Backorder Processing with SAP R3 vs SAP APO

Backorder Processing with SAP R/3 vs. SAP APO Global Available-to-Promise Patti Kimler Product Manager PTU Applications SAP Labs, LLC

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 2

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 3

Backorder Processing (BOP) – the Basics n When is an order a backorder? n When a schedule line doesn’t have a confirmed quantity n What should a backorder processing solution do? n Simulate results n Lend visibility to the situation Run in a reasonable amount of time Allow selection of orders based on business requirements Allocate product in a prioritized way Allow results to be sorted in a meaningful way n n n Note that both solutions — R/3 and SAP APO — can satisfy all these items, to some extent ã SAP AG 2005, 4

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 5

Prerequisites n ATP check for orders in question must be set to take place in APO n R/3, my. SAP ERP, or SAP CRM as an order management system What does that mean? ! n Typically, in the setup of Global Available-to-Promise (g. ATP), you specify (once) in the SAP APO Core Interface (CIF) that you want your ATP customizing settings transferred from R/3 (or my. SAP ERP) to SAP APO n Then, in another integration model of the CIF, you must have selected the ATP check switch for the materials you have specified in that integration model ã SAP AG 2005, 6

Core Interface Settings – Integration Models ã SAP AG 2005, 7

my. SAP ERP and my. SAP Business Suite SAP R/3 n Standardized business processes n Client-server n Distributed processing SAP R/2 n Real-time n Integration n International n Mainframe my. SAP ERP n Real-time business n Powered by SAP Net. Weaver n Enterprise Services Architecture my. SAP Business Suite n tio u l o my. SAP PLM Ev on my. SAP SRM ti u l vo Re R/3 R/2 my. SAP ERP my. SAP CRM my. SAP SCM SAP Net. Weaver 1972 ã SAP AG 2005, 8 1979 . . . 1992 2000 2003

my. SAP Business Suite SAP Enterprise Portal Business Information Warehouse & SEM Supply Chain Event Monitoring SCEM PLM SRM TPVS SCM EWM SPP CRM RR my. SAP ERP Design Make Move Sell Service n Strategy- Product Innovation n Strategy- SRM, Global Visibility n Strategy- Operational Excellence n Strategy- Customer Intimacy n Value Based Initiatives n < Time to Market n < Supplier Consolidation n < Inventory n > Revenue n > Product Quality $ n < Material Consolidation n > Customer Service n > Market Share n > Life Cycle Product $ n < Maverick Spending n > Global Resource Mgmt. n > Profitability n > Collaboration n > Operational Efficiency n > Customer Satisfaction n ROI n < 20% Development $ n < 5 -15% Material Cost n < 10 -30% Inventory n > 2 -3% Market share- AMR n < 21% Scrap & Rework n > Productivity 20 -30% n > Rev. -Customer Service n > Margins-5%>25%- Bain n < Planning Cycles- Days n > Selling Efficiency-$10>1 n < 7% Manufacturing $ n < 20% Warranty ã Buy SAP AG 2005, 9 n > Customer Satisfaction

Where SAP APO Fits in SAP SCM n SAP Advanced Planning and Optimization (SAP APO 4. 1) n SAP Inventory Collaboration Hub (SAP ICH 4. 1) n SAP Event Management (SAP EM 4. 1) n SAP Net. Weaver (Web AS, BW, …) (SAP Net. Weaver ‘ 04) ã SAP AG 2005, 10

