Copyright © 2003 Americas’ SAP Users’ Group

APO 3.0 Implementation at WyethThomas Bailey, Wyeth Pharmaceuticals

Rajesh Sundar, Infinite Strategies Inc.

Session: 4811

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Introducing Wyeth

Wyeth Overview

What began as a small drugstore with John Wyeth and his Brother at 1410 Walnut Street, Philadelphia, Pennsylvania is now one of the leading pharmaceutical and biotechnology companies in the world.

• 2002 Sales were $15 Billion

• Total Assets are $26 Billion

• 53,000 Employees, World Wide

• Consists of 4 Divisions

– Consumer Health

– Fort Dodge Animal Health

– Pharmaceuticals

– Research

APO at Wyeth Pharmaceuticals

• 6 sites using installations of APO 3.0• 2 sites to be implemented this year for APO 3.0

Demand PlanningSupply Network Planning

New global initiative underway to transform supply chain:

• Production Planning/Detailed Scheduling• Supply Network Planning• Shared Resources between Business Units• Changes to Organization and Business Processes

Agenda

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Why APO

Disparate solutions at various sites due to acquisitions and accelerated growth.

Complexity of various production processes

SAP R/3 chosen as the ERP solution

Provide integrated view of entire Supply Chain

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Deploym ent Plant to DC DC to DC (Stk

Transfer Req)

Reports, SAP APO Alerts

ManufacturingR3 (Execution System)

APO (Planning System )R3 (Execution

System )

Demand Planning Supply Network Planning

High-level Business Process Overview

MM-PPM odule

System

In tegration w ith R3

DC'sDistribution Systems

Distribution

Run Model inPlanning Horizon

CheckCapacity

Capacity LevelingDecision Change Capacity Shift Capacity M ove to a lternate

Resource

Run So lver G enerate

recom m endedproduction

Add Dem and toForecast

Planned O rders

Stk T ransfer Req

Filename: High-Level Business Process.vsd

Business Process Overview

APO Application Architecture

CIF

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Demand Planning Design

Forecast from Legacy Systems for OTC (Over The Counter) line of products

Demand Planning in SAP APO for RX (Prescription drugs)

BW as a Staging Area for Forecast and shipment Data

Fulfill Reporting requirements such as schedule attainment etc

DP Demand Data Flow

MaterialDemand

Material & Plant Demand

SAPAPO

SupplyNetworkPlanning

RXB/O, C/O

SAP/LPM

OTCB/O, C/O

JDE

OTCForecast

Lotus

..

AffiliateForecast(s)

Prism, etc.

SAPAPO

DemandPlanning

Demand Adjustments

BW Data LoadReview

(client driven)

SAPBW

(demand datastaging)

SAP/APO/DPRX

Forecast

Demand Staging in BW

Forecast from Legacy Systems is collected and staged in BW Info cube’s

Back Orders and Carry Over’s from prior months is also collected in BW from Legacy Systems (such as JDE )

Error Handling and Data Cleansing happens in BW prior to replicating this data in APO.

Data from BW is replicated in APO into Info Cubes and loaded into DP Planning Book.

Forecasting

Consolidating forecasts from legacy forecasting systems (Futurion, Lotus etc.) along with other Market Intelligence to specify what ‘likely’ will be required by our customers.

Demand and Supply Planning done within one integrated planning system.

The Adjusted Final Forecast is released to SNP at the Ship from level.

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

SNP Design

APO Planning only carried out at the Finished Product and Bulk (Semi-Finished) Product Levels

All lower level components planned in SAP R/3 using standard MRP

Planning Area and Planning Book designed for 52 weeks and 12 months Time Horizon

Heuristics (Rules Based Planning) is used as the Supply Planning Algorithm in SNP

Alerts used exclusively to Manage exceptions in Supply Chain

Capacity Leveling in SNP is used for Rough Cut Capacity Planning

Heuristics Planning Run

Factors Considered in the heuristic run:

Transportation Lanes-Valid movements in the supply chain that link plant to DC and DC to DC.

Lead Times-Time to manufacture product

Quota Arrangements-% of Demand allocation of requirements to sourcing locations

Lot Sizing – Lot-for-lot, fixed, target range of coverage, rounding profiles, rounding values

Production Process Models

Production Horizon

Target Days Supply

Safety Stock

Supply Planning Process

Production Horizon

Action in R/3 Action in APO

3 4 5 6 7 8 9 121110 14 1513 161 2

PLANT RESPONSIBILITY

SUPPLY PLANNINGRESPONSIBILITY

Process Orders Planned Orders

Weekly BucketWeekly Bucket

Capacity Leveling

Day 1 Day 2 Day 3 Day 4 Day 5

Capacity load

100 %

BACKWARD FORWARD

Alert Monitor - Overview

The Alert Monitor allows Supply Planners to review a predefined set of Alert Messages in order to react more efficiently; when the related exceptions occur, alert messages will appear in the Alert Monitor.

