SAP advanced planner and optimizer helps a company to improve its production planning, pricing, scheduling and product shipment. SAP advanced planner and optimizer or SAP APO is a set of software tools which carry out complex calculations and use latest methodologies to predict rise or downfall in customer demand and help the company in planning in advance according to the situation.
SAP APO gets real time updates from the customers to calculate their demand in near future, called as demand triggers, and then take into consideration some complex variables like supply of raw material, production time, plant schedule etc to prepare the right quantity of different products to satisfy future demand. APO is a new dimension component of SAP and is a part of SAP Supply Chain Management.
SAP APO is not a standalone application and cannot run as an independent solution in fact it requires support of SAP R/3 at the backend to gather crucial master and transaction data. SAP R/3 at the backend provide necessary data to APO core interface which directly interacts with SAP supply chain management module and any data related to inventory, product master, customer master, sales, supplies, production etc. is transferred to APO in real time. The data transfer from one system to another does not require any batch processing and is transferred automatically and immediately.
SAP advanced planner and optimizer has entire suite of supply chain planner applications, these application utilize this data to enhance the working of supply chain and forecast, plan and optimize the supply chain system. SAP Advanced planner and optimizer has eight application levels, Network Design, Demand Planning, Production Planning and Detailed Scheduling, Transportation Planning and Vehicle Scheduling, Global Availability and Supply Chain Collaboration.
Network design proposes complete picture of network like general planning of network, location, product locations, transportation lanes and production processes, it also suggest opening and closing of locations, opening new locations and optimal positions of location in the network. The optimizer provides information for production, storage, transportation and handling by calculating costs, ensuring capacity utilization and quantities.
Demand Planning is another very important component of SAP APO which can forecast the demand of any company's products and prepare a demand plan for future. Demand Planning uses statistical and collaborative forecasting techniques, user specific planning layouts and interactive planning books to include various departments and also other companies in the forecast creation process.
Global availability of SAP Advanced planner and optimizer ensures the presence of the company and availability of products at the points where they can match the customer demands. It also includes availability of service providing installations so as to provide timely and prompt services. Service parts planning ensure the minimum inventory of parts, maintenance of parts and other material.
Production plan and detailed scheduling ensures the procurement of raw material for in house production and also timely execution of external procurement process to maintain the inventory of product and optimize the same. Transportation planning and vehicle scheduling provide features like collaborative shipment forecasting, optimizing route and mode of transportation, load consolidation, carrier selection and collaborative shipment tendering.
