Case Study: What You Don’t Know Can Hurt You

Steve Grace and

— 20 Tips and Tricks from Hollister for Getting Yugal Kumar
the Most Out of SAP Advanced Planning and Hollister
Optimization

Produced by Wellesley Information Services, LLC, publisher of SAPinsider. © 2017 Wellesley Information Services. All rights reserved.
In This Session

• Learn about tools and techniques to automate background job scheduling and process
chains creation

• Examine the use of composite and automatic model selection to pick an appropriate
forecasting model

• See some lessons for right-sizing your inventory and identifying shortages

• Look at strategies to identify significant exceptions through alert monitoring and visual
signals in the planning books

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What We’ll Cover

• Background jobs
• Forecast model selection
• Inventory optimizing/reviewing shortages
• Alert monitoring
• Planning book design
• Wrap-up

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 Background jobs

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Automating Tasks

• A key requirement of any system is the ability to automate tasks. SAP APO offers a full
set of solutions for:
 Automation of repetitive tasks

 Saving users’ time and sanity

 Modeling scenarios and what-ifs

 So the user can make informed decisions and choices

 Creating a set of logs

 So the user can review and monitor results when it suits them

4
Background Jobs

• Background jobs can be created in SAP APO, which:

 Incorporate multiple steps in an organized sequence

 The same activity/step repeated multiple times for different selections (e.g., using

different values for each Plant/Location)

 A series of activities/steps that follow on from each other logically to form an overall

process (e.g., the various steps required to generate a forecast based on history)
 Can be scheduled to run at set times or can be run on demand as per business
requirements
 A weekly or monthly planning cycle

 Ad hoc re-planning of steps in the event of major business change

5
Background Jobs (cont.)

• The creation, scheduling, and monitoring of background jobs in SAP APO works like that
in SAP ERP for those already familiar
 SM36 to Create a new Background job

Select the
 Adding steps in the required sequence
program to be
used
And the variant controlling
parameters and selections
(e.g., locations)
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Background Jobs (cont.)

• In this example, a set of steps running heuristics across various Location/Product

combinations …

These are the variants

This program runs defining
heuristics Location/Products,
horizon, periodicity 7
Background Job Logs

• The Spool Files or Job Logs can be used as a basic tool for what-if planning or for trying
something out that you want to undo soon after
 Run one job that creates a Spool or Log

 Run second job that reverts the situation

 Assess the results from first job by accessing Spool or Log

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Process Chains

• To automate processes even further, SAP APO offers the ability to create Process Chains
 These are sequences of background jobs

 Multiple levels of jobs can be scheduled to run at once

▪ Simultaneously to optimize server use during quiet times

▪ In-built checks to confirm job success before moving onto next job as and when required

As soon as you start creating background jobs for users, start discussing Process
Chains with them – they can save them a lot of time scheduling and releasing jobs

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Process Chains (cont.)

• Here is an example Process Chain that runs all of the monthly DP jobs for our European
operations
 There are four simultaneous chains optimizing processor usage

The links between

processes here are red/
green – i.e., the chain
continues even if the
previous step fails
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Process Chains (cont.)

• Each one of these elements is a chain of background jobs with multiple steps in itself

You can then create

Process Chains of
Process Chains …

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 Forecast model selection

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Forecast Model Introduction

• The selection of the appropriate Forecast Model requires a high level of understanding of
statistics
 Careful analysis

 Repeated calculations and iterations

• SAP APO Demand Planning (DP) offers some solutions to make the planners’ selection
process a bit easier
 Automatic Model Selection

 Automatic Tests (Trend/Seasonality)

 Composite Forecast Models

 Combination of models

 Best-fit model based on KPIs

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Automatic Model Selection

• There are two methods SAP APO offers for Automatic Model Selection
 Method 1 applies various tests and then runs selected model

 Method 2 applies various tests and then makes multiple attempts with selected model
varying alpha/beta values

You can choose to incorporate either or both of these

methods depending on your design but then choose to
run the models selected by the planners themselves
immediately after. The log will keep the results from
above, but actual planning results will be as defined by
planners.

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Automatic Model Selection (cont.)

Agree on a specific and set list of models and tests to be run rather than choosing
all available – otherwise your planners will spend even more time reviewing the
results of hundreds of logs. They should choose the best-fit models for your
business and restrict to those.

Don’t use all of these

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Automatic Model Selection (cont.)

• We use three main Automatic Model Selection steps at Hollister, the results of which are
then superseded by the manually selected models chosen by the planners themselves

Auto Model 50 Auto Model 51 Auto Model 56

New products
No previous experience/ analysis of
history
APO conducts multiple tests including
intermittent demand, trend, and seasonal
New and existing products
Planner has detected or believes there
may be a trend
APO conducts a test for trend
“Special”/Class A products
Planner wants a complete and thorough
analysis
APO conducts multiple tests including
intermittent demand, trend, and seasonal

Alpha, beta, and gamma default from
profile settings
If tests are negative, a constant model is
used – this may be due to data integrity,
so should be viewed with care
Alpha, beta, and gamma default from
profile settings
If tests are negative, a constant model is
used – this may be due to data integrity,
so should be viewed with care
APO also establishes the best values for
α, β, and γ
Similar to Model 50, but takes a lot longer
to process, hence only key products
selected here

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Composite Forecast Model

• SAP APO offers a Forecast Strategy which is a combination of a number of strategies

called Composite Forecasting
 Various strategies are selected for use in forecast cycle

 Strategies can then be weighted as a percentage, giving a combined forecast using

all models or
 Strategies can be compared to each other and the one producing the lowest forecast

error is used

We have found that the combined forecast approach can be more

confusing to understand and validate, but is relevant for the more
important products
The best method approach is not appropriate where a constant
model would be best suited
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Composite Forecast Model (Standard Mode)

• Composite Forecast Models are created and assigned in a similar process to standard
Univariate Models
 Choose Composite Forecast tab instead of Univariate Profile

 With Standard Mode, you then select existing Univariate Profiles and weight them
accordingly
 This requires careful input from planners

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Composite Forecast Model (Best-Fit Modes)

• The other approach to using Composite Forecast Models is similar to the Automatic
Model Selection
 You can choose a Mode where the Model selected is based on the smallest Forecast
Error
 The advantage over Automatic Selection is that the planners themselves are still in

control of the choice of Model

▪ This can be a good intermediate step to automating

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Composite Forecast Model (Analysis)

• After Forecast jobs or Process Chains have been run, you can access Forecast
Comparison
 Composite Forecast  Forecast Comparison

 Error comparisons

 Change logs

▪ This allows planners to review and confirm what actions have been taken and gain buy-in

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 Inventory optimizing/reviewing
 shortages

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Inventory Optimizing

• Many organizations use many different ways to assess inventory levels and to create
KPIs
 Simple quantity on hand

 Simple value on hand

 Days on hand

 Based on historical usage or forward demand

▪ Differences in number of periods used to calculate

 Turnover
 Again, based on historical usage or forward demand

 Inventory quality ratios

 More complex calculations combining usage, projected demand, and an acceptable

number of days inventory

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Inventory Key Figures

• If an organization has a very clear set of inventory KPIs with calculation rules that do not
change frequently, we can model those in SAP APO
 Created by a combination of new Key Figures and Macros

 The Key Figure can be assigned to Planning Books

 The Macro is used to calculate the values and to populate the results into the

Planning Books

▪ Day’s Supply is populated based on Hollister’s own preferred calculation

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Supply Shortage

• In the event of projected shortages or non-availability of product, this can be shown in

SNP Planning Books
 We use Supply Shortage Key Figure

 This is essentially Stock On Hand, but only displays if the values are negative

Include Supply Shortage in your Planning Book/Data View designs and share this
with planners – they can then view All Products for this Key Figure to create a
shortages list

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 Alert monitoring

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Alert Monitoring

• SAP APO offers a tool to create and monitor for Alerts

 Across all areas of SCM planning, including DP and SNP

 Based on Macros which test for conditions

▪ If the condition is found, then an Alert is created

 Alerts can be reviewed in several ways depending on user requirements

 Database or dynamic

▪ E.g., emailed reports or online display in Planning Book

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Alert Monitoring (Database)

• Database Alerts are used for generating reports

 A Macro tests for conditions and then writes to a database file

 This database can then be viewed online, exported to other applications, or even

emailed as attachment directly to planners

Use Database Alerts where there are large selections of Location Products.
The generation of Alerts can then be automated as a Background Job.

