APO…SNP & PPDS One Year Later

Steve Basar & Dianne NewtonSchering-Plough

SPHCP

Schering-Plough Business Climate

• Mass customization trends– Customer/promotion/security specific SKUs– Market/region specific assortment mix

• Collaboration requirements– Need to work closely with suppliers– Ability to get quick response from co-packers/contractors

• Increasing competition– Need fast response to changes in marketplace

• Short product life-cycles– New products– Graphics changes

The SPHCP Supply Chain

CCTruckShip

VendorManaged

DCMemphis

Cleveland

Plants & Contract Mfr.s

47%

Rx: KenilworthManati

Contract-Mfg:6 major contractors

28%

25%

6,800SKU’s

SuppliersDisplay

Copacker

ADC

~80% volume to~20 Customers

Customer W/Hs & stores

~1,500 7-digit SKUs

~200 “Projects” per year

Overview APO Structure

Advance Planning OptimizerAdvance Planning Optimizer

Demand PlanningDemand Planning

Customerorder

ManufacturingExecution

InventoryManagement DeploymentDeployment

ProductionPlanning andScheduling Supply

NetworkPlanning

SupplyNetworkPlanning

R/3

APO Master Data Review

• Assessment of Resources

• Understanding of the required data elements

• Should you automate?

• If manual, when do you maintenance

APO SNP – Key Learnings

• Alerts and Alert Management

• Capacity Planning

• Exporting Planning Books for Collaboration

• Dependent Demand – Master Data

• Subcontracting in APO

• Other Tips

APO SNP Alerts

• Alert jobs run nightly– Using weekly planning book/data view– DB alerts: Backlog, Target stock level shortfall

• Layouts– Created unique layout for each alert

• Settings– Using settings to expand alert horizon– Start near term and manage out– Acknowledge alerts as reviewed

APO SNP Alerts

Transaction /SAPAPO/AMON1

APO SNP Alerts

Can use percentages to prioritize alerts

APO SNP Alerts

Create Unique Layouts for each alert

Select Layout

APO SNP Alerts

Example of Backlog layout

APO SNP Alerts

• Use settings to expand alert horizon• Start near term and manage out

APO SNP – Capacity Planning

• Level Capacity in Weekly Buckets– Review plan in APO– Export data for collaboration with

Manufacturing– Use excel pivot tables

• Problem: Units of Measure– Need base Unit of EA– Must run heuristics to see changes made in

SNP

APO SNP Capacity

Weekly Capacity in HoursLeveling does not work on PP/DS orders

APO SNP - Collaboration

• Collaboration: Export Planning Book to Excel– Review plan in APO, refine and save– Export using monthly data view– Edit file and send to supplier

• Future: Collaboration on the internet– Need unique planning book/data view

APO SNP - Tips

• Dependent Demand– All items must be APO planned

• Subcontracting– Cumbersome process– Master data requirements

• Goods Receipt Time– Impacts placement of SNP order in planning book

• Order Quantities– Using pallet quantity from DC to Manufacturing plant– Improves visibility of backorders

APO PPDS Current Environment

• Stable System Environment• Automatic PPM creation• Exception planning/scheduling through

alerts• Shared Production Horizons with SNP• Batch Jobs

– SNP conversion – nightly/weekly– Automatic planning run – nightly/weekly– Optimization – weekly

APO SNP to PPDS Integration

• Master Data Setup

• PPM Reconciliation between SNP & PPDS

• Pegging

• Order Placement between SNP & PPDS

• Planning/Scheduling Horizon

Master Data Setup

There are two parameter settings that need to be maintained.

If the shelf life flag is set then 9999 value should be used in the Req.Max.Sh.Life field. This allows pegging to occur for materials whose shelf life occurs within 9999 days.

