Yesterday, over 1500 people attended the keynotes of the Logistics and SCM 2014 show by SAPInsider at the MGM Grand in Las Vegas. Ahead of them was the opportunity to learn and listen to 195 sessions and 31 case studies by 165 supply chain experts.


The event was kicked off by Bernd Leukert, the Head of Application Innovation and Member of the Executive Board of SAP. Bernd set the stage for the event by saying that “Business challenges and change has put the end consumer, the digital user, into the center of your business process”, and that “the companies that can manage and be responsive to this change will be the winners”.


Bernd described how, when it comes to supply chain solutions, “SAP is rethinking demand processes, rethinking orchestration, rethinking operations,  rethinking logistics and rethinking how decisions are made”.


This was a perfect set up for Hans Thalbauer (SVP of Solution Management for Supply Chain) to continue the discussion with his session entitled “From supply chains to demand networks” , where he introduced the new SAP Supply Chain strategy.


Hans elaborated on the business major business realities faced by today’s companies:


  • Volatility in the market, both geographical and demographically due to to the rising middle class in emerging markets, the aging populations in the traditional markets, and the "always on" millennial generation who are informed, connected and empowered.


  • Innovative (and disruptive) technologies such as 3d printing, M2M connectivity and the “internet of things” (See a blog the Jetsons Supply Chain which discusses this in more detail).


  • Logistics Complexity driven by the volatility and innovation that has, in turn, made the logistics networks must more complex and volatile.


Hans posed the question “What are companies doing to put the customer in the center of the process?” and what this means to a supply chain  executives?  


He stated that “after numerous discussions with customers it is becoming clear that “businesses need to transform their supply chains to demand networks” that:


  • Enables “Always-On” connectivity through end-to-end visibility with real-time what-if decision support to manage the supply chain in real time


  • Now more than ever, “Planning Matters” and drives the need for Integrated Business Planning & response management to improve short-term planning results


  • Companies must “Be Accessible”  to the extended network and ecosystem through flexible and reliable collaboration to orchestrate the global network of partners


  • Strive to “Fulfill to Please”  by enabling a nimble distribution models to execute the supply chain efficiently



Hans then went on to explain the SAP supply chain strategy and how it is centered on 4 main areas  that will transform supply chains to demand networks in the future.


  • Supply Chain Monitoring to enable end-to-end visibility and segmentation of customers, products, and suppliers. You can then not only monitors current activity, but also perform what-if simulations and predictive analytics needed by today’s supply chain professional.  Hans explained that sustainability is another key aspect of monitoring, as it’s used to ensure compliance with regulations like batch traceability, serialization, and food safety.


  • Integrated Business Planning to gain full demand transparency for short-, mid- and long-term on all levels of the Bill-of-Material by leveraging demand sensing and statistical forecasting methods. This then drives a cross departmental Sales & Operations Plan balancing the impact on inventory, service levels and profitability. Hans explained the importance of determining optimal inventory levels at each tier within the supply chain and automatically set targets for operational plans.


  • Demand-Driven Supply Network that leverage market and customer Intelligence to benefit from market volatility and avoid waste in the demand network. Establish response orchestration processes to support omni-channel strategies and coordinate the demand fulfillment. And the need to connect the business partners to the Business Network for supply chain collaboration processes to provide the flexibility, visibility and transparency needed to orchestrate the fulfillment.


  • Logistics and Order Fulfillment processes to make informed decisions to balance customer service and the cost of delivering that level of Customer Service. This requires aligned integrated distribution and fulfillment processes around speed, efficiency and sustainability, and the ability to connect all the participants of the Logistics Network and track the progress of the delivery.


Thanks to Bernd and Hans for a great session.  The audience defiantly left the session informed and energized to learn more over the next few days.


It was a case of “What happens in Vegas, needs to be shared with all their colleagues when they return to work next week.


Follow mw on twitter @howellsrichard

Business Logistics as a concept is probably only about fifty years old. Yet in most countries logistics costs are well over 10% of GDP. And for most companies that ship products, transportation is their highest operational expense. This cost of shipping directly impacts consumer prices and company profitability, and it’s rising by about 6.5% annually, as fuel prices go up and as firms expand inefficiently. Companies need a solution that curbs these creeping costs.


That’s where SAP’s Transportation Management solution comes in. SAP TM is not just a Best of Breed solution, though it has that depth of functionality; it’s a holistic solution too. It’s the fastest growing market player, used across at least 21 countries and 20 industries. And it’s used by customers from the smallest to the largest; from those who used mixed legacy to those who replaced Best of Breed solutions. Indeed, the question I’m often asked when presenting it is “Is there anything TM doesn’t do?”


Optionally green.

The answer, pretty much, is ‘no’. As an example, transport is responsible for well over 20% of global carbon emissions. For a third-party logistics firm, where margins are tight because competition is fierce, comprehensiveness and differentiation of service is key. So, included in our software is the ability to select for more environmentally-friendly routes, allowing third-party logistics firms using our solution to claim that feature too.


