscal periods and provide it to the Sales and Operations Planning monthly cycle (to create a consensus and run Supply Planning). Weekly cycle: Review current month forecast to identify supply risks, advise Sales and Marketing of these risks and change the forecast which applies to a period outside of the Supply Planning frozen period.
Strategic
Tactical
Operational
AOP generation
Monthly Cycle
Weekly Cycle
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Demand Planning Processes (continued)
AOP/Outlook generation: APO Forecast volume can be used as a starting point for AOP generation. Volumes are sent to R/3 where it is converted into value. Volume/value adjustments are done in R/3 AOP volume is sent back to APO for Supply Planning purposes and KPI analysis
APO APO
Process Process Volumes from APO Volumes from APO DP DP Convert volume to Convert volume to value value Adjust Volume Adjust Volume Send Adjusted Volume Send Adjusted Volume to APO to APO Run SNP with Run SNP with Adjusted volume Adjusted volume Volume adjusted after Volume adjusted after SNP SNP
CO-PA (R/3)
Responsible Responsible
Demand Planning
CO-PA (R/3)
Finance
Supply Planning
Convert volume to Convert volume to value value Adjust Volume Adjust Volume
Finance
Interface SAP - APO

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Final AOP volume sent Final AOP volume sent to APO to APO
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Monthly Cycle: Demand Planning can be considered as a sub-process of the Sales and Operations Planning
S&OP high Level flow S&OP high Level flow

Updated Demand Forecast
Business Group Review Local Local Euro Euro
Dem and Demand M eeting eeting M
Custom er er Custom Service Service Review Review
Local S&OP Local S&OP M eeting eeting M
OpCo Dem and Plan

APO
Local S&OP Review
Euro & Local Production Plan
Aggregate OpCo Dem and Plans Update Supply Plan Update Supply Plan Euro Supply Review Euro Demand Balancing
Euro Euro S&OP S&OP M eeting eeting M
S&OP scope DP scope S&OP scope S&OP scope with im pact with impact on DP on DP
Capacity Check and Inventory
Aggregate Supply Plan
Review Supply Chain

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Monthly Cycle: Rolling forecast for month M to M+24 is prepared by Demand Planners: In second last week of month M-1, Based on the history accumulated until month M-2 Second last week of previous month (*) Updated Demand Forecast
M.1. Generate KPIs Demand meeting M.2. KPIsanalysis M.5.Create Demand Forecast M.3. Updated Promotional Planning M.4. New Product Launches
Calendar is depending on the S&OP requirements (*) Caldendar
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Last week of previous month (*)
S&OP activities that impact DP

Define Supply Plan at Euro Level Local S&OP meeting
Customer service review Demand Meeting Business Group Review
M.6. Update Demand Forecast

Monthly Cycle: Demand planners will provide every month a rolling forecast for the following 24 fiscal periods. There will be some differences between the first 6 months and the remaining 12 months: - First 6 months: Presented in weeks if needed (in APO DP not much extra work is needed) Forecast based on clean history + promotions - Last 18 months (S&OP requirement for long term capacity checking): Presented in months Forecast as extrapolation of non-cleaned history
Monthly Cycle
18 months in months 6 months in weeks
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Forecast Baseline + Promotions
Non-clean history (no promotions)

Horizon
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Weekly Process: Process model overview: The process consists of reviewing the consumption of the forecast within the current month, facilitating decision making on critical exceptions (e.g. potential stock storage) This will be made by exception based on the following sources: - Consumption of forecast after the weekly upload (Monday-Tuesday) - Daily stock-out report coming from R/3 - Order to Cash (CDP) will develop ATP based on: Physical stock + Incoming stock Promised (reserved) stock Monday-Friday
Review current Review current month forecast month forecast consumption consumption Communicate Communicate risks to Sales & Marketing Marketing Update demand Update demand forecast with forecast with promotional promotional activities activities Communicate Communicate changes to Supply changes to Supply Planning Planning
Update demand Update demand forecast in APO forecast in
Risks Risks identified? identified?
Yes
No
Changes in Changes in Promotional Promotional Planning? Planning?
Provide changes in Provide changes in promotional promotional planning planning
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Data Structure
SCP data structure are based on CDP hierarchies: Hierarchies defined taking into account the global EuRoPe solution Easy to integrate with CDP CDP is responsible for defining the content of each of the level of the hierarchies Planning levels are grouped in dimensions. Dimensions do not have any functional impact, and it is only a way of organising the information in the system. In the SCP EuRoPe Solution it is planned to use 3 dimensions: Product Customer and Demand organization Geography APO is based on a Data Warehouse and therefore the information is always consistent at all levels
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Data Structure (continued)
The DP planning level is based on the characteristics definition. In order to be more integrated with R/3 data, the dimensions and characteristics are usually based on R/3 hierarchies: Product dimension and characteristics are usually based on R/3 product hierarchy
Sub Brand Concept Business line Category Process Type
Brand
Promo -tional Type
Kit
Type 1
Variety
Segment Sub Segment
Example of Planning level
Product Family
Product
Format SKU
All views are defined on SKU level

