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Excerpt from Demand Planning with SAP APO – Concepts and Design by Avijit Dutta and Shreekant Shiralkar
SAP APO is the Advanced Planning and Optimization component of SAP SCM. The acronym APO stands for Advanced Planning and Optimization. SAP APO provides collaboration, planning, and optimization across the entire supply chain network.
APO: Not a standalone system
APO cannot exist as standalone system, as it needs a backend ERP system for input data and also eventually to pass planning data back to the ERP system for execution.
SAP APO helps to address supply chain challenges by providing a robust and sophisticated planning solution.
SAP APO integrates seamlessly with other major components of SAP SCM as depicted in Figure 2.1. However, SAP APO also integrates with SAP systems, non-SAP systems, and the web as shown in Figure 2.2.
Figure 2.2: SAP APO modules and interfaces
It is important to understand that APO represents an advanced planning and optimization component. This is precisely because we do get a miniature version of planning in ERP itself. The planning functionality in SAP ERP is quite generalized and is not as comprehensive as SAP APO. Needless to say, the SAP APO optimization functionality that reinforces the planning output does not exist in SAP ERP.
In this section, we will look at the different business processes and modules that pertain to SAP APO, the building blocks of SAP APO, its integration with the core execution system like SAP ERP, integration with different peripheral systems, integration with non-SAP systems, and finally SAP APO architecture.