Backorder Processing

with SAP R/3 vs.

SAP APO Global
Available-to-Promise

Patti Kimler
Product Manager
PTU Applications
SAP Labs, LLC
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 2
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 3
 Backorder Processing (BOP) the Basics

When is an order a backorder?

When a schedule line doesnt have a confirmed quantity

What should a backorder processing solution do?

Simulate results
Lend visibility to the situation
Run in a reasonable amount of time
Allow selection of orders based on business requirements
Allocate product in a prioritized way
Allow results to be sorted in a meaningful way

Note that both solutions R/3 and SAP APO can satisfy all
these items, to some extent

SAP AG 2005, 4
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 5
 Prerequisites

ATP check for orders in question must be set to take

place in APO

R/3, mySAP ERP, or SAP CRM as an order

management system

What does that mean?!

Typically, in the setup of Global Available-to-Promise (gATP),

you specify (once) in the SAP APO Core Interface (CIF) that
you want your ATP customizing settings transferred from R/3
(or mySAP ERP) to SAP APO

Then, in another integration model of the CIF, you must have

selected the ATP check switch for the materials you have
specified in that integration model

SAP AG 2005, 6
 Core Interface Settings Integration Models

SAP AG 2005, 7
 mySAP ERP and mySAP Business Suite

mySAP ERP
SAP R/3 Real-time business
Standardized Powered by SAP NetWeaver
business Enterprise Services Architecture
SAP R/2 processes
Real-time Client-server
Integration Distributed mySAP Business Suite
processing on
uti
International mySAP PLM
o l
Mainframe Ev

t i on mySAP mySAP ERP mySAP

u
e vol SRM CRM
R

R/2
R/3 mySAP SCM

SAP NetWeaver
1972 1979 ... 1992 2000 2003
SAP AG 2005, 8
 mySAP Business Suite

SAP Enterprise Portal

Business Information Warehouse & SEM

Supply Chain Event Monitoring SCEM

TPVS SPP
PLM SRM SCM CRM
EWM RR

mySAP ERP
Design Buy Make Move Sell Service

Strategy- Product Innovation
Value Based Initiatives
< Time to Market
> Product Quality $
> Life Cycle Product $
> Collaboration
ROI ROI
< 20% Development $
< 21% Scrap & Rework
< 7% Manufacturing $
< 20% Warranty
SAP AG 2005, 9
Strategy- SRM, Global Visibility Strategy- Operational Excellence
Value Based Initiatives Value Based Initiatives
< Supplier Consolidation < Inventory
< Material Consolidation > Customer Service
< Maverick Spending > Global Resource Mgmt.
> Collaboration > Operational Efficiency
ROI
< 5-15% Material Cost < 10-30% Inventory
> Productivity 20-30% > Rev.-Customer Service
< Planning Cycles- Days
Strategy- Customer Intimacy
Value Based Initiatives
> Revenue
> Market Share
> Profitability
> Customer Satisfaction
ROI
> 2-3% Market share- AMR
> Margins-5%>25%- Bain
> Selling Efficiency-$10>1
> Customer Satisfaction
 Where SAP APO Fits in SAP SCM

SAP Advanced Planning

and Optimization
(SAP APO 4.1)

SAP Inventory
Collaboration Hub
(SAP ICH 4.1)

SAP Event Management

(SAP EM 4.1)

SAP NetWeaver (Web AS, BW, )

(SAP NetWeaver 04)

SAP AG 2005, 10
 Evolution of SAP SCM Functionality
Default
SAP SCOPE SAP APO 2.0 mySAP SCM SAP SCM 4.0 SAP SCM
Initiative Collaborative ASCN vision SAP APO 4.0 release
MRP II for Planning Planning announced SAP ICH 4.0
SAP R/3 MM/PP Collaborative SAP is market leader SAP EM 4.0
Transportation Mgmt. scenarios in Q2
SAP NetWeaver
Warehouse Mgmt. SAP APO available Strategic integration
in mySAP.com partnership with MIT
Partnership with RFID pilots for Metro
Auto ID Center
ILOG Store and P&G

