How to Execute Heuristics in Supply Network Planning

  • by Alok Jaiswal, Consultant, Infosys Limited
  • April 13, 2015
Learn the process flow of an SAP Advanced Planning and Optimization (APO) supply network planning (SNP) heuristics run. Follow a step-by-step procedure to configure and run three types of heuristics and interpret the results.
Learning Objectives
After reading this article, you’ll know how to:
  • Set up the shipping cockpit
  • Understand the differences between Shipping Cockpit Planning (SCOP) and Shipping Cockpit Execution (SCOE)
  • Process an outbound order through SCOP and SCOE
Key Concept
An heuristics run can be broadly classified into three categories: location, network, and multi-level heuristics. The main characteristics of heuristics are:
•    The plan (output) generated from this algorithm may not necessarily be feasible (i.e., unconstrained plan)
•    The algorithm looks at demand and does a netting calculation using current inventory levels, target days of supply, and safety stock to generate a plan
•    The planner might have to use capacity leveling to generate a feasible plan based on capacity restrictions and other constraints
SAP Advanced Planning and Optimization (APO) supply network planning (SNP) helps to provide medium- or long-term planning or procurement of products to meet customer demand. SNP heuristics help to plan the constant flow of products through the entire network of the supply chain.

SNP provides three basic algorithms to integrate purchasing, production, distribution of demand, and transportation:
•    Heuristics
•    Capable-to-match (CTM)
•    The optimizer

SNP does cross-plant planning (i.e., plans for all sources of supply from the customer, through distribution centers to the plants and their suppliers). Different algorithms differ on the constraints that are considered, the way they make decisions, and on the level of aggregation at which they perform the planning.

Results of SNP heuristics help you to understand the amount of products that need to be purchased or produced from the medium- or long-term planning perspective.

An heuristics run does not take available capacity into account, so there is a possibility that it could generate an infeasible plan. If the heuristics run results in a capacity overload, it can be overcome with the help of a capacity-leveling process.

Figure 1 shows the high level steps that are performed in SNP.

Figure 1
SNP process flow

Alok Jaiswal

Alok Jaiswal is a consultant at Infosys Limited.

He has more than six years of experience in IT and ERP consulting and in supply chain management (SCM). He has worked on various SAP Advanced Planning and Optimization (APO) modules such as Demand Planning (DP), Production Planning/Detailed Scheduling (PP/DS), Supply Network Planning (SNP), and Core Interface (CIF) at various stages of the project life cycle.

He is also an APICS-certified CSCP (Certified Supply Chain Planner) consultant, with exposure in functional areas of demand planning, lean management, value stream mapping, and inventory management across manufacturing, healthcare, and textile sectors.

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