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

2. 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)

3. 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

4. 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

5. 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)

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

7. Supply Network in SAP SCM (International)

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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. Introduction to SCM and SAP APO SAP Implementation

17. 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

18. 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

19. 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

20. 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

21. SAP Access through SAPGUI SAPGUI Download
The latest SAP GUI release posted on SAP @CSU, Chico web server
User = sap; Password = sapgui4me.
This GUI works on Windows 7 and 8 systems.

22. SAPGUI Download Instruction

23. 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

24. SAPGUI Setup SAP ERP

25. SAPGUI Setup SAP SCM

26. 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

27. 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