SCM APO DP Overview

SAPSCM/APO European Initiative
APO Overview Internal Training

Demand Planning Overview
March 2003
- 2 - Accenture 2003
Training Agenda
Advanced Planner & Optimizer Overview
Demand Planning Overview
Supply Network Planning Overview
Production Planning & Detailed Scheduling Overview
Global Available-to-Promise Overview
APO Integration & CIF Overview
APO Implementation Considerations
Objectives
Main Goals of This Section
To understand Demand Planning as an accurate forecasting tool in the APO context.
To know Demand Planning main features, in concrete:
Its architecture, data storage and representation attributes
Its main tools (Planning Toolbox, Planning Environment, Accuracy Analysis)
The different forecasting methods available
To visualize how DP applies to a real case (Sara Lee).
To be aware of main considerations and complexity factors when implementing Demand Planning.
To get familiar with the look of DP and its basic functions through a demo and practising with
simple exercises.
Contents
1. Demand Planning Features & Capabilities
2. Case Study: Sara Lee
3. Key Aspects to Consider When Implementing DP
4. DP Demo: Accelerated Supply Chain Integration APO
Template
5. DP Exercises
Demand Planning Accurate Forecasting
A toolkit of statistical forecasting techniques
Tightly linked to the R/3 System and the SAP BW SAP (data can be automatically transferred)
Tree selection and drill-down capabilities facilitates navigation through multidimensional data
structures
Uses the Alert Monitor to report exceptions
Demand Planning Features and Capabilities
Planners Knowledge
Task-specific planning tools
Flexible views
Graphics
Promotional planning
Life cycle management
Cannibalization
Accuracy reporting
Statistical Methods
Multi-model approach
Average models
Exponential smoothing
Causal factors
Trend dampening
Model combination
Pick best
Demand Planning Data Mart
Anticipation of
Future Demand
Information
Collaborative
forecasts

Order & shipment
actuals & history
Cost
POS data
Nielsen / IRI data
...
C
U
S
T
O
M
E
R

YEARS
MONTHS
WEEKS
DAYS
HOURS
QUARTERS
SELL HOLD MOVE MAKE
DESIGN
B2B Exchanges
Contract
Manufacturers
3PLs / 4PLs
Channel
Partners
B2B Exchanges
BUY
S
U
P
P
L
I
E
R

Production
Activity
Control
Order Management
Procurement Manufacturing
Execution
System
Load
Planning
Transport
Planning
Distribution
Requirements
Planning
Materials
Planning
Production
Planning

Supply Demand
Matching

Product
Allocation
Sales
Forecasting
Inventory
Target
Setting

Supply Contract
Negotiations
Network
Sourcing
Customer Service
Territory Planning
Available to
Promise
In-transit &
On-hand Inventory
Tracking

Material
Inventory
Tracking

New Product Development Logistics Network Design
Detailed
Production
Scheduling
Material Requirements
Planning
APO Demand Planning within Supply Chain Planning
Demand
Planning
APO DP
SAP APO Demand Planning Architecture
Demand Planning is composed of three layers:
Graphical user interface
Planning and analysis engine
Data mart
Planning Views
GUI
OLAP
Processor
Business
Planning
Library
Statistical
Forecasting
Toolbox
Planning &
Analysis
Engine
Planning Area
Time
Series
Catalog
Notes
Data Mart
SAP APO Demand Planning Architecture (continued)
Performance is of vital importance in any demand planning solution if users are to fully benefit from
available information
DP architecture includes several features to ensure high performance:
Dedicated server
Multidimensional data mart based on the star schema that supports efficient use of storage
space and of CPU cycles, minimizing query response time
Batch forecasting so do not impede online performance
The size of the information treated depends on:
Number of characteristics: many characteristics will let the user more flexibility to define the
planning level and to review the information but it makes the system works slower
Number of key figures: many key figures will give the user a lot of information related to
forecast but it makes the system works slower
Number of characteristic combinations: the time consuming for any calculation (e.g. macros)
depends directly on the number of characteristic combinations
Number of planning versions: two planning versions needs double capacity than one
Type and number of temporal periods

Data Storage and Representation
Multidimensional Data Storage in the data mart allows to:
View data and plan from many different perspectives
Drill down from one level to the next
Info Cubes:
A multidimensional data structure
The primary container of data used in planning, analysis and reporting
Contains two types of data, key figures and characteristics (or dimensions):
- Key figures are quantifiable values (e.g. sales in units, orders, shipments, POS)
- Characteristics or dimensions determine the organizational levels at which you do
aggregation and reporting (e.g. products and customers)
Info Cubes also share master data and descriptive text, which are stored in different tables
The Online Analytical Processing processor:
Models the business rules considering the aggregational behavior of key figures (e.g. sales
summed by product and time)
Guarantees that all business rules are met and the computed views present valid results
Data Storage and Representation (continued)
Hierarchies are modeled as combinations of characteristic values (e.g. product are grouped into
product family hierarchies) using proportional and temporal factors, in order to be used as the basis for
aggregation, disaggregation and drilling down.
The DP planning level is based on the characteristics definition. In order to be more integrated with
R/3 data, the dimensions and characteristics are usually based on R/3 hierarchies:
Product dimension and characteristics are usually based on R/3 product hierarchy
Customer dimension and characteristics are usually based on a R/3 customer hierarchy
Geographic dimension and characteristics are usually based on the supply network
Dimensions
Hierarchies
Attributes
Facts
Time Series Management
N
o
t
e
s
Promotion Forecast
99
01
00
02
Life Cycle
time sequence
Aug. Sept.
W32 W33 W34 W35 W36 W37 W38 W39 W40 W41
124
203
Material
C
u
s
t
o
m
e
r

Product
Groups
Regions
Data Storage and Representation (continued)
Time Series Management:
Based on catalogs: time series data with related attributes (e.g. promotional patterns and life
cycles)
SAP DP allows to reuse time series saving time and ensuring consistency (e.g. reuse a past
promotional pattern to estimate the impact of a similar future promotion)
Notes Management maintains all notes entered by planners to create an audit trail of all demand
planning activities, which is specially helpful when multiple sources and people are involved (such as
in consensus forecasting)
Dimensions
Hierarchies
Attributes
Facts
Time Series Management
N
o
t
e
s
Promotion Forecast
99
01
00
02
Life Cycle
time sequence
Aug. Sept.
W32 W33 W34 W35 W36 W37 W38 W39 W40 W41
124
203
Material
C
u
s
t
o
m
e
r

