In modern supply chain management ERP is used for transactional data while tools like Advanced Planning and Optimization is used for forecasting, planning, scheduling and confirmation. Further, in processes such as production planning there is a technique termed SNP optimizer. This is used for calculation of costs and Total cost is calculated as the sum of Delay cost, Non-delivery cost, storage cost and production cost. An ERP-enabled Supply Chain Process helps the organization to create a supply chain that is reliable, flexible and responsive. It also enables in enhancing the visibility across the supply chain.

1. Impact of ERP on Supply Chain
effectiveness
Shailesh Harsora

2. Agenda
• Usage of ERP for transactional data
• Usage of APO for forecasting, planning &
scheduling and Confirmation.
• Integration of SAP/APO for end to end
integration of Demand-Supply.
• Usage of Business Intelligence for Analysis

3. Supply Chain complexity:
Suppliers Manufacturers Warehouses & Customers
Distribution Centers
Transportation Transportation
Costs Costs
Transportation
Material Costs
Manufacturing Costs Inventory Costs Costs 3

4. Demand Chain
S
U C
P U
P S
L Inbound Outbound
I
Logistics PLANT Logistics T
O
E me
R 3PL 3PL
Fixed Schedules, r
S Supplier Kanban.

5. The Integrated Demand Chain
SAP
S
U C
P US
P T
L SRM R3 & SCM DMS & O
CRM
I M
E ER
R S
S

6. SAPSCM (APO)
APO (Advanced Planning and Optimization)
It offers planning and optimization functionalities in different
business processes of
• Demand Planning & Forecasting
• Supply Net work Planning
• Production Planning Detailed Scheduling
• Global Available to Promise (GATP)
• Transportation Management

7. System Tool
Business Requirement IT Solution
Dealers Forecast Demand Planning (DP)
Monthly/Weekly /Daily
Despatch & Production
Supply Network Planning (SNP)
plan
Weekly day wise planning Production Planning (PP)
and sequencing Detailed Scheduling (DS)
Delivery Commitment to Global Availability To Promise
customer (GATP)
7

8. Demand Planning & Forecasting
• This module helps demand forecasting thro
collaboration with customers.
• Geographical, product and business hierarchy
can be configured for facilitating collaborative
forecasting.
• It also provides statistical tools for demand
forecasting.

9. Demand Planning & Forecasting
• Demand Capturing
1. Direct & Indirect Orders from Customers
2. Demand based on Forecast
• Demand Propagation
1. Sales orders Creation
2. Stock transfer Order(STO) creation
3. Multi Plant Demand distribution scenario

10. Supply Network Planning
This module can be used for
• Demand Propagation
• Network optimisation
• Distribution planning (Deployment)
• Production planning

11. Supply Network Planning
Planning Processes in SNP module
Network Production Procurement
planning planning planning

12. Supply Network Planning
Demand propagation on plant
Dealer-5 Dealer-1 Dealer-2 Dealer-3 Dealer-4
Ex plant Billing Ex warehouse Billing
Stock Yard Stock Yard
Dealer-6 1 2
Stock norms
Tr. Lead time
Plant
Network Production Procurement
planning planning planning

13. Supply Network Planning
Network Planning-Demand Propagation
Tue W ed Thu F ri S at Sun Mon Tue W ed Thu F ri
06/02 07/02 08/02 09/02 10/02 11/02 12/02 13/02 14/02 15/02 16/02
S to ckY ard D 1 req m t 5 5 5 5 5 5 5
D 2 req m t 3 3 3 3 3 3 3
S to ck 6
N etR eq m t 2 8 8 8 8 8 8
R eq m t o n p lan t 26 8 8 8 8 0 8 8 8 8
T arget D ays supply 3 D ays
T ransit Lead tim e 3 D ays
Network Production Procurement
planning planning planning

14. Supply Network Planning
Planning Processes in SNP module
Network Production Procurement
planning planning planning

15. Supply Network Planning
Production Planning horizon
PPDS planning Horizon of 3 weeks
for RFD. Every week, 3rd week SNP
plan will be converted to PPDS
plan
SNP Planning Horizon (4 months)
W1 W2 W3 W4 M1 M2
SNP Production Horizon,
PPDS Plan orders
Where SNP will not plan
SNP Plan orders being a frozen period.
Network Production Procurement
planning planning planning

16. How constraints are defined?
– Hard constraints- thru Work centers mapped in SAP
• Resource capacity, currently TCF line
• Aggregate hard constraints like engine, Axle & Transmission
• Supplier hard constraints
– Soft Constraints- thru MRP master data updation in SAP
• Parts can be arranged with lead time, which will consider the availability
like stock, expected receipts (Schedule lines on time lines)

17. Production planning
• SNP Optimizer
• Capable To Match(CTM)

18. SNP Optimizer
• SNP Optimizer is a method of planning where
in there are costs attached to all orders
(delay, non-delivery, storage and production
costs). The optimizer tries to plan orders by
minimizing the overall total cost. It uses linear
programming logic for optimization
Total cost = Delay Cost + Non-Delivery Cost +
Storage Cost + Production Cost

19. Capable To Match(CTM)
• CTM is a method of planning where the SAP
plans as per priorities given to orders
(e.g. FIFO of Ordering date)
• CTM is Multi-level Finite order based planning

20. Supply Network Planning
Production Planning:
Objective-
 To meet the demand by producing vehs as close to the
demand.
 Minimum delay if capacity < Demand.
 Model prioritisation in case of Capacity or Material
constraint.
 Build ahead considering future high demand for selected
models indicated by Marketing.
Network Production Procurement
planning planning planning

21. Supply Network Planning
Production Planning by SNP optimiser
 Resource constraints
 Component availability
Cost Modeling like
Storage cost
Delay cost
Non delivery cost *
Production cost
(All cost are the relative costs)
* Also termed as Acquisition Cost and has intangible benefit or Loss depend on
Product demand and customer profile Hence it is most significant cost element
Network Production Procurement
planning planning planning

22. Supply Network Planning
Production Planning: SNP optimiser-
Works on the principle of reducing total cost where,
Total cost = Sum of {Non Delivery (ND)
+ Delay cost (DC)
+ Storage cost (SC)
+ Production cost (PC)}
SNP optimiser uses linear programming to solve the above equation. A
comprehensive cost model is developed to meet business requirements.
Network Production Procurement
planning planning planning

23. Supply Network Planning
Planning Processes in SNP module
Network Production Procurement
planning planning planning
Network Production Procurement
planning planning planning

24. Supply Network Planning
Procurement planning…
Component planning is based on Production plan
• Netting off the stock and expected receipts (Schedule lines/open PO)
• In transit stock based on ASN
• Planned Lead time
• Lot size, safety stock norms
• Fresh purchase requisitions will be generated
Network Production Procurement
planning planning planning

25. PPDS activities
• Convert SNP plan orders to PPDS plan orders as per rule based
sequencing.
• It generates time based sequence which can be used for JIT supplies
• PPDS Plan orders flows to R3, (can be used for MRP)
• Actual production as per PPDS plan orders
• Backlog run for aligning the variation/loss of production.

26. GATP (Global Availability to Promise)
BOP (Back order Processing)
• This module matches the Requirements with
Receipts elements based on business rules.
• It provides confirmation dates to firm demand
based on the stocks and plan orders.

27. PROCESS FLOW CHART
Dealer’s
Own No Dealer Creates Triggering of
Customer Stock and
Order Confirm P.O./ OTF S.O. in R/3
POs
Yes
Yes
Dealer’s Stk. Yard
Delivery Date Receipt +
Commitment. Stock
GATP
CHECK
no
Dealer to
System to create formalise his
recpt and forecast in next
update SO / STO weekly planning
run
27

28. Business Inteligence
• The SAP BW Business Intelligence provides
flexible reporting and analysis tools for strategic
analyses, operational reporting, and decision-
making support within a business. These tools
include query, reporting, and analysis functions.
• As an employee with access authorization you
can evaluate past or current data on various
levels of detail, and from different perspectives,
not only on the Web but also in MS Excel

29. BW Dashboards

30. Supply Chain Process with ERP
• Supply Chain Reliability
• Supply Chain Responsiveness
• Supply Chain Cost
• Supply Chain Flexibility
• Supply Chain Visibility
Agile Customer Centric Supply Chain

31. Thank You