Evolution of SAP SCM Functionality SAP SCOPE Initiative • • • MRP II for Planning SAP R/3 MM/PP Transportation Mgmt. Warehouse Mgmt. Partnership with ILOG 1997 SAP APO 2. 0 my. SAP SCM 4. 0 • Collaborative Planning • ASCN vision announced • SAP APO 4. 0 • Collaborative scenarios • SAP is market leader in Q 2 • SAP EM 4. 0 • SAP APO available in my. SAP. com • Strategic partnership with MIT Auto ID Center 1998 1999 2000 2001 Default SAP SCM release • SAP ICH 4. 0 • SAP Net. Weaver integration • RFID pilots for Metro Store and P&G 2002 2003 2004 SAP APO 1. 1 my. SAP SCM 4. 1 • SAP enters APS market with standalone solution • SAP APO 3. 0 SCM Content Workplace • SAP APO 3. 1 Industry Release • SAP APO 4. 1 • SAP LES R/3 4. 6 C • Decentralized warehouse mgmt. system • SAP EM 4. 1 • Transportation Planning • Supply Chain Event Management 1. 1 • Radio frequency • CRM SCM integration • SAP ICH 4. 1 • SAP Net. Weaver Integration • RFID-enabled SCM SAP SCM release in ramp-up since June 2004 ã SAP AG 2005, 11

Global ATP – The Technical Perspective ã SAP AG 2005, 12

Key Capabilities n Multiple Operating Modes Batch n Interactive n n Simulative n Filter n Sorter n Support for Product Allocations ã SAP AG 2005, 13

Batch Backorder Processing 2 modes: Direct update of batch backorder processing n BOP runs and immediately updates the results to the database without an intermediate step Batch backorder processing with postprocessing n BOP runs, saves the results to a buffer, and protects the assigned quantities with temporary quantity assignments n The results can be updated or rejected. If rejected, the temporary quantity assignments are deleted ã SAP AG 2005, 14

Interactive Backorder Processing n Similar to batch backorder processing with postprocessing, except for the addition of a pre-configured worklist n It can be accessed directly from the menu structure within SAP APO, or used as a postprocessing function of Batch backorder processing n Filters and sorts are available to both operating modes ã SAP AG 2005, 15

Interactive Backorder Processing – With a Worklist ã SAP AG 2005, 16

Interactive Backorder Processing – Without a Worklist ã SAP AG 2005, 17

Simulative Backorder Processing n No temporary quantity assignments are written to live. Cache n No orders are updated in R/3 n The results can be viewed in a log but cannot be updated interactively n The results can be saved in the buffer or deleted ã SAP AG 2005, 18

Filter Plus a Userexit! ã SAP AG 2005, 19

Sorter Plus a Userexit! ã SAP AG 2005, 20

Product Allocations and Backorder Processing n As of SAP SCM release 4. 1 (currently in Phase II Ramp-Up), product allocations may be checked as part of backorder processing n In prior releases, product allocations are neither checked nor updated n Also as part of release 4. 1, if product allocations are checked by BOP, a new icon will display on the results screen telling you that this occurred ã SAP AG 2005, 21

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 22

Prerequisites n ATP check must be set to occur in R/3 What does that mean? ! n You’re using R/3 and not APO for ATP checks ã SAP AG 2005, 23

The Selection Screen Selection Sort ã SAP AG 2005, 24

The Results ã SAP AG 2005, 25

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 26

Comparison APO R/3 and my. SAP ERP n Redistribution flag n No redistribution flag – releases all orders’ assigned quantities, then rechecks them if they didn’t have a check before n Redistribution for each basic method n No redistribution n Filter has 28 fields plus userexit n Fixed filter with <10 fields n Sorter has 25 fields plus userexit n Fixed sorter n Able to confirm new results with old prior to database commit ã SAP AG 2005, 27 n Changes are committed to database with no comparison

Comparison (cont. ) APO R/3 and my. SAP ERP n Schedule line check available for all documents n Schedule line checks for stock transport orders only n Date configuration – material availability or goods Issue n Date configuration – No option (material availability date is used) n Possible to preserve the lesser quantity that has been agreed upon without giving more n Possible to improve and not degrade confirmations ã SAP AG 2005, 28 n R/3 and my. SAP ERP do not differentiate between confirmed quantity and requested quantity n No opportunity to preserve what was done previously

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 29

The Highlights n R/3 and my. SAP ERP have limited sort and filter fields n With no user exits available to expand the selection n R/3 and my. SAP ERP are not as flexible as my. SAP SCM n Dates aren’t configurable Operating modes are selectable n Schedule line checks are limited to one document type n n No way to preserve previous check n Orders are opened, quantities are released, check is redone n No new development taking place ã SAP AG 2005, 30