1997 1998 1999 2000 2001 2002 2003 2004

SAP APO 1.1 mySAP SCM mySAP SCM SAP SCM 4.1
SAP enters APS SAP APO 3.0 SCM SAP APO 3.1 SAP APO 4.1
market with stand- Content Workplace Industry Release SAP ICH 4.1
alone solution SAP LES R/3 4.6 C Supply Chain Event SAP EM 4.1
Decentralized Transportation Management 1.1 SAP NetWeaver
warehouse mgmt. Planning CRM SCM Integration
system integration
Radio frequency RFID-enabled SCM

SAP SCM release

in ramp-up since June 2004
SAP AG 2005, 11
 Global ATP The Technical Perspective

SAP AG 2005, 12
 Key Capabilities

Multiple Operating Modes

Batch
Interactive
Simulative

Filter

Sorter

Support for Product Allocations

SAP AG 2005, 13
 Batch Backorder Processing

2 modes:
Direct update of batch backorder processing

BOP runs and immediately updates the results to the database

without an intermediate step

Batch backorder processing with postprocessing

BOP runs, saves the results to a buffer, and protects the

assigned quantities with temporary quantity assignments

The results can be updated or rejected. If rejected, the

temporary quantity assignments are deleted

SAP AG 2005, 14
 Interactive Backorder Processing

Similar to batch backorder processing with postprocessing,

except for the addition of a pre-configured worklist

It can be accessed directly from the menu structure within

SAP APO, or used as a postprocessing function of Batch
backorder processing

Filters and sorts are available to both operating modes

SAP AG 2005, 15
 Interactive Backorder Processing With a Worklist

SAP AG 2005, 16
 Interactive Backorder Processing Without a Worklist

SAP AG 2005, 17
 Simulative Backorder Processing

No temporary quantity assignments are written to liveCache

No orders are updated in R/3

The results can be viewed in a log but cannot be

updated interactively

The results can be saved in the buffer or deleted

SAP AG 2005, 18
 Filter

Plus a Userexit!

SAP AG 2005, 19
 Sorter

Plus a Userexit!

SAP AG 2005, 20
 Product Allocations and Backorder Processing

As of SAP SCM release 4.1 (currently in Phase II Ramp-Up),

product allocations may be checked as part of
backorder processing

In prior releases, product allocations are neither checked

nor updated

Also as part of release 4.1, if product allocations are checked by

BOP, a new icon will display on the results screen telling you
that this occurred

SAP AG 2005, 21
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 22
 Prerequisites

ATP check must be set to occur in R/3

What does that mean?!

Youre using R/3 and not APO for ATP checks

SAP AG 2005, 23
 The Selection Screen

Selection

Sort

SAP AG 2005, 24
 The Results

SAP AG 2005, 25
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 26
 Comparison

APO R/3 and mySAP ERP

Redistribution flag No redistribution flag releases
all orders assigned quantities,
then rechecks them if they
didnt have a check before

No redistribution
Redistribution for each
basic method
Fixed filter with <10 fields
Filter has 28 fields plus userexit
Fixed sorter
Sorter has 25 fields
plus userexit Changes are committed to
database with no comparison
Able to confirm new
results with old prior to
database commit

SAP AG 2005, 27
 Comparison (cont.)
APO
Schedule line check available
for all documents
Date configuration material
availability or goods Issue
Possible to preserve the lesser
quantity that has been agreed
upon without giving more
Possible to improve and not
degrade confirmations
SAP AG 2005, 28
R/3 and mySAP ERP
Schedule line checks for stock
transport orders only
Date configuration No
option (material availability
date is used)
R/3 and mySAP ERP do not
differentiate between confirmed
quantity and requested quantity
No opportunity to preserve
what was done previously
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 29
 The Highlights

R/3 and mySAP ERP have limited sort and filter fields
With no user exits available to expand the selection

R/3 and mySAP ERP are not as flexible as mySAP SCM

Dates arent configurable
Operating modes are selectable
Schedule line checks are limited to one document type

