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General Discussion - Why to choose APO over R/3 for planning?

Hi All,

Why do we choose APO over R/3 for planning? What are the inputs or other factors that make APO a better planning tool?

Are the factors which make APO a better tool not available foe R/3 planning?

Thanks in advance

Changed subject suitably.

Message was edited by:

Somnath Manna

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14 Answers

  • Best Answer
    May 14, 2007 at 04:45 AM

    Finally someone has asked the big question.

    Well my knowledge of R/3 is limited but this are some of the points I could quickly come up with.

    We shall go module-wise.

    First Demand Planning - Of course R/3 provides Demand Management and also Statistical Forecasting tools. However the architecture in APO-DP is totally different and based on characteristic value combinations with liveCache for very fast data access. This allows easy aggregation and disaggregation. Moreover once you create the CVCs they can be modified easily with the associates transaction data using Realignment. The macro functionality in DP provides quick and user-friendly computations on the transaction data. Moreover the Statistical Forecasting toolset in APO-DP is more comprehensive to that in R/3. Not sure if MLR is possible in R/3. Promotion planning and Life-cycle planning are some nice features in APO-DP.

    Second - Supply Network Planning in APO can be mapped to DRP in R/3. But then APO offers planning cross-plant for a complete supply chain network. SNP in APO offers basic Heuristic-based planning (quite similar to R/3 DRP) along with advanced planning features like Optimization and Capable-to-Match (order-based planning for prioritised demand matching). Moreover Deployment and Transport Load Builder functionalities provides automatic planning in case of short supply followed by consolidation of deliveries according to transportation capacities.

    Third - Production Planning Detailed Scheduling.

    This according to me is the most hotly debated module. APO PPDS is very close to R/3 Production Planning functionalities and relies on the same set of master data transferred from R/3 to APO via CIF. However the multitude of Heuristics (both Production Planning and Scheduling) provides automation and gives more time to the Planners and Schedulers in focusing on more important tasks. The Detailed Scheduling functionality especially Planning Board in APO is a rich graphical and intuitive application for carrying out sequencing of activities. Likewise the Product Planning Table and Product Overview features of APO provides a cockpit view of the Production Plan and allows drilling down to exceptions. Of course PPDS has Optimiser functionality but the usability of the results is questioned by many a business users.

    I hope there will be some good discussion on this thread.



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    • Former Member Former Member

      APO is a solution component that comes as part of SAP SCM. In fact the latest version of APO software is called SCM 7.0.

      You will get a detailed quotation if you contact your SAP account manager directly



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    Former Member
    Jul 31, 2007 at 02:13 PM

    I do aggree what other have mentioned .Here are specific inputs on newly desined process in APO in comparisosn with R/3

    1. Existing Processes in SAP R/3


    Forecasting enables companies to run statistical forecasting model, aggregate and disaggregate forecasts, as well as the capability to modify forecasting numbers manually

    Newly-Designed Processes

    Demand Planning DP (SAP APO)

    Demand Planning adds to forecasting capabilities to manage promotions, product introductions and phase outs, as well as the impact o causal factors, like weather or macro economic data.

    Additional forecasting techniques are available like Linear Regression (Causal Factors), Croston Method (Slow Moving Items) and Weighted Average

    Consensus based Planning enables Marketing, Sales, Logistics to share and collaborate on their forecast and create a final consensus forecast

    Forecasting based on characteristics instead of SKU for configured products

    2. Existing Processes in SAP R/3

    <b>Sales & Operations Planning</b>

    SOP allows to consolidate forecast based on supply capabilities, through reporting and interactive planning capabilities.

    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Demand and Supply Plans can be intelligently balanced leveraging cost or/and revenue based optimization techniques

    Trade-off Analysis to determine product-mix, inventory build ups for seasonal demand, capacity allocations for alternative manufacturing locations etc.

    Web based information sharing and collaborative interactive planning environment

    KPI Reporting

    3. Existing Processes in SAP R/3

    <b>Distribution Requirements Planning</b>

    Traditional DRP logic allows to calculate requirements for a single stage distribution network

    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Supply Network Heuristic enables to run DRP across the complete supply network generating requirements (production and purchasing) at each node.

    The planner can easily navigate through the network to view and modify demands and supply‘s in their different categories

    Demand Planning Units and Stock Keeping Units mapping can be done on quotations.

    4. Existing Processes in SAP R/3

    Not available

    Newly-Designed Processes

    <b>Deployment SNP (SAP APO)</b>

    The ability to deploy products through the supply network based on pull or push concepts. Different heuristics like fair share logics are supported.

    Transport Load Building allows to combine different products to a single load, interactive, as well as via heuristic to create full truck loads.

    5. Existing Processes in SAP R/3

    <b>Master Planning</b>

    Master Planning allows to plan production at an aggregated level including rough cut capacity planning.

    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Supply Network Planning allows to consider distribution, production and transportation constraints concurrently.

    In addition to a generic SNP Optimizer based on Linear Programming and capacity leveling algorithms, industry specific optimization is available for

    Campaign Optimization

    Capable to Match

    6. Existing Processes in SAP R/3

    <b>Material Requirements Planning</b>

    MRP calculates material requirements based on BOM structures, lead times, lot sizes etc.