Savings large or small

Integration is also key when it comes to cost savings. SAP TM seamlessly integrates SAP ERP, EWM, EM and much more to enable an end-to-end logistics process. I was recently at a global manufacturing customer that’s still using spreadsheet software and an array of legacy systems to plan both their internal and outbound logistics across many countries. For them, TM could revolutionize their business if integrated completely, or just reduce costs if it’s only implemented for a section of their supply chain.


One of our shipper customers is a good example of this. By closely integrating one global TM with several ERP and warehouse solutions into a common logistics execution platform, they are already achieving reduced freight spend and improved operational efficiency. They’re estimating that TM will save them around 5-10% on their transportation costs, which comes to about €250 million savings. Another firm we work with is claiming even higher savings. And, given that SAP TM is an integral part of SAP’s Supply Chain Execution Platform, the efficiencies don’t stop there.


Our Transportation Management product integrates order management, compliance checks, costs and revenue flows, enables process automation, acts as an end-to-end solution and can handle implementations of any scale. That’s the way to curb these creeping costs – a focus on using effective transportation management that creates efficiencies across the board.


To learn more about how we can help you with your business challenges, please have a look at SAP's Solution Explorer for Transportation Management.


Follow us on @scmatsap

Transferring data between ERP and APO can be a tricky, error-prone activity, which is why we asked Claudio Gonzalez of SCM Connections to host an online Q&A to address the biggest questions users are facing and tips to optimize CIF performance. Check out the transcript from this Q&A session and see whether your questions were answered.


Claudio will be one of the featured speakers at SAPinsider’s SAP SCM 2014 conference in Las Vegas, April 1-4. For more info on the event visit our website at Logistics & SCM, PLM, Manufacturing, and Procurement 2014 and follow us on Twitter @InsiderSCM

Comment From Pat H.: Is CIF a standard, delivered SAP tool with ERP / APO or a separate add-on?

Claudio Gonzalez: The CIF is a standard delivered interface.  CIF is an integrated part of the ERP system.

Comment From Brad Antalik: If ECC and SCM were both on HANA does this eliminate the need for the CIF? If the CIF is still used how would HANA affect it?

Claudio Gonzalez: Should not affect it as of right now as there is no dependency. CIF is an integration module independent of the underlying database. Now in the future there has been some thinking that With ERP DB in memory, we could see the day that the master data (and transactional) dataset for both, merge, allowing an unified system with Global ATP (SCM-APO-GATP) available out of the box. The same for CRM and ERP integration.

Comment From Ana Parra: Can APO be based on the SAP HANA Platform? Do you have supported evidence of before and after scenarios for SAP HANA performance? Thanks!

Claudio Gonzalez: This one is a bit off the CIF topic, but to answer the question HANA is available on SCM as of version 7.02. Here is a good link with some details on it

Comment From Guest: Just implemented SAP TM9.0 and SAP EM9.0 with SAP Optimizer 10.0. ECC is EhP6. In past, I was able to use CIF cockpit to monitor CIF data transfer and troubleshoot any issue. What's the equivalent process/method to monitor and troubleshoot CIF related issue and data transfer in the newer versions?

Claudio Gonzalez: As far as I know the CIF Cockpit should be available as long as you have the SCM Suite. I do recommend to use the following CCR report (/SAPAAPO/CCR) , Queue Manager (/SAPAPO/CQ) and CPP report (/SAPAPO/CPP) in conjunction with the CIF Cockpit to troubleshoot CIF related issues

Comment From Axel Völcker: Our ERP system has to provide two SAP system with material master data. How can we set up the IM's for the Material Master data?

Claudio Gonzalez: You would create two integration models. Each integration model would have a different logical system. Each logical system is tied to a specific SAP SCM system.

Comment From Pavan Kumar Bhattu: I have two questions:

1) If we CIF Purchase info records with two purchase organization data, then how will It reflect in APO?

2) If we CIF Sub-contracting SNP PDS, then will it create any transportation lane in APO?

Claudio Gonzalez:
1) The info record would CIF to APO and on the external procurement relationship, the different Purch Org would show under the General data tab. I am assuming the different Purch Org will have also a different destination location, which would then create two lanes, this is the most common scenario

2) Yes, when you CIF a Subcontracting PDS to APO, be that SNP or PP/DS the system will create the lanes for the input components from the Manufacturing location to the Subcontracting location. The lanes from the Subcontracting location to the Manufacturing locations for the FG are created by the PIR or Contract.

Comment From AJ: Can you please further elaborate on PDS_MAINT in ECC?

Claudio Gonzalez: PDS_MAINT is a transaction in the ECC side that's used to update changes to PDS in APO. As of SCM 7.0 EHP1 you could not make changes to the PDS directly in APO. Thus, PDS_MAINT was used to make changes. Changes such as costing, priorities, consumption, bucket offset and so on. In EHP2 there is a functionality to mass maintenance PDS directly in APO but it has its limitations and it seems that if you re-send the PDS from ECC it will overwrite the changes, need to verify this.

Comment From Ayyapann Kaaliidos: Is there no WEEKLY R/3 Consumption mode available in R/3? We are in ECC6 SP10. But we use WEEKLY Consumption mode in APO. We are in SCM 7.01 SP 5.