Product
Groups
Regions

Planning Environment
DPs rich planning and forecasting functions are based on the Statistical Forecasting Toolbox
and the Business Planning Library. These functions include:
Aggregate functions (sum, weighted sum, average)
Disaggregate functions (quotas, proportional and equal distribution)
Comparison functions (difference, ratio, percent, percent difference, share and correlation)
Financial functions (conversion from units into revenue, currency conversion and business
period conversion)
Time-series functions (time-phased, average, and weighted average of time series)
A Planning Book is an easy-to-use tree
control for selecting data and a frame with a
grid and a graphical data display:
Preconfigured planning books for
promotional planning, causal analysis,
statistical forecasting, life cycle
management, etc
These can be used as guides for
customized planning books
Planning Environment (continued)
You can use Advanced Macros to:
Calculate deviations
Make automatic corrections
Calculate sales budgets
Define your own exceptional situations
Launch status queries
Advanced Macros models the calculations based on the individual business tasks to perform
principally:
Build a macro consisting of one or more steps
Control how macro steps are processed and how results are calculated
Use a wide range of functions and operations
Define offsets so that the result in one period is determined by a value in the previous period
Restrict the execution of a macro to a specific period or periods
Write macro results to a row, a column or a cell
Create context-specific and user-specific planning views
Trigger an alert in the Alert Monitor to inform of particular business situations
Integration with Microsoft Excel
Statistical Forecasting Toolbox
A Toolbox of all practical, proven forecasting methods
Time Series Models:
Uses past sales to identify level, trend, and seasonal patterns as a basis for creating future
projections
Nave models, moving average, simple linear regression, Browns exponential smoothing, Holt-
Winters, Box-Jenkins
Stochastic Models:
Accurate forecast with sporadic demand pattern
Croston model uses exponential smoothing to estimate:
- The size of demand during periods in which demand occur
- The demand frequency
Final forecast are determined by distributing the size of demand according to the demand
frequency
Forecasting
Statistical Forecasting Toolbox (continued)
Multiple Linear Regression:
Technique for estimating the relationship between past sales and other causal factors
Variety of options to model linear and non-linear trends:
- Seasonal patterns
- Life cycle patterns
- Dummy variables and time lags
Correlation analysis corrects variables
Pick-the-Best, applies the best method among:
All of the available forecasting methods, or
The planner-specified forecasting methods
S-Shaped Curves supports complete lifecycle forecasting (introduction/growth and end-of-life phases)
Logistic and exponential functions
First estimation based on similar products
Adjusted over time when sales history is available
Causal Analysis
Includes all significant causal factors (price, number of displays, number of stores, temperature,
working days) in the models and determine how they affect customers behavior
Simulate sales development according to the mix of causal factors (what-if analysis, marketing mix
planning)
Multiple linear regression to model the impact of causal factors
50F 65 75 85 60
U
n
i
t

S
a
l
e
s

Feb. Mar. April May June July Aug. Sept.
Multi-Tier Forecasting
Integrates sell-in data (like POS data) into the process of forecasting sell-through data (like shipments)
Causal model based on significant causal factors to forecast POS
Second causal model is used to forecast shipments:
Uses past POS data and the POS forecast as the main causal factor
Takes the time lag between POS and shipments into account
Considers other causal factors (forward buys, trade promotions)
POS
Data
Manufacturing

Retailer
Sales
History
Consumer
P
r
o
m
o
t
i
o
n

A
d
v
e
r
t
i
s
e
m
e
n
t

time
C
o
m
p
e
t
i
t
o
r

P
r
o
m
o
t
i
o
n

sales
Sell Through
Sell In
Consumer demand
+ Replenishment lead time
+ Forward buying
= Retailer Demand
Data Analysis
Identifies missing values and outliers in the data to improve the quality of the statistical forecast.
Through the outlier, an automatic correction of historical data is done taking into consideration out-of-
range data that may disturb the identification of historical pattern
Identifies structural changes in established patterns:
Level, trend, and amplitude changes
Change from unstable to stable behavior
Automatic detection via tracking signals
Automatic outlier detection & correction
Manual intervention
Promotion Planning
Impact of promotions must be projected separately from standard forecast components that are based
on historical sales data
Takes prices into account when doing profitability analysis for promotional calendars
Reporting capabilities allow to track promotional activities and related costs
Archives a promotion pattern in a promotion catalog, so it can be reused
Several techniques for estimating the effect of a promotion
Promotion
Planner
Promotion patterns
97
99
98
00
Price
Quantity
-10%
Forecast simulation
Profit
Sales
Life Cycle-Management
A Demand Planning and Supply Network Planning both components function
Planning strategies for a product depend on the stage of its life cycle:
Should the product be introduced, and when?
How should a product be promoted during the different stages?
Should the product be deleted, and when?
Should a successor product be introduced?
Should a re-launch be started for a product, and when?
What is the cannibalization effect of a new product with existing products? Etc.
DP can represent the launch, growth and discontinuation phases by using phase-in, phase-out and like
modeling profiles (or combining them):
A phase-in profile reduces demand history by ever increasing percentages during a specific period or
periods (simulating upward sales curve launch and growth phases)
A phase-out profile reduces demand forecast of a product by ever decreasing percentages (simulating
downward sales curve discontinuation phase)
Like modeling creates a forecast using the historical data on a product with a similar demand behavior
(new products and products with short life cycles)
Product Launch
Aggregate
End of Life
Consensus-Based Forecasting
SAP DP supports consensus-based Sales & Operations Planning (S&OP)
Multidimensional data structure of the InfoCubes enables to create multiple plans:
Product levels for Marketing
Sales areas and account/channel for Sales
Distribution centers and plants for Operations
Business units for Finance
Synchronizes multiple plans into one Consensus Plan that drives business
Composite Forecasting reconciles and combines different plans on same level and multi-levels
Forecast
1

n
...
Combine &
Reconcile
Sales Forecast
Marketing Forecast
Forecast Accuracy Analysis & Alert Monitor
Forecast accuracy reporting:
Helps to assess the accuracy of past forecasts
Integrates this knowledge into projections for the future
Stores a series of forecasts for a particular period and compares each deviation of this series to the
actual values for the same period (mean absolute deviation, error total, mean percentage error, )
Reports shoe forecast errors at any level and dimension:
Actual versus forecast
Actual versus time-lagged forecast
Actual versus different planning versions
Actual versus budget
Alert Monitor informs in real time via e-mail or exception message if an exception occurs
Exception conditions can be defined based on thresholds for special statistics and tracking signals
Reports can be sorted:
By forecast error
Restrict them to products with a forecast error greater than a specified threshold
Advantages of SAP APO Demand Planning
Global server with a BW infrastructure
Integrated exception handling, creation of user defined alerts
Integration with Production Planning (S&OP scenario)
Main memory based planning
Flexible navigation in the planning table, variable drill down
Extensive forecasting technique
Promotion planning and evaluation
Collaborative planning via the internet
Supports Sales Bills of Material (BOMs)
Contents
Template
5. DP Exercises
Case Study: Sara Lee
Introduction
Main objectives of Demand Planning for Sara Lee:
S&OP purposes: Provide the essential input for S&OP monthly cycle (forecast) and create
consensus within the OpCo. Demand Forecast should contain the required detail in order to
compare with Business/Sales targets
Supply Planning purposes: Provide updated forecast from different OpCos (in weekly
buckets) to Supply Planning in order to base Supply Planning on consolidated forecast from
each OpCo
Benefits of Demand Planning for Sara Lee:
Improve the communication and transparency from all OpCos to CoE
Provide to Supply Planning short and long term volume estimation for capacity planning
Create consensus in the OpCo (together with S&OP)
Understanding the demand of each OpCo through deep analysis (KPIs, market intelligence,)
Move from Reaction on toward Plan Activities
Improved customer service level
Lower obsolete and safety stocks
Project Approach
A template has been developed in order to align, cover and support all the processes performed in
the Sara Lee Opcos in Europe. In different phases, the Opcos will start to use the new template,
changing their actual procedures and/or systems (local roll-outs).
There will be a central team responsible of maintaining the basic and common applications.
In every roll-out a local team will be assigned to check that the requirements of the Opco are covered,
to conduct the trainings, etc.
Communication between local and central teams:
Either in the central and in the local teams, there will be a member responsible of the
communication between them. The communication link will be one-to-one.
CUSTOMIZING: The local team will ask the central for customizing new structures.
Every local roll-out will have a different copy of the Implementation Guidelines.
GAPS: The local team will detect functionality not covered by the template, then, these gaps
must be written down in a document called EuRoPe fit.
Both teams will have a meeting to determine how each issue in the EuRoPe fit must be solved.

