How to Leverage Collaborative Demand Planning with APO

  • by Anjali Butley, Solution Architect, SAP SCM and SAP Integrated Business Planning
  • August 19, 2014
Discover how to leverage, configure, and execute the business requirement of collaborative demand planning using SAP Advanced Planning and Optimization (APO). Find out how to use the collaborative demand planning functionality of APO for a consensus demand forecast.
Learning Objectives

Reading this article, you will know how to:

  • Understand the business requirement of collaborative demand planning with SAP Advanced Planning and Optimization (APO)
  • Configure collaborative demand planning
  • Set up user settings for collaborative business partners
  • Complete step-by-step business process  execution by an organization’s demand planner and collaborative partner via a web browser 
Key Concept
Collaborative demand planning is an agreement between business partners on demand quantity for a specific time period. Collaborative demand planning provides organizations with the benefit of developing an accurate demand plan with better communication, transparency, and quick decision making by involving business partners.

Consider this scenario: ABC organization faces issues with key customers to meet the supply per their demands. Top management is also thinking of mergers and acquisitions to expand the ABC’s profitable products’ market and reduce its loss-making products’ market.

ABC’s customers have a very flexible demand plan, and there is a delay in communication from the customer side. Therefore, ABC cannot take any quick action to align customers’ demands for supplying goods on time even though it is a profitable product. In other words, ABC can’t meet the key performance indicator (KPI) for customer service for profitable products.

ABC wants to collaborate with its key customers to get a consensus on forecast demand, quick communication, and alerts on the demand plan. ABC does not want to share more information with them (e.g., inventory or profit margins) for the next one or two years. Supply Network Collaboration (SNC) requires more information sharing than APO, so ABC chose to use APO rather than SNC. 

The Business Challenges

ABC organization is using SAP ERP Central Component (ECC) 6.0 and APO 7.0 for supply chain business processes. Currently, ABC faces a myriad of major challenges to meet customer demand and align it with the supply. On the demand planning side, ABC has these requirements:

  • Quick corrective action on the flexible demand changes from customer
  • Availability of real-time demand information from customer
  • Consensus-based forecast demand plan by involving customer
  • Visibility of demand
  • Transparency of demand

ABC’s IT department faces these challenges:

  • It needs to understand the business requirement for selecting the right SAP product for collaboration with business partners.
  • It must maintain an IT budget for purchasing new software products and implementation costs.

After a detailed study of the business requirements and challenges, ABC organization decided that the most suitable and optimized business solution would be to leverage APO 7.0 without adding any new hardware or software. With regard to business process functionality, ABC organization focused on implementing collaborative supply chain planning for collaborative demand planning for consensus demand planning. 

Collaborative demand planning is a functionality in which ITS technology is involved to get consensus from the partners. Consensus demand planning is an agreed upon demand plan of all the stakeholders. A consensus can be taken manually or involving any ITS or web technology.  

Anjali Butley

Anjali Butley has more than 20 years of strong functional, business, and IT experience with domain expertise in supply chain planning and logistics.

She is a business analyst with more than 18 years of SAP experience in design and development of integrated supply chain solutions for large-scale enterprises. Her expertise includes process modeling, business process analysis, application implementations, production support, and presales across multiple client engagements in the SCM domain.

She has executed various types of SAP projects, such as implementation, global rollouts, enhancement, production support, business consulting, and program and project management in multicultural environments worldwide. Her industry exposure includes areas across major industry verticals, including IT consulting, consumer, high technology, life sciences, pharmacetutical, and discrete manufacturing.

She is always interested in exploring new SAP SCM applications and products and sharing her learning experiences with the SCM worldwide community.

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