Add more categories. Review This Product. Welcome to Loot. Checkout Your Cart Price. APO can be used to tackle real optimization problems arising in industry. These are the project designers, projects leaders, the IT personnel inside the companies, but also operations research practitioners, supply chain management consultants, and decision makers in the area of tool selection for optimization tasks. Review This Product No reviews yet - be the first to create one! Carlos F. Daganzo University. Copyright by John. Altekar Senior Functional Architect,. They are the ideal companion to a standard.
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However, whether old or new, all of these areas are particularly effective functionalities that have a high potential for providing a strong return on your investment. The optimizer is appropriate for when multiple procurement decisions can be made, and where the company is indifferent, and the main differentiator either is price or can be represented with costs.
When subcontracting is enabled in SAP SCM, it allows your company to better meet demand because the subcontract manufacturer is essentially competing against the in-house manufacturing to fulfill the sales order. This is especially useful if costs are set correctly in the SNP optimizer assuming the optimizer is used because then the company can allocate demand to capacity most efficiently. So if your company is under capacity at the time of the sales order subtracted from the production lead time, it makes sense to manufacture the order internally.
If, however, your company is over capacity at the date of the sales order subtracted from the production lead time, giving it to a subcontractor can be a better alternative over either having to postpone the customer request or having the customer go to a different source. A subcontract purchase requisition is connected to the subcontract purchase order through the material that the company is receiving as well as the material that the company is providing to its subcontractor. The planned order shows all of the requirements for the subcontract components. The higher the penalty cost, the higher the priority of the customer.
Companies that benefit from this are those that need to use the optimizer for procurement or make or buy decisions but want to have some limited prioritization. Until release 5. SPP added repair planning functionality as of release 5. With repair planning, SPP can compare the cost and lead time of bringing new parts versus repairing unserviceable parts at any location. Repair or buy functionality is well suited to high-value service parts that are cheaper to repair than procure.
Almost every company that manufactures or supplies this type of service part has a repair planning program in various states of effectiveness ; this functionality systematizes the repair planning function. This functionality can be used for both service parts sold to customers as well as parts that are used to maintain equipment in the supply chain. This functionality requires the maintenance of several types of data:. But again, this is chiefly a master data exercise in developing repair lead times and costs per product location, so this is quite a bit of work.
An important step is developing a method for properly identifying unserviceable items and coding them appropriately in the location product master which we demonstrate later. Based on the forecast, SAP SCM can induct parts into repair so they can be brought into a serviceable state in time to meet demand. The functionality works in the following way. When this functionality is activated, the system checks whether enough unserviceable products to be repaired are available and how the costs compare with procuring new products. Alternatively, the system can be configured to skip this analysis and instead always schedule a repair which is processed as a repair order or refurbishment order by the execution system.
A product location can have two statuses with respect to repair or buy functionality. They are listed in Table To get to where the serviceable field is set, you need to first configure the SPP product location tabs to appear. This means GATP looks for the planned independent requirement quantity that lies directly before the sales order.
Backward consumption means that the company can provide available to promise quantities prior to customer need dates, which may be acceptable to the customer. If the customer accepts the new date, this is a more efficient use of capacity. Backward consumption allows the system to look back even a short period of time prior to the current date, scheduling resources that are unscheduled or under capacity.
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The company can literally gain business at a very low cost because the production takes place on resources that would have otherwise sat idle. As Figure The functionality is simply opening up to allow GATP to consume more flexibly. Another area that should be leveraged by companies and that is always a topic of interest is the more advanced methods of safety stock management. Improving Safety Stock Management Safety stock is the quantity of redundant inventory that is held to mitigate variability in the supply chain.
Its existence is necessary to manage the lead-time variability from supplier to customers. The formula for safety stock is:. An old concept and elementary to implement in its more simple forms, safety stock is still significantly and surprisingly mismanaged in the industry.
We recommend using dynamic methods for safety stock, which means that safety stock can and will flex depending on the variability of supplier lead time or the forecast error. If lower inventory levels are desired which they almost always are , then either forecast accuracy must be improved, or supplier lead times or variability must be reduced. There are ways to work on improving both the forecast and supplier reliability through any number of methods. If these inputs are improved, the safety stock under dynamic methods will naturally improve with no interference whatsoever.
Safety stock is the cart, not the horse. The two high-level methods are listed in Table The most common method of setting safety stock is referred to as static safety stock, in which the value is hard-coded into the product location master. The more advanced safety stock methods in SNP are categorized as enhanced, and this uses some of the same inputs as in standard dynamic forecasting.