We had to handle this in user exit only, as we have configured CIF Master data update as Instant and the CIF will overwrite the values in APO if it's not handled in user exit. Will this functionality be part of any future R/3 versions?

Claudio Gonzalez: I have not heard of any plans to add this functionality in ECC yet. But, before you go about modifying the CIF as to not override the ‘W' value in APO. Try the following, ECC has a consumption mode ‘4' (Forward/Backward) which Is not supported by APO. I believe if you set it to this value, it would not override the APO value. It is not pretty but it will save you a custom change.

Comment From Mukesh Lohana: What criterion determines whether inbound queues or outbound queues are faster? We use outbound queues and transfers for the huge planning data from APO to ECC. If we change to work with inbound queues to transfer data from APO to ECC, then in my understanding ECC will be responsible for handling the load the data. Since ECC is an execution system, and a lot of activities are occurring, will the change from outbound to inbound queues slow down the execution system (ECC)? What you suggest?

Claudio Gonzalez: Since this question is more technical than functional, let’s first quickly explain the difference between Outbound and Inbound.

- Communication Method: Outbound Queue - Calling system sends the queues to the receiving system without taking care of the system load of the receiving system. No scheduling of the processes happens in the receiving system. The can lead to overloading of the receiving system, which leads to deterioration of CIF performance with high data volume.

- Communication Method: Inbound Queue - Calling system sends the queues to the 'entrance' of the receiving system which allows the receiving system to control the system queue load on its own. Scheduling of the processes happen in the receiving system. Therefore, in theory this will lead to better CIF performance.

Based on the above and if you go through SAP recommendations, it is stated that if you have performance issues in the target system to use Inbound Queues.

At the end of the day, any actual performance degradation on the ECC side won't be known until change is made and tested.

The following notes deal with how to change the communication from outbound to inbound. 388001, 388528, 388677.

Also, I always recommend to have note 384077 on your favorites, as it deals with how to optimize CIF communication and it is updated regularly.

Comment from Brad: If transactional data goes real time to APO, what is the purpose of the batch stock, sales orders, and purchase orders CIF jobs?

Claudio Gonzalez: Regardless if the data goes real time or not, which by the way I recommend real time. You would need PO, Sales Orders and other transactional data to integrate into APO so that your planning system has all the necessary data for accurate planning.


To view the rest of the transcript, click here

Even in the biggest companies, warehouse management solutions are often a mishmash of patched together solutions from an array of “Niche” or Best of Breed offerings and legacy systems. You often find inventory control personnel totally consumed in correcting interface errors between their legacy system and the inventory backend.


Yet we can’t afford this muddle. We need to push for efficiencies in how we manage our workers but we also need to care for them as any other asset - and new technologies that are built into today’s Warehouse Management systems are the solution. The feedback from   companies we speak to is that this latest stage of technology makes pickers’ lives easier without increasing their workload - as well as improving efficiency by as much as 25-30%.


You can’t track what you can’t see

The first big step is data-visualization. There’s a lot of data moving fast in a warehouse and problems can snowball fast. To address this there is a need for office personnel access that data and provide predictive analytics on their mobile devices in real time, allowing them to make decisions and correct  warehouse imbalances very quickly.


Yet the pickers on the floor also need this data. Many companies are installing large flat screens throughout their warehouses, which report in real time on the current state of the warehouse using easy-to-understand visualizations like speedometers or traffic lights. A North American manufacturing client of ours installed these ‘Big Boards’ and also integrated them with their assembly processes through automation-control capabilities that allow customers to take central control of conveyors, rack feeders and so on. Immediately, pickers got great feedback on how their teams are doing relative to their targets and where problems might hit next.


Voice recognition is the talk of the warehouse

The next big advancement that we are seeing is voice control. We have a large grocery customer in Sweden who is using automatically-guided vehicles, which follow pickers around. The picker controls the vehicle with voice commands, so that when the pallet’s full, it will automatically go off to the palletizer and a replacement will arrive. Voice controls also allow  the picker to identify cases vocally, when their hands are full, so they don’t have to juggle packets to get out a pocket scanner.


Seeing is believing

Finally, we’re prototyping augmented reality technology and, so far, it really seems to be working. We are experimenting wth a prototype with Augmented Reality Glasses (see video) which has a fully-mapped warehouse in which pickers can be guided easily to cases, which their glasses scan immediately. Similarly, problems - for example, moving vehicles nearby or pallets building up on a conveyer - get visually represented too. Every action is obvious and easy with Augmented Reality (AR).


Workers using our voice tech already report that they feel less rushed, despite achieving a productivity increase. We’re betting augmented reality will take even more stress out of the job. And our next steps on HANA look to be introducing even more advanced search capabilities. We need to take advantage of all these cool technologies that are coming out - for workers and the bottom line.


Today’s warehouse technology is transforming operations, increasing control over warehouse efficiency and increasing competitiveness. To learn more about how we can help you with your business challenges please have a look at SAP's Solution Explorer for Supply Chain Management.


Follow me on Twitter @howellsrichard. I attended a presentation by Lance Younger from State of Flux Technologies on the topic of Information and Technology as key accelerators for SRM leaders.


