SCM500 Master Guide for Procurement Processes

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Master Guide

mySAP™ SCM

powered by SAP

NetWeaver™

Using SAP

®

_{SCM 5.0, SAP}

®

_{SCM ES}

5.0, ERP 2005, and SAP

®

_NetWeaver

2004s

Document Version 6.10 – December 2006 Material Number 50076015

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Master Guide: mySAP SCM

1 Getting Started ...7

1.1 History of Changes ...9

1.2 The Main SAP Documentation Types ...10

1.2.1 Cross-Phase Documentation ... 10

1.2.2 Implementation... 11

1.2.3 Production Operation ... 12

1.2.4 Upgrade... 12

1.3 Related Information ...12

1.3.1 SAP Service Marketplace Links ... 13

1.3.2 SAP Solution Manager ... 13

1.4 Important SAP Notes ...14

2 Technical Landscapes for mySAP SCM...15

2.1 Technical Landscapes...15

2.2 Installation Information ...16

2.3 Technical Landscape and Installation Information for

Enterprise Services...18

3 Business Processes of mySAP SCM ...21

3.1 Demand and Supply Planning ...21

3.1.1 Demand Planning & Forecasting ... 21

3.1.2 Responsive Demand Planning ... 23

3.1.3 Safety Stock Planning... 24

3.1.4 Distribution Planning ... 25

3.1.5 Responsive Replenishment Planning ... 25

3.1.6 Purchase Order Processing ... 27

3.1.7 Supplier Managed Inventory with Purchase Order Processing .... 27

3.1.8 Supply Network Planning ... 28

3.1.8.1 Supply Network Planning Heuristic...29

3.1.8.2 Supply Network Optimization...29

3.1.8.3 Multilevel Demand and Supply Matching ...30

3.2 Warehousing ...30

3.2.1 Inbound Processing and Receipt Confirmation without WM ... 30

3.2.2 Inbound Processing and Receipt Confirmation with WM ... 31

3.2.3 Inbound Processing and Receipt Confirmation with WM in SCM. 33

3.2.4 Outbound Processing with WM ... 34

3.2.5 Outbound Processing without WM... 34

3.2.6 Outbound Processing with WM in SCM ... 35

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3.2.8 Warehouse & Storage in SCM ... 37

3.2.9 Cross-Docking... 37

3.2.10 Physical Inventory on Storage Location Level ... 38

3.2.11 Physical Inventory on Storage Bin Level ... 39

3.2.12 Physical Inventory on Storage Bin Level in SCM ... 40

3.3 Transportation...40

3.3.1 Transportation Planning ... 40

3.3.2 Transportation Execution ... 41

3.3.3 Freight Costing... 41

3.4 Service Parts Planning ...42

3.4.1 Parts Forecasting ... 42

3.4.2 Stocking List Determination... 42

3.4.3 Safety Stock Calculation ... 43

3.4.4 Distribution Requirements Planning ... 43

3.4.5 Pull Deployment ... 44

3.4.6 Inventory Balancing ... 44

3.4.7 Parts Monitoring... 45

3.5 Order Fulfillment ...45

3.5.1 Sourcing... 46

3.5.2 Supersession... 46

3.6 Manufacturing (Planning & Operations) ...47

3.6.1 Production Planning (Process Manufacturing) ... 47

3.6.1.1 MTS in ERP ...47

3.6.1.2 MTO in ERP...48

3.6.1.3 MTS in SCM...49

3.6.1.4 MTO in SCM ...49

3.6.2 Production Planning (Discrete Manufacturing) ... 50

3.6.2.1 MTS in ERP ...51 3.6.2.2 MTO in ERP...51 3.6.2.3 CTO in ERP ...52 3.6.2.4 ETO in ERP ...53 3.6.2.5 MTS in SCM...53 3.6.2.6 MTO in SCM ...54 3.6.2.7 CTO in SCM...55 3.6.2.8 ETO in SCM...56

3.6.3 Production Planning (Repetitive Manufacturing) ... 56

3.6.3.1 MTS in ERP ...57 3.6.3.2 MTO in ERP...57 3.6.3.3 CTO in ERP ...58 3.6.3.4 MTS in SCM...59 3.6.3.5 MTO in SCM ...60 3.6.3.6 CTO in SCM...61

3.6.4 Production Scheduling ... 62

3.6.4.1 Production Scheduling (Manual Scheduling)...62

3.6.4.2 Production Scheduling with Scheduling Heuristics...63

3.6.4.3 Production Scheduling Optimization...63

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3.6.4.5 Production Scheduling with Production Campaigns...65

3.6.5 Manufacturing Execution ... 66

3.6.5.1 Manufacturing Execution (Process Manufacturing)...66

3.6.5.2 Manufacturing Execution (Discrete Manufacturing)...67

3.6.5.3 Manufacturing Execution (Repetitive Manufacturing)...68

4 Software Components Overview ...70

4.1 Application Components...70

4.1.1 SAP Supply Chain Management Server (SCM Server)... 70

4.1.2 SAP APO Optimizer (SCM Optimizer) ... 70

4.1.3 SAP SCM – Web Communication Layer (SCM WCL) ... 71

4.2 Technology Components ...71

4.2.1 SAP Exchange Infrastructure... 71

4.2.3 SAP liveCache (SCM LC) ... 71

5 Software Component Matrix...73

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1 Getting Started

1 Getting Started

mySAP Supply Chain Management

mySAP Supply Chain Management (mySAP SCM) can help your organization transform a linear supply chain into an adaptive supply chain network, allowing you to access the knowledge and resources of your peers, adjust intelligently to changing market conditions, and remain customer-focused. Giving your company a competitive edge.

mySAP SCM enables adaptive supply chain networks by providing companies with planning and execution capabilities for managing enterprise operations, as well as coordination and collaboration technology to extend those operations beyond corporate boundaries:

• Supply Chain Planning and Collaboration

With mySAP SCM you can model your existing supply chain, set goals, and forecast, optimize, and schedule time, materials, and other resources. Supply chain planning functionality enables you to maximize return on assets and ensure a profitable match of supply and demand.

