What is SAP APO? Easy High-level overview

What is SAP APO?

SAP APO stands for Advanced Planner and Optimizer. SAP APO is a Planning tool that helps the organization to manage its Supply Chain process. SAP APO is primarily having five modules DP (Demand Planning), SNP (Supply Network Planning), PPDS (Production Planning and Detailed Scheduling), gATP (Global Availability to Promise), and SPP (Service Parts Planning).

SAP APO integrates with SAP ERP using the Core Interface (CIF) which helps in integrating the master data, transactional data, and sales data in real-time. SAP APO helps the Enterprise Collaboration on a strategic, tactical, and operational planning stage and it helps in co-operation between partners in all levels of Supply Chain Planning.

DP (Demand Planning):

                    SAP APO Demand Planning is a complex, high performance, and highly flexible component which helps to create the forecast of the market demand of the company’s product and it also considers many factors that might affect the demand. It has user-specific planning books and planning the layout and it is possible to create the forecast based on the demand history by using the Demand Planning library of statistical forecasting and advanced macro techniques.  Promotions and forecast overrides can be used to add marketing intelligence and make management adjustments.

SNP (Supplier Network Planning):

                     SAP APO Supplier Network Planning helps the organization to determine the purchasing plans, distribution plans, and sourcing and production plans. It also ensures the optimal use of manufacturing, distribution, and transportation of resources to meet the forecast and actual demand. Based on the heuristic and optimization algorithm it helps the planner to define the inventory policies and the deployment function determines how and when the inventory has to be deployed to the DC’s.

PPDS (Production Planning and Detailed Scheduling):

                    SAP APO Production Planning and Detailed Scheduling allow the manufacturing units to plan product and critical resources in an optimal fashion and to plan a product in PPDS you must have entered the planning procedure in location product master data. PPDS helps the planner to analyze lead time and it also helps to reduce the inventory cost and increase the on-time delivery performance.

Also read: What is SAP S/4HANA?

gATP (Global Availability To Promise):

                    SAP APO gATP is used to support the online search of the products requested is available at particular time and quantities that satisfy customer demand. gATP contains the process of ATP check which is run via live cache, which helps to process large volumes of data and enables data sharing across several applications and it uses the ATP rules to decide whether the customer demands can be confirmed against the available stocks. gATP meets the challenge of providing availability information across a global enterprise.

SPP (Service Parts Planning):

                    SAP APO SPP provides the planning functions which are relevant to service parts starting from the demand to the delivery of the product. Planning of the service parts is initially done by BOD which contains all locations. SPP considers the characteristics of each product during planning like location, sales behavior, slow-moving or fast-moving, etc. Based on these characteristics it determines whether period based SPP based on the forecast or to plan based on reorder point.

References: Guru99 and SAP Help

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