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Excerpt from Demand Planning with SAP APO – Execution by Shreekant Shiralkar and Avijit Dutta.
Release and transfer of demand plan
Demand planning is the trigger for supply planning and production planning. This is possible when we make the demand plan available to supply planners and demand planners; after verifying the appropriate release and transfer of the demand plan to the supply system and production system respectively. In this chapter, we will introduce various mass processing and verification methods for carrying out independent consensus demand plan release and transfer to their target system. Once it is successfully released, transferred, and verified, we allow the next planning activities to take place
including supply planning and production planning.
We will explain the concepts, business rationale, execution, and verification method
behind mass processing of release and transfer of demand plan and will look at these
concepts through the lens of our business scenario.
Demand planning is the first significant planning process in entire supply chain planning process. After demand planning, the next planning process that follows helps us to make good use of the demand plan are supply planning and production planning, if the operating company also does manufacturing. Therefore, the consensus independent demand plan needs to facilitate supply planning and production planning. Supply planning and demand planning is possible through release and transfer of demand plan based on the design for the same.
Supply planning and production planning can be executed in planning system like APO, as well as in an execution system like ERP, as we know that ERP also allows for planning, albeit in a limited way, apart from execution. The choice of a supply planning and production planning system is driven by business necessity of the company and their focus on planning.
The efficiency of supply planning and production planning depends not only on the accuracy of the demand plan, but also on how we integrate demand planning, supply planning, and production planning. In a real life business situation, we normally carry out these activities through mass processing because volumes and complexities are enormous in a real business. Mass processing, being a fairly automated process, helps with speed, accuracy, and volume handling.
Mass processing follow up activities
Mass processing execution is followed by job log assessment, alert monitoring,
exception handling/ analysis through interactive planning, and the demand plan release and transfer assessment in the target system.
In this chapter, we will exclusively devote our discussion to release of the demand plan to the APO SNP system for supply planning and transfer of demand plan to the ERP system for production planning. We will explain the different mass processing methods for both release of the demand plan and transfer of demand plan. We will also explain two different methods for releasing demand to SNP and for transferring demand to ERP. This briefly explains the concept behind release and transfer of demand plan. We explain the application of release and transfer of demand plan for our business scenario as follows.
You will find the reference to this section in the block ‘Release and Transfer of Demand Plan’ in APO DP process flow depicted in Figure 9.2 on page 230.
For our business scenario at DM Consumer Appliances, Inc. we assumed fewer complexities in the production processes and a fairly stable and uninterrupted capacity. Therefore, we carry out production planning using simpler methods in the ERP system. As for supply planning, we have one distribution center and two retail stores. However, we anticipate that the supply chain network at DM Consumer Appliances will become increasingly complex in the coming days and therefore, we decide to do the supply planning using the APO SNP system. Furthermore, we want to familiarize you with two discrete mechanisms for integration, i.e., integration to APO SNP through release of demand plan and integration to ERP through transfer of demand plan.
At DM Consumer Appliances, Inc., we do the supply planning for non-manufacturing plants like Frankfort Distribution Center, the Columbus Retail Store, and the Philadelphia Retail Store in APO SNP, whereas we do the production planning for the Atlanta Manufacturing Plant in ERP after disaggregating the independent consensus independent demand plan for all individual products to their respective locations. In the following sections, we will explain the different methods for release and transfer of demand plan and we exemplify the concepts though our business scenario. Subsequently, we will explain the different methods for verifying release and transfer of demand plans.
Demand planning (DP) is an important process for supply chain management (SCM) across businesses and has a significant impact on the overall efficiency of business operations. With this book you will learn how to use the SAP ERP system for production planning and supply chain execution activities and how to use the Advanced Planner and Optimizer Supply Network Planning (APO SNP) system for supply planning in the network.
Using a detailed case study and screenshots, you will walk through the entire demand planning execution process from APO DP, to APO BW, and the SAP ERP system using configurations, master data and transactions in SAP. The authors also provide methodologies and a roadmap for a template-based SAP global rollout and SAP implementation that is applicable for SAP APO DP. This expert guide to demand planning execution in SAP APO covers:
– The data loading process to target systems using APO BW
– Statistical forecasting, aggregation, and disaggregation of the demand plan
– Product life cycle planning, promotion planning, cannibalization, and consensus planning
– Mass processing methods for releasing and transferring supply and production planning