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Alert Monitoring (Dynamic)

• Dynamic Alerts are used for highlighting exceptions real-time to planners

 They can be generated in Planning Books so that planners can see them when they are
accessing data

Dynamic Alerts can be configured with a range of options: change the colors of
cells in the Planning Book or add an icon to make them really stand out better for
planners

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 Planning book design

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Planning Book Design

• Unlike in SAP ERP, the layout of planning data in the Planning Books in SAP APO is not
fixed
 SAP APO allows us to configure and customize multiple views for differing business
needs
 These views can be different cosmetically

 These views can be different functionally

 Once you understand the range of options available to you in design mode, you should
then work with the users

Make the users aware of all of their options, but ensure they understand the
implications of these choices, otherwise they’ll be looking for changes as
soon as they start to use the new views
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Planning Book Timelines

• Planning Book Data Views can be customized based on the timelines displayed
 Time Bucket Profiles are selected to control how this is displayed

Users can select other available Time Bucket Profiles when in the Planning Book,
but configuring a Data View for each of the most commonly used profiles makes it
quicker and easier for the users

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Planning Book Timelines (cont.)

• And you can configure the Time Buckets Profiles to have different buckets for the short-
term versus the long-term horizon

Create Time Buckets Profiles with a range of bucket sizes where planning takes
place over an extended horizon; this allows planners to see the full planning
horizon in summary at once

Horizon is in days And months

up to here further out

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Planning Book Cosmetics

• SAP APO allows us to choose color schemes for our design of Planning Book Data
Views, which can be configured to assist users in their day-to-day activities

Set default colors to highlight cells or

ranges that are editable vs. cells that are
calculated
The grey cells are
updated by Macros

The white/clear cells

can be edited by
planners
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Planning Book Cosmetics (cont.)

Set default colors for Data Views so that

planners can be clear when they are in a
different version

Green Data Views could

be normal ongoing
planning?

Blue Data Views could

be for annual planning
only?

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Planning Book Key Figures

• SAP APO also allows us to choose which Key Figures are displayed and used for
Planning Book Data Views

Creating a reduced-set Data View without Macros can allow for

faster-loading of data where only display activities are required

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 Wrap-up

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Where to Find More Information

• http://help.sap.com/saphelp_scm50/helpdata/en/ac/216b6e337b11d398290000e8a49608/co
ntent.htm
 Forecast Strategies via SAP Documentation

 Particularly useful for understanding the differences between models 50-55

• Marc Hoppe, Sales and Inventory Planning with SAP APO (SAP PRESS, 2007).
• Jörg Thomas Dickersbach, Supply Chain Management with SAP APO™: Structures,
Modelling Approaches and Implementation of SAP SCM™ 2008 (Springer, 2009).

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Key Points to Take Home

 Automate repeated tasks to save time and effort

 Combine those automated jobs into larger Process Chains to optimize the use
of system resources and to consolidate work
 Use Automatic Model Selection strategies as guides for planners, not as the
final solution
 Use Composite Forecasting as a supplemental support guide for planners in
model selection
 Make full use of SAP APO Macro function to create your own Key Figures for
monitoring of inventory and shortages
 Create Planning Book/Data Views that are relevant for the users
 Use Alert Monitoring; Database Alerts for reports and Dynamic Alerts
to change Planning Book views

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Your Turn!

Steve Grace & Yugal Kumar

Thank You
Any Questions?
steve.grace@hollister.com

yugal.kumar@hollister.com
Please remember to complete
t your session evaluation

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