The presentation was particularly poignant because he presented results from, a survey that State of Flux recently conducted with a number of industry leaders globally.


Peter Smith reported on the survey in Spend Matters in early November 2013 and it is available to participants for free but to interested parties for a fee. I thought that there were a couple of revealing statistics in Younger's presentation that remain important markers for the SCN community to consider in this space.


SRM is more than the technology

The view that SRM is simply enabled by giving suppliers access to your internal systems and relevant data is a false one.


The recurring drivers for being more supplier relationship management focused is to reduce costs, reduce risk and improve performance.


While financial drivers continue to be strong motivators, business continuity is growing in importance and ultimately may outstrip the cost considerations - is the SRM technology you have, providing details of that risk element?


Another fact is that despite the presence of a supplier relationship management system, many organizations, in fact an astonishing 80%+ still do a great deal of management and planning of suppliers and vendors from the comfort of Microsoft Excel. The concern with this approach is that this data may never make its way back into SAP.


When viewed in the parallel context of growing transactional volumes and complexity and teams of increasingly younger and less experienced personnel, this all plays into the concerns of Supply Chain professionals.


SC Professionals are largely preoccupied with ‘keep the lights on’ initiatives rather than ambitious broad swathe solutions to solve all the ills of procurement and supplier relationship management and ultimately there are questions about who should own such initiatives anyway. Risk is the remit of the C-Suite to manage not normally the responsibility of procurement and logistics.


The good news for those companies that have taken the leap to solutions of various kinds and retain SAP as their system of record is that you don’t need to detract from your existing functionality or capabilities to be able to improve business operations. In fact you can critically evaluate these cloud and enhanced technologies if you have the time, in parallel to your ongoing work. The challenge is finding that time,


Maintaining a good set of records and data as it relates to vendor records, requisitions, purchase orders and contracts is always front and center of operations and came up in many of the presentations of people that spoke at eWorld,  This was aligned with the the conversations I have has with companies in the past. Companies that use Winshuttle widely in supply chain operations to maintain data in all of these areas as well as others.


Marilyn Monroe Condo - Square One  gracing the Mississauga Skyline

Optimizing processes for Canada’s most business friendly city

In fact one organization, the City of Mississauga, Canada’s 6th largest city with nearly three quarters of a million residents uses Winshuttle extensively with FB60 and F-47 and with some seven other ME transactions to create and change contracts, requisitions and orders.


Mississauga has been using Winshuttle since 2009 and uses it in a complementary way to the way that it uses SAP. For companies like them, savings come in many forms but most significantly in the way that it buys back time for supply chain personnel to spend time on higher value tasks like vendor evaluation and analytics.  In fact even for organizations that don’t consider themselves as having a sustainment challenge, Winshuttle can prove to be a boon for those potentially challenging SAP upgrades.


For Mississauga historically it took 3 support team members 3 weeks per instance (DEV and QA) to test every time a support pack was applied, amounting to 18 person weeks (90 person days). After considering Winshuttle for part of the regression testing it now takes 5 person days in DEV and 3 person days in QA, for a total of 8 person days to complete regression.  While testing is not necessarily Winshuttle’s greatest strength, the flexibility of the toolset demonstrated a huge saving of 82 person days that can now be reallocated to more cost effective initiatives.


For Mississauga the implementation of Winshuttle was the final catalyst for a move of all groups to the city standard MS Excel.


This meant significant reductions in the ongoing custom ABAP interface development effort, and increased the city’s time to market on interface requests; empowering SAP users with increased control over their data and the ability to make mass changes in an environment that they are familiar with.

OK, give me an honest answer, what’s your Planner do as soon as they receive the most recent forecast revision?  

I mean, after rolling their eyes! 


They change it, of course!


And why do they change the carefully-constructed forecast?  Because the one thing we all know about a forecast is that it is WRONG.


Typically the Planner has better information.   Either something new happened between the time of forecast creation and forecast publication, or new orders came in, or the Planner sees information the Forecaster doesn’t see, or the forecast is in monthly buckets and the planner needs weekly, perhaps the forecast is in weekly buckets and the Planner needs to break this do daily. 


Either way, the Planner sees things the Forecaster doesn’t.  And time is not a friend of the forecast. The next day the forecast is another day older, and more information comes in. The following day… and so on.


Orders come in, get changed, and ship. Time sensitive information is available about orders, shipments, customer preferences and patterns. As time-specific information comes in, and Planners make more changes.  Or, even worse, they don’t make the changes, leading to missed orders, expedites, and over-buffering inventory.


The reality is that Planners can only react to the dozen-or-so products they can manage manually!  Other SKU’s are “left to their own devices”, typically on reorder-point planning, possibly over-buffered with inventory, or expedited – or missed.


What is the answer?

In a recent blog titled Know what your consumers are thinking, before they do!  Richard Howells talked about the need for getting closer to actual customer demand and improving our traditional forecasting processes. This involves gathering insight from inside and outside of your organization, from all available structured and unstructured sources.


So, what if we could sense all these changes, patterns, and “new” information, and make recommendations FOR the Planner?  And let’s do this not on a couple dozen products, but for every last one?  And in real-time?