• DP Alert• DP Sales Pace – Shipments exceed forecast by

over 74.5%• SNP Alerts

• Resource Overload – Resource is loaded more than 100%

• Backlog – Projected inventory is less than 0• Target stock level shortfall – Projected inventory

is less than the Target Stock Level (for products with safety stock)

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Shortcoming and Work a round's

SNP PPM not integrated to R/3

CIF Options

Custom Interface program

Process Order Interface Issues

Operation/Phase Links

Com Errors

Demand reduction in APO

With IDOC processing in R/3

SNP PPM Interface

Two types of PPM in APO

SAP standard CIF interface involves:

CIF across PP/DS PPM

Convert PP/DS to SNP PPM

Con’s:

Cannot update SNP PPM’s without deleting them in APO

Cannot load rough-cut single Level PPM’s

PPM Interface Work around

Designed a custom PPM Upload Program in R/3

Uses BAPI’s and RFC connection to load PPM’s into APO.

Consideration for rough cut and other Plant specific customizations

Process Order Interface

Errors on initial CIF activation of Process Orders from R/3 to APO caused due to:

Due to existing Old data in R/3

Data cleansing in R/3 such as setting TECO (Technically Complete) status of Old Process Orders.

Maintenance of links between Operations in a Recipe in R/3

Using un-supported PI (R/3 Plug-in ) in R/3.

Process Order Work around

To enable the Activation of the Process orders in APO the following workaround was utilized

Using Process Order CIF User-exit to enhance and provide logic for dropping all operations and BOM related information coming across from R/3

Just send the Process Order Number, Quantity and Start and finish Dates across to APO

Demand Reduction in APO

Demand reduction versus Standard Consumption For demand within SNP: “Demand

Reduction” occurs as shipments are made from the DC to the Customer. “Demand Consumption”, which occurs as sales-orders and/or deliveries created (but not yet shipped) is not currently used at Wyeth.

Shipments are posted into R/3 via IDOC’s from external systems. When these IDOC’s are processed in R/3 a

reduction event is not sent to APO.

Demand Reduction Work around

CIF interface to trigger reduction behaves Differently in Batch mode (via IDOC’s)

CIF interface works differently if the deliveries in R/3 is done in multiple steps.

Pick, Pack and Post and save in one step – reduction event is triggered.

Pick, Save, Pack, Save, Post in multi steps – reduction event is not triggered.

Work with SAP to resolve the CIF related reduction events.

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Out of the Box APO - R/3 Link

Configurable to scope and requirements

Master Data and Transaction Data

Core Interface Function (CIF)

APO Master Data

APO

R/3 Batch or On-Demand

Master Data (FROM R/3)

• Locations

• Products

• Resources

Master Data

Production Process Model (PPM)

A Production Process Model (PPM) is a combination of a BOM and a Routing or the equivalent of a Master Recipe in R/3.

PPM defines the output materials (Finished Products), Input material (Raw Materials), Activities and Operations along with the Modes (Resources).

Finished GoodAdvil Tab 24’s pack

Bulk ProductAdvil Tablet

Finished BulkTablet Coating

Granulation

Tablet Compression

Packaging Line

Material Resources

SNP PPM Architecture

SNP PPM Load Process

Custom Interface Program Developed in-house to Read Production Version and Recipe Information from R/3 and Load it into APO via SAP Provided Standard BAPI.

Rollup Multilevel BOM’s into Single Level for Semi-finished Products

Plant and recipe level PPM customization

Using Standard SAP Provided Function Modules to Read Recipe and Production Version’s from R/3

Uploaded Daily via Scheduled Batch Process

PPM Data Load Process

PPM Upload ABAP

Recipe

BOM

Production Version

BAPI

R/3APO

RFCSNP

PPM

DP

PP/DS

Transaction Data (R/3 TO APO, APO TO R/3)

MPS (planned orders)

STO’s (purchase orders/requests)

International Sales Orders (where applicable)

Inventory (quantity, batch info)

Transaction Data

APO Planned Order (APO-1)

R/3 Planned

Order

( 031395 )

APO Planned Order ( 031395 )

APO

R/3Batch or

On-Demand

Initial:

Instantaneous

Changes:

Instantaneous

Transaction Data – Planned Order

Wyeth Overview

Why APO

Architecture

DP Design

SNP Design

Shortcoming’s and Workarounds

CIF and R/3 Integration

Summary

Agenda

Disadvantages of Current Model

• Does not provide pegging of materials to perform multilevel MPS planning

• Does not provide clear indicators of supply problems

• Does not define ownership or accountability for MPS

• Does not allow for inventory reduction as safety stocks at all planning levels are required to ensure coverage for poor planning

• Does not allow for accurate capacity level loading of manufacturing sites

Proposed Enhancements

• Implementation of new application in APO for Detailed Scheduling (PP/DS)

• Increase magnitude of change management required to redefine business processes and organization

• Considerations for the new Model

• Time required for training and development of new application

• Validation may be required for new application• Retrofitting of sites operating

Lesson’s Learnt

• Design of APO Processes should be consistent with

R/3 design

• APO Master data requires higher level of data quality

as compared to R/3

• A through test plan and execution is very critical

• Choose the right implementation Partner

Copyright © 2003 Americas’ SAP Users’ Group

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Session Code: [4811]