Logistics Engineering Introduction to SCM – SAP APO EIN 5346 Logistics Engineering Fall, 2015

Objective 2. Gain hands-on experience with Magaya Gain hands-on experience with SAP APO (APO - Advanced Planner & Optimizer) - Supply chain management concepts - SCM master configuration - SCM integration, data transfer - Supply network planning and optimization 2. Gain hands-on experience with Magaya (Magaya - A software for logistics industry) - Basic activities in Warehouse set up and operations - Shipments by air - Shipments by ocean - Wholesaler management (Process PO & Sales orders) http://www.magaya.com/en-us/Solutions

SCM Scope Multiple facility SCM Integrated planning for the entire supply chain network Multiple plants and distribution centers Multiple vendors Multiple customers Multiple transportation options

ERP Operations related to SCM Related ERP Modules and activities Materials Management (MM) Production Planning (PP) Sales and Operations Planning (SOP) Forecasting Master Scheduling Capacity Requirements Planning

ERP & SCM Basics (SAP View) SAP ERP (Enterprise Resources Planning): Holds master data for materials, plants, customers, vendors, purchasing information records Holds transactional data (e.g., sales orders, planned orders) Is where SCM plans get executed SAP SCM (Supply Chain Management): Is where “advanced planning” happens Imports master and transactional data from ERP Sends plans back to ERP for execution ERP SCM Core Interface (CIF) (APO)

Supply Network in SAP SCM (Domestic) Customer Vendor Distribution center Plant

Supply Network in SAP SCM (International)

Common Supply Chain Processes VMI: vendor managed inventory VMI: vendor managed inventory

Characteristics of the SC Network Each node may consist of a production system of its own Links in the network represent a business relationship between two nodes e.g. transportation of a product between two nodes Number of levels in a supply chain varies and depends on the complexity of the product

Characteristics of the SC Network Multiple Products, each with possibly different Bills of Material and multiple configurations Multiple Suppliers for raw materials, parts or subassemblies Multiple Subcontractors Multiple Plants possibly containing a wide variety of equipments Multiple Warehouses Distribution centers, local, regional and factory warehouses Different means of Transportation (air, sea, rail, FTL, LTL) either leased, owned or contracted Different information systems and communication channels People with various skills at all levels of the organization FTL – Full Truck Load LTL – Less than Truck Load FTL – Full Truck Load LTL – Less than Truck Load

Example of Costs and Revenues in the Supply Chain Production and purchasing costs Setup or changeover costs Transportation and handling costs Hiring and firing costs Overtime costs Inventory costs Promotional and advertising costs Renting and leasing costs Subcontracting costs Overhead Capital investments and depreciation Taxes and duties Revenue Customer is the only source of revenue From sale of products, spare parts, materials or service

Example of Constraints Productivity constraints Equipment capacity constraints Labour availability Technological constraints Inventory constraints Purchasing, manufacturing and distribution lead times Demand uncertainties and seasonalities Service requirements Budget Regulations and other constraints

Hierarchical Planning Hierarchical planning - a three level management framework: Strategic or long-term planning Tactical planning (or management control) for mid-term planning Operational planning for short term planning Results of one each level are considered as an inputs to the lower level planning Effective implementation and control of the plans requires: An execution layer Feedback loops at all levels * R.N. Anthony, Planning and Control Systems: A Framework for Analysis, Cambridge. Mass., 1965

Hierarchical Planning Framework Procurement Production Distribution Sales Material programs Supplier selection Cooperation Plant location Production systems - Subcontractors Physical distribution structure - Transportation strategy Product program - Strategic sales planning Long term - Personnel training - Contracts - Material Requirements Planning - Master production Scheduling - Capacity planning - Distribution planning - Mid-term sales planning Mid term - Personnel scheduling -- Material ordering - lot-sizing - operations scheduling - shop floor control - Warehouse replenishment - Transportation planning - Mid-term sales planning Short term EXECUTION Flow of goods Information Feedback