Enterprise Demand Sensing does just that: Manage this “big data”, multiple forecast signals, different forecast and consumption timing, with automatic pattern recognition, automatic weighting of the different demand factors and patterns, and with forecast updates to ASSIST the planners.

All this (big) data is available in a harmonized view of actual demand for your products, helping drive promotional plans, inventory positioning and organizational decisions in real time.

EDS helps you foresee changes in demand sooner and boost sales by predicting and reducing out-of-stocks or slumps in sales. Or make smarter inventory decisions around logistics, safety stocks and transportation plans.

To learn more on how to better sense demand, and get closer to your customer and actual demand SAP and SAP Insider are hosting a webinar on February 27thRegister today to join us online and supercharge your demand management.

Follow us on @scmatsap

SAP Enterprise Inventory and Service-Level Optimization prescribes activity to balance profitable service with optimal inventory, considering all inventory drivers in your multistage, complex supply chain. You can more effectively plan and manage inventory levels at every stocking location in your global supply chain.


Click here to view this video.


Click here for the EIS home page at

If transfer to Datastore is running very slowly (generally speaking transfer time for a scenario shouldn't exceed an hour), look at the following possible causes:


  1. Have statistics been gathered on the MIPO schema recently?

    With versions of MIPO >6.8, full schema stats are gathered in the post-processing step (after a scenario is loaded, for example) so this shouldn't be an issue for MIPO. Statistics are gathered on the Datastore schema after a transfer is successful.

    Prior to version 6.8 statistics were gathered with the "stale" option, meaning there had to be a noticeable change in the size of a table before Oracle would actually gather stats on that table.

  2. Are any indexes missing in the MIPO schema?


In one case, it was found that there were two indexes missing from the MIPO schema that caused the query behind the STOCKING_POINT transfer to run much longer than they should (>40 hours).

The indexes that were missing were: STOCKING_REPLENISH_PLAN_IDX1 and STOCKING_POINT_OUTPUT_IDX2.

In this blog I explain a key use case, Business users in the Sales & Operations Planning process are always looking for : Adding master data on the
fly. Let’s see what the use case is and how SAP Sales & Operations Planning Powered by SAP HANA solves it.


Master data on the fly use case:


Planning is future and one of the key use case is around planning for new product , new customer, new territory, new resource, new promotion or a
combination of them to achieve objectives. The expectation is that the S&OP planner whether he is from sales or supply side in the process will have to add these master data on the fly and start planning for it. These master data are not yet in the transaction systems, as the planner has not even sure if the product is going to be launched or the new customer will be acquired or new territory introduced or new resource procured to meet the capacity. But as he supports the management in pursuit to growth, the planner needs to add these products, customers etc (technically referred to as master data).


How is this accomplished with software tools and the challenges?


In Microsoft Excel, its very flexible and is as easy as adding a new row in your sheet, its often painful to get more people across the organization to add their plans against new product as someone has to send it across to others. Usually this also gets chaotic and leads to spreadsheet hell. So while its very flexible, it can really lead to total misalignment especially when everyone want to orchestrate a very collaborative Sales & Operations Planning process.


In a pure OLAP (online analytical processing ) based planning tool, its once again a big technical challenge as when you would like to add master data, this needs to change the entire OLAP structure and often needs IT support. This is something Business users gets pained about and complain that their planning tool is not flexible enough, and given they are used to flexibility of Microsoft Excel, they find this as a missing functionality in the planning tool.

SAP Sales & Operations Planning powered by SAP HANA
Master Data Planning Feature:


Given this is a key use case and since SAP HANA is a seamless realtime platform across OLTP (Online transaction processing) and
OLAP(Online transaction processing), we introduced this key feature for master data planning,at the hands of the end user. This feature provides the flexibility of Microsoft Excel as S&OP Business users do their planning with Excel, but it also provides a collaborative platform where master data added can be accessed by different planner users in real time, as the master data gets added to the underlying HANA platform.


Below screenshots shows some of the capabilities of this feature:


Master data option in Excel Addin



Add master data (new product) based on existing master data (product)


Copy of master data (existing product id to another product id to create new product)



Delete not required master data (subject to security)



Add new combinations of master data (eg Location/Resource combination )



To further try out this feature and more, subscribe to the 3 free day trial :


Happy New Year 2014 and looking forward to great interaction on HANA based innovations for Planning & Analytics applications.....and taking them to end user empowerment !

In 2013, SAP acquired SmartOps, Inc., a long time SAP solution extension and leader in the field of Inventory and Service-Level Optimization.  Prior to that acquisition, SmartOps educational material was available through the SmartOps website. That material has been moved to SCN and can be found at the links below.  At SAP, SmartOps is now called Enterprise and Service Level Optimization (EIS).


SAP Enterprise Inventory and Service-Level Optimization (formerly SmartOps) Education - Part 1 of 2

SAP Enterprise Inventory and Service-Level Optimization (formerly SmartOps) Education - Part 2 of 2


Here you will find individual video vignettes on the building blocks of SAP EIS inventory optimization software. At SAP, we are now offering classroom training on EIS, with details found here. These videos serve as single serving size lessons.  Click around, watch them in order or browse directly to a topic video. As always, if you have any questions about education, contact your SAP representative or reach us through the education site referred above.