Initial training
(central to local)
EuRoPe fit sessions
(local)
EuRoPe fit analysis
(central & local)
GAP estimation
(central)
GAPs approval
(project management)
Central GAPs design
- Template development -
(central)
Local GAPs design
(local)
Project Approach (continued)
Procedure for the EuRoPe fit Analysis and Development:
Demand Planning Processes
Demand Planning Processes are divided into three cycles:
AOP/Outlook generation: Provide volumes taken from APO DP as a starting point for the
AOP/Outlook generation
Monthly cycle: Update Demand Forecast for the following 24 fiscal periods and provide it to the
Sales and Operations Planning monthly cycle (to create a consensus and run Supply Planning).
Weekly cycle: Review current month forecast to identify supply risks, advise Sales and
Marketing of these risks and change the forecast which applies to a period outside of the Supply
Planning frozen period.
Tactical Operational
Monthly Cycle
Weekly Cycle
Strategic
AOP generation
Demand Planning Processes
(continued)
AOP/Outlook generation:
APO Forecast volume can be used as a
starting point for AOP generation.
Volumes are sent to R/3 where it is
converted into value.
Volume/value adjustments are done in R/3
AOP volume is sent back to APO for
Supply Planning purposes and KPI
analysis
CO-PA
(R/3)
APO
CO-PA
(R/3)
APO
Volumes from APO DP
Convert volume to
value
Adjust Volume
Run SNP with
Adjusted volume
Volume adjusted after
SNP
Convert volume to
value
Adjust Volume
Final AOP volume sent
to APO
Interface SAP - APO
Send Adjusted Volume
to APO
Demand
Planning
Finance
Supply
Planning
Finance
Responsible Process
Demand Planning Processes (continued)
Monthly Cycle: Demand Planning can be considered as a sub-process of the Sales and Operations
Planning
Monthly Cycle: Rolling forecast for month M to M+24 is prepared by Demand Planners:
In second last week of month M-1,
Based on the history accumulated until month M-2
(*) Caldendar
M.1. Generate KPIs
M.2. KPIs analysis
Demand Forecast
M.5. Create
M.3. Updated
Promotional
Planning
M.4. New Product
Launches
(*) Calendar is depending on the S&OP requirements
Updated
Demand
Forecast
S&OP activities that impact DP

Local
S&OP
meeting
M.6. Update
Demand Forecast
Last week of previous month (*)
Second last week of previous month (*)
Define Supply
Plan at Euro
Level
Demand Meeting
Demand
meeting
Customer service
review
Business Group Review
Monthly Cycle:
Demand planners will provide every month a rolling forecast for the following 24 fiscal periods.
There will be some differences between the first 6 months and the remaining 12 months:
- First 6 months:
Presented in weeks if needed (in APO DP not much extra work is needed)
Forecast based on clean history + promotions
- Last 18 months (S&OP requirement for long term capacity checking):
Presented in months
Forecast as extrapolation of
non-cleaned history
Monthly Cycle
Horizon
6 months in weeks
18 months in months
Monthly Cycle
Horizon Horizon
6 months in weeks
18 months in months
Non-clean history
(no promotions)
Forecast Baseline +
Promotions
Weekly Process: Process model overview:
The process consists of reviewing the consumption of the forecast within the current month,
facilitating decision making on critical exceptions (e.g. potential stock storage)
This will be made by exception based on the following sources:
- Consumption of forecast after the weekly upload (Monday-Tuesday)
- Daily stock-out report coming from R/3
- Order to Cash (CDP) will develop ATP based on: Physical stock + Incoming stock
Promised (reserved) stock
Review current
month forecast
consumption
Communicate
risks to Sales &
Marketing
Provide changes in
promotional
planning
Update demand
forecast in APO
Update demand
forecast with
promotional
activities
Communicate
changes to Supply
Planning
Monday-Friday
Risks
identified?
Yes
No
Changes in
Promotional
Planning?
Data Structure
SCP data structure are based on CDP hierarchies:
Hierarchies defined taking into account the global EuRoPe solution
Easy to integrate with CDP
CDP is responsible for defining the content of each of the level of the hierarchies
Planning levels are grouped in dimensions. Dimensions do not have any functional impact, and it is
only a way of organising the information in the system.
In the SCP EuRoPe Solution it is planned to use 3 dimensions:
Product
Customer and Demand organization
Geography
APO is based on a Data Warehouse and therefore the information is always consistent at all levels
Data Structure (continued)
The DP planning level is based on the characteristics definition. In order to be more integrated with
R/3 data, the dimensions and characteristics are usually based on R/3 hierarchies:
Product dimension and characteristics are usually based on R/3 product hierarchy
Business
line
SKU
Category
Product
Segment
Format
Sub
Segment
Product
Family
Brand
All views are defined on SKU level
Promo
-tional
Type
Sub
Brand
Concept
Kit

Process
Type
Type 1 Variety
Example of
Planning level
Tea Coffee Household Body Care Level
Business Line
Body Care
Category
Bath&Shower
Segment
Sub-segment
Bath
Product Family
Herbs
Brand
Radox
Sub-brand
Original
Product
Radox Herbal Bath
Original
Process Type
-
Variety
-
Packaging Type
bottle
Product Type
standard
Format
500 ml
SKU
Radox Herbal bath
Original 500 ml
Bath
Household
Airfresheners
Home
Starter
Ambi-Pur
Perfum dinterieur
Ambi-Pur Perfum
dinterieur Anti-tabacco
-
Anti-tabacco
electrical
standard
-
Ambi-Pur Perfum
dinterieu Anti-tabacco
starter electrical
Airfresheners
Coffee&Tea
Coffee
Roasted Coffee regular
Standard
Douwe Egberts
Desert
Douwe Egberts dessert
Ground
caffeinated
Brick pack
10% free
250 gr
Douwe Egberts dessert 250
gr 10% free
Roasted Coffee
Coffee & Tea
Tea
Black
Regular
Pickwick
-
Pickwick English
-
English
box
standard
80 * 2
Pickwick English 80*2
Hot Tea
Concept
- - - -
Data Structure (continued):
Product Hierarchy in Sara Lee:
Data Structure (continued)
Customer dimension and characteristics are usually based on a R/3 customer hierarchy

