APO's Capable-to-Match Functionality Eases Multi-Site Supply Planning

  • by Srinivas Gudipati, Director, SAP Solutions, Falcon Prime, Inc.
  • November 15, 2004
The Supply Network Planning (SNP) module in SAP Advanced Planning and Optimization (APO) technology allows organizations to plan for sourcing, production, distribution, and purchasing. Use the SNP Capable-to-Match (CTM) planning tool to maintain inventory levels across the supply chain and to eliminate procurement shortfalls.
Key Concept
The Capable-to-Match (CTM) planning algorithm in SNP supports rule- based supply chain planning to propose a feasible solution for demand fulfillment. A search strategy with existing stocks and planned receipts matches demand elements with supply elements. CTM uses constraint-based heuristics to conduct multi- site checks of production capacities, procurement priorities, and transportation capabilities based on predefined supply categories and demand priorities.

Maintaining inventory levels for a global supply chain is no small feat. Coordinating deliveries around the world, ensuring each facilities stays supplied with the lowest cost materials, and preventing overages are only a few of the issues planners have to cope with. One of my clients recently faced these challenges with success. A key element to that success was the implementation of the Advanced Planning and Optimization (APO) Capable-to-Match (CTM) planning algorithm that is part of SNP.

My client uses SAP APO with an R/3 execution system to address its global demand planning, logistics, and order management processes. The system meets the demands of a globalized supply chain by accommodating cyclical business trends and multiple partners, avoiding excess inventory levels and liabilities, eliminating gross profit erosion, and being ever-vigilant of the competitive landscape.

SAP technology provides my client with so-called "what-if" planning capabilities. This allows users to source from different vendors as needed, move material from different plants, and use existing inventory before procurement across the supply chain. The APO CTM planning algorithm available in the SNP module allows the client to maintain inventory levels and create strategic plans that minimize supply outages while maximizing the advantages economies of scale provide with vendors.

Srinivas Gudipati

Srinivas Gudipati is director of SAP solutions at Falcon Prime Inc., at which he leads SAP SCM solutions (SAP ERP Logistics, SAP APO, and RFID).  He implements large scale corporate supply chain projects and deploys the end-to-end supply chain process solutions. Falcon Prime Inc. specializes in SAP products and solutions across the enterprise domain, and provides business and technology consulting services, software implementation, and development. Srinivas has 12 years of SAP experience and more than eight years of experience implementing SAP supply chain solutions.

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