This material was created prior to the SAP acquisition of SmartOps and is therefore SmartOps branded.  We are modifying these videos and redoing some of them and will post updates as they become available.


There are many more documents and presentation materials available at the EIS Category on SCN.

Feel free to ask questions or make comments as you become familiar with this material and look for more being added in 2014.

Over the past two months, I had the opportunity to join SAP customers such as Johnson & Johnson, Estee Lauder, PPG, Molex, and Campbell's Soup at the North American and European SmartOps (an SAP Company) User Group meetings.


Here are my 3 takeaways from the sessions:

      1) What you put in is what you get out

When trying to understand the Inventory Optimization recommendations it is more important to focus on the INPUTs than the OUTPUTs. Most planners would look at inventory targets and try to compare them to what was previously recommended. However, the best way to make sense of the outputs is to look at the inputs. That is where the best clues are to decipher what the algorithms are using to come up with the optimal recommendations. For example, a reduction in lead time or forecast error can further reduce the safety stock recommendations. Dave Hrivnak from Eastman Chemical recommended using data mining and visualization techniques to identify data anomalies such as abnormally high or low lead time.

2) Speak the same language

PPG, DuPont, and Eastman Chemical talked about how SAP Enterprise Inventory and Service-Level Optimization provides a common ground for communicating inventory and service level drivers. A common toolset that takes a holistic view of all the required considerations to make a data driven decision allows stakeholders to have an intelligent conversation about policies and inputs instead of assigning blame about what is happening in the business.  For example, if 2 orders are cut because of a product availability issue, but the service level target is still met then a discussion about service levels and inventory investment can be held using the cost to serve report.


      3) Boil the water... slowly

Often times, planners are reluctant to accept targets if there is a big change to their current operating model.  Therefore, to facilitate the buy in for the optimized inventory targets, a “step down” (or "step up" in some cases) approach is very effective to get the planners comfortable. A “step down” approach involves gradually adjusting the inventory targets closer to the optimized recommendations until the planners are aligned with the optimization. Users discussed the millions of dollars of inventory reduction that they were able to achieve through this approach.


I’m always excited to discuss best practices with our SAP customer base. Tackling complex multi-echelon supply chain optimization problems is never an easy feat. However, with the help of SAP’s integrated Supply Chain Management Solutions and an engaged customer base, every day SAP users achieve millions of dollars in reduced inventory and improved service levels.

Join the conversation... Connect with me on LinkedIn or at


Optimizing work in-process  inventory levels is a prime focus in the manufacturing organizations across globe and there are myriad of methodology /algorithms  available to approach it .


One of the interesting approach is introduced by John Little.  It  is applicable to queuing systems i.e a  system  in which discrete objects is produced/arrives at some rate.

As per Little's Law

The  work in-process inventory  in a stable system is equal to the average flow  rate, multiplied by the  average processing time .


Mathematically it can be expressed as

L = λW

where L = Work in process inventory

λ = Average output from process /Throughput:

W= Average Processing  time


WIP Inventory = Average output from process /Throughput  X Average Processing Time


Let us correlate Little's law to real life scenario . Consider the below assembly line where raw materials is processed through series of work centers  and turned into a finished product after operation at work center 5.



Production  rate of the assembly line is 4 pieces per hour and average  processing/cycle time to transform the raw material to finished product  is  60 minutes or 1hour.

If we use this information in Little's law then this implies that the  work in process inventory at any time will be 4 Pieces ( Average output from process /Throughput  X Average Processing Time i.e . 4 X1).


One way to bring down this WIP inventory is to improve the cycle time .  30 % decrease in cycle time i.e  bringing the cycle time from 60 minutes to 42 minutes will result into 25 % decrease in WIP inventory.


Improved WIP inventory  =  4X 0.7  = 2.8 ~ 3 Pieces.

% Decrease in WIP   = (4-3)/4 *100 = 25 %





Lean is how a properly designed and operated supply chain should function.


A Lean Supply Chain process is one that has been streamlined to reduce and eliminate waste or non-value added activities along the supply chain flow associated with the movement of products.

Waste can be measured in time, inventory and unnecessary costs. Value-added activities are those that contribute to efficiently placing the final product at the customer’s door.


Lean supply chain management is not just for manufacturers who practice lean manufacturing. Nor is it just for large

retailers. It is a practice that can benefit small and mid-size home furnishings retailers, wholesalers, distributors and others.

Supply chain management is meant to reduce excess inventory in the supply chain. It should be demand driven, built on the “pull” approach of customers pulling inventory in a flow as required, not by suppliers pushing inventory. Excess inventory reflects the additional time spent within the supply chain operation. So the perfect supply chain is lean, having removed wasteful time and inventory



Is anybody aware of more Lean Methodologies .

Feel free to comment ?

Harsh Singh

DP Datamart

Posted by Harsh Singh Sep 6, 2013



Demand Planning – Data Mart


The data mart setup process consists of the creation of InfoCubes in SAP SCM and the loading of actual and/or planned data.

  • Actual data can be used as input for time series forecasting and causal analysis, or for a comparison of the demand plan with actual demand.
  • Planned data could consist of forecasts submitted by individuals or departments, such as product line forecasts from sales representatives.


In Demand Planning (DP) and Supply Network Planning (SNP), you can store data in three ways:

·         in liveCache time series objects - the data is stored in buckets, with no reference to orders; this storage method is suitable for tactical, aggregated planning (DP)

·         in liveCache orders - the data is stored with reference to orders; this storage method is suitable for operative planning, such as in a classical SNP setup

·         in an InfoCube - this storage method is suitable for data backups, old planning data, and actual sales history.


Each key figure in a planning area has its own data storage method.


Upload Process


1.      Create an InfoArea


  1. On the SAP Easy Access screen, choose Demand Planning ® Environment ® Data Warehousing Workbench.


In the modeling tree on the left, choose .




Right-click the node on the right and choose Create InfoArea.



Enter a name and a description for the InfoArea and press .




2.      Create an InfoCube


An InfoCube consists of several InfoObjects and is structured according to the star schema. This means there is a (large) fact table that contains the key figures for the InfoCube, as well as several (smaller) dimension tables which surround it. The characteristics of the InfoCube are stored in these dimensions.


Select the InfoArea you previously created and choose Create InfoCube from the context menu.



Enter a name and a description for the InfoCube, click Create  , select the InfoCube type , and choose Enter.




In the subsequent screen, click   for Infoobjects.






You can choose the characteristics from the list of display as above.




Or you can click Dimensions from the right end panel, and right click as above.



Similarly insert the Key figures from the selection.




And for Time Dimension also




Click Activate  from the toolbar  


3.      Define Source System

All systems that provide BI with data are described as source systems. These can be:


  • SAP systems
  • BI systems
  • Flat files for which metadata is maintained manually and transferred to BW using a file
  • interface
  • Database management systems into which data is loaded from a database supported
  • by SAP using DB Connect, without using an external extraction program
  • Relational or multidimensional sources that are connected to BI using UD Connect
  • Web Services that transfer data to BI by means of a push
  • Non-SAP systems for which data and metadata is transferred using staging BAPIs.






4.      Create an Application Component




5.      Create an InfoSource for the Application Component


Transaction Data required is maintained here in this step. Master Data (in the form of Texts, Attributes, and hierarchies) would come from Characteristics.



6.      Assign the Source System to the InfoSource


Since fields that logically belong together exist in different source systems, they can be grouped together in a single InfoSource in the BI system by assigning multiple DataSources to one InfoSource.


Define the transfer structure, transfer rules, and communication structure.

·         The transfer structure defines how the data is transferred from the data source.

·         The communication structure defines how data is imported into the InfoCubes.







7.      Create Update Rules for the Infocube.


Update rules specify how data (key figures, time characteristics, characteristics) is updated into the InfoProvider from the communication structure of an InfoSource








Click ‘Activate’  from the Toolbar.


8.      Create an InfoPackage.


An InfoPackage contains the following data:

○     When the data is to be uploaded, for instance, immediately or as a background job

○     Details about the external data such as the location of flat files

○     Selection criteria

○     The target InfoCube(s)


In the context menu for the Source System, select









Sample Flow of the Update Process for Delivery & Request:




Loading Data from Infocube to Planning Area (/SAPAPO/TSCUBE):


To access this function, choose Demand Planning → Environment → Load planning area version from the SAP Easy Access menu.





Basic Terminologies used in Business Intelligence


Business Intelligence (BI) - collates and prepares the large set of enterprise data.

  • By analyzing the data using BI tools, you can gain insights that support the decision-making process within your company.
  • BI makes it possible to quickly create reports about business processes and their results and to analyze and interpret data about customers, suppliers, and internal activities

Architecture of BI




Persistent Staging Area - After it is extracted from source systems, data is transferred to the entry layer of the data warehouse, the persistent staging area (PSA). In this layer, data is stored in the same form as in the source system.
Data warehouse - The result of the first transformations and clean up is saved in the next layer, the data warehouse. This data warehouse layer offers integrated, granular, historic, stable data that acts as the basis for building consistent reporting structures and allows you to react to new requirements with flexibility.
Architected Data Marts - The data warehouse layer provides the most multidimensional analysis structures. These are also called architected data marts. This layer satisfies data analysis requirements. The term “architected“ refers to data marts that are not isolated applications but are based on a universally consistent data model. 
Operational Data Store - As well as strategic data analysis, a data warehouse also supports operative data analysis by means of the operational data store. Data can be updated to an operational data store on a continual basis or at short intervals and be read for operative analysis. While the operational data store layer contains all the changes to the data, only the days-end status, for example, is stored in the data warehouse layer.



Data Flow in the Data Warehouse




A DataSource is a set of fields that are used to extract data of a business unit from a source system and transfer it to the entry layer of the BI system or provide it for direct access.

Before data can be processed in BI, it is loaded into the PSA using an InfoPackage.


Using the transformation, data is copied from a source format to a target format in BI. The transformation process thus allows you to consolidate, cleanse, and integrate data.


In the data flow, the transformation replaces the update and transfer rules, including transfer structure maintenance. In the transformation, the fields of a DataSource are also assigned to the InfoObjects of the BI system.


InfoObjects are the smallest units of BI. They are divided into


  • characteristics (for example, customers),
  • key figures (for example, revenue),
  • units (for example, currency, amount unit) and
  • time characteristics (for example, fiscal year) 



InfoProviders are persistent data repositories that are used in the layer architecture of the Data Warehouse or in views on data. They provide the data for analysis, reporting and planning.


Using an InfoSource, which is optional in the new data flow, you can connect multiple sequential transformations.


Data transfer process (DTP) is used to transfer the data within BI from one persistent object to another object, in accordance with certain transformations and filters.


Open Hub Destination - Object that allows you to distribute data from a BI system to non-SAP data marts, analytical applications, and other applications.



1.1 Comparision

1.1.1 What is SAP ECC WM


What is currently referred to as traditional SAP Warehouse Management is a Software that has been available since the SAP R2. When the client server version of SAP R/3 was introduced in 1992 SAP WM also got a big boost in new capabilities to manage warehouse operations. With this release many companies included WM into their upgrade strategies.Ever since then, SAP WM has been widely adopted, with more than 7,000 customers worldwide. It is a scalable solution that has been deployed in various business environments and industries from simple raw materials warehouses to complex, high-volume, and automated distribution facilities. SAP WM can be deployed as a centralized or decentralized solution. The functionality of SAP WM has been expanded further as part of the latest SAP version ECC 6.0.



1.1.2 What is SAP SCM-EWM ?


In 2005, SAP released a new Warehouse Management solution called SCM-EWM. EWM is the abbreviation of Extended Warehouse Management which offers flexible, automated support for processing various goods movements and for managing stocks in simple to complex warehouses, furthermore it supports planning and efficient processing of all logistics processes in customers warehouses. SAP EWM maps an entire warehouse complex in detail in the system, down to storage bin level. The business user can always determine exactly where a stock belongs to a particular material is located in the warehouse complex at any given time.This redesigned solution accommodates the core functionality of ERP WM with additional capabilities that match those available from third-party, state-of-the-art solutions. The most significant functionality advancements include labor management, slotting and a solution called Material Flow Systems, which is designed to allow the WMS to directly control automation without the use of what is commonly known as a Warehouse Control System or WCS.



1.1.3 How SAP SCM EWM Evolved ?


In year 2002, SAP partnered with Cat Logistics and Ford Corporation to develop a new  supply chain management solution specifically tailored for the service parts management industry. After investing thousands of man-hours on this project, SAP EWM application was built as an application on mySAP SCM (Supply Chain Management) application stack. The development of the solution mainly focused on managing complex warehouse operations. Cat Logistics began implementing the solution for one of its Indianapolis, Ind., Caterpillar parts facilities in January 2006. Then, in September 2007 Evobus (bus and coach manufacturer) built a new logistics centre where interface with miniload system and  SAP EWM was implemented.


Below diagram shows how SAP EWM has been evolving and what capabilities has been intrduced over the time.





1.1.4 Why SAP SCM EWM was developed


EWM Represents a new Supply Chain Management (SCM) based Warehouse Management System (WMS) solution rather than a highly modified Logistics Execution System (LES) / Warehouse Management (WM). Reasons for this completely new design include:

  1. Requirement for data volume, performance and process flexibility made a new architecture necessary.
  2. Follow on from the Decentralised SAP Warehouse concept enabling 24/7 system availability
  3. Extend the basic concept of SAP ECC WM, Transfer Orders to enable process flexibility
  4. To avoid high risk of changing existing architecture of mature application (WM) with thousands of live customers
  5. Customer mind shift from Managing Stocks to Controlling Processes.


1.1.5 Why it is necessary to move from SAP ECC WMS to SAP SCM EWM


  1. SAP future vision is to continue to expand SAP EWM as a professional WMS solution with new capabilities and refinements.
  2. SAP will still support SAP ECC WMS implementations with ever increasing maintenance costs, but no new enhancements are done to make it a comprehensive WMS system.
  3. SAP EWM supports multiple Industries.
  4. SAP EWM enables warehouse activities to be executed seamlessly with inbuilt industry best practises. e.g. Catch Weight Management, Cross Docking, Value Added Services
  5. SAP EWM gives the capability to handle large volume of transactions with faster times required in Consumer Product industries.
  6. As the market leader in Business Systems Developments SAP brings continuous enhancements to SAP EWM with cutting edge technology to enable business to grow faster. e.g. SAP EWM versions 7.02 eliminates middleware's to connect with MFS systems, SAP EWM 9.0 eliminates requirement of middleware's in Voice Picking,
  7. In future SAP SCM – EWM running on SAP HANA will bring the speeds in processing transaction, handling huge volumes of data and capability for predictive analytics.


1.1.6 Capability comparision of SAP SCM EWM 9.0 with SAP ECC-WM based on SAP ECC 6.0


SAP EWM to WM Comparision.JPG


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