2. Copyright © 2003 Americas’ SAP Users’ Group APO 3.0 Implementation at Wyeth Thomas Bailey, Wyeth Pharmaceuticals Rajesh Sundar, Infinite Strategies Inc. Session: 4811

3. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

4. Introducing Wyeth

5. Wyeth Overview What began as a small drugstore with John Wyeth and his Brother at 1410 Walnut Street, Philadelphia, Pennsylvania is now one of the leading pharmaceutical and biotechnology companies in the world. 2002 Sales were $15 Billion Total Assets are $26 Billion 53,000 Employees, World Wide Consists of 4 Divisions –Consumer Health –Fort Dodge Animal Health –Pharmaceuticals –Research

6. APO at Wyeth Pharmaceuticals 6 sites using installations of APO 3.0 2 sites to be implemented this year for APO 3.0 Demand Planning Supply Network Planning New global initiative underway to transform supply chain: Production Planning/Detailed Scheduling Supply Network Planning Shared Resources between Business Units Changes to Organization and Business Processes

7. Agenda Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary

8. Why APO Disparate solutions at various sites due to acquisitions and accelerated growth. Complexity of various production processes SAP R/3 chosen as the ERP solution Provide integrated view of entire Supply Chain

9. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

10. Business Process Overview

11. APO Application Architecture CIF

12. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

13. Demand Planning Design Forecast from Legacy Systems for OTC (Over The Counter) line of products Demand Planning in SAP APO for RX (Prescription drugs) BW as a Staging Area for Forecast and shipment Data Fulfill Reporting requirements such as schedule attainment etc

14. DP Demand Data Flow Material Demand Material & Plant Demand SAP APO Supply Network Planning RX B/O, C/O SAP/LPM OTC B/O, C/O JDE OTC Forecast Lotus.. Affiliate Forecast(s) Prism, etc. SAP APO Demand Planning Demand Adjustments BW Data Load Review (client driven) SAP BW (demand data staging) SAP/APO/DP RX Forecast

15. Demand Staging in BW Forecast from Legacy Systems is collected and staged in BW Info cube’s Back Orders and Carry Over’s from prior months is also collected in BW from Legacy Systems (such as JDE ) Error Handling and Data Cleansing happens in BW prior to replicating this data in APO. Data from BW is replicated in APO into Info Cubes and loaded into DP Planning Book.

16. Forecasting Consolidating forecasts from legacy forecasting systems (Futurion, Lotus etc.) along with other Market Intelligence to specify what ‘likely’ will be required by our customers. Demand and Supply Planning done within one integrated planning system. The Adjusted Final Forecast is released to SNP at the Ship from level.

17. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

18. SNP Design APO Planning only carried out at the Finished Product and Bulk (Semi-Finished) Product Levels All lower level components planned in SAP R/3 using standard MRP Planning Area and Planning Book designed for 52 weeks and 12 months Time Horizon Heuristics (Rules Based Planning) is used as the Supply Planning Algorithm in SNP Alerts used exclusively to Manage exceptions in Supply Chain Capacity Leveling in SNP is used for Rough Cut Capacity Planning

19. Heuristics Planning Run Factors Considered in the heuristic run: Transportation Lanes-Valid movements in the supply chain that link plant to DC and DC to DC. Lead Times-Time to manufacture product Quota Arrangements-% of Demand allocation of requirements to sourcing locations Lot Sizing – Lot-for-lot, fixed, target range of coverage, rounding profiles, rounding values Production Process Models Production Horizon Target Days Supply Safety Stock

20. Supply Planning Process Production Horizon Action in R/3Action in APO 34567 8912111014151316 12 PLANT RESPONSIBILITY SUPPLY PLANNING RESPONSIBILITY Process Orders Planned Orders Weekly Bucket

21. Capacity Leveling Day 1Day 2Day 3Day 4Day 5 Capacity load 100 % BACKWARDFORWARD

22. Alert Monitor - Overview The Alert Monitor allows Supply Planners to review a predefined set of Alert Messages in order to react more efficiently; when the related exceptions occur, alert messages will appear in the Alert Monitor. DP Alert DP Sales Pace – Shipments exceed forecast by over 74.5% SNP Alerts Resource Overload – Resource is loaded more than 100% Backlog – Projected inventory is less than 0 Target stock level shortfall – Projected inventory is less than the Target Stock Level (for products with safety stock)

23. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

24. Shortcoming and Work a round's SNP PPM not integrated to R/3 CIF Options Custom Interface program Process Order Interface Issues Operation/Phase Links Com Errors Demand reduction in APO With IDOC processing in R/3

25. SNP PPM Interface Two types of PPM in APO SAP standard CIF interface involves: CIF across PP/DS PPM Convert PP/DS to SNP PPM Con’s: Cannot update SNP PPM’s without deleting them in APO Cannot load rough-cut single Level PPM’s

26. PPM Interface Work around Designed a custom PPM Upload Program in R/3 Uses BAPI’s and RFC connection to load PPM’s into APO. Consideration for rough cut and other Plant specific customizations

27. Process Order Interface Errors on initial CIF activation of Process Orders from R/3 to APO caused due to: Due to existing Old data in R/3 Data cleansing in R/3 such as setting TECO (Technically Complete) status of Old Process Orders. Maintenance of links between Operations in a Recipe in R/3 Using un-supported PI (R/3 Plug-in ) in R/3.

28. Process Order Work around To enable the Activation of the Process orders in APO the following workaround was utilized Using Process Order CIF User-exit to enhance and provide logic for dropping all operations and BOM related information coming across from R/3 Just send the Process Order Number, Quantity and Start and finish Dates across to APO

29. Demand Reduction in APO Demand reduction versus Standard Consumption For demand within SNP: “Demand Reduction” occurs as shipments are made from the DC to the Customer. “Demand Consumption”, which occurs as sales-orders and/or deliveries created (but not yet shipped) is not currently used at Wyeth. Shipments are posted into R/3 via IDOC’s from external systems. When these IDOC’s are processed in R/3 a reduction event is not sent to APO.

30. Demand Reduction Work around CIF interface to trigger reduction behaves Differently in Batch mode (via IDOC’s) CIF interface works differently if the deliveries in R/3 is done in multiple steps. Pick, Pack and Post and save in one step – reduction event is triggered. Pick, Save, Pack, Save, Post in multi steps – reduction event is not triggered. Work with SAP to resolve the CIF related reduction events.

31. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

32. Out of the Box APO - R/3 Link Configurable to scope and requirements Master Data and Transaction Data Core Interface Function (CIF)

33. APO Master Data APO R/3 Batch or On-Demand Master Data (FROM R/3) Locations Products Resources Master Data

34. Production Process Model (PPM) A Production Process Model (PPM) is a combination of a BOM and a Routing or the equivalent of a Master Recipe in R/3. PPM defines the output materials (Finished Products), Input material (Raw Materials), Activities and Operations along with the Modes (Resources).

35. Finished Good Advil Tab 24’s pack Bulk Product Advil Tablet Finished Bulk Tablet Coating Granulation Tablet Compression Packaging Line MaterialResources SNP PPM Architecture

36. SNP PPM Load Process Custom Interface Program Developed in-house to Read Production Version and Recipe Information from R/3 and Load it into APO via SAP Provided Standard BAPI. Rollup Multilevel BOM’s into Single Level for Semi-finished Products Plant and recipe level PPM customization Using Standard SAP Provided Function Modules to Read Recipe and Production Version’s from R/3 Uploaded Daily via Scheduled Batch Process

37. PPM Data Load Process PPM Upload ABAP Recipe BOM Production Version BAPI R/3 APO RFC SNP PPM DP PP/DS

38. Transaction Data (R/3 TO APO, APO TO R/3) MPS (planned orders) STO’s (purchase orders/requests) International Sales Orders (where applicable) Inventory (quantity, batch info) Transaction Data

39. APO Planned Order (APO-1) R/3 Planned Order ( 031395 ) APO Planned Order ( 031395 ) APO R/3 Batch or On- Demand Initial: Instantaneous Changes: Instantaneous Transaction Data – Planned Order

40. Wyeth Overview Why APO Architecture DP Design SNP Design Shortcoming’s and Workarounds CIF and R/3 Integration Summary Agenda

41. Disadvantages of Current Model Does not provide pegging of materials to perform multilevel MPS planning Does not provide clear indicators of supply problems Does not define ownership or accountability for MPS Does not allow for inventory reduction as safety stocks at all planning levels are required to ensure coverage for poor planning Does not allow for accurate capacity level loading of manufacturing sites

42. Proposed Enhancements Implementation of new application in APO for Detailed Scheduling (PP/DS) Increase magnitude of change management required to redefine business processes and organization Considerations for the new Model Time required for training and development of new application Validation may be required for new application Retrofitting of sites operating

43. Lesson’s Learnt Design of APO Processes should be consistent with R/3 design APO Master data requires higher level of data quality as compared to R/3 A through test plan and execution is very critical Choose the right implementation Partner

44. Copyright © 2003 Americas’ SAP Users’ Group Thank you for attending! Please remember to complete and return your evaluation form following this session. Session Code: [4811]