• Supply Chain Execution

mySAP SCM enables you to carry out supply chain planning and generate high efficiency at the lowest possible cost. You can sense and respond to demand through an adaptive supply chain network in which distribution, transportation, and logistics are integrated into real-time planning processes.

• Supply Chain Visibility Design and Analytics

mySAP SCM gives you networkwide visibility across your extended supply chain to perform strategic as well as day-to-day planning. The solution also enables

collaboration and analytics, so you can monitor and analyze the performance of your extended supply chain using predefined key performance indicators (KPIs).

service.sap.com/scm.

For more information about mySAP SCM, see

This Master Guide

This mySAP SCM Master Guide provides a central starting point for the technical implementation of mySAP SCM. It contains all the information for the implementation of mySAP SCM business processes.

mySAP SCM consists of the following business process groups:

Demand and Supply Planning

[page 21]

Warehousing

[page 30]

Transportation

[page 40]

Service Parts Planning

[page 42]

Order Fulfillment

[page 45]

Manufacturing (Planning & Operations)

[page 47]

o Production Planning (Process Manufacturing) [page 47] o Production Planning (Discrete Manufacturing) [page 50] o Production Planning (Repetitive Manufacturing) [page 56] o Production Scheduling [page 62]

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o Manufacturing Execution [page 66]

To facilitate the implementation and upgrade process, all information within this document is ordered by business processes and business process groups. You can choose from several generic business processes and find all the information that is relevant for the technical implementation of a specific business process in that section. Upgrade information for business processes is available in the Upgrade Master Guide for this mySAP Business Suite solution (available on SAP Service Marketplace at service.sap.com/instguides). ThisMaster Guide provides information about which components and guides are required during this process.

Getting Started

• [page 7] contains valuable information about using this document and related information (documentation and SAP Notes) crucial to the installation and upgrade.

Technical Landscapes for mySAP SCM

• [page 15] contains information about the

technical landscapes that are needed by the business processes of mySAP SCM.

Information about the Business Processes

• [page 21] contains the following information

for all mySAP SCM business processes: − Business process overview

− Information about the required technical system landscape

Software Components Overview

• [page 70] contains a short description of the software components that are part of mySAP SCM.

• The software component matrix [page 73] provides the information about which business processes use which component and whether the corresponding component is

mandatory or optional.

• Depending on the specific business process, different installation and master guides are required during the business process implementation. In References [page 77], you can find an overview of all required documentation referenced in this Master Guide.

You can find the most current information about the technical implementation of mySAP SCMand the latest installation and configuration guides on SAP Service Marketplace at service.sap.com/instguides.

We strongly recommend that you use the documents available here. The guides are regularly updated.

The business processes that are presented here serve as examples of how you can use SAP software in your company. The business processes are only intended as models and do not necessarily run the way they are described here in your customer-specific system landscape. Check your requirements and systems to determine whether these processes can be used productively at your site. Furthermore, we recommend that you test these processes thoroughly in your test systems to ensure they are complete and free of errors before going live.

This Master Guide provides just one way to implement each business processes. This is the implementation valid for SAP SCM 5.0.

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Component List Viewer in SAP Service Marketplace (service.sap.com/scl).

1.1 History of Changes

The Master Guide is regularly updated on SAP Service Marketplace at

service.sap.com/instguides.

Make sure you have the latest version of the Master Guide by checking SAP

Service Marketplace before starting the installation.

The following table provides an overview on the most important changes that were made in the latest versions.

Master Guide Version Important Changes

1.00 December 2005 2.00 February 2006

3.00 May 2006 The component SAP SCM 5.0 – SAP liveCache has been removed as a mandatory component for the following processes:

• Purchase Order Processing

• Supplier Managed Inventory with Purchase Order Processing

Inclusion of SAP SCM 5.0 SR1 and SAP Solution Manager 4.0 in the Media List

4.00 September 2006

5.00 November 2006 Exclusion of Media List

6.00 November 2006 Chapter 4.2.2 SAP Frontend GUIs has been been removed

6.10 December 2006 Addition of technical system landscapes and installation information for enterprise services (SAP SCM ES 5.0 add-on)

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1.2 The Main SAP Documentation Types

The following is an overview of the most important documentation types that you need in the various phases of the SAP Solution lifecycle.

Documentation Types in the Software Lifecycle

Implementation Implementation

Master Guide

Configuration

Documentation Release Notes

Component Installation Guide

Component Upgrade Guide Upgrade Master Guide Operation

Operation UpgradeUpgrade

Solution Management Guide

Implementation Guide (IMG) Delta and Upgrade IMG Security Guide

SAP Library SAPterm

1.2.1 Cross-Phase Documentation

SAPterm

SAPterm is SAP’s terminology database. It contains SAP-specific vocabulary in over 30 languages, as well as many definitions and glossary entries in English and German.

• Target group: Relevant for all target groups

help.sap.com

• Current version: Located in the SAP Help Portal at → Additional

Information → Glossary(direct access) or Terminology (as terminology CD); in the SAP system in transaction STERM

SAP Library

The SAP Library is a collection of function- and process-oriented documentation for SAP components. The SAP Library also contains the Business Scenario Descriptions.

• Target group: Consultants, system administrators, and project teams for implementations or upgrades

help.sap.com

• Current version: Located in the SAP Help Portal at

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1 Getting Started 1.2 The Main SAP Documentation Types

The Implementation Guide is a tool for configuring the SAP system to meet customer requirements. Its structure and documentation are component-oriented.