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Data Structure (continued):
Product Hierarchy in Sara Lee:
Level Body Care
Body Care Bath&Shower Bath Bath Herbs Radox Original Radox Herbal Bath Original bottle standard 500 ml Radox Herbal bath Original 500 ml
Household
Household Airfresheners Airfresheners Home Starter Ambi-Pur Perfum dinterieur Ambi-Pur Perfum dinterieur Antitabacco Anti-tabacco electrical standard Ambi-Pur Perfum dinterieu Antitabacco starter electrical
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Coffee
Coffee&Tea Coffee Roasted Coffee Roasted Coffee regular Standard Douwe Egberts Desert Douwe Egberts dessert Ground caffeinated Brick pack 10% free 250 gr Douwe Egberts dessert 250 gr 10% free Tea
Tea
Coffee & Tea
Business Line Category Segment Sub-segment Product Family Brand Sub-brand Product Process Type Variety Concept Packaging Type Product Type Format SKU
Hot Tea Black Regular Pickwick Pickwick English English box standard 80 * 2 Pickwick English 80*2
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Data Structure (continued)
Customer dimension and characteristics are usually based on a R/3 customer hierarchy
Sales Area Sales Director KAM Customer group Customer
Geographic dimension and characteristics are usually based on the supply network
Factories DC Clients Lowest Point of Delivery APO Supply Network
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Forecasting Detailed Process
The following are the detailed activities that Demand Planners will be doing every month with APO This cycle summarizes the scenarios that have been tested in the prototype phase:
Select Forecast Levels Choose statistical algorithm Clean History and Evaluate Forecast Baseline Disaggregation Evaluate Forecast Performance Add Events
Monthly cycle
Close the Period and KPI generation Send forecast to Supply Planning
Phase in/out Update Forecast Create consensus (local S&OP)
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Forecasting Detailed Process: Select Forecast Levels
Level of detail of the forecast The lowest level of detail of the forecast (due to Supply Planning or S&OP requirements) is: - SKU/customer/lowest point of delivery - weekly buckets Alternatives in APO APO gives the opportunity to forecast at any level of aggregation (product, cost, geography) using later Disaggregation and Reconciliation capabilities to allocate demand to the desired level
SubBrand Level
Select Forecast Levels Choose statistical algorithm Clean History and Evaluate Forecast Baseline Disaggregation Evaluate Forecast Performance Monthly cycle Add Events Phase in/out Update Forecast Create consensus (local S&OP) Send forecast to Supply Planning
Close the Period and KPI generation
Data consistency along the hierarchy
80.000
DE Dessert Dessert 6.000 DE 500g 4.000 2.000
Format Level
Forecast Level
SKU Level
32.000
Dessert 72.000 DE 250g 23.000 17.000
12.000
15.000 5.000
1.300
2.000
700
SKU/Customer
SKU/Customer
Customer Level
13.300 Auchan
17.000 Makro
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Advantages of Forecasting at different levels Reduction in Forecast errors: Forecasting aggregated levels of products typically results in lower forecast errors (principle of compensating errors) Importance to the Business: Analyse your products according to their strategic or economic value to the company (ABC analysis). Spend effort when it is required Customer concentration: Depending on the customer segmentation we can have the opportunity to focus on customer level forecast (Holland 3 customer 70% of market share, while in Spain only 39% - Nielsen) Customer collaboration: Requires that you forecast at customer level which you then can share with the customer Basic rules for selecting a forecast level Select a level aggregated enough: - To be representative (show continuous trend over periods) - Not to be too time consuming The level contains set of products homogeneous with similar demand pattern Ensure that is feasible to disaggregate to lower levels (without jeopardising accuracy)
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How to define the level at which to forecast: Identify the characteristics of the group of products that make them homogeneous and are therefore suitable for aggregating
Characteristic Description s Capacity to predict future Demand demand Volatility Identify seasonality, Market trend,... Intelligence Promotional Number, frequency and types of promotions activity Lifecycle Range of products Strategic Value Customer Collaboratio Customer n concentratio n
New product, growing, mature or declining A large number of SKU makes forecast complex Importance of the SKU/group of SKU for the company Collaboration with customer Special agreements Number of customers buying the product
Impact Example: Kiwi Large Shoe for selectin Polish 50 ml (H&BC UK) g level Demand is stable and Homogehomogeneous for the products of neous this group This is a seasonal product. Higher Homogesales from October to March neous Homoge No customer promotions neous Homoge Mature group neous Easy to 10 SKUs in this group disaggreg . Shoecare is a core line and Product A therefore high strategic to the No customer collaboration company Customer Solus listings - Safeway and view Sainsburys High concentration (6 customers Customer view 80% of the market)
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Forecasting Detailed Process: Choose Statistical Algorithm
What is available in APO?
Although in APO it is possible to use univariate and multivariable/causal forecast models, only univariate models are in scope APO provides a wide range of different statistical models and strategies to use for forecasting (up to 35): - Linear regression with seasonality - Trend model - Trend and seasonal model - Automatic model selection,... How to select the best model? First step: Prior to selecting the forecasting statistical model, Demand Planners will have to gather market intelligence to understand with pattern to find. Second step: Test which model better fits the expected demand pattern. Take into consideration some recommendation:
- Linear regression with seasonality model is very easy to understand by users and require very little maintenance (preferred model by Demand Planning implementation team) - Most of the other models require some statistical skills by users and time consuming maintenance by DP when reusing the same profile for next rolling forecasts
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Forecasting Detailed Process: Clean History & Evaluate Forecast Baseline
Why is necessary to clean history?
Select Forecast Levels Choose statistical algorithm Clean History and Evaluate Forecast Baseline Disaggregation Add Events Monthly cycle Phase in/out Update Forecast Create consensus (local S&OP) Send forecast to Supply Planning Evaluate Forecast Performance
To enable forecasting to be based on a model created using history that is free of impact of events (non repetitive history) Any outliers (promotions) will give errors in estimating seasonal demand To understand underlying demand e.g. seasonality and ensure that it is reflected in the forecast Ensure that the planned contribution of events is not duplicated in the forecast To provide a baseline forecast to account management so that they can focus on promotions Should you always clean history? No. Balance the amount of effort required versus the result: - Focus on major events which significantly effect your baseline. - Focus on A category products. - If events are repetitive in type and in time then the user could decide not to clean history.
Bas Sales history
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How to clean history in APO? APO gives the opportunity to clean history using different methods: - outlier correction: adjusts automatically historical values lying outside of the tolerance lane towards forecast baseline Easy to use and very little work - Mark events: Outlier correction that only applies to the selected periods - Manual correction: Manually add an event that subtracts/adds the desired volume to the history - Promotional planning: Automatically subtract the impact of the promotions defined in promotional planning
Total history Total history - updated promo = baseline
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Recommendations Use outlier correction - ... for the first history upload. Manual clean history for the last two year could be very time consuming, - ... for B and C products, as requires very little maintenance, - ... for non-promoted products (to smooth the deviations) Use mark events - when it is clear the period that Demand Planner wants to clean, and the correct impact of the event is unknown Use manual correction - also when the event o period that the user wants to clean is identified and the impact of the event is known Use promotional planning - for A products, because although requires significant maintenance (change the impact of events in Promotional Planning if the real impact is different than what was estimated), the forecast baseline can become more significant
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Forecasting Detailed Process: Disaggregation of the Forecast
What is disaggregation: Disaggregation consists of splitting the forecast made at a higher level in the hierarchies (i.e, from product format to SKU) and time (from month to week), using APO features APO gives the opportunity to choose between different alternatives: Historical splitting factors calculated by the system (proportional factors) Factors from previous forecast (pro-rata) Factors calculated outside APO Depending on each product group the approach may be different, the recommendation is to: Use proportional factors (only standard SKU) for the first forecast For following forecasts consider changes in the splitting factors done in previous rolling forecast. Therefore use pro-rata For time disaggregation (e.g., from fiscal periods to weeks) use factors calculated outside APO as a feasible alternative to what the system provides
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Example: Step 1: Forecast data creation: no data exists in advance. Proportional factors have been calculated
Forecast Level Proportional factors calculated from history (only STD SKUs) First disaggregation (create) is based on proportional factors
1000
25% 35% 40%
Product Family Level
250
350
400
SKU Level
Step 2: Forecast is updated at SKU level

