APO Supply Network Planning

Overview
 Contents
SNP Introduction
SNP Functionality

SNP Strategies
 Contents
SNP Introduction

SNP Functionality

SNP Strategies
Supply Network Planning in
APO
 Supply Network Planning
Supply Network Planning (SNP) integrates purchasing, manufacturing, distribution,

and transportation to develop tactical planning and sourcing decisions to be

implemented on the basis of a single, global consistent model.

Supply Network Planning SNP uses advanced optimization techniques, based on constraints and penalties, to

plan product flow along the supply chain.

Starting from a sales plan, SNP determines a permissible short-to-medium term plan

to cover both the quantities that must be transported between two locations and the

quantities to be produced and procured.

Deployment function in SNP determines how and when inventory should be deployed
Deployment
to distribution centers, customers, and VMI accounts. It produces optimized

distribution plans based on constraints (such as transportation capacities) and

business rules (such as minimum cost approach, or replenishment strategies).

Transport
Transport Load Builder (TLB) function in SNP maximizes transport capacities by
Load Builder
optimizing load building
 APO Process Flow

Yearly/
Demand Planning Forecast
Monthly

Supply Network P.O. Req; STO Req

Monthly Planned Orders
Planning

Weekly/ Production/
Daily Detailed Scheduling

Conf.
STO Req
Daily Deployment

Daily Transport Load Transport Orders

Builder R

SNP run output are planned orders and purchase requisitions (recommended transport orders and
planned POs)
Production orders are transfer to PP/DS whereas recommended transport orders are used in the
deployment run.
 Supply Network Distribution
Customer Demands

Transport Order

Distribution
Centers

Planned Order
Plants

Suppliers Purchase Order

Starting from a sales plan, SNP determines a permissible short- to medium-term plan for fulfilling the estimated sales

volumes.

This plan covers both the quantities that must be transported between two locations (for example, distribution center to

customer or production plant to distribution center), and the quantities to be produced and procured.

 Contents
SNP Introduction

SNP Functionality

SNP Strategies
 SNP Cycle
Set up master data, supply
chain model and SNP configuration

Release
demand
plan to SNP
Build loads for unassigned Perform SNP
transport orders Heuristics, Optimization
or CTM run

Run TLB

Review plan/resolve
Run problems
Deployment

Release constrained Finalize SNP

SNP plan to DP plan (available to PP/DS)
 SNP Planning Functionality
Supply Network Planning Strategies (Mid and Long term Planning)
Heuristics Unconstrained Planning
Optimization Cost based Optimization
Capable to Match Supply Demand Match
Deployment (Short term deployment planning)
Heuristic Fair Share, Push Deployment, Push-Pull
Deployment
Optimization
Transport Load Builder
Leveling in transport loading
 Contents
SNP Introduction

SNP Functionality

SNP Strategies
 SNP Heuristics
The execution of the heuristic generates a boom in needs across the entire supply chain, based on the demand forecast
or firm sales orders. It comprises the heuristic itself, capacity leveling and deployment.

Heuristic Factors
One time period (bucket)

Transportation Lanes: movements allowed across the supply chain

Distribution by quotas: percentage of needs assignment to different supply

sources

Lot sizing: exact, fixed lot, expected coverage, rounding values

Scrap

Safety Stocks

Calendars

Production Process Models (PPM)

Components availability

Heuristic considers demand at product/location level, checks inventory, stock in transit and firm production.

All requirements of a given location will be grouped as a single requirement for the time bucket (days, weeks, months)
 SNP Heuristics
Capacity Check

The SNP heuristic assumes infinite capacity for resources considered during planning, for which reason the initial
plan provided may not be feasible.

The user can check the impact which the planned orders have on resources via the Capacity Check view,
reviewing the points at which the plan is not feasible.

Capacity Leveling

Using this tool, user can modify the proposed plan by adjusting the use of the resources. This adjustment should
be performed location by location, taking into account the impact that modifications may have on other resources.

This adjustment can be performed in different ways:

By moving orders back in time (backward adjustment)

By moving orders forward (forward adjustment)

By combining the adjustment backward and forward

Each method can be performed using the product priority or order size rules
 SNP Capability To Match
Capable to Match generates a finite capacity planning of short/medium term distribution, production and supply needs
based on prioritized demand, categorized offering and planning strategy.

The basic feature of CTM, as against other tools, is that CTM plans on the basis of individual orders, attempting to meet
them one by one in accordance with their priority, instead of doing so in time buckets

Features

One time period (bucket) Demand from the APO DP module can be prioritized in accordance with one or more of the
following criteria:

Center

Product

Order type

Delivery date

Supply Categorization (Stock + Production Plan) can be categorized by location, product or

product/location combination.

The categorization of the offer can be done in accordance with the criteria - Stock Categories
(excess stock, stock on-hand, order requests, etc.), Production, Safety Stock, Stock in days
 SNP Optimizer
The objective of the optimizer is to find the optimal solution to an equation (target function) in which all the penalty factors
defined simultaneously are considered. The objective may be to minimize costs or maximize profits.

Features
One time period (bucket)

The optimizer uses linear programming methods for planning, such that it simultaneously

considers all relevant factors.

The planning of the entire chain is solved as a single problem, without the need to perform a

sequential process

The Optimizer proposes the optimal solution in accordance with costs incurred and the

restrictions defined in the system. These costs are used to define the priorities for the

solution.

The result will be an optimal solution (minimal cost or maximum profit) taking into account

transport, production, storage and handling restrictions. The result may be late delivery or

non fulfillment of safety stocks, if this is the lowest cost solution.

 SNP Planning Comparison
DECISION HEUR + CL CTM OPTIMIZER

MATRIX
FUNCTIONAL COVERAGE

QUALITY OF PLAN OBTAINED

DIFFICULTY OF PARAMETERIZATION/CONFIGURATION

MAINTENANCE

INTERACTION ON PART OF USER

INTERPRETATION OF RESULTS

PERFORMANCE

VIABILITY OF PARAMETER DEFINITION

Thank You