Geographic dimension and characteristics are usually based on the supply network
Customer group
Sales Director
KAM
Customer
Sales Area
Lowest Point of
Delivery
APO Supply
Network
Clients
DC
Factories
Forecasting Detailed Process
The following are the detailed activities that Demand Planners will be doing every month with APO
This cycle summarizes the scenarios that have been tested in the prototype phase:
Send forecast to
Supply Planning
Clean History and Evaluate
Forecast Baseline
Add Events
Phase in/out
Create consensus
(local S&OP)
Close the Period and
KPI generation
Evaluate Forecast
Performance
Update Forecast
Select Forecast Levels
Choose statistical algorithm
Monthly cycle
Disaggregation
Forecasting Detailed Process: Select Forecast Levels
Level of detail of the forecast
The lowest level of detail of the forecast (due to Supply Planning or S&OP
requirements) is:
- SKU/customer/lowest point of delivery
- weekly buckets
Alternatives in APO
APO gives the opportunity to forecast at any level of aggregation (product, cost,
geography) using later Disaggregation and Reconciliation capabilities to allocate
demand to the desired level
Send forecast toSupply
Planning
Clean Historyand Evaluate
Forecast Baseline
Add Events
Phase in/out
Create consensus (local S&OP)
Close the Period andKPI
generation
Evaluate Forecast
Performance
Update Forecast
Monthly cycle
Disaggregation
SubBrand Level
Forecast Level
SKU/Customer
DE Dessert
DE Dessert
250g
DE Dessert
500g
D
a
t
a

c
o
n
s
i
s
t
e
n
c
y

a
l
o
n
g

t
h
e

h
i
e
r
a
r
c
h
y

80.000
6.000 72.000
32.000 17.000 23.000 4.000 2.000
12.000 5.000 700 2.000 1.300 15.000
5.700 17.000 13.300
Makro Auchan Intermarch
Format Level
SKU Level
Customer Level
SKU/Customer
Advantages of Forecasting at different levels
Reduction in Forecast errors: Forecasting aggregated levels of products typically
results in lower forecast errors (principle of compensating errors)
Importance to the Business: Analyse your products according to their strategic or
economic value to the company (ABC analysis). Spend effort when it is required
Customer concentration: Depending on the customer segmentation we can have
the opportunity to focus on customer level forecast (Holland 3 customer 70% of
market share, while in Spain only 39% - Nielsen)
Customer collaboration: Requires that you forecast at customer level which you
then can share with the customer
Basic rules for selecting a forecast level
Select a level aggregated enough:
- To be representative (show continuous trend over periods)
- Not to be too time consuming
The level contains set of products homogeneous with similar demand pattern
Ensure that is feasible to disaggregate to lower levels (without jeopardising
accuracy)
Planning
Forecast Baseline
Add Events
Phase in/out
generation
Evaluate Forecast
Performance
Update Forecast
Monthly cycle
Disaggregation
How to define the level at which to forecast:
Identify the characteristics of the group of products that make them homogeneous
and are therefore suitable for aggregating
Demand
Volatility
Market
Intelligence
Promotional
activity
Characteristics
Customer
concentration
Range of
products
Lifecycle
Customer
Collaboration
Strategic Value
Capacity to predict future
demand
Identify seasonality, trend,...
Number, frequency and types
of promotions
Description
Number of customers buying
the product
A large number of SKU makes
forecast complex
New product, growing,
mature or declining
Collaboration with customer
Special agreements
Importance of the SKU/group
of SKU for the company
Demand is stable and homogeneous
for the products of this group
This is a seasonal product. Higher
sales from October to March
No customer promotions
Example: Kiwi Large Shoe Polish 50 ml
(H&BC UK)
High concentration (6 customers
80% of the market)
10 SKUs in this group
Mature group
No customer collaboration
Solus listings - Safeway and Sainsburys
Shoecare is a core line and therefore
high strategic to the company
Homoge-
neous
Homoge-
neous
Homoge-
neous
Customer
view
Easy to
disaggreg.
Homoge-
neous
Impact for
selecting
level
Customer
view
Product A
Planning
Forecast Baseline
Add Events
Phase in/out
generation
Evaluate Forecast
Performance
Update Forecast
Monthly cycle
Disaggregation
Forecasting Detailed Process: Choose Statistical Algorithm
What is available in APO?
Although in APO it is possible to use univariate and multivariable/causal forecast models,
only univariate models are in scope
APO provides a wide range of different statistical models and strategies to use for
forecasting (up to 35):
- Linear regression with seasonality
- Trend model
- Trend and seasonal model
- Automatic model selection,...
How to select the best model?
First step: Prior to selecting the forecasting statistical model, Demand Planners will have
to gather market intelligence to understand with pattern to find.
Second step: Test which model better fits the expected demand pattern. Take into
consideration some recommendation:
- Linear regression with seasonality model is very easy to understand by users and
require very little maintenance (preferred model by Demand Planning implementation
team)
- Most of the other models require some statistical skills by users and time consuming
maintenance by DP when reusing the same profile for next rolling forecasts

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Clean History & Evaluate Forecast
Baseline
Why is necessary to clean history?
To enable forecasting to be based on a model created using history that is free of impact of
events (non repetitive history)
Any outliers (promotions) will give errors in estimating seasonal demand
To understand underlying demand e.g. seasonality and ensure that it is reflected in the forecast
Ensure that the planned contribution of events is not duplicated in the forecast
To provide a baseline forecast to account management so that they can focus on promotions
Should you always clean history?
No. Balance the amount of effort required versus the result:
- Focus on major events which significantly effect your baseline.
- Focus on A category products.
- If events are repetitive in type and in time then the user could decide not to clean history.