Differentiating Factors by Planning Levels Factor- Level Strategic Tactical Operational Purpose Supply chain design, resource acquisition Planning resource utilization Operation scheduling and execution Implementation instruments Policies, objectives, capital investment Budgets Schedules, procedures and reports Planning horizon Long: 3-5 years Medium: 6-18 months Short: daily, weekly, monthly Scope Broad corporate level Medium plant level Short floor level Level of Management Top Middle Low Frequency of re-planning Low: every few years Medium: monthly or quarterly High: weekly, daily or as required Source of information Largely external External and internal Largely internal Level of aggregation - product data - time High Product families years Medium Product groups Month Low individual products continuous Degree of uncertainty Medium Degree of risk

Introduction to SCM and SAP APO SAP Implementation

SAP ERP Central Component SAP Business Suite SAP NetWeaver SAP SCM SAP PLM SAP SRM SAP CRM SAP ERP Central Component (ECC) SCM – Supply Chain Management SRM – Supplier Management CRM – Customer Relationship Management PLM – Product Lifecycle Management

Planning with SAP ERP & SCM Basic Components of SAP SCM SAP ECC ERP SAP SCM (includes SAP BW) Core Interface (CIF) (APO) Demand Planning Supply Network Planning and optimization Production Planning with capacity considerations ATP (Available-To-Promise) CTP (Capable-To-Promise) Detailed Scheduling Deployment Transportation planning Vehicle routing and scheduling Mater data Materials Locations Partner Plants Info records Transactional data Customer orders Production orders Purchasing orders Execution

Planning at Supply Chain Level SAP ECC 1 Core Interface SAP SCM SAP ECC 2 (APO) - Planning may be done centrally SAP ECC n - Each SAP ECC component covers one or more locations In the network

Supply Planning Tasks and Output for SCM Identify sources for finished products Plan and consider safety levels in any location Distribute production over plants Choose production resources in plants Explode bill of materials in plants Identify sources for supply of raw materials and components Outputs Purchase requisitions Stock transport Planned production orders

SAP Access through SAPGUI SAPGUI Download The latest SAP GUI release posted on SAP @CSU, Chico web server http://worker.cob.csuchico.edu User = sap; Password = sapgui4me. This GUI works on Windows 7 and 8 systems.

SAPGUI Download Instruction

SAP SCM ERP/APO server, Clients, Userid, Password SAP SCM ERP Server: BRISTOL Client: 420 Userid: gbi-051 to gbi-074 Initial password: SAP4US SAP SCM APO Server: RIGA

SAPGUI Setup SAP ERP

SAPGUI Setup SAP SCM

Teams No. Name Userid Password Group 1 Martinez,Diego Hernan gbi-051 SAP4US 2 Fan,Yuhan gbi-052 3 Reyes,Evis gbi-053 4 Suarez,Rolando gbi-054 5 Espinoza Acosta,Sigfredo Alejandro gbi-055 6 Ahmad,Mohamed Nathmi gbi-056 7 Deonarinesingh,Parvesh gbi-057 8 Poosti,Mehrnoosh gbi-058 9 Lucia,Francesca gbi-059 10 Duran Arboleda,Edith Estefania gbi-060 11 Quezada Rivera,Rosirys Elena gbi-061 12 Velez Gonzalez,William-Jose gbi-062 13 Samson,Pierre- Richard gbi-063 14 Antonio,Joao R gbi-064 15 Beatty Jr,John Lowell gbi-065 16 Escobar,Isabel gbi-066 17 Decker,Andrew Phillip gbi-067 18 Moacys, Paulo gbi-068 19 Zhao,Yi gbi-069 20 Hodgson, Evelyn gbi-070 21 Castillo,Richard Alexander gbi-071 22 Bellini,Alejandro gbi-072 23 He,Jiamu gbi-073 24 Hegazy,Khaled Ahmed Mohamed Hasan gbi-074

Exercises: (Due date 11/28/2015) (Access SAP SCM ERP server: Bristol, client 420) 1. Overview of Global Bike International (GBI) company. 2. Change data in ERP to prepare for SCM 1) Distribution centers 2) Material types 3) Assign transportation zone to customers 3. Add & change data to prepare for SCM 1) Create production version for materials in ERP - Define distribution key - Create production version