    Capacity Planning

    CRP in a second step looks at the capacity requirements

    Newly-Designed Processes

    Production Planning PP/DS (SAP APO)

    Production Planning allows to consider material and capacity constraints simultaneously to derive material, capacity requirements and dynamic lead times. BOMs and lot sizing will be also considered

    Pegging relationships between customer order, production orders, purchase orders will be stored and enable bi-directional propagation if changes occur on the demand or supply side

    7. Existing Processes in SAP R/3

    <b>Transportation Planning</b>

    Manual Planning of shipments, including predefined master routes.

    Newly-Designed Processes

    Transportation Planning TP/VS (SAP APO)

    Transportation Planning enables companies to determine the right shipment mode and route based on demand and supply situation, considering transportation constraints and costs.

    8. Existing Processes in SAP R/3

    <b>Shop Floor Scheduling and Assembly Processing</b>

    Planning Table to view in a Gant Chart the schedule.

    Heuristics like forward/backward scheduling (infinite)

    Manual scheduling

    Newly-Designed Processes

    Detailed Scheduling PP/DS (SAP APO)

    Finite and infinite scheduling, considering material, capacity, time and market constraints.

    Manual scheduling

    Scheduling optimization via optimization algorithms, like

    Genetic Algorithm

    Constraint based Propagation

    Kiran Kute

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    Former Member
    Feb 07, 2009 at 05:39 PM

    My first thought when reviewing a question like this is as follows:

    It does not matter which system you choose you should rather ask the question which system can the customer use?

    While there are numerous organizations that have really complex planning issues, there are even more that cannot really use the features found in APO. Organizations that put in APO because this is the so called best tool for the Job need to first determine can they support this tool. It does not help that the planner does all these wonderful planning iterations but then the business just cannot act on these results. In such instances APO will just be an overkill.

    So if a company wants to decide between APO and R/3 they should first ask the question. What can my company support. Do I want the best theoretical and optimised production plan for my business or do I just want to make sure that my planning department is able to plan with more reliable planning data.

    To be honest if you cannot plan propperly in R/3 using Capacity planning and detailed scheduling then adding the advanced features of APO will not necessarily solve your problems.

    I firmly believe that only once you have exhausted all the available planning tools in R/3, are you really ready to move to the benefits that APO has to offer.

    Having said the above, there is one area that standard R/3 will have difficulty with and where APO obviously will excel, and that is when you plan accross multiple sites and where the transportation or availability accross sites needs to be coordinated. In this area R/3 can only do so much.

    In summary look at your organizations capabilities and not at your "theoretical buzz word technologies"

    As an earlier post pointed out. We might all want to drive the mercedes but not all of us can afford the cost of this luxury. For those who can only afford the Kia, maybe you need to look at the owners manual again to see how to use some of those features you might have missed. This could just give you the time you need to build up enough expertiese to be able to afford and drive the Mercedes.


    Craig van der walt

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    • Former Member

      I know from my earliest days in CO-PA that everyone talks volumes about how they want to plan and analyze perfectly, but are in a complete haze when you ask them to specify what it is they are exactly planning and why!

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    Former Member
    Jun 26, 2007 at 09:29 PM

    The basic problems of Planning and Scheduling stems from

    the requirements to compute in a multi product family, the requirements for Material, Manufacturing, Distribution, Customers etc., This is further required to be done at the Corporate, Plant and Shop Floor level.

    Enterprise/Strategic- level ---enterprise material plg/production plg/distribution plg/demand plg

    Plant/tactical--level-plant material plg/plant production plg/drp/demand forecasting

    Shop floor/operational--material releasing/ scheduleing.dispatching/commodity deployment/order promising

    Strategic planning is the key element in a company's longterm success and has a critical impact on its future. Fastchanging market demands and short product life cycles force enterprises to continuously evaluate and optimize their supply chains. Companies have to use marketing and financial plans as a basis for deciding on the sourcing, production, and distribution of products to meet customer requirements at competitive costs. As strategic decisions are linked to costs, it is difficult to change them at short notice. It is therefore vital

    that companies make their long-term decisions carefully,

    achieving a long-term cost-effective and profitable solution to guarantee the company’s effectiveness.

    The following features support strategic planning

    problems--Network Definition: Networks used in demand

    planning, as well as in supply network planning,

    reflect a company's supply chain.. It can be used

    for feeding into simulation models. Planning can

    be executed based on this network. One can model every part of the supply chain (such as locations, transportation lanes, resources, products, and production process models) using the Supply Chain Engineer. The Supply Chain Engineer allows you to place locations on a map and link them with the corresponding transportation lanes.

    The direction of the lanes determines the product flow. Using the Supply Chain Engineer, one can drill down to all elements belonging to the supply network. Further, information about single or combined elements in the network, can be requested.

    For example, one has the ability to see which products belong to a particular location. Products can also be added to this location or modify the locations master data.

