Enhance R/3's Product Allocation Tool by Integrating It with APO's DP and GATP Modules

  • by David Ducray
  • May 15, 2004
SAP R/3 and Advanced Planner and Optimizer (APO) provide several different ways to manage planning hierarchies for product allocation purposes, each with benefits and drawbacks. The author shows how to optimize product allocation in R/3 and presents examples of how R/3 integrates with APO's Demand Planning (DP) and Global Available to Promise (GATP).

Both SAP R/3 and Advanced Planner and Optimizer (APO) allow a company to allocate product across distribution chains based on predetermined criteria, ensuring a planned distribution. Product allocations can be based on any number of market dynamics represented by SAP characteristics. These characteristics enable a more efficient analysis of a market and provide an organization opportunities to use market share analysis, new product distribution strategies, or sales forecasts to map to its product allocation strategies.

Characteristics in SAP are used as criteria according to which data can be summarized. A planning hierarchy comprises a number of characteristics mapping to key segmentations in your company's markets. For effective planning and reporting purposes, it is essential that these planning hierarchies represent how your product "goes to market." This enables more efficient use of your time and resources when building and maintaining a plan. It is also important that the structures or tables used to store this data maintain the correct relational consistency when this data is aggregated or disaggregated.

By integrating R/3 with APO's Demand Planning (DP) and Global Available to Promise (GATP), you can add flexibility to the R/3 product allocation tool. This enhanced capability allows you to adapt product allocation to the marketing hierarchies in your organization. I will demonstrate how to do this and explain the various options you have to integrate product allocation in R/3 and APO.

You have several alternatives to introduce product allocation into your R/3 and APO system landscape, and my goal here is to help you understand them. In addition, developers responsible for creating customized Logistics Information System (LIS) structures and update rules will find information on creating the necessary formula to ensure that your data is updated on a consistent basis, if you decide to use R/3 planning for your product allocation solution.

David Ducray

David Ducray has a bachelor of commerce degree, majoring in economics and business administration. He is also CPIM- and SAPcertified. As the manufacturing information technology director for a high-tech electronics manufacturing organization, David was responsible for re-engineering forecast-to-stock, replenishment-to-procurement, and order-to-cash strategies, as well as implementing these systems. He has spent the past two and a half years consulting for a leading consumer products organization in the fields of order-to-cash and forecast-to-stock and implementing SAP R/3 in these fields in 19 countries. Prior to this engagement, David spent more than three years consulting for a leading electronic components and systems.

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