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:

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:

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...