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 31

SCM 4. 1 – g. ATP Developments n Better support for time zones n Usability of ATP n Configurable rules-based ATP results screen n Usability of Backorder Processing Enhanced usability n Better icons to explain what occurred n Correct and reject individual orders n Improved links from the results display u Product Allocations u Link to TP/VS added in 4. 0 n ã SAP AG 2005, 32

But SCM 5. 0 Is Coming, and … . . . It’s HUGE! (my boss said I should keep saying that, to get everyone ready for it) ã SAP AG 2005, 33

g. ATP Highlights in SCM 5. 0 n Temporary facility closure n A hurricane just hit my Florida distribution center n Alternate locations to use when a primary facility is closed n Ship out of Texas and Georgia instead n Maximum numbers of substitutions in RBA n Locations and location products, not products n Consolidation n I’d like to take all these orders sourced from different locations and consolidate them at this single location before I ship them to the customer n Drop ships/Third party n I’d like the vendor to deliver this to the customer ã SAP AG 2005, 34

g. ATP Highlights in SCM 5. 0 – More! n RBA in Stock Transport Orders (not location, just product substitution) n The product you requested is not available, substitute another n Reassignment of order confirmations n I’d like to borrow from Peter to pay Paul, automatically, not manually, based on criteria that I specify n Event-driven backorder processing n I’ve just gotten stock in and I want to allocate it to a group of high-priority orders that are waiting for it n This is not a complete list ã SAP AG 2005, 35

Event-Driven Backorder Processing? ! n Uses something new called the Order Due List, which is also used by reassignment of order confirmations n Uses Workflow n Allows an event, like a stock receipt or a return order, to trigger a run of BOP against the Order Due List n The Order Due List will contain your highest priority, unconfirmed orders n Brilliant! ã SAP AG 2005, 36

How to Decide? n If R/3 or my. SAP ERP’s ATP functionality just isn’t enough of a solution anymore, consider the APO g. ATP solution in my. SAP SCM. However, don’t wait for SCM 5. 0! (Remember, it’s HUGE) n Prioritize what you need and figure out what release it’s in n SCM release notes are posted on http: //help. sap. com/ n How many APO releases back are you? If you’re on APO 3. 0 or 3. 1, consider upgrading now to at least 4. 0, if not 4. 1 n Why? Chances are there’s a lot in 5. 0 that you’ll want to roll-out, and it’ll be a smaller bite if you’re not tackling all the interim releases before you can get to 5. 0 n Also, 4. 0 and 4. 1 are smaller releases from a g. ATP perspective (Remember, 5. 0 is HUGE) n ã SAP AG 2005, 37

What We’ll Cover … n What is Backorder Processing and what should it do? n SAP APO’s Backorder Processing n R/3’s Backorder Processing n Let’s look at them both now – SAP APO vs. R/3 n The gaps – Where R/3 falls short n What’s new in Global Available-to-Promise and coming up soon n Key takeaways ã SAP AG 2005, 38

Key Takeaways n The BOP program you use is dependent on the system in which your ATP check takes place n APO’s Backorder Processing has more Sort and Filter options than R/3 or my. SAP ERP, with user exits to add even more fields n APO’s BOP is scalable – no need to do a full run every time n With any BOP solution, force it to do what you really need it to do. Use variants, etc. , to tailor your BOP runs n If R/3’s ATP solution just isn’t a solution for you, and you’ve already got all or part of my. SAP SCM in place (i. e. APO DP), consider implementing g. ATP and attaining the benefit of the BOP program, among other things n Never assume that the product as it is today is the product that you’ll be using tomorrow. New enhancements and opportunities are always right around the corner n It is possible to implement BOP without an ATP check in the order, and there are successful implementations that have done it! ã SAP AG 2005, 39

Your Turn! Questions? ã SAP AG 2005, 40

To Contact the Speaker Patti Kimler Product Manager SCM PTU Applications SAP Labs, LLC M 386 -334 -4756 HO 386 -960 -5257 patricia. kimler@sap. com ã SAP AG 2005, 41