• Target group: Solution consultants and project teams for implementations or upgrades

• Current version: In the SAP menu of the SAP system under Tools → Customizing →

IMG

Security Guide

The Security Guide describes the settings for a medium security level and offers suggestions for raising security levels. A collective Security Guide is available for the SAP NetWeaver technologies like SAP Web Application Server (SAP Web AS). This document contains general guidelines and suggestions about system security. Other technologies and individual applications have a Security Guide of their own.

• Target group: Technology consultants, solution consultants, and project teams for implementations or upgrades

• Current version: Located on SAP Service Marketplace at

service.sap.com/securityguide

1.2.2 Implementation

Master Guide

The Master Guide is the starting point for implementing an SAP solution. It lists the required SAP components and third party applications that are required for each Business Scenario. It provides scenario-specific descriptions of preparation, execution, and follow-up of an

implementation. It also offers references to other documents, such as Component Installation Guides and SAP Notes.

• Target group: Technology consultants, system administrators, and project teams for implementations

SAP Service Marketplace at • Current version: Located on

service.sap.com/instguides Component Installation Guide

The Component Installation Guide describes the technical implementation of an SAP component, taking into account the combinations of operating systems and databases. It does not describe any business-related configuration.

• Target group: Technology consultants and project teams for implementations • Current version: Located on SAP Service Marketplace at

service.sap.com/instguides

Configuration Documentation in SAP Solution Manager

SAP Solution Manager is a tool with various functions. One of its main functions is the

configuration of SAP solutions and Business Scenarios. It contains IMG activities, transactions, and so on, as well as documentation. Instead of the configuration documentation in SAP Solution Manager, there may be separate Business Scenario Configuration Guides on SAP Service Marketplace for earlier shipments of the Business Scenarios.

• Target group: Solution consultants and project teams for implementations • Current version: In SAP Solution Manager

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1 Getting Started 1.3 Related Information

1.2.3 Production Operation

Solution Operation Guide

The Solution Operation Guide is the starting point for operating an SAP solution. The guide refers users to the tools and documentation they need to carry out various tasks, such as monitoring, backup/restore, master data maintenance, transports, and tests. It also refers users to other documents, for example, the SAP Library, the Master Guide, and the Component Management Guides.

• Target group: System administrators, technology consultants, solution consultants, and project teams for implementations or upgrades

SAP Service Marketplace at • Current version: Located on

1.2.4 Upgrade

Upgrade Master Guide

The Upgrade Master Guide is the starting point for upgrading the Business Scenarios of an SAP solution. It provides scenario-specific descriptions of preparation, execution, and follow-up of an follow-upgrade. It also refers to other documents, such as the Component Upgrade Guides and SAP Notes. Instead of an Upgrade Master Guide, there may be several Business Scenario Upgrade Guides or a Solution Upgrade Guide for earlier shipments of the Business Scenarios of an SAP solution.

• Target group: Technology consultants and project teams for upgrades Service Marketplace at

• Current version: Located on SAP

service.sap.com/instguides Component Upgrade Guide

The Component Upgrade Guide describes the technical upgrade of an SAP component, taking into account the combinations of operating systems and databases. It does not describe any business-related configuration.

• Target group: Technology consultants and project teams for upgrades • Current version: Located on SAP Service Marketplace at

service.sap.com/instguides Release Notes

Release Notes are documents that contain short descriptions of new features or changes in an SAP component since the previous release. Release Notes about ABAP developments enable the SAP system to generate delta and upgrade IMGs.

• Target group: Consultants and project teams for upgrades • Current version: Located on SAP Service Marketplace at

service.sap.com/releasenotes and in the SAP menu of the SAP system

under Help → Release information

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1 Getting Started 1.3 Related Information

1.3.1 SAP Service Marketplace Links

The following list contains links to crucial information for implementing mySAP SCM.

List of Related Documentation

Content Location service.sap.com/pam

Information about technical and release planning issues on SAP components

Information about the latest version of installation and upgrade guides for SAP components

service.sap.com/notes

Information about SAP Notes

service.sap.com/platforms

Information about released platforms

service.sap.com/sizing

Information about sizing, calculation of hardware requirements (such as CPU, disk and memory resource) with the Quick Sizer tool

service.sap.com/securityguide

Information about network security – SAP Security Guide

service.sap.com/network

Information about network integration

service.sap.com/ha

Information about high availability

service.sap.com/message

Information about creating error messages

service.sap.com/performancemap

Performance Map

service.sap.com/installNW2004s

Information about installation of SAP NetWeaver 2004s

service.sap.com/upgradeNW2004s

Information about upgrade of SAP NetWeaver 2004s

help.sap.com/

Documentation on SAP Help Portal

1.3.2 SAP Solution Manager

SAP provides the SAP Solution Manager as a highly recommended platform to efficiently support the implementation of your solution. Using SAP Solution Manager significantly accelerates the implementation process and helps you achieve your business goals. At the same time, SAP delivers Support Services based on the business scenarios designed and documented in SAP Solution Manager. Implementation content for your solution may further accelerate the implementation process. For information about availability of content

specifically tailored to your solution, see SAP Service Marketplace at

service.sap.com/solutionmanager.

In the installation or upgrade process, an SAP Solution Manager system is required to generate the SAP Solution Manager Key. Without the SAP Solution Manager Key, you cannot continue the installation process. The generation of the required key is implemented into the SAP Solution Manager as of Release 3.2 SP8. For details, see SAP Service Marketplace at

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1 Getting Started 1.4 Important SAP Notes

1.4 Important SAP Notes

Read the SAP Installation Notes before you start the installation. These SAP notes contain the most recent information about the installation, as well as changes to the installation documentation.

Make sure that you have the up-to-date version of each SAP Note, which you can find on

service.sap.com/notes.

SAP Service Marketplace at

List of Related SAP Notes SAP Note

Number

Title

886898 SAP SCM 5.0 SP Stack 12/2005: Release & information 832393 Release Restrictions for SCM 5.0

826093 Additional Information on Upgrading to SAP SCM 5.0

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2 Technical Landscapes for mySAP SCM 2.1 Technical Landscape

2 Technical Landscapes for mySAP

SCM

2.1 Technical Landscape

The following diagram provides an overview of a possible system landscape for the business processes of mySAP SCM. liveCache DB SAP SCM 5.0 – SCM LC SCM Server RDBMS SAP SCM 5.0 – SCM Server XI Server RDBMS SAP NetWeaver 2004s usage

type PI

BI Server

RDBMS SAP NetWeaver 2004s usage

type BI CRM Server RDBMS SAP CRM 5.0 – CRM Server SCM Optimizer SAP SCM 5.0 – SCM Optimizer ERP Server RDBMS SAP ERP 2005 – SAP ECC

We do not recommend installing all components on one host. Instead, you can distribute the components among several hosts, as displayed in the figure. The figure represents one of several ways of distributing the components. The distribution depends on many factors, such as sizing, security, available hardware, and so on. In practice, any distribution of components among hosts is possible.

Before you start installation, ensure that you know which components are required for the business process you plan to use. We do not recommend installing all components. Only install those components that are required for the business process you use.

For more information about the required components, see the software component matrix for each business process.

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2 Technical Landscapes for mySAP SCM 2.2 Installation Information

2.2 Installation Information

The following tables describe the installation sequence for the different servers.

ERP Server

For detailed information, see

Installation of SAP ERP

2005 – SAP ECC Server service.sap.com/instguides → mySAP Business

Suite Solutions → mySAP ERP → mySAP ERP 2005 → SAP ECC 6.0

SCM Server

Installation of SAP SCM 5.0

– SCM Server service.sap.com/instguides → mySAP Business

Suite Solutions → mySAP SCM → Using SAP SCM 5.0

SAP liveCache

Installation of SAP SCM 5.0 –

SAP liveCache service.sap.com/instguides → mySAP Business

SCM Optimizer

Installation of SAP SCM 5.0 –

SCM Optimizer service.sap.com/instguides → mySAP Business

XI Server

Installation of SAP NW 2004s

usage type PI service.sap.com/installNW2004s

You can download the XI content for SAP SCM ES from SAP Service Marketplace at

Installation of XI Content for

SAP SCM Basis 5.0 service.sap.com/swdc

→ Download → Support Packages and Patches → Entry

by Application Group → SAP Application Components → SAP SCM → SAP SCM 5.0 → Entry by Component → XI Content → XI Content SCM Basis 5.0

BI Server

Installation of SAP NW 2004s

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2 Technical Landscapes for mySAP SCM 2.2 Installation Information

Depending on the data volume that your company handles, the integrated BI of the SCM server may be sufficient. In this case you do not need a separate BI server.

CRM Server

Installation of SAP CRM 5.0 –

CRM Server service.sap.com/instguides → mySAP Business

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2 Technical Landscapes for mySAP SCM 2.3 Technical Landscape and Installation Information for Enterprise Services

2.3 Technical Landscape and Installation

Information for Enterprise Services

Technical Landscape

Enterprise Services for SAP SCM Basis and SAP APO

As a prerequisite for running enterprise services for mySAP SCM, you must install the same system landscapes as described in the previous chapters of this master guide. In addition, you must also install the add-on for mySAP SCM enterprise service enablement, SAP SCM ES 5.0, for SCM Basis and APO. The following diagram provides an overview of a possible system landscapes for SCM Basis and APO enterprise services.

Possible System Landscape for mySAP SCM Enterprise Services (SCM Basis and APO) liveCache DB SAP SCM 5.0 – SCM LC SCM Server RDBMS SAP SCM 5.0 – SCM Server SAP SCM ES 5.0 Add-On

SAP NetWeaver Usage Type PI

The following software components are either mandatory or optional, as indicated below, for the technical implementation of enterprise services for SAP SCM Basis and SAP APO:

Component Mandatory Optional

SAP SCM 5.0 – SCM Server, SP07 X

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2 Technical Landscapes for mySAP SCM

Technical Landscape

SAP SCM 5.0 – SCM LC X

SAP NetWeaver 2004s usage type PI X

XI Content for SAP SCM ES 5.0 X

Enterprise Services for SAP Inventory Collaboration

Hub (SAP ICH)

As a prerequisite for running enterprise services for SAP ICH, you must install the same system landscapes as described in the previous chapters of this master guide. The following diagram provides an overview of a possible system landscapes for SAP ICH enterprise services.

Possible System Landscape for mySAP SCM Enterprise Services (SAP Inventory Collaboration Hub) liveCache DB SAP SCM 5.0 – SCM LC SCM Server RDBMS SAP SCM 5.0 – SCM Server ERP Server RDBMS SAP ERP 2005 – SAP ECC

SAP NetWeaver Usage Type PI

The following software components are either mandatory or optional, as indicated below, for the technical implementation of enterprise services for SAP ICH:

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2 Technical Landscapes for mySAP SCM Technical Landscape

SAP SCM 5.0 – SCM Server X

SAP SCM 5.0 – SCM LC X

SAP ERP 2005 – ECC Server X

XI Content for SAP SCM Basis 5.0 X

SAP SCM Enterprise Services Add-On:

Installation Information

Enterprise Services for SAP SCM Basis and SAP APO

SCM Server (with SAP SCM ES Add-On)

For more information, see SAP Service Marketplace at

Installation of SAP SCM 5.0

– SCM Server service.sap.com/instguides → mySAP Business

You can download the SAP SCM ES add-on from SAP Service Marketplace at

Installation of SAP SCM ES

5.0 service.sap.com/swdc →

Download → Installations and Upgrades → Entry by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0 → Installation

and

service.sap.com/swdc → Download → Support

Packages and Patches → Entry by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0

For more information about the installation, see SAP Note 950881 and 968334.

You can download the XI content for SAP SCM ES from SAP Service Marketplace at

XI Content for SAP SCM ES

5.0 (optional) service.sap.com/swdc

→ Download → Support Packages and Patches → Entry

by Application Group → SAP Application Components → SAP SCM ES → SAP SCM ES 5.0 → XI Content SCM SE 5.0

Enterprise Services for SAP Inventory Collaboration

Hub (SAP ICH)

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3 Business Processes of mySAP SCM 3.1 Demand and Supply Planning

3 Business Processes of mySAP SCM

This section contains short process descriptions and information about the technical landscape of the business processes.

A detailed process description and configuration documentation is part of SAP Solution Manager implementation content ST-ICO 150.

3.1 Demand and Supply Planning

The process group Demand and Supply Planning contains the following business processes:

Demand Planning & Forecasting

• [page 21]

Responsive Demand Planning

• [page 23]

Safety Stock Planning

• [page 24]

Distribution Planning

• [page 25]

Responsive Replenishment

• [page 25]

Purchase Order Processing

• [page 27]

Supplier Managed Inventory with Purchase Oder Processing

• [page 27]

Supply Network Planning Heuristic

• [page 29]

Supply Network Optimization

• [page 29]

Multilevel Demand and Supply Matching

• [page 30]

3.1.1 Demand Planning & Forecasting

Overview

You can use this business process to perform your demand planning and forecasting in SAP Supply Chain Management (SCM). Demand Planning is often the starting point of the entire supply chain planning process and you can use it to create forecasts of market demand for your company's products.

The business process Demand Planning and Forecasting contains the following major planning processes:

• Consensus Demand Planning • Forecasting and Lifecycle Planning • Promotion Planning

Consensus Demand Planning

Consensus Demand Planning brings together all available information and enables a collaborative planning process that includes all partners. It automatically includes forecasts and promotion plans. You can carry out various calculations to combine all information or to check for critical situations that are highlighted as alerts.

The result of consensus demand planning is a final demand plan that you can transfer to: • Supply planning for further planning

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• Execution (in the ERP System and in SAP R/3) to trigger production or procurement • SAP Business Intelligence (SAP BI) for archiving, reporting, or integrating to other

systems and solutions

Forecasting and Lifecycle Planning

A company’s product portfolio probably includes a variety of products that are in different stages of their lifecycle and have different demand types. Unfortunately, a single forecasting method that creates accurate statistical forecasts for mature, slow-moving or new products does not exist. Therefore, you have to use a number of methods to get the right answers. Forecasting and Lifecycle Planning offers a toolbox for practical, proven forecasting that can be divided into three methods:

• Statistical Forecasting • Causal Forecasting • Composite Forecasting

You can combine Lifecycle Planning with each of these methods.

Promotion Planning

In Demand Planning, you can plan promotions or other special events separately. You can use Promotion Planning to record either one-time events, such as the millennium, or

repeated events, such as quarterly advertising campaigns. Other examples of promotions are trade fairs, trade discounts, dealer allowances, product displays, coupons, contests, free-standing inserts, as well as non-sales-related events, such as competitors' activities, market intelligence, economic trends, strikes, and natural disasters, such as hurricanes or

earthquakes.

Technical System Landscape

The following software components are either mandatory or optional, as indicated below, for the technical implementation of this process.

The following table provides just one way to implement the business process. For other combinations, see service.sap.com/scl.

SAP SCM 5.0 – SAP liveCache X

SAP ERP 2005 – SAP ECC X

SAP NetWeaver 2004s usage type BI X

For more information about the installation of these components, see Technical Landscapes for mySAP SCM [page 15].

Depending on the data volume that your company handles, the integrated BI of the SCM server may be sufficient. In this case you do not need a separate BI server.

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3.1.2 Responsive Demand Planning

Overview

You can use this business process to promote close collaboration with your business partners in a short-term planning horizon. During this process, all data received from your customer are validated and the short-term baseline and promotion demands are planned accordingly. Thus, a company can respond very quickly to changes in the Distribution Supply Chain.

Responsive Demand Planning contains the following building blocks:

Controlled Data Import

In the Data Import Controller, all incoming messages that are transferred from the customer to the vendor are validated and adjusted automatically or manually when appropriate. Where needed, this validation step checks and adjusts master data and transaction data before the system executes subsequent supply chain planning.

Responsive Forecasting

In Responsive Forecasting, the Vendor Managed Inventory (VMI) Analyst develops an unconstrained forecast of future demand. To develop the unconstrained forecast, a number of statistical forecasting and extrapolation techniques are applied to the historical sales data transmitted by the customer. The majority of the process flow steps in Responsive

Forecasting are automated; user intervention is only required when exceptional situations occur. Responsive Forecasting filters these situations and presents them in the Alert Monitor for subsequent (manual) processing by the VMI Analyst.

The goal of Responsive Forecasting is twofold: to capture the demand situation as accurately as possible, and to monitor short-term fluctuations in market demand closely, so that quick action can be taken, if necessary, to prevent stockouts.

Responsive Promotion Planning

You can use this building block of the Responsive Demand Planning process to: • Plan the promotional uplift as accurately as possible

• Monitor – and if necessary respond quickly to – changes in promotional demand during the replenishment period, with the goal of preventing stockouts

This use is particularly important because promotion items experience a significantly higher stockout rate than baseline items.

• Model cannibalization and post-promotion effects

Promotion planning fulfills a number of requirements, including the following:

• Correction of historical sales data by removing effects that are related to promotions alone. By correcting historical sales data, Responsive Promotion Planning enables the calculation of accurate historical data that can be used, in turn, as a foundation for forecasting.

• Inclusion, in the forecast, of changes in demand that are related to promotions and events alone. By including these changes, Responsive Promotion Planning enables sufficient supply to be secured.

• Rapid response to unforeseen changes, thus ensuring that promotion quantities are appropriately adjusted, optimal supply fulfilled, and stockouts prevented.

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Technical System Landscape

3.1.3 Safety Stock Planning

Overview

You can use this business process to plan the quantity of additional stock to procure and hold in case of unexpectedly high fluctuations in demand. Safety Stock Planning allows you to meet a target service level while creating a minimum necessary amount of safety stock throughout your entire supply chain for all intermediate and finished products at their respective locations.

Two different groups of safety stock calculation methods are offered: • Basic safety stock planning

• Extended safety stock planning

Basic Safety Stock Planning Method

The easiest way to plan your safety stock is to define a time-dependent or time-independent safety stock level, or to define a number of safety days of supply values for given materials required at any stock holding location. The system applies these settings and calculates the resulting safety stock automatically. The safety stock is then considered during the following supply network planning runs and the production run.

Extended Safety Stock Planning Method

The extended safety stock planning method can calculate and consider the variability on the demand and supply side. It can also perform simulations of the service level and the forecast error. Besides service levels the system also supports re-order cycle and re-order point strategies.

For more information about safety stock planning methods, see the SAP library under mySAP

Business Suite → SAP Supply Chain Management (SAP SCM) → SAP Advanced Planning and Optimization (SAP APO) → Supply Network Planning → Safety Stock Planning.

Technical System Landscape

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3.1.4 Distribution Planning

Overview

You can use this business process to plan distribution for your deployment run. When production is completed, deployment determines which demands the existing supply can fulfill. Deployment decides on an individual product basis where to transport available quantities. If there are insufficient quantities available to fulfill the demand, or the quantities available exceed the demand, deployment makes adjustments to the plan created by the SNP run.

The deployment run generates deployment stock transfers based on the SNP stock transfers that were created during the SNP run. The Transport Load Builder (TLB) then uses these deployment stock transfers to create transport loads, thus generating TLB shipments.

You cannot use deployment for stock transfers involving storage location MRP areas. For more information, see the SAP Library under mySAP Business Suite → SAP Advanced Planning and Optimization (SAP APO) → Cross-Application

Topics → Supply Chain Planning Within a Plant → Stock Transfer with Storage Location MRP Areas.

Technical System Landscape

3.1.5 Responsive Replenishment Planning

Overview

You can use this business process to plan responsive replenishment. Based on the results of the Responsive Demand Planning Process, Responsive Replenishment Planning plans the optimal shipments to the locations of a customer. During this process the netting takes place,

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then transport loads are created, and finally the orders are created. Promotion and baseline demands can be planned independently from another.

Responsive Replenishment Planning contains the following building blocks:

• Replenishment Planning (RP) • Transport Load Building (TLB) • Order Release and Publication (ORP)

Replenishment Planning

You can use Replenishment Planning to calculate the quantities that are delivered to a customer location, for example, a distribution center, to satisfy customer demand and to maintain the desired service level. Starting with the demand forecast that is generated upon completion of Responsive Forecasting, Replenishment Planning determines the optimal short-term to medium-term plan that is required to fulfill the estimated demand. This plan covers the quantities that must be transported from the vendor’s distribution center (or production plant) to the customer’s distribution center (or store).

Transport Load Building

You can use Transport Load Building to consolidate replenishment orders resulting from Replenishment Planning, and to create feasible transport units on the basis of business rules. These rules represent the constraints of the relevant means of transport, thereby remaining within the corresponding minimum and maximum capacities.

Order Release and Publication

You can also use this business process to ensure that the Transport Load Builder (TLB) shipments – generated during Transport Load Building – are prepared for publication and then transferred to the vendor back-end system for subsequent sales orders and outbound delivery processing. Order Release and Publication also ensures that vendor-generated orders – representing the purchase order acknowledgements – are transferred to the

customer back-end system for subsequent purchase orders and inbound delivery processing. In order to keep the planning and execution systems in a consistent and synchronized state, changes to sales orders in the back-end system are communicated to the planning

component.

Technical System Landscape

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3.1.6 Purchase Order Processing

Overview

You can use this business process to send out purchase orders (POs) to the supplier using the web-based application SAP ICH. POs are typically generated as part of the customer's MRP run or the customer creates them manually. The suppliers can view the POs by status, enter free text notes, and also print or download them. The supplier can enter confirmations or order responses indicating which date and quantity they can commit to. At the time of shipment, the supplier can create ASN messages as well, which together with the confirmations update the customer's ERP/MRP system.

The main business value is that the customer can communicate requirements accurately and in real-time, replacing older methods, such as phone, fax, or e-mail. Suppliers can find their requirements through a web browser only and are proactively alerted to exception situations, such as a new or changed PO, on-screen or by e-mail. Suppliers can respond to the

requirements quickly and accurately via confirmations and ASNs.

Technical System Landscape

3.1.7 Supplier Managed Inventory with Purchase

Order Processing

Overview

You can use this business process to shift net replenishment planning and execution from the customer to the supplier. The supplier uses gross demand (dependent requirements) and stock balance to calculate a replenishment plan based on minimum-maximum inventory level logic, and subsequently converts the plan into purchase orders (POs) and ASNs at the time of shipment. The POs and ASNs are sent back to the customer's ERP system as an indication of a supplier commitment to deliver goods. POs are optional in the SMI process. The replenishment plan can be converted directly into ASNs if needed.

The main business value is that the customer no longer has to perform the MRP net planning and replenishment activities for the purchased components or raw materials, and the

suppliers can better utilize their own capacity by conducting both the planning and execution pieces of the replenishment process.

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Technical System Landscape

3.1.8 Supply Network Planning

Supply Network Planning contains the following business processes:

Supply Network Planning Heuristic

• [page 29]

Supply Network Optimization

• [page 29]

Multilevel Demand and Supply Matching

• [page 30]

Overview

You can use this business process to integrate purchasing, production, distribution of demands, and transportation so that comprehensive mid-term to long-term tactical planning and sourcing decisions can be simulated and performed on the basis of a single, global, consistent model or sub-model.

Supply Network Planning offers three basic algorithms to carry out the planning: • Heuristics (together with capacity leveling capability)

• Optimization

• Multilevel supply and demand matching (capable-to-match)

Starting from a demand plan, Supply Network Planning determines a permissible medium- to long-term plan for fulfilling the estimated and real sales volumes. The algorithms plan for all sources of supply from the customer, through distribution centers to the plants and their suppliers.

Each algorithm does the following:

• Distributes production over the plants • Selects production options and alternatives • Explodes the bill of materials

• Determines the procurement of semi-finished goods and raw materials

The algorithms differ when making decisions, and considering the constraints (for such factors as production, storage, or transportation). They also differ on which level of aggregation they perform the planning.

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The result is best – but not necessarily optimal – purchasing, production, and distribution decisions as well as reduced order fulfillment times and inventory levels, and an improved customer service level.

Supply Network Planning is based on a model of the supply network. The model represents a specific supply chain (or network) and consists of individual nodes, links, and other elements. The nodes represent different locations of the network, such as customer locations,

distribution centers, plants, or suppliers. The transportation lanes represent the links between the nodes. Elements such as products, bills of materials, routings, and different kinds of resources are also essential parts of the supply network.

The supply network definition itself is not part of the ongoing Supply Network Planning process, but an important prerequisite. The structure of the model and the detailed settings influence the results of the planning run.

3.1.8.1 Supply Network Planning Heuristic

Technical System Landscape

SAP SCM 5.0 – SCM Optimizer X

3.1.8.2 Supply Network Optimization

Technical System Landscape

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3 Business Processes of mySAP SCM

3.1.8.3 Multilevel Demand and Supply Matching

Technical System Landscape

3.2 Warehousing

The process group Warehousing contains the following business processes:

Inbound Processing and Receipt Confirmation without WM

• [page 30]

Inbound Processing and Receipt Confirmation with WM

• [page 31]

Inbound Processing and Receipt Confirmation with WM in SCM

• [page 33]

Outbound Processing with WM

• [page 34]

Outbound Processing without WM

• [page 34]

Outbound Processing with WM in SCM

• [page 35]

Warehousing & Storage

• [page 36]

Warehouse & Storage in SCM

• [page 37]

Cross Docking

• [page 37]

Physical Inventory on Storage Location Level

• [page 38]

Physical Inventory on Storage Bin Level

• [page 39]

Physical Inventory on Storage Bin Level in SCM

• [page 40]

3.2.1 Inbound Processing and Receipt

Confirmation without WM

Overview

Your can use this business process for your inbound processing and receipt confirmation. Whenever a company procures a product from an external supplier, whether for use in production (raw materials) or for direct consumption (C-materials), the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time.

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3 Business Processes of mySAP SCM 3.2 Warehousing

For the delivered product an inbound delivery is selected and processed for putaway. The goods receipt posting can be processed prior to or after putaway of the materials.

You can control the physical receipt of materials at the warehouse or the receiving locations on different levels of detail. From controlling the process on a document level only by using purchase orders and stock transports orders, to inbound deliveries and shipments, and even to the pallet and material level, the receiving process is supported in different ways.

Depending on customer-specific needs, it is optional to use inbound deliveries and advanced material flow and process control capabilities. These options include yard management, warehouse management with task and resource management controlling the process down to the pallet and package level using advanced strategies (see also Inbound Processing and

Receipt Confirmation with WM).

Inbound processing and goods receipts are key steps in any procurement or replenishment process. These steps are not industry-specific, but common practice for any company procuring products, whether for production of its own or direct consumption.

Inbound processing reflects the receipt of materials that are delivered to a receiving location. This receipt can be processed based on purchase orders, stock transport orders, or even a returns order. It includes the notification of goods to be received, the putaway, goods receipt posting, and the proof-of-delivery message to the supplier. By viewing the goods receipt from the two perspectives you can follow the purchase order process and the physical material movements separately.

The processes described are goods receipt against a purchase order (MIGO) without using Warehouse Management and inbound processing using the inbound delivery, the ASN message and the POD of the customer.

If Handling Unit Management is used for packing, you need to use an inbound delivery to pack against. An inbound delivery is also required if the warehouse is implemented in a decentralized environment.

Technical System Landscape

3.2.2 Inbound Processing and Receipt

Confirmation with WM

Overview

You can use this business process for your inbound processing and receipt confirmation in conjunction with Warehouse Management (WM). Whenever a company procures a product from a supplier, whether for use in production (raw materials) or for direct consumption

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(C-3 Business Processes of mySAP SCM 3.2 Warehousing

materials), the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time. For the delivered product an inbound delivery is selected and processed for putaway. The goods receipt posting can be processed prior to or after putaway of the materials.

You can control the physical receipt of materials at the warehouse or the receiving locations on different levels of detail. From controlling the process on a document level only using purchase orders and stock transports orders, to inbound deliveries and shipments and even to the pallet and material level, the receiving process is supported in different ways.

Depending on customer-specific needs, it is optional to use inbound deliveries and advanced material flow and process control capabilities.

Inbound processing and goods receipts are key steps in any procurement or replenishment process. These steps are not industry-specific, but common practice for any company procuring products, whether for production of its own or direct consumption.

Inbound processing reflects the receipt of materials that are delivered to a receiving location. This receipt can be processed based on purchase orders, stock transport orders, or even a returns order. It includes the notification of goods to be received, the putaway, goods receipt posting, and the proof-of-delivery message to the supplier. By viewing the goods receipt from two perspectives, you can follow the purchase order process and the physical material movements separately.