Sales history
source: Information Resources,
Inc.
Baseline
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Baseline
How to clean history in APO?
APO gives the opportunity to clean history using different methods:
- outlier correction:
adjusts automatically historical values lying outside of the tolerance lane towards
forecast baseline
Easy to use and very little work
- Mark events: Outlier correction that only applies to the selected periods
- Manual correction: Manually add an event that subtracts/adds the desired volume to the
history
- Promotional planning: Automatically subtract the impact of the promotions defined in
promotional planning
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Total history
Total history - updated promo = baseline
Baseline
Recommendations
Use outlier correction
- ... for the first history upload. Manual clean history for the last two year could be very time
consuming,
- ... for B and C products, as requires very little maintenance,
- ... for non-promoted products (to smooth the deviations)
Use mark events
- when it is clear the period that Demand Planner wants to clean, and the correct impact
of the event is unknown
Use manual correction
- also when the event o period that the user wants to clean is identified and the impact of
the event is known
Use promotional planning
- for A products, because although requires significant maintenance (change the impact of
events in Promotional Planning if the real impact is different than what was estimated), the
forecast baseline can become more significant

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Disaggregation of the
Forecast
What is disaggregation:
Disaggregation consists of splitting the forecast made at a higher level in the
hierarchies (i.e, from product format to SKU) and time (from month to week), using
APO features
APO gives the opportunity to choose between different alternatives:
Historical splitting factors calculated by the system (proportional factors)
Factors from previous forecast (pro-rata)
Factors calculated outside APO
Depending on each product group the approach may be different, the recommendation
is to:
Use proportional factors (only standard SKU) for the first forecast
For following forecasts consider changes in the splitting factors done in previous
rolling forecast. Therefore use pro-rata
For time disaggregation (e.g., from fiscal periods to weeks) use factors calculated
outside APO as a feasible alternative to what the system provides

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
SKU Level
1000
400 250 350
Product Family Level
Forecast Level
25% 35% 40%
Proportional factors calculated
from history (only STD SKUs)
First disaggregation (create) is
based on proportional factors
1100
400 350 350
Forecast updated at Brand level due to changes at SKU level
25% 35% 40%
No changes on the proportional factors
First SKU forecast is updated from 250 to 350
SKU Level
32% 32% 36%
New proportion established due to the changes at SKU
level. These values do not overwrite the proportional
factors
Forecasting Detailed Process: Disaggregation of the Forecast
Example:
Step 1: Forecast data creation: no data exists in advance. Proportional factors have been
calculated

Step 2: Forecast is updated at SKU level
1200
400 384 384
Forecast is overwritten based on the new history data
25% 35% 40%
Disaggregation is performed based on the existing data
at lower level not in proportional factors anymore
Forecast at SKU level is updated to new values but
keeping the proportion of the previous data
SKU Level
32% 32% 36%
1200
400 350 350
Brand Level
25%
35%
40%
SKU Level
32% 32% 36%
April01 May01
time
1400
560 350 490
25% 35% 40%
Step 3: New forecast is run (rolling forecast). Same forecast profile but historical horizon has
been updated with one more period

Note: Changes in the disaggregation factors only affect to the periods which Demand Planners
updated in previous rolling forecasts
Disaggregation in time (from fiscal periods to weeks)
Every month Demand Planners will update the forecast for the following 24 months
The forecast will be made in fiscal period buckets
The disaggregation factor from fiscal periods to weeks will be calculated outside APO
- Every OpCo will calculate if there is a weekly seasonality in the fiscal period (e.g.,
first weeks have lower sales that last weeks). Otherwise fiscal forecast will be equally
distributed to weeks.
- This factors will only affect the baseline sales. Promotions will be directly assigned to
the weeks when the promotion is executed (Promotional Planning)
P1 P2 P3
Forecast Baseline
W1 W2 W3 W4
10% 20% 30% 40%
200
20 40 60 80
- - 20 20
20 40 80 100
W1 W2 W3 W4
Identify weekly
profile in fiscal
periods
Weekly profile
Baseline
Promotions
Final Forecast
Forecast baseline for the Period 1: 200
Promotion on week 3 and week 4
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Add Events
What is an event:
An event can be defined as any activity, internal or external, that have a significant
impact on demand.
Types of event:
There can be many different types of events:
- Sales events (Logistics, Financial, Change in customer listings)
- Marketing events (TV campaign, Change in price policy, )
- External events (competitors actions, market tendencies,)
Why events are needed in DP:
Demand planners work with APO to get a representative Forecast Baseline (free of
impact of events)
Events can represent a very significant volume. It is therefore essential to have a
good estimation of the expected impact of sales and to apply them in APO
The information has to be provided to Demand Planners by the people that are
closer to the market and customers (Sales and Marketing)
Sales
t
Updated
Forecast
Forecast
Baseline
Promotions
Obsolete
Stock
New
Product
Introductions
Sales
t

Cannibalisation
effects
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Information required for Sales events
Demand Planner will include the impact of promotions, with a significant impact on
sales, to the APO forecast
Every month Sales should provide to the Demand Planner the updated promotional
plan for the following 6 months, which ideally will contain:
- Description and customer target of the promotion
- Volume estimation for the SKU (or group of SKUs) on promotion
- Weekly detail of the impact (when possible)
- Estimation of the expected cannibalization (when possible)
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Week 1 Week 2 SKUs promoted
700

+ 15%

500

+20%

Sanex Shampoo
500 ml

SKU of Douwe
Egberts dessert

Promotion A
Week 3
500

+5%

Week n
-600

-20%

Description of promotion: 10% discount
Start date (shipping): 15 February
End date (shipping): 28 February
Customer (s) target: Carrefour
Expected promotional volume
Week 1 Week 2 SKUs cannibalised
100

-5%

100

- 5%

Sanex Shampoo
750 ml

SKUs of JM
dessert
Week n
25

0%

Expected cannibalization
Information required for Marketing events
For price policy changes:
- Planned dates for price policy changes per account,
- Dates when the changes will be communicated to customers,
- Estimation on change of volume (at aggregated product level) for the periods:
From communication date to price change date
From price change date until sales are stabilised

For other Marketing events (TV campaigns )
- Volume estimation for the SKU (or group of SKUs) on promotion
- Estimation of the expected cannibalization (when available)

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Information required for External events
In some occasions an OpCo can be aware of external factors that may have
significant impact on future sales
An example of this can be the Coffee demand that can have a strong relationship
with:
- Price
- Price distance
- Market Share
- Market Growth
To include these events in APO forecast it is necessary to:
- Make an interpretation of external data (e.g., Nielsen)
- Estimate the impact on future demand that this situation may have
- Communicate the impacts to Demand Planners, who will include it as an event
in the promotional calendar

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Product Lifecycle Management
What is it?
The Product Lifecycle usually has different phases: launch, growth, maturity and
decline
Demand Planners need to take product lifecycle into account when forecasting,
especially in the launch and decline phases

Alternatives in APO
APO DP provides different alternatives to deal with lifecycle management:
- Like modelling - Choose a product similar in behaviour to the new product
introduction and use its launch profile to base your forecast on (or % of this
profile)
- Phase-in profile - Select a product which has a similar mature sales history and
apply a profile for launch. This profile can be based on market intelligence
- Phase-out profile - Apply a time series phase-out profile to simulate the
discontinuation of a product.
- Manual profile A profile for the product is manually entered into the system
Demand Planners will choose the best option considering the specific
characteristics of each case

Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Product Lifecycle Management
Phase In - Phase Out: Product Lifecycle management
The information required for each of these activities will be:
For new product introduction (phase-in):
- Introduction strategy for different accounts (new launch calendar),
- Phase-in profile:
expected volume for the coming periods at SKU level, or
referent SKU (or group of SKU) from which to be used as a Like
Profile
- Cannibalisation expected on other SKUs already listed in customers
(estimation of total volume at an aggregated level e.g. format).
For phase-out of existing SKUs:
- Phase-out strategy for different accounts (phase-out calendar),
- Phase-out profile (expected volume for the coming weeks),
- Positive cannibalisation with other products
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Update Forecast
What is a job?
APO gives the opportunity to run any process in batch jobs (i.e, run a
forecast, include impact of promotions,) and forecast by exception, making
use of alerts to identify potential forecast errors
Advantages of jobs:
Reduction in Demand Planner work effort
Alerts identify potential errors
Disadvantages of jobs:
Demand Planners do not see on-line the work they are doing (e.g., adding a
new promotion or disaggregate the forecast)
Maintenance of the jobs is required
Recommendation:
Make an ABC analysis taking into consideration volume, value and strategic
value of each set of products.
For A group of products: On-line forecasting: Spend effort when is
necessary
For B and C: Forecast by exception
20%
80%
20%
80%
N of SKUs Value
ABC analysis
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Forecasting Detailed Process: Update Forecast
What is an alert?
Alerts in APO are customizing Warnings that a Demand Planner can use to
track results from any activity he/she performs in the system
Forecast (from last period) 100 120 150 170
Forecast (from actual period) 110 90 150 220
Periods P1 P2 P3 P4
Difference in Percentage is Greater than 20% !!!!
Watch Out!!!
Alert
Planning
Forecast Baseline
generation
Evaluate Forecast
Performance
Monthly cycle
Add Events
Phase in/out
Update Forecast
Disaggregation
Contents
Template
5. DP Exercises
Lessons Learned
R/3 Integration:
Data structure between R/3 and APO should be aligned. Otherwise, interface may become very
complex. The involvement of Demand Planner in the definition of product/client hierarchy in R/3 is key
When a transactional system is already in place, using of existing data hierarchy is recommended
in order to avoid double maintenance. You should evaluate whether to keep current data structure or
design a new one
Relationship with other APO modules:
Demand is the input to SNP. When distribution network is complex, it may oblige the Demand Planner
to plan demand for many locations. During the Detailed Design phase, consider how the relationship
with SNP will be:
If a valid desaggregation strategy for forecasting and dimensioning locations already exists in
DP, then it can be reused for SNP
If customer uses percentages to assign locations, then maintenance will be done from SNP
In general, final decision depends on Demand Planner management style, being closer to
commercial (DP preference) or production (SNP preference) point of view
Key Aspects to Consider When
Implementing DP
forecast
forecast
forecast
forecast
supply
supply
supply
supply
Lessons Learned (continued)
Modelling:
Understand the process during the Detailed Design phase is key. Later modifications in APO
(characteristics, key figures, ) imply to activate and inactivate planning area, so all data is lost
(including forecast). Redoing all the data and managing several environments becomes inconvenient
and time consuming. It is recommendable to be specially aware of:
The use of attributes, characteristics and characteristics combinations
Ratios definition (the impact is less, given that extra ratios can be created)
Desaggregation strategy
Define the security model as soon as possible (in the Detailed Design phase). By doing so, we will
be able to estimate customization and planning areas creation effort properly, taking into consideration
that:
Authorization managing does not allow to restrict access by data, managing access is only
possible at the planning area level
The later may imply to multiply effort as many times as user groups are to be defined
Define desaggregation strategy as soon as possible (in Detailed Design phase):
A low level desaggregation may imply that forecast demand by client may not be much
accurate. Keep the criteria that customer suggests us to define the optimal desaggregation level
When possible, use temporal desaggregation criteria that APO provides
Implementing DP
Modelling (cont.):
Providing that customer is not always capable to use complex methods, use more simple forecast
methods such as linear regression and seasonability if possible. Other methods can result in a black-
box for the customer so that they become more difficult to understand and use effectively

Knowledge transfer:
Emphasize knowledge transfer during the project life. Planners need to spend a significant amount of
time to learn and make full use of the tool (e.g. different options for desaggregation). By not
considering it, they may feel that Excel can do more than DP. Two approaches are suggested to
overcome this risk:
Provide the user a prototype so he/she may experience the tool
Create a super-user role: a competent and fully-dedicated user that will support us in training
and support tasks
Implementing DP

About DP functionality:
The following is a list of functional issues that complicate a DP implementation. Take special care
when explaining functionality to the customer as they may differ from SAP official version:
New product cycles: not integrated with R/3, so that product characteristics creation is manual
and tedious
New product versions: realignment and phase in phase out functionalities to manage product
versions do not work always properly
Promotions: not agile for the user, many options that are not used
Cannibalization: poor functionality, it does not fill customer requirements
Kits and Displays: does not cover dependent demand functionality properly (e.g. parent product
characteristics are transferred to dependent products while this is not always true)
Implementing DP
Complexity Factors: Process Business Scenarios
Implementing DP
It indicates the complexity of the
data structure (product/ client/
location) and the alignment with
the transactional system.
DataMart
Strategy
Number of dimensions.
(product/client/location).
Stability of R/3 environment.
Data structure alignment.
Sales History Data in SAP standard system.
Data structure alignment
between APO and the other
system.
N. of sources of data.
It indicates the complexity in the
integration of sales history.
Planning Cycle Planning frequency. It indicates the frequency in which
planning is performed.

Planning Horizon Number of months. It indicates the number of months
to forecast.
Factor Description Criteria
Complexity Factors: Process Business Scenarios (continued)
Implementing DP
Lifecycle
Management
Number of new products.
Number of new versions per
product.
It indicates the degree of new
products introduction.
New Customers
Introduction
Market
segmentation.
It indicates the degree of new
costumers introduction.
Kits and Displays
Management
Frequency of development
of kits and displays.
Variety of kits and displays.
It indicates the number and
variety of aggregation of final
products that are done.
Promotional
Planning
Promotional
activity.
It indicates the degree of
promotional activity.
Aggregation
Strategies
Desaggregation criteria complexity.
Desaggregation profile volatility.
It indicates the complexity that
exists in the data desaggregation
.
Implementing DP
It defines the demand model. Statistical
Forecasting-Time
Series
Demand trend and seasonality.

Statistical
Forecasting-
Causal
Number of factors that need to be
considered.
This option must be input if
causal forecasting is considered.
Upload and
Evaluation of an
External Forecast
Number of sources for data
obtaining.
Alignment of data format
(SAP standard).
Data structure alignment with
APO.
It indicates the complexity of the
process of uploading and
evaluating external forecasts.
Consensus
Forecasting
Number of forecasts.