If the shelf life flag is not selected then the Req.Max.Sh.Life should be left blank and the pegging for shelf will reference the Max late receipt time in the demand tab

Symptom

A receipt does not cover a requirement, although the shelf life of the receipt finishes after the required minimum shelf life

Cause and preconditions

The error can occur if the product master is maintained as follows:

o The indicator "Planning with shelf life" has been selected.

o The required maximum lifetime < shelf life.

Master Data Setup

For all materials

The value of 10,000 had been entered in both the max early and max late receipts field. This will allow pegging to occur from the demand requirement date to a receipt forwards and backwards of that demand by 10,000 hours

For Materials included in optimization only. The rest stays with a value of zero LIFO

Pegging Strategy 1 First In First Out

Here the system uses the earliest receipt in the pegging interval to cover a requirement, that is, first the first receipt and then the second, and so on. With this strategy excess receipts only become available later

Master Data Setup

If the shelf life flag is not selected then the Req.Max.Sh.Life should be left blank and the pegging for shelf will reference the Max late receipt time in the demand tab

For all materials

The value of 10,000 had been entered in both the max early and max late receipts field. This will allow pegging to occur from the demand requirement date to a receipt forwards and backwards of that demand by 10,000 hours.

Pegging strategy for dynamic pegging

Using the pegging strategy you can determine in which time sequence the system should cover requirements for the product with dynamic pegging and which time sequence the system should use the product receipts in the pegging interval to cover requirement. Thus, the pegging strategy controls,

• Which requirement the system should cover first• Which receipts the system should use first

Master Data Setup

Reason 1:

To create SNP planned orders at the beginning of the time bucket during an SNP heuristics run, you must place an “X” in the availability date field.

Reason 2:

OSS Note 575297 Suggestion for the symptom: Requirements are not covered in time.

If you want to schedule the requirements within the periods defined by the calendar, you must specify the indicator Availability date = X ( availability date calculated from period duration and period factor) and a period factor.

Master Data Setup

Period Factor for Determining the Availability Date

Definition

Factor that the system uses to calculate the availability date of a receipt element within a time period (bucket).

Use

The system determines the exact availability date of the receipt element within a bucket by adding a time interval (the result of multiplying the period factor by the bucket length) to the bucket start time. You can enter a factor between 0 and 1 where 0 represents the start of the bucket, 0.5 the middle of the bucket, and 1 the end. When calculating the availability date, the system takes into account all working days, meaning that it does not take into account days that are defined as non-working days in calendars.

In Supply Network Planning (heuristic), the system automatically sets the availability time within daily buckets to 12:00.

Dependencies

In the nearby Availability Date field, you must enter the value X, so that the value entered in the Period Factor field can be taken into consideration by the system. If you do not enter a value in the Availability Date field, the system uses the default value 0.5 for the period factor.

Type of Heuristics – SNP to PPDS

• Daily View

• Weekly View

• Placement of SNP Orders

APO PPDS Optimization

• Multi-Mixed resources environment• Harder to optimize with multi-mixed• Different Master Data required for optimization to

execute appropriately– Demand Tab

• Pegging Strategy• Maximum Earliest/latest receipt

– PPDS Tab• Offset Priority

– SNP2 Tab• Other Data - Priority

APO PPDS Optimization Cont’d

• Two entirely different optimizing environment– Suncare/OTC - Seasonal Business– Footcare - Deep BOMS with multiple co-

dependencies– Required different optimizing setup criteria

• Objective Function• Setup Costs• Delay Costs

APO PPDS Optimization Cont’d

• Presently optimizing pilot work centers– Suncare

• Two work centers – 1 Packaging line, 1 Compounding tank

– Footcare• Seven work centers – 1 Packaging line, 6 WIP

work centers

Summary

• Great strides in system stability during the last year– APO Improvement Project– Pilot Optimization Implemented

• Next Steps– Complete Optimization for all work centers– Assessment of additional training needs– Cross Training– SNP Optimization

• Upgrade to 4.0 APO

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Session Code: 4804