The processes described are good receipt against a purchase order (MIGO) using Warehouse Management and inbound processing using the inbound delivery, the ASN message and the POD of the customer. The good receipt posting can be processed prior to or after putaway of the materials. In this process a goods receipt for a purchase order or a goods receipt posting for inbound delivery after putaway is possible.

If Handling Unit Management is used for packing, you must use an inbound delivery to pack against. An inbound delivery is also required if the warehouse is implemented in a

decentralized environment (BAPI connection between Warehouse Management and the ERP System).

Technical System Landscape

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3 Business Processes of mySAP SCM 3.2 Warehousing

3.2.3 Inbound Processing and Receipt

Confirmation with WM in SCM

Overview

You can use this business process for your inbound processing and receipt confirmation in conjunction with Extended Warehouse Management (EWM) in SAP Supply Chain

Management (SCM). For this process variant – the logistics process of receiving goods in the warehouse – you must ensure a high degree of variability and flexibility. In the

implementation, you can define different optional steps in order to ensure an efficient and streamlined receiving process.

Whenever a company requires a product to be procured from an external source of supply, the product is delivered according to the official procurement document (a PO) agreed between two business partners. The supplier sends a message (ASN) to announce the arrival of the goods. The goods are delivered in a certain quantity to an agreed company location at a defined date and time. For the delivered product, an inbound delivery is selected and processed for putaway. Once the goods are taken into stock, a goods receipt must be posted.

Inbound processing and goods receipts are key steps in any procurement or replenishment process. Using inbound processing in EWM in SAP SCM supports specific requirements for receiving goods in WM-managed warehouses for discrete industries, for example, for Service Parts Management.

The receiving process is divided into several process steps which ensure that the physical receiving process is reflected in system activities and documents. The basic concept is to differentiate between planned activities and notifications (for example, ASN, inbound delivery notification) and finalized documents after processing (inbound delivery).

If you use Handling Unit (HU) Management for packing, you must use an inbound delivery to pack against.

SCM500 Master Guide for Procurement Processes

Master Guide

mySAP™ SCM

powered by SAP

NetWeaver™

Using SAP

SCM 5.0, SAP

SCM ES

5.0, ERP 2005, and SAP

NetWeaver

2004s

Typographic Conventions

Icons

Contents

1 Getting Started ...7

1.1 History of Changes ...9

1.2 The Main SAP Documentation Types ...10

1.2.1 Cross-Phase Documentation ... 10

1.2.2 Implementation... 11

1.2.3 Production Operation ... 12

1.2.4 Upgrade... 12

1.3 Related Information ...12

1.3.1 SAP Service Marketplace Links ... 13

1.3.2 SAP Solution Manager ... 13

1.4 Important SAP Notes ...14

2 Technical Landscapes for mySAP SCM...15

2.1 Technical Landscapes...15

2.2 Installation Information ...16

2.3 Technical Landscape and Installation Information for

Enterprise Services...18

3 Business Processes of mySAP SCM ...21

3.1 Demand and Supply Planning ...21

3.1.1 Demand Planning & Forecasting ... 21

3.1.2 Responsive Demand Planning ... 23

3.1.3 Safety Stock Planning... 24

3.1.4 Distribution Planning ... 25

3.1.5 Responsive Replenishment Planning ... 25

3.1.6 Purchase Order Processing ... 27

3.1.7 Supplier Managed Inventory with Purchase Order Processing .... 27

3.1.8 Supply Network Planning ... 28

3.2 Warehousing ...30

3.2.1 Inbound Processing and Receipt Confirmation without WM ... 30

3.2.2 Inbound Processing and Receipt Confirmation with WM ... 31

3.2.3 Inbound Processing and Receipt Confirmation with WM in SCM. 33

3.2.4 Outbound Processing with WM ... 34

3.2.5 Outbound Processing without WM... 34

3.2.6 Outbound Processing with WM in SCM ... 35

3.2.8 Warehouse & Storage in SCM ... 37

3.2.9 Cross-Docking... 37

3.2.10 Physical Inventory on Storage Location Level ... 38

3.2.11 Physical Inventory on Storage Bin Level ... 39

3.2.12 Physical Inventory on Storage Bin Level in SCM ... 40

3.3 Transportation...40

3.3.1 Transportation Planning ... 40

3.3.2 Transportation Execution ... 41

3.3.3 Freight Costing... 41

3.4 Service Parts Planning ...42

3.4.1 Parts Forecasting ... 42

3.4.2 Stocking List Determination... 42

3.4.3 Safety Stock Calculation ... 43

3.4.4 Distribution Requirements Planning ... 43

3.4.5 Pull Deployment ... 44

3.4.6 Inventory Balancing ... 44

3.4.7 Parts Monitoring... 45

3.5 Order Fulfillment ...45

3.5.1 Sourcing... 46

3.5.2 Supersession... 46

3.6 Manufacturing (Planning & Operations) ...47

3.6.1 Production Planning (Process Manufacturing) ... 47

3.6.2 Production Planning (Discrete Manufacturing) ... 50

3.6.3 Production Planning (Repetitive Manufacturing) ... 56

3.6.4 Production Scheduling ... 62

3.6.5 Manufacturing Execution ... 66

4 Software Components Overview ...70

4.1 Application Components...70

4.1.1 SAP Supply Chain Management Server (SCM Server)... 70

4.1.2 SAP APO Optimizer (SCM Optimizer) ... 70

4.1.3 SAP SCM – Web Communication Layer (SCM WCL) ... 71

4.2 Technology Components ...71

4.2.1 SAP Exchange Infrastructure... 71

_{SCM 5.0, SAP}

_{SCM ES}

_NetWeaver