26 Replies Latest reply: Nov 11, 2014 4:01 AM by Liangli Wu RSS

General Discussion - Why to choose APO over R/3 for planning?

Currently Being Moderated

Hi All,


Why do we choose APO over R/3 for planning? What are the inputs or other factors that make APO a better planning tool?

Are the factors which make APO a better tool not available foe R/3 planning?


Thanks in advance


Changed subject suitably.

Message was edited by:

        Somnath Manna

  • Re: General
    Somnath Manna
    Currently Being Moderated

    Finally someone has asked the big question.


    Well my knowledge of R/3 is limited but this are some of the points I could quickly come up with.


    We shall go module-wise.

    First Demand Planning - Of course R/3 provides Demand Management and also Statistical Forecasting tools. However the architecture in APO-DP is totally different and based on characteristic value combinations with liveCache for very fast data access. This allows easy aggregation and disaggregation. Moreover once you create the CVCs they can be modified easily with the associates transaction data using Realignment. The macro functionality in DP provides quick and user-friendly computations on the transaction data. Moreover the Statistical Forecasting toolset in APO-DP is more comprehensive to that in R/3. Not sure if MLR is possible in R/3. Promotion planning and Life-cycle planning are some nice features in APO-DP.


    Second - Supply Network Planning in APO can be mapped to DRP in R/3. But then APO offers planning cross-plant for a complete supply chain network. SNP in APO offers basic Heuristic-based planning (quite similar to R/3 DRP) along with advanced planning features like Optimization and Capable-to-Match (order-based planning for prioritised demand matching). Moreover Deployment and Transport Load Builder functionalities provides automatic planning in case of short supply followed by consolidation of deliveries according to transportation capacities.


    Third - Production Planning Detailed Scheduling.

    This according to me is the most hotly debated module. APO PPDS is very close to R/3 Production Planning functionalities and relies on the same set of master data transferred from R/3 to APO via CIF. However the multitude of Heuristics (both Production Planning and Scheduling) provides automation and gives more time to the Planners and Schedulers in focusing on more important tasks. The Detailed Scheduling functionality especially Planning Board in APO is a rich graphical and intuitive application for carrying out sequencing of activities. Likewise the Product Planning Table and Product Overview features of APO provides a cockpit view of the Production Plan and allows drilling down to exceptions. Of course PPDS has Optimiser functionality but the usability of the results is questioned by many a business users.


    I hope there will be some good discussion on this thread.



    • Re: General
      P. Ayyagari
      Currently Being Moderated

      <b>Detailed Comparision between R3-PP and APO -PPDS:</b>


      (1) <b>Linear vs Simultaneous Planning Process</b>

      <b>R/3 PP</b>

      Linear Process – Traditional MRP Logic

      Run MPS & MRP

      Create planned purchases, production orders, Explodes BOM, Calculates net requirements & Lot size

      Run Rough-Cut Capacity Planning

      Backward scheduling logic only using standard lead-times to determine required start date

      Production order process

      Optional material & capacity check


      Capacity leveling over & under

      Sequencing by overall setup time within day


      APO PPDS</b>

      Plans for both Material & Capacity Constraints in one planning process

      Optimization of Planning

      Sequencing & Changeover

      Bottleneck resources

      Automatic solve constraint resources alternate resource, capacity variant

      Detailed Capacity Planning


      (2) <b>R/3 PP Linear Planning Process</b>

      Sequential programs makes for long planning cycle

      Batch runs

      Limited what-if simulations


      <b>PP/DS - APO Takes Minutes</b>

      Parallel Processing - Simultaneously Plans Material & Capacity

      Constraints Based Forecast - Planning for Materials & Capacity

      Reduced Planning Cycle Time from Weeks to Minutes


      (3) <b>Unconstrained vs Constraint-Based Planning</b>

      <b>R/3 PP</b>

      Infinite material & capacity planning

      Creates unconstraint plan

      Creates feasible schedule

      Sequencing by overall setup time within day

      Simulation is for long term planning

      Backward scheduling logic only

      Due date driven planning

      Manual Capacity Leveling



      Finite capacity & material planning

      Constraint-Based Planning

      Uses Optimization to create schedule

      Minimize = total LT + setup time + delay time + production cost + setup cost

      Simulation is fast real-time, “what if” planning capabilities

      Forward & backward scheduling

      Customer priority, cost, driven solution

      Scheduling Algorithms

      Detail Capacity Planning


      (4)<b> Technology</b>


      <b>R/3 PP</b>

      Real-time integration of enterprise-wide

      Data utilizing 3-tier client/server architecture

      Application Link Enabling (ALE)

      Componentization of applications



      Real-time integration of enterprise-wide and inter-enterprise - R/3 and non-SAP

      System transaction information utilizing

      liveCache technology in a APO architecture, enables fast responsive planning


      (5)<b> Supply Chain Cockpit</b>

      <b>R/3 PP</b>

      Not Available



      Graphical Supply Chain visualization

      Model builder for APO applications

      Alