What is SAP Advanced Planning and Optimization (SAP APO)?

SAP Advanced Planning and Optimization (SAP APO) is the planning component that, together with SAP Event Management (SAP EM) and SAP Inventory Collaboration Hub (SAP ICH), makes up the SAP SCM solution.

The mySAP SCM Solution suite is complete and heuristic, spanning from supply chain planning and execution to collaboration, visibility and performance management.

Structure of the mySAP SCM solution

Supply Chain Planning contains demand planning, (cross-plant) distribution and procurement planning, and detailed production planning down to operation level. These functions can be executed in SAP ERP Central Component (SAP ECC) (previously version: SAP R/3) and/or in SAP SCM in the components SCM DP, SCM SNP and SCM PP/DS in SAP APO.

Supply Chain Execution contains planning execution as part of manufacturing. Materials Management also falls into this area. mySAP ERP Central Component (ECC) or SAP ECC play a central role in these functions.

Supply Chain Visibility is a key area of the mySAP SCM solution and is composed of Supply Chain Event Management (SCEM) and Supply Chain Performance Management (SCPM).

Supply Chain Collaboration is a key area in the mySAP SCM solution that supports collaborative planning and the exchange of documents with suppliers and customers. Collaborative planning can be done in the SAP Inventory Collaboration Hub (SAP ICH) or in SAP APO.

Structure of SAP APO

Synchronize supply with demand in the global chain by balancing push and pull network-planning processes and by handling replenishment and production based on actual demand.

SAP Advanced Planning & Optimization (APO) is consisted of the following components:

• APO DP: Improves the forecast quality and planning accuracy


• APO SNP: Improves visibility across your global chain and lowers inventory


• APO PP/DS: Supports you in creating optimized production plans


• APO gATP: Allows state-of-the-art sales order confirmation planning processes


• APO TP/VS: Optimizes transportation loads and minimizes transportation costs


• APO Alert Monitor: Powerful exception message system integrated in all APO planning modules

APO components

APO DP (Demand Planning):

Calculate and determine future demand to improve demand quality and accuracy. Improved forecast quality by using one tool for power and business user and consolidated demand plan (different regions, countries, departments, for example)

APO SNP (Supply Network Planning):

Calculates quantities to be produced and delivered to the locations to match customer demand and maintain desired service levels. To increased visibility over the overall supply chain and optimized sourcing and capacity utilization. SNP also reduced inventory levels and improved customer service.

APO PP/DS (Production Planning & Detailed Scheduling):

PP (Production Planning) delivers a short term plan that matches overall supply to demand, given available resources and production methodology.

And DS (Detailed Production Scheduling) determines optimal production sequence for execution to meet delivery commitments based on actual constraints on the shop floor.

APO PP/DS determines how, when, and where resources and materials should be deployed to accomplish the production goals and Master planning for materials

APO gATP (global Available-to-Promise):

Online information about the most recent state of plan allows order promising that will execute after the customers' expectation. Meet the demand communicated throughout the supply chain with the best sourcing for the available inventories in the supply chain and to sell only what you can actually sell.

APO TP/VS (Transportation Planning / Vehicle Scheduling):

Plan and optimize shipments for orders (sales orders, purchase orders, returns, and stock transport orders) and deliveries. Reduction of transportation costs via advanced planning algorithm. Utilization of vehicles can be optimized. Clear visibility of vehicles / resources / demands and optimized Shipments in terms of lowest transportation costs

APO VMI (Vendor Managed Inventory):

Allows efficient management of the supply chain by managing customer inventory replenishment with automated collaboration. Reduction of stock-outs, rush orders and supply bottlenecks and improved cooperation to the customers and delivery service level.

APO Alert Monitor:

Powerful exception message system integrated in all SAP APO planning modules. First task of the day for a planner: Check the existing alerts. Drill-down from the alert monitor to the application to solve the issue, for example.