Forecast updated at Brand level due to changes at SKU level No changes on the proportional factors New proportion established due to the changes at SKU level. These values do not overwrite the proportional factors First SKU forecast is updated from 250 to 350 32%
1100
25% 35% 40% 32%
36%
350
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350
400
SKU Level
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Step 3: New forecast is run (rolling forecast). Same forecast profile but historical horizon has been updated with one more period
Forecast is overwritten based on the new history data
1200
25% 35% 40%
Disaggregation is performed based on the existing data at lower level not in proportional factors anymore Forecast at SKU level is updated to new values but keeping the proportion of the previous data
32%
32%
36%
384
384
400
SKU Level
Note: Changes in the disaggregation factors only affect to the periods which Demand Planners updated in previous rolling forecasts April01 May01 time Brand Level
25%
1200
25% 35% 40% 32% 32% 36%
1400
35% 40%
350
350
400
SKU Level
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350
490
560
Accenture 2003

Disaggregation in time (from fiscal periods to weeks) Every month Demand Planners will update the forecast for the following 24 months The forecast will be made in fiscal period buckets The disaggregation factor from fiscal periods to weeks will be calculated outside APO - Every OpCo will calculate if there is a weekly seasonality in the fiscal period (e.g., first weeks have lower sales that last weeks). Otherwise fiscal forecast will be equally distributed to weeks. - This factors will only affect the baseline sales. Promotions will be directly assigned to the weeks when the promotion is executed (Promotional Planning)
200 Forecast Baseline
Evaluate Forecast Performance Monthly cycle Select Forecast Levels Choose statistical algorithm Clean History and Evaluate Forecast Baseline Disaggregation Add Events Phase in/out Update Forecast Create consensus (local S&OP) Send forecast to Supply Planning
P1
P2
P3
Forecast baseline for the Period 1: 200 Promotion on week 3 and week W1 W2 W3 W4 4 Weekly profile10% 20% 30% 40% Baseline Promotions 20 40 40 60 20 80 80 20 100
Identify weekly profile in fiscal periods
W1
W2
W3
W4
--49 -49
Final Forecast 20
Accenture 2003

Forecasting Detailed Process: Add Events
What is an event: An event can be defined as any activity, internal or external, that have a significant impact on demand. Types of event: There can be many different types of events: - Sales events (Logistics, Financial, Change in customer listings) - Marketing events (TV campaign, Change in price policy, ) - External events (competitors actions, market tendencies,) Why events are needed in DP: Demand planners work with APO to get a representative Forecast Baseline (free of impact of events) Events can represent a very significant volume. It is therefore essential to have a good estimation of the expected impact of sales and to apply them in APO The information has to be provided to Demand Planners by the people that are closer to the market and customers (Sales and Marketing)
Forecast Baseline Promotions Sales Obsolete t Cannibalisation Stock effects t New Product Introductions Updated Forecast
Sales
--50 -50
Accenture 2003

Information required for Sales events Demand Planner will include the impact of promotions, with a significant impact on sales, to the APO forecast Every month Sales should provide to the Demand Planner the updated promotional plan for the following 6 months, which ideally will contain: - Description and customer target of the promotion - Volume estimation for the SKU (or group of SKUs) on promotion - Weekly detail of the impact (when possible) - Estimation of the expected cannibalization (when possible)
Promotion A Promotion A

Description of promotion: 10% discount Customer (s) target: Carrefour Start date (shipping): 15 February End date (shipping): 28 February Expected promotional volume Expected cannibalization Week 1 Week 2 Week 3
700 + 15% 500 +20% 500 +5%
SKUs promoted Sanex Shampoo 500 ml SKU of Douwe Egberts dessert
Week n
-600 -20%
SKUs cannibalised Sanex Shampoo 750 ml SKUs of JM dessert
Week 1 Week 2 Week n

100 -5% 100 - 5% 25 0%
--51 -51
Accenture 2003

Information required for Marketing events For price policy changes: - Planned dates for price policy changes per account, - Dates when the changes will be communicated to customers, - Estimation on change of volume (at aggregated product level) for the periods: From communication date to price change date From price change date until sales are stabilised For other Marketing events (TV campaigns ) - Volume estimation for the SKU (or group of SKUs) on promotion - Estimation of the expected cannibalization (when available)
--52 -52
Accenture 2003

Information required for External events In some occasions an OpCo can be aware of external factors that may have significant impact on future sales An example of this can be the Coffee demand that can have a strong relationship with: - Price - Price distance - Market Share - Market Growth To include these events in APO forecast it is necessary to: - Make an interpretation of external data (e.g., Nielsen) - Estimate the impact on future demand that this situation may have - Communicate the impacts to Demand Planners, who will include it as an event in the promotional calendar
--53 -53
Accenture 2003

Forecasting Detailed Process: Product Lifecycle Management
What is it? The Product Lifecycle usually has different phases: launch, growth, maturity and decline Demand Planners need to take product lifecycle into account when forecasting, especially in the launch and decline phases Alternatives in APO APO DP provides different alternatives to deal with lifecycle management: - Like modelling - Choose a product similar in behaviour to the new product introduction and use its launch profile to base your forecast on (or % of this profile) - Phase-in profile - Select a product which has a similar mature sales history and apply a profile for launch. This profile can be based on market intelligence - Phase-out profile - Apply a time series phase-out profile to simulate the discontinuation of a product. - Manual profile A profile for the product is manually entered into the system Demand Planners will choose the best option considering the specific characteristics of each case
--54 -54
Accenture 2003

Forecasting Detailed Process: Product Lifecycle Management
Phase In - Phase Out: Product Lifecycle management The information required for each of these activities will be: For new product introduction (phase-in): - Introduction strategy for different accounts (new launch calendar), - Phase-in profile: expected volume for the coming periods at SKU level, or referent SKU (or group of SKU) from which to be used as a Like Profile - Cannibalisation expected on other SKUs already listed in customers (estimation of total volume at an aggregated level e.g. format). For phase-out of existing SKUs: - Phase-out strategy for different accounts (phase-out calendar), - Phase-out profile (expected volume for the coming weeks), - Positive cannibalisation with other products
--55 -55
Accenture 2003

Forecasting Detailed Process: Update Forecast
What is a job? APO gives the opportunity to run any process in batch jobs (i.e, run a forecast, include impact of promotions,) and forecast by exception, making use of alerts to identify potential forecast errors Advantages of jobs: Reduction in Demand Planner work effort Alerts identify potential errors Disadvantages of jobs: Demand Planners do not see on-line the work they are doing (e.g., adding a new promotion or disaggregate the forecast) Maintenance of the jobs is required Recommendation: Make an ABC analysis taking into consideration volume, value and strategic value of each set of products. For A group of products: On-line forecasting: Spend effort when is necessary For B and C: Forecast by exception
20%
ABC analysis
20% 80% 80%
N of SKUs Value
--56 -56
Accenture 2003

Forecasting Detailed Process: Update Forecast
What is an alert? Alerts in APO are customizing Warnings that a Demand Planner can use to track results from any activity he/she performs in the system
Periods Forecast (from last period) 100 Forecast (from actual period)
P1 120 110
P2 150 90
P3 170 150
P4
220
Alert
Watch Out!!!
Difference in Percentage is Greater than 20% !!!!
--57 -57
Accenture 2003
Contents
1. 2. 3. 4.
5.
--58 -58
Accenture 2003
Key Aspects to Consider When Implementing DP

Lessons Learned
R/3 Integration:
Data structure between R/3 and APO should be aligned. Otherwise, interface may become very complex. The involvement of Demand Planner in the definition of product/client hierarchy in R/3 is key When a transactional system is already in place, using of existing data hierarchy is recommended in order to avoid double maintenance. You should evaluate whether to keep current data structure or design a new one
Relationship with other APO modules:

Demand is the input to SNP. When distribution network is complex, it may oblige the Demand Planner to plan demand for many locations. During the Detailed Design phase, consider how the relationship with SNP will be: If a valid desaggregation strategy for forecasting and dimensioning locations already exists in DP, then it can be reused for SNP If customer uses percentages to assign locations, then maintenance will be done from SNP In general, final decision depends on Demand Planner management style, being closer to commercial (DP preference) or production (SNP preference) point of view
forecast forecast forecast
forecast supply supply supply

--59 -59
supply
Accenture 2003

Lessons Learned (continued)
Modelling:
Understand the process during the Detailed Design phase is key. Later modifications in APO (characteristics, key figures, ) imply to activate and inactivate planning area, so all data is lost (including forecast). Redoing all the data and managing several environments becomes inconvenient and time consuming. It is recommendable to be specially aware of: The use of attributes, characteristics and characteristics combinations Ratios definition (the impact is less, given that extra ratios can be created) Desaggregation strategy Define the security model as soon as possible (in the Detailed Design phase). By doing so, we will be able to estimate customization and planning areas creation effort properly, taking into consideration that: Authorization managing does not allow to restrict access by data, managing access is only possible at the planning area level The later may imply to multiply effort as many times as user groups are to be defined Define desaggregation strategy as soon as possible (in Detailed Design phase): A low level desaggregation may imply that forecast demand by client may not be much accurate. Keep the criteria that customer suggests us to define the optimal desaggregation level When possible, use temporal desaggregation criteria that APO provides
--60 -60
Accenture 2003

Modelling (cont.):
Providing that customer is not always capable to use complex methods, use more simple forecast methods such as linear regression and seasonability if possible. Other methods can result in a blackbox for the customer so that they become more difficult to understand and use effectively
Knowledge transfer:
Emphasize knowledge transfer during the project life. Planners need to spend a significant amount of time to learn and make full use of the tool (e.g. different options for desaggregation). By not considering it, they may feel that Excel can do more than DP. Two approaches are suggested to overcome this risk: Provide the user a prototype so he/she may experience the tool Create a super-user role: a competent and fully-dedicated user that will support us in training and support tasks
--61 -61
Accenture 2003

About DP functionality:
The following is a list of functional issues that complicate a DP implementation. Take special care when explaining functionality to the customer as they may differ from SAP official version: New product cycles: not integrated with R/3, so that product characteristics creation is manual and tedious New product versions: realignment and phase in phase out functionalities to manage product versions do not work always properly Promotions: not agile for the user, many options that are not used Cannibalization: poor functionality, it does not fill customer requirements Kits and Displays: does not cover dependent demand functionality properly (e.g. parent product characteristics are transferred to dependent products while this is not always true)
--62 -62
Accenture 2003

Complexity Factors: Process Business Scenarios
Factor
DataMart Strategy
Description
It indicates the complexity of the data structure (product/ client/ location) and the alignment with the transactional system.
Criteria
Number of dimensions. (product/client/location). Stability of R/3 environment. Data structure alignment.
Sales History
It indicates the complexity in the integration of sales history.
Data in SAP standard system. Data structure alignment between APO and the
other system.
N. of sources of data.
Planning Cycle
It indicates the frequency in which planning is performed.
Planning frequency.
Planning Horizon
It indicates the number of months to forecast.

--63 -63
Number of months.
Accenture 2003

Complexity Factors: Process Business Scenarios (continued)
Factor
Aggregation Strategies
Description
It indicates the complexity that exists in the data desaggregation .
Criteria
Number of dimensions. (product/client/location). Desaggregation criteria complexity. Desaggregation profile volatility.
Lifecycle Management
It indicates the degree of new products introduction.
Number of new products. Number of new versions per

product.
New Customers Introduction Kits and Displays Management
It indicates the degree of new costumers introduction.

It indicates the number and variety of aggregation of final products that are done.
Market segmentation.
Frequency of development of kits and displays. Variety of kits and displays.
Promotional Planning
It indicates the degree of promotional activity.

--64 -64
Promotional activity.
Accenture 2003

Factor
Statistical Forecasting-Time Series Statistical ForecastingCausal
Upload and Evaluation of an External Forecast
Description
It defines the demand model.
Criteria
Demand trend and seasonality.
This option must be input if causal forecasting is considered.
Number of factors that need to

be considered.
It indicates the complexity of the process of uploading and evaluating external forecasts.
Number of sources for data obtaining.
Alignment of data format (SAP standard). Data structure alignment with APO.
Consensus Forecasting
It indicates the number of forecasts that are to be made among all the departments involved and the degree of consensus reached.
Number of forecasts.
--65 -65
Accenture 2003

Factor
Forecast Accuracy Tracking Demand Forecast Valuation
Description
It indicates the complexity that exists in the forecast accuracy tracking process.
Criteria
Complexity of the KPI calculation. Number of dimensions. (product/client/location).
It indicates the complexity that exists in the demand forecast valuation process.
Type of system in which valuation

is calculated.
Calculation complexity.
Review and Adjust Forecasts at Various Aggregation Levels
It indicates the complexity that exists in the review and adjustment of forecasts.
Number of dimensions. (product/client/location).
Desaggregation criteria complexity. Desaggregation profile volatility.
Generate New Forecast (Batch Run)
It indicates the complexity that exists in the generation of forecasts.
Number of SKUs.
Number of inputs used to perform the forecast. Desaggregation criteria complexity.
--66 -66
Accenture 2003

Factor
Release of Forecast
Description
It indicates the complexity that exists in the transfer of the forecast to SNP (or other system).