    Alerts: The Alert Monitor is a stand-alone component

    of APO that enables a unified approach to monitor planning situations. It notifies you of any critical situation occurring in one of the APO applications,

    such as Demand Planning and Supply Planning, Production Planning, and Detailed Scheduling, or Transportation Planning and Vehicle Scheduling. Alerts are displayed in various ways, either directly in the Supply Chain Cockpit, in the cockpits control panel, in the application, or through email. Using a series of event triggers and alarm conditions, the Alert Monitor can automatically identify problems in the supply chain. It can also monitor material, capacity, transportation,

    and storage constraints. In addition, it can handle

    metrics such as delivery performance, cost flow, and throughput. It reports exceptions, including orders that exceed forecasts or orders that fall short of forecast and therefore may lead to excess inventory if production is not adjusted accordingly. Based on this monitoring process, one can readjust plans whenever needed.

    SAP APO Supply Network Planning integrates purchasing,

    manufacturing, distribution, and transportation so that

    comprehensive tactical planning and sourcing decisions

    can be simulated and implemented on the basis of a single, global consistent model. Supply Network Planning uses advanced optimization techniques, based on constraints and penalties, to plan product flow along the supply chain.

    The results are optimal purchasing, production, and distribution decisions; reduced order fulfillment times and inventory levels; and improved customer service.

    Starting from a demand plan, Supply Network Planning

    determines a permissible short- to medium-term plan

    for fulfilling the estimated sales volumes. This plan covers both the quantities that must be transported between two locations (for example, distribution center to customer or production plant to distribution center), and the quantities to be produced and procured. When making a recommendation, Supply Network Planning compares all logistical activities to the available capacity.

    The Deployment function determines how and when inventory should be deployed to distribution centers, customers, and vendor-managed inventory accounts. It produces optimized distribution plans based on constraints (such as transportation capacities) and business rules (such as minimum cost approach, or replenishment strategies).

    The Transport Load Builder (TLB) function maximizes

    transport capacities by optimizing load building. In addition, the seamless integration with APO Demand

    Planning supports an efficient SOP process.

    APO is a planning tool on a global level and r3 is more

    an execution tool and effective integration of the two

    gives an efficient long term/medium term/and

    short term planning and execution capabilities

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    Former Member
    Aug 28, 2007 at 07:01 PM

    In short difference is same as driving a Mercedez Vs Kia...

    APO is Mecedez and R/3 Kia ... when it comes to finite planning for Global SUpply Chians or constraint Supply Chain


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    • Former Member Former Member

      This topic can be discussed in detail in the following various topics.

      If we just compare as below will get more clarity.

      1.APO-DP vs R3-Flexible Planning

      2.APO-GATP vs R3-ATP

      3.APO-SNP vs R3-DRP

      4.APO-PPDS vs R3-MRP & Capacity Planning

      5.APO-BW vs R3-LIS

      6.APO-Livecache vs R3-Application run time memory

      7.APO-OLAP vs R3-OLTP

      8.APO-TPVS vs R3-LE

      Because of these factors we are choosing APO.

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    Former Member
    Nov 11, 2014 at 03:01 AM

    Once you know clearly what are the constraints of Kia & they really impact your life, then it is the  time considering to buy a Mecedez.

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    Former Member
    Aug 02, 2007 at 07:23 AM

    APO is better compared to R/3 wrt following points-

    1) APO is an a planning & optimisation tool, means the results are optimised to the tune of optimised costs & capacities, the system will plan the orders considering the best available cost & the capacities across the planning chain defined in the system,

    2) APO is having the capabilities of planning the MRP & capacities simultaneously, means the planned orders fo the dependent requirements shall be generated provided the capacities are available on the defined work centres, wehreas in R/3 first the Qty. planning is done followed by capacity analysis. This shall mean the planned order shall be generated irrespective of capacity available or not on the work centre.

    3) APO is capable of doing the global planning across the supply chain.

    4) APO can do the braod level panning in SNP where in it looks for the header level material across the supply chain globally & create the Planned orders or Purchase requisitions based on the shortfall qty. & PPDS is responsible for doing the minute based planning at the shop floor.

    5) The Demand Planning in APo is a very powerful tool in APO which is capable of doing the forecasting based on the historical data.

    Hope this shall be of some help to you. Give poits if you find this useful.



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    Former Member
    Sep 05, 2007 at 06:20 PM

    The problem that I always see is that the users don´t know how to drive a Kia. I only recomend APO for the customers that have a good R/3 implementation and use.

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    Former Member
    Dec 03, 2007 at 03:38 PM

    Apart from APO having advanced features there is a basic difference. Complex planning activities are time consuming. Sometimes you do not want to load your transactional system (R/3). Thats why you can use APO system which is both OLTP and OLAP to shift the load. Another advantage is global nature of planning (for example GATP ) in APO.

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    Former Member
    Feb 29, 2008 at 03:32 PM

    MRP is generally used for the planning in R/3 in general for all purpose requirement.

    But due to the important of the COST or due to the Import condition of the material, it is required to take so much care while doing this type of palnning. For thios purpose, APO is used where it will help you in the decision making to choose which ids the best for the planning of such type of material.

    Especislly for the BOTTLE NECK items, Through APO you will get the optimised solution from the diffretn solutions available in the R/3

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