4 Keys to Unlock SAP APO

  • by Daniel Wood, Lecturer, Arizona State University
  • April 15, 2007
When determining which Advanced Planning and Optimization (APO) modules to deploy for specific business problems, you should be familiar with four key concepts: planning time horizons, order-versus-time series structures, SCM business processes, and the APO configuration process. Find out how these four concepts can help you plan your APO implementation.
Key Concept

A planning horizon is a period of time during which you analyze, plan, or execute specific business objectives. Typically you have three types of planning horizons: execution, demand planning, and strategic. The execution horizon time period may be today plus five days, the demand planning horizon may be today plus one year, and the strategic horizon may be one to three years. Exact lengths vary by industry.

A time fence describes the beginning and end of a planning horizon. A time fence addresses a period of time that you cordon off from certain activities to assure production stability and avoid costs associated with excessive change during execution. For example, you can define a time fence during which changes to the demand signal feeding a factory floor are disallowed because production has begun.

If you’re considering an SAP Advanced Planning and Optimization (APO) implementation, you may be wondering how you should plan it. The best way to approach such an implementation is with four key concepts:
  • Planning time horizons

  • Order-versus-time series structures

  • SCM business processes

  • APO configuration process

These key concepts help new users understand important APO areas so they can get up to speed more quickly. I’ll explain each of them and how they relate to APO.

Daniel Wood

Daniel Wood is a lecturer at Arizona State University in the W.P. Carey School of Business and a former industry SAP SCM business system analyst. He is author of SAP SCM: Applications and Modeling for Supply Chain Management (Wiley)

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