Product segmentation in SAP APO DP

[Former Member]

Hi Friends,

   I am looking for inputs on product segmentation in SAP APO DP, based on business defined parameters. Any pointer or help in this regard is highly appreciated. If anybody knows the link to SAP Library, please share.

Cheers!

Raghav

[Former Member · Accepted solution]

Hi Raghavendra,

Can you elaborate on your requirement? By Product Segmentation, do you mean something like ABC classification?

Typically I have seen any such product grouping is done outside APO in an offline exercise and used as an input for planning / navigation.

Thanks,

Shardul Dnyate

[satish_waghmare3]

Hello Raghav,

There are already some valuable inputs given by other experts. As other suggested Business Requirement is the key behind developing/designing the solution for SKU segmentation. Focus on Business requirement and then plan your solution accordingly.

Let me add some input based on my experience of implementing SKU Segmentation using APO.

ABC/XYZ classification is a new functionality provided by SAP as of SCM 7.0 EhP2.  ABC/XYZ classification is part of DP (Demand Planning) and supports forecast accuracy by analyzing
historical data. Thereby, planning objects are classified in high, medium and low value
and high, medium and low volatility. Standard ABC/XYZ classification does not
support Supply Planning functions i.e. Supply Network Planning does not differentiate
between the segmentation results. Furthermore, standard ABC/XYZ classification
does not account for lead time, contribution margin or product lifecycle status
and (launch/discontinuation) dates. 

However custom Z program can be develop which can update a characteristic or attribute in APO DP MPOS and based on the value of this characteristic/attribute, fields (fields like Lead time, Lot Size Procedure, Safety Stock Method, Forecast Horizon) from Product Master can be updated so that it can be used in Supply Planning as well. This way SKU or Product Segmentation can be used both in DP and SNP as well.

Hope this will help.

Thank you

Satish Waghmare

[Former Member]

Thank you very much Shardul and DB for your quick response.

It is for ABC classification / segmentation, which is usually derived through BW programs till SCM 5.1. Are you aware of any standard program in SCM 7.0+ for this classification?. Do we have any open source application for this, which can be integrated with ECC?

Cheers!

Raghav

[Former Member]

Raghav,

Product Segmentation is always specific to the company.  20 companies will segment their products 20 different ways.

Demand Planning in SCM like an empty spreadsheet.  It has huge functionalities (including support of product segmentation), but you have to define your exact requirements for segmentation, and you have to then build the solution from scratch, based upon the segments you have defined.

Companies may wish to segment their products based on characteristics of the sales marketplace, or they may wish to segment their products based on characteristics of the products themselves, or they may choose other ways to segment.  Once the segments are defined, you determine how you will identify the segments from the data that is available to you (typically the ECC system), and what type of key figure data you will need to support the solutions.  Most DP solutions use BW type methods to extract the data, and then move the requisite data into the Demand Planning Planning areas, where it can then be managed, forecasted, reviewed, edited, and released to supply planning.

In short, there is no standard method to create a 'product segmentation' solution in DP.  You will have to do that yourself, using your SAP DP expertise, combined with a detailed knowledge of the client's business requirements.

Best Regards & Good Luck,

DB49