Criteria
Type of system to which the forecast is to be transferred. Number of characteristics that are subject to modification during the transfer.
Alert Monitor Work by Exception Returns Scenario
It indicates the complexity that exists in the alert management.
Number of alerts to be managed. Complexity of the KPI calculation

for alert treatment.

Frequency of returns. Volume of products that are returned.
It indicates the number of returns that exist.
Reporting Scenario
It indicates the complexity that exists in the reporting.
Number of reports.
Complexity of KPIs calculation. Number of filters (conditions for report data selection). Complexity of filters operations.
--67 -67
Accenture 2003

Complexity Factors: Technology Set Up
Factor
Infocubes
Criteria
Number of characteristics. Number of dimensions (product / client / location). Number of key figures.
Planning Area
Number of characteristics. Number of dimensions (product / client / location). Number of key figures. Number of planning books. Temporal buckets.
Data Warehouse Interfaces
Complexity on the calculation of KPIs.
KPI calculation frequency Level of machine resources load.
--68 -68
Accenture 2003

Complexity Factors: Technology Set Up (continued)
Factor
Roles and Authorizations
Criteria
Number of roles.
Standard SAP vs. non-standard SAP system. Number of characteristics to maintain. Number of dimensions (product / client / location). Data structures alignment.
Master Data Interface
R / 3 Interface
Standard SAP vs. non-standard SAP system.
Data structures alignment. Transfer frequency.
--69 -69
Accenture 2003

Complexity Factors: Technology Conversion
Factor
Locations Products Sales History
Criteria
Number of locations per product. Number of products.
PPM DP
PPM loaded from SAP R/3 vs. a non SAP system.
Number of PPMs. Average number of components per PPM.
--70 -70
Accenture 2003
Contents
1. 2. 3. 4.
5.
--71 -71
Accenture 2003
DP Demo: Accelerated Supply Chain Integration APO Template

This scenario shows an example of how the customer dimension has to be considered in the Supply Chain Planning Process
GOALS
To demonstrate that the Supply Chain process has to be customer oriented in order to ensure the required service level at minimum cost.
EXPECTED CUSTOMER BENEFITS
Improvement of forecast accuracy as a consequence of considering events and sales history at the customer level. Build up the basics to launch downstream collaborative initiatives (CPFR or CRP/VMI).
INDEX
Business Description Previous Steps SAP APO Demand Planning
--72 -72 Accenture 2003

Business Description
Definition of DFUs (Demand Forecasting Units) The DFU is a combination of product, geographical area and demand group (customer). A DFU level has to be defined at which forecasts are created and agreed on with all the people involved in the process.
Category A Nationwide All customer
Product A Nationwide All customers
Product B Nationwide All customers
customer A
Product B Nationwide
customer B
customer C
Promotional activities with the most significant impact on sales are planned and executed at the customer level.
In environments with a great customer concentration, the introduction of customer dimension in the forecast hierarchy is necessary to improve forecast accuracy. The actual sales information at the customer level is critical to quickly react to deviations in the promotional behavior.
--73 -73 Accenture 2003

Criteria to Determine Significant Customers
There is a compromise between workload and improvement of forecast accuracy in the selection of customers to be considered in the demand forecast.
Only 15 to 20 customers are usually significant to the forecasting process. The criteria to determine what are these significant customers are: Sales volume: these customers must account for at least 50% of total sales. Promotional activity with significant impact on sales: customers with promotional activity that eventually could impact more than 10% on total sales must be considered in the forecast process. Customers involved in collaboration initiatives (CRP/VMI, CPFR, etc.): customers with special agreements. Customers with very high sales volume in some products: customers which account for over 50% of sales of one product with strategic relevance.
--74 -74
Accenture 2003

Procedure to Reflect Changes in Market in SAP APO
The market is changing every day with continuous mergers, demergers, acquisitions, etc. that must be reflected in the forecast to better match future demand. Generally speaking, it is not advisable to change historical data to match changes in the customer composition. It is preferable to introduce events in order to increase or decrease the base sales forecast.
OR customer A customer A
In this case, the forecast is adjusted by introducing an event in the future with the impact in sales of the increased or decreased number of points of sales. The merge of two customers can be handled by creation of: a new data selection including the two old customers and the new one. a database realignment process. The introduction of a new customer does not entail any change in the standard methodology.
--75 -75
customer A
customer B
New customer
Accenture 2003

Previous Steps
Before performing this scenario in SAP APO, it is necessary to delete all the previous transactional data from former users that could affect the scenario results. For that matter, the next steps must be executed: Go to transaction SE38.
1.
2.
Fill the program: /SAPAPO/RLCDELETE
2.
Press the button
to execute it.
--76 -76 Accenture 2003

Previous Steps
4. Get a variant:
5. Select the variant TEMPLATE_003

DO NOT SELECT ANY VARIANT EXCEPT THIS ONE !!
--77 -77
Accenture 2003

Previous Steps
6. Execute
1. and confirm all messages the system issues.