No way to preserve previous check

Orders are opened, quantities are released, check is redone

No new development taking place

SAP AG 2005, 30
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 31
 SCM 4.1 gATP Developments

Better support for time zones

Usability of ATP
Configurable rules-based ATP results screen

Usability of Backorder Processing

Enhanced usability
Better icons to explain what occurred
Correct and reject individual orders
Improved links from the results display
Product Allocations
Link to TP/VS added in 4.0

SAP AG 2005, 32
 But SCM 5.0 Is Coming, and

... Its HUGE! (my boss said I should keep saying that, to get everyone ready for it)

SAP AG 2005, 33
 gATP Highlights in SCM 5.0

Temporary facility closure

A hurricane just hit my Florida distribution center

Alternate locations to use when a primary facility is closed

Ship out of Texas and Georgia instead

Maximum numbers of substitutions in RBA

Locations and location products, not products

Consolidation
Id like to take all these orders sourced from different
locations and consolidate them at this single location
before I ship them to the customer

Drop ships/Third party

Id like the vendor to deliver this to the customer

SAP AG 2005, 34
 gATP Highlights in SCM 5.0 More!

RBA in Stock Transport Orders (not location, just

product substitution)
The product you requested is not available,
substitute another

Reassignment of order confirmations

Id like to borrow from Peter to pay Paul, automatically,
not manually, based on criteria that I specify

Event-driven backorder processing

Ive just gotten stock in and I want to allocate it to a
group of high-priority orders that are waiting for it

This is not a complete list

SAP AG 2005, 35
 Event-Driven Backorder Processing?!

Uses something new called the Order Due List, which is also
used by reassignment of order confirmations

Uses Workflow

Allows an event, like a stock receipt or a return order, to trigger

a run of BOP against the Order Due List

The Order Due List will contain your highest priority,

unconfirmed orders

Brilliant!

SAP AG 2005, 36
 How to Decide?

If R/3 or mySAP ERPs ATP functionality just isnt enough

of a solution anymore, consider the APO gATP solution in
mySAP SCM. However, dont wait for SCM 5.0!
(Remember, its HUGE)

Prioritize what you need and figure out what release its in
SCM release notes are posted on http://help.sap.com/

How many APO releases back are you?

If youre on APO 3.0 or 3.1, consider upgrading now to at least
4.0, if not 4.1
Why? Chances are theres a lot in 5.0 that youll want to roll-out,
and itll be a smaller bite if youre not tackling all the interim
releases before you can get to 5.0
Also, 4.0 and 4.1 are smaller releases from a gATP perspective
(Remember, 5.0 is HUGE)

SAP AG 2005, 37
 What Well Cover

What is Backorder Processing and what should it do?

SAP APOs Backorder Processing

R/3s Backorder Processing

Lets look at them both now SAP APO vs. R/3

The gaps Where R/3 falls short

Whats new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 38
 Key Takeaways

The BOP program you use is dependent on the system in which your
ATP check takes place
APOs Backorder Processing has more Sort and Filter options than R/3
or mySAP ERP, with user exits to add even more fields
APOs BOP is scalable no need to do a full run every time

With any BOP solution, force it to do what you really need it to do. Use
variants, etc., to tailor your BOP runs
If R/3s ATP solution just isnt a solution for you, and youve already got
all or part of mySAP SCM in place (i.e. APO DP), consider implementing
gATP and attaining the benefit of the BOP program, among other things
Never assume that the product as it is today is the product that youll
be using tomorrow. New enhancements and opportunities are always
right around the corner
It is possible to implement BOP without an ATP check in the order, and
there are successful implementations that have done it!

SAP AG 2005, 39
 Your Turn!

Questions?

SAP AG 2005, 40
 To Contact the Speaker

Patti Kimler
Product Manager SCM
PTU Applications
SAP Labs, LLC
M 386-334-4756
HO 386-960-5257
patricia.kimler@sap.com
SAP AG 2005, 41