It indicates the number of
forecasts that are to be made
among all the departments
involved and the degree of
consensus reached.
Implementing DP
exists in the forecast accuracy
tracking process.
Forecast
Accuracy
Tracking
Complexity of the KPI calculation.
Demand Forecast
Valuation
Type of system in which valuation
is calculated.
Calculation complexity.
exists in the demand forecast
valuation process.
Review and Adjust
Forecasts at
Various
Aggregation
Levels
Desaggregation criteria
complexity.
Desaggregation profile volatility.
exists in the review and
adjustment of forecasts.
Generate New
Forecast (Batch
Run)
Number of SKUs.
Number of inputs used to perform
the forecast.
Desaggregation criteria
complexity.
exists in the generation of
forecasts.
Implementing DP
exists in the transfer of the
forecast to SNP (or other system).
Release of
Forecast
Type of system to which the forecast
is to be transferred.
Number of characteristics that are
subject to modification during the
transfer.
Alert Monitor
Work by
Exception
Number of alerts to be managed.
Complexity of the KPI calculation
for alert treatment.
exists in the alert management.
Returns Scenario Frequency of returns.
Volume of products that are
returned.
It indicates the number of returns
that exist.
Reporting
Scenario
Number of reports.
Complexity of KPIs calculation.
Number of filters (conditions for
report data selection).
Complexity of filters operations.
exists in the reporting.
Complexity Factors: Technology Set Up
Implementing DP
Infocubes Number of characteristics.
Number of dimensions (product / client /
location).
Number of key figures.
Planning Area Number of characteristics.
location).
Number of key figures.
Number of planning books.
Temporal buckets.
Data Warehouse
Interfaces
Complexity on the calculation of KPIs.
KPI calculation frequency
Level of machine resources load.
Factor Criteria
Complexity Factors: Technology Set Up (continued)
Implementing DP
Master Data
Interface
Standard SAP vs. non-standard SAP
system.
Number of characteristics to maintain.
location).
Data structures alignment.
R / 3 Interface Standard SAP vs. non-standard SAP
system.
Data structures alignment.
Transfer frequency.
Factor Criteria
Roles and
Authorizations
Number of roles.
Complexity Factors: Technology Conversion
Implementing DP
Products Number of products.
Sales History Utilization of business warehouse.
Volume of data.

Factor Criteria
Locations
Number of locations per product.
PPM DP PPM loaded from SAP R/3 vs. a non
SAP system.
Number of PPMs.
Average number of components per
PPM.
Contents
Template
5. DP Exercises
DP Demo: Accelerated Supply Chain
Integration APO Template
This scenario shows an example of how the customer dimension has
to be considered in the Supply Chain Planning Process
To demonstrate that the Supply Chain process has to be customer oriented in order
to ensure the required service level at minimum cost.
Improvement of forecast accuracy as a consequence of considering events and sales
history at the customer level.

Build up the basics to launch downstream collaborative initiatives (CPFR or
CRP/VMI).
GOALS
EXPECTED CUSTOMER BENEFITS
INDEX

Business Description
Previous Steps
SAP APO Demand Planning

In environments with a great customer concentration, the introduction of customer
dimension in the forecast hierarchy is necessary to improve forecast accuracy.

The actual sales information at the customer level is critical to quickly react to
deviations in the promotional behavior.
Category A
Nationwide
All customer
Product A
Nationwide
All customers
Product B
Nationwide
All customers
Product B
Nationwide
customer B
Product B
Nationwide
customer A
Product B
Nationwide
customer C
Promotional activities with
the most significant impact
on sales are planned and
executed at the customer
level.
The DFU is a combination of product, geographical area
and demand group (customer). A DFU level has to be
defined at which forecasts are created and agreed on with
all the people involved in the process.
Definition of DFUs (Demand Forecasting Units)

There is a compromise between workload and improvement of forecast accuracy in
the selection of customers to be considered in the demand forecast.

Only 15 to 20 customers are usually significant to the forecasting process.

The criteria to determine what are these significant customers are:
Sales volume: these customers must account for at least 50% of total sales.
Promotional activity with significant impact on sales: customers with promotional
activity that eventually could impact more than 10% on total sales must be considered
in the forecast process.
Customers involved in collaboration initiatives (CRP/VMI, CPFR, etc.): customers
with special agreements.
Customers with very high sales volume in some products: customers which
account for over 50% of sales of one product with strategic relevance.

Criteria to Determine Significant Customers

The market is changing every day with continuous mergers, demergers, acquisitions, etc.
that must be reflected in the forecast to better match future demand.

Generally speaking, it is not advisable to change historical data to match changes in the
customer composition. It is preferable to introduce events in order to increase or decrease
the base sales forecast.

In this case, the forecast is adjusted by
introducing an event in the future with
the impact in sales of the increased or
decreased number of points of sales.
The merge of two customers can be
handled by creation of:
a new data selection including the
two old customers and the new
one.
a database realignment process.
The introduction of a new customer
does not entail any change in the
standard methodology.
customer A customer A
OR
customer A customer B
New customer
Procedure to Reflect Changes in Market in SAP APO

Before performing this scenario in SAP APO, it is necessary to delete all the
previous transactional data from former users that could affect the scenario
results. For that matter, the next steps must be executed:

1. Go to transaction SE38.

2. Fill the program:
/SAPAPO/RLCDELETE

3. Press the button to execute it.

Previous Steps

4. Get a variant:

5. Select the variant TEMPLATE_003
DO NOT SELECT ANY
VARIANT EXCEPT
THIS ONE !!
Previous Steps

6. Execute

6. and confirm all messages the system issues.
Previous Steps

Review of Historical Sales
Review historical sales of one product and disaggregate the information in the client dimension.
Generate Forecast
Choose statistic model.
Errors review and model re-selection if needed.
Event Introduction
Introduce a promotional event at the client level.
Review existing promotions for this client / product.
Forecast Review
Review the forecast at the client level and the impact of cannibalization between standard and
promotional products.
Alerts due to significant Sales Deviation
Analyze the alerts generated by the system due to significant sales deviation in one client during the
promotional period.

SAP APO Demand Planning
MAIN FUNCTIONALITIES

1. Menu path: Demand Planning / Planning / Interactive Planning

2. In the shuffler, press the button and select Data Views.

3. Open the Planning Book PB_003_02 and select (double click) in the data view
DV_003_01 Press the button and select Info Objects
4. Select the data selection and Object Selection screen will appear. Select the
product P_003_217.

5. Press the button to load the historical product sales.

SAP APO DP

6. To perform a drill down in the client dimension, click on Header button and, in
the Total - Account tab strip, select the option Details.

7. To obtain the percentages by client over total sales, press the button
SAP APO DP

1. To generate forecast select in the menu: Settings Forecast profile.

2. Select your Master Forecast Profile: MP_P_003_217 press the button and then press
button to obtain the Forecast.

3. To display the graphical forecast press the button and then press the button

4. To choose the other statistic model press the button and select the new model (if
you consider it necessary).
Press the button

SAP APO DP
Generate Forecast

5. To review the errors press the button and obtain the forecast errors for this
statistic model.
SAP APO DP
Generate Forecast


2. Press the button and the promotional screen will appear.

3. Press the button to create a new event.

4. Fill in the fields as described below:
Short Text (Promotion ID): P_217_PROMO*
Description: Promotion 217*
Cannibalization group: CAN_217
Period: enter W
Number of periods: enter 3
Begin date: 10.03.03**
End date: 30.03.03**
Promotional key figure: RPROMEV
Planning key figure: RHIST
SAP APO DP
Event Introduction
*These fields are filled in
with names as example. The
user must put their own
names or dates
**The begin and end dates
must be always in the future

5. Press the button Save in the command bar

6. The screen for the promotional data introduction will appear:

SAP APO DP
Event Introduction
CAN_5246

7. In the shuffler, select the product P_003_217

8. Press the drill down button in the shuffler and select Account (client).

9. Select the client 100890 (which is affected by the promotion).

10. Press the button Assign Objects in the command bar.

11. In the shuffler, press the button and come back to the product selection.

12. Select the product P_003_217 and press the button.

13. In the promotional planning screen, enter the quantities for the first period (e.g. 1.000),
for the second periods (e.g. 1.500) and for the third period(e.g. 2000)

14. In the command bar, press the button Change status and then, select the
option Planned, in the Future.

15. Save the promotion by pressing the button

SAP APO DP
Event Introduction

16. Return to the interactive planning screen by clicking the button

17. Review the impact on the forecast of the planned promotion(Load the product P_003_217
and select the graphic view )

SAP APO DP
Event Introduction

19. Menu path: Favorites/Promotion Reporting

20. Select the fields planning area PA_003_3, version PV_003_01 and promotion key figure
RPROMEV.

21. Press the button
SAP APO DP
Event Introduction

1. At Interactive Planning screen, select the data selection product P_003_5246 and the
promotion button to load it into the table.

2. Go to the header, and in the Product tab strip select Details.

3. Review in the promotional and net forecast key figures the impact of cannibalization
between the two products (optional).

4. Go to the header, and in the Account tab strip select Details.

5. Review, in the promotional and net forecast key figures, the impact of cannibalization
between the two products at the client level. When a product is in promotion, others
products may be affected

SAP APO DP
Forecast Review
SAP APO DP
Alerts

The alert monitor always provides a picture of current structure and supports the management of
daily planning activity.

1. Menu Path: Supply Chain Monitoring / Alert Monitor.

2. Select in Favorites the option Setting Alert Profile Template 03 (DP.

Select Products or Resources.
Select your preferred alert type.
Once you have selected Products, select
the object you want to control.

3. The interactive planning screen appears and the user only has to load the data selection
into the table to review what is happening.

4. To do a drill down in the client dimension, go to the header and, in the Total Account
(client) tabstrip, select the option Details.

SAP APO DP
Alerts
Contents
Template
5. DP Exercises
DP Exercises
DP EXERCISE
SAP APO installation guide and getting started: Before you do the exercises we are going to install the
SAP GUI and the access to the Barcelona APO Solution Center.
1. Access the address: https://software.accenture.com/
2. In the Search Tool bar click SAP and then click GO
3. Click on the link SAP Frontend-Version 6.10
4. Follow the wizard instructions

This will leave SAP GUI installed on your hard disk.

5. Click on the SAPlogon icon in your desktop
6. Click on the NEW button
7. Input the following data:
Name: Barcelona APO Solution Center
Application Server: 170.251.70.208
System number: 00
8. Click on the OK button and double click on the access
DP Exercises
DP EXERCISE
Objective:
To consolidate the DP concepts learnt along the course.
At the conclusion of this unit, you will be able to:
Evaluate historical data and create sales forecast.
Analyze the differences among the forecasts you get when the statistical models have been
changed.
Analyze the variables that APO provides you to asses forecast accuracy based on past data.
Create promotional events in APO.
Check the promotion impact on the forecast and cannibalization produced between products.
Exercise:
The first step is to delete all the previous transactional data from former users that could affect our
results.
Select the product P_003_3004 and review sales at client level,both in absolute values and in
percentages.
Create a forecast, check the variables and change the statistical model for the forecast. Check the
differences between the models and check the MAD and MAPE statistical parameters.

DP Exercises
DP EXERCISE
Introduce an event:
Short Text (Promotion ID):
Description: Promotion 3004 (user x)
Cannibalization group: CAN_3004
Period: enter W
Number of periods: enter 3
Begin date: (user)
End date: (user)
Promotional key figure: RPROMEV
Planning key figure: RHIST

Introduce some values for your promotion.
Check the promotion impact on the forecast.
Check the cannibalisation between products both at product level and at client level.

Before performing this scenario in SAP APO, it is necessary to delete all the
previous transactional data from former users that could affect the scenario
results. For that matter, the next steps must be executed:

1. Go to transaction SE38.

2. Fill the program:
/SAPAPO/RLCDELETE

3. Press the button to execute it.

DP Exercises
DP EXERCISE SOLUTION

4. Get a variant:

5. Select the variant TEMPLATE_003
DO NOT SELECT ANY
VARIANT EXCEPT
THIS ONE !!
DP Exercises

6. Execute

7. and confirm all messages the system issues.
All the categories from orders
(forecast, purchase requisitions,
production orders..) that could
affect the scenario results are
included in the variant.
All the products and
Locations defined in our
template are included in
the variant.
DP Exercises
Review of Historical Sales:


2. In the shuffler, press the button and select Data Views.

3. Open the Planning Book PB_003_02 and select (double click) in the data view
DV_003_01 Press the button and select Info Objects
4. Select the data selection and Object Selection screen will appear. Select the
product P_003_3004.

5. Press the button to load the historical product sales.

DP Exercises


6. To perform a drill down in the client dimension, click on Header button and, in
the Total - Account tab strip, select the option Details.

7. To obtain the percentages by client over total sales, press the button
DP Exercises
Generate Forecast:
1. To generate forecast select in the menu: Settings Forecast profile.

2. Select your Master Forecast Profile: MP_P_003_3004 press the button and then
press button to obtain the Forecast.

3. To display the graphical forecast press the button and then press the button
DP Exercises

4. To choose the other statistic model press the button and select the new model (if
you consider necessary).
Press the button

5. To review the errors press the button and obtain the errors parameters for this
statistic model:
Mean absolute deviation (MAD): mean absolute deviation gives the mean average
difference between the forecasted value and the historical value in the ex-post
forecast.
Mean absolute percent error (MAPE): mean absolute percentage error

MAPE
MAD
DP Exercises

6. You can choose other models and review the new results. Exit without saving
pressing

7. To come back to the interactive planning press the button

DP Exercises
Next steps:

For next steps follow the instructions from the Demo Scenario. Be careful with
planning versions and products, so each assistant should use their products.

Use the information given at the exercise to introduce the promotional event as well.
DP Exercises

SCM APO DP Overview

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

SCM APO DP Overview

Uploaded by

Copyright:

Available Formats

SAPSCM/APO European Initiative

APO Overview Internal Training

You might also like