--78 -78 Accenture 2003

SAP APO Demand Planning
MAIN FUNCTIONALITIES
Review of Historical Sales
Review historical sales of one product and disaggregate the information in the client dimension. Choose statistic model. Errors review and model re-selection if needed. Introduce a promotional event at the client level. Review existing promotions for this client / product. Review the forecast at the client level and the impact of cannibalization between standard and promotional products. Analyze the alerts generated by the system due to significant sales deviation in one client during the promotional period.
Generate Forecast

Event Introduction

Forecast Review
Alerts due to significant Sales Deviation
--79 -79
Accenture 2003

SAP APO DP
1. 2. 3. 4. 5.
Menu path: Demand Planning / Planning / Interactive Planning In the shuffler, press the button and select Data Views.
Open the Planning Book PB_003_02 and select (double click) in the data view DV_003_01 Press the button and select Info Objects Select the data selection product P_003_217. Press the button and Object Selection screen will appear. Select the
to load the historical product sales.
--80 -80
Accenture 2003

SAP APO DP
6.
To perform a drill down in the client dimension, click on Header button the Total - Account tab strip, select the option Details.
and, in
7.
To obtain the percentages by client over total sales, press the button
--81 -81
Accenture 2003

SAP APO DP
Generate Forecast
1. To generate forecast select in the menu: Settings Forecast profile. 2. Select your Master Forecast Profile: MP_P_003_217 press the button
button
to obtain the Forecast.
and then press
3. To display the graphical forecast press the button 4. To choose the other statistic model press the button
and then press the button and select the new model (if
you consider it necessary). Press the button
--82 -82
Accenture 2003

SAP APO DP
Generate Forecast
5. To review the errors press the button
statistic model.
and obtain the forecast errors for this
--83 -83
Accenture 2003

SAP APO DP
Event Introduction
1. Menu path: Demand Planning / Planning / Interactive Planning 2. Press the button 3. Press the button 4. Fill in the fields as described below:

and the promotional screen will appear. to create a new event.

*These fields are filled in with names as example. The user must put their own names or dates **The begin and end dates must be always in the future
Short Text (Promotion ID): P_217_PROMO* Description: Promotion 217* Cannibalization group: CAN_217 Period: enter W Number of periods: enter 3 Begin date: 10.03.03** End date: 30.03.03** Promotional key figure: RPROMEV Planning key figure: RHIST
--84 -84
Accenture 2003

SAP APO DP
Event Introduction
5. Press the button Save in the command bar 6. The screen for the promotional data introduction will appear:
CAN_5246
--85 -85
Accenture 2003

SAP APO DP
Event Introduction
7. 8. 9.
In the shuffler, select the product P_003_217 Press the drill down button in the shuffler and select Account (client).
Select the client 100890 (which is affected by the promotion). in the command bar. and come back to the product selection.
10. Press the button Assign Objects 11. In the shuffler, press the button
12. Select the product P_003_217 and press the button. 13. In the promotional planning screen, enter the quantities for the first period (e.g. 1.000),
for the second periods (e.g. 1.500) and for the third period(e.g. 2000) option Planned, in the Future.
14. In the command bar, press the button Change status 15. Save the promotion by pressing the button
and then, select the
--86 -86
Accenture 2003

SAP APO DP
Event Introduction
16. Return to the interactive planning screen by clicking the button 17. Review the impact on the forecast of the planned promotion(Load the product P_003_217
and select the graphic view
--87 -87
Accenture 2003

SAP APO DP
Event Introduction
19. Menu path: Favorites/Promotion Reporting 20. Select the fields planning area PA_003_3, version PV_003_01 and promotion key figure
RPROMEV.
21. Press the button
--88 -88
Accenture 2003

SAP APO DP
Forecast Review
1. At Interactive Planning screen, select the data selection product P_003_5246 and the
promotion button to load it into the table.
2. Go to the header, and in the Product tab strip select Details. 3. Review in the promotional and net forecast key figures the impact of cannibalization
between the two products (optional).
4. Go to the header, and in the Account tab strip select Details. 5. Review, in the promotional and net forecast key figures, the impact of cannibalization
between the two products at the client level. When a product is in promotion, others products may be affected
--89 -89
Accenture 2003

SAP APO DP
Alerts
The alert monitor always provides a picture of current structure and supports the management
of daily planning activity.

1. 2.
Menu Path: Supply Chain Monitoring / Alert Monitor. Select in Favorites the option Setting Alert Profile Template 03 (DP.
Select Products or Resources.
Select your preferred alert type.
Once you have selected Products, select the object you want to control.
--90 -90
Accenture 2003

SAP APO DP
Alerts
3. The interactive planning screen appears and the user only has to load the data selection
into the table to review what is happening. (client) tabstrip, select the option Details.
4. To do a drill down in the client dimension, go to the header and, in the Total Account
--91 -91
Accenture 2003
Contents
1. 2. 3. 4.
5.
--92 -92
Accenture 2003
DP Exercises
DP EXERCISE
SAP APO installation guide and getting started: Before you do the exercises we are going to install the SAP GUI and the access to the Barcelona APO Solution Center.
1. Access the address: https://software.accenture.com/ 2. In the Search Tool bar click SAP and then click GO 3. Click on the link SAP Frontend-Version 6.10 4. Follow the wizard instructions This will leave SAP GUI installed on your hard disk.
5. Click on the SAPlogon icon in your desktop 6. Click on the NEW button 7. Input the following data: Name: Barcelona APO Solution Center Application Server: 170.251.70.208 System number: 00 8. Click on the OK button and double click on the access
--93 -93
Accenture 2003
DP Exercises
DP EXERCISE Objective:
To consolidate the DP concepts learnt along the course. At the conclusion of this unit, you will be able to: Evaluate historical data and create sales forecast. Analyze the differences among the forecasts you get when the statistical models have been changed. Analyze the variables that APO provides you to asses forecast accuracy based on past data. Create promotional events in APO. Check the promotion impact on the forecast and cannibalization produced between products.
Exercise:
The first step is to delete all the previous transactional data from former users that could affect our results. Select the product P_003_3004 and review sales at client level,both in absolute values and in percentages. Create a forecast, check the variables and change the statistical model for the forecast. Check the differences between the models and check the MAD and MAPE statistical parameters.
--94 -94
Accenture 2003
DP Exercises
DP EXERCISE
Introduce an event: Short Text (Promotion ID): Description: Promotion 3004 (user x) Cannibalization group: CAN_3004 Period: enter W Number of periods: enter 3 Begin date: (user) End date: (user) Promotional key figure: RPROMEV Planning key figure: RHIST Introduce some values for your promotion. Check the promotion impact on the forecast. Check the cannibalisation between products both at product level and at client level.
--95 -95
Accenture 2003
DP Exercises
DP EXERCISE SOLUTION
Before performing this scenario in SAP APO, it is necessary to delete all the previous transactional data from former users that could affect the scenario results. For that matter, the next steps must be executed: Go to transaction SE38.
1.
2.
Fill the program: /SAPAPO/RLCDELETE
2.
Press the button
to execute it.
--96 -96 Accenture 2003
DP Exercises
4.
Get a variant:
5.
Select the variant TEMPLATE_003

DO NOT SELECT ANY VARIANT EXCEPT THIS ONE !!
--97 -97
Accenture 2003
DP Exercises
6. Execute
All the categories from orders (forecast, purchase requisitions, production orders..) that could affect the scenario results are included in the variant.
All the products and Locations defined in our template are included in the variant.
7. and confirm all messages the system issues.

--98 -98 Accenture 2003
DP Exercises
Review of Historical Sales:

1. 2. 3. 4. 5.
Menu path: Demand Planning / Planning / Interactive Planning In the shuffler, press the button and select Data Views.
Open the Planning Book PB_003_02 and select (double click) in the data view DV_003_01 Press the button and select Info Objects Select the data selection product P_003_3004. Press the button and Object Selection screen will appear. Select the
to load the historical product sales.
--99 -99
Accenture 2003
DP Exercises
6.
To perform a drill down in the client dimension, click on Header button the Total - Account tab strip, select the option Details.
and, in
7.
To obtain the percentages by client over total sales, press the button
-- 100 -100
Accenture 2003
DP Exercises
DP EXERCISE SOLUTION Generate Forecast:
1. To generate forecast select in the menu: Settings Forecast profile. 2. Select your Master Forecast Profile: MP_P_003_3004 press the button
press button
to obtain the Forecast.
and then
3. To display the graphical forecast press the button
and then press the button
-- 101 -101
Accenture 2003
DP Exercises
4. To choose the other statistic model press the button
you consider necessary). Press the button statistic model:
and select the new model (if
5. To review the errors press the button
and obtain the errors parameters for this
Mean absolute deviation (MAD): mean absolute deviation gives the mean average difference between the forecasted value and the historical value in the ex-post forecast. Mean absolute percent error (MAPE): mean absolute percentage error
MAPE
MAD
-- 102 -102
Accenture 2003
DP Exercises
6. You can choose other models and review the new results. Exit without saving
pressing
7. To come back to the interactive planning press the button
-- 103 -103
Accenture 2003
DP Exercises
DP EXERCISE SOLUTION Next steps:
For next steps follow the instructions from the Demo Scenario. Be careful with planning versions and products, so each assistant should use their products. Use the information given at the exercise to introduce the promotional event as well.
-- 104 -104
Accenture 2003

SAPSCM/APO European Initiative: APO Overview Internal Training Demand Planning Overview

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SAPSCM/APO European Initiative: APO Overview Internal Training Demand Planning Overview

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SAPSCM/APO European Initiative

APO Overview Internal Training Demand Planning Overview

Demand Planning Features and Capabilities

Demand Planning Data Mart

Anticipation of Future Demand

Demand Planning Features and Capabilities

Supply Contract Negotiations

Customer Service Territory Planning

Inventory Target Setting

Demand Planning APO DP

Supply Demand Matching

Distribution Requirements Planning

Material Inventory Tracking

In-transit & On-hand Inventory Tracking Order Management

Channel Partners B2B Exchanges

Demand Planning Features and Capabilities

Planning & Analysis Engine

Business Planning Library

Statistical Forecasting Toolbox

Time Series Catalog

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Cust P ome eri o rd

Material Product Groups

Attributes Life Cycle Promotion

Time Series Management

Demand Planning Features and Capabilities

Cust P ome eri o rd

Material Product Groups

Attributes Life Cycle Promotion

Time Series Management

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Sales History Sell Through Sell In

Consumer demand + Replenishment lead time

+ Forward buying = Retailer Demand

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Profit Promotion Promotion patterns

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Combine & Reconcile

Demand Planning Features and Capabilities

Demand Planning Features and Capabilities

Case Study: Sara Lee

Case Study: Sara Lee

Case Study: Sara Lee

EuRoPe fit sessions

EuRoPe fit analysis

Local GAPs design

Central GAPs design

Case Study: Sara Lee

Case Study: Sara Lee

Interface SAP - APO

Case Study: Sara Lee

S&OP high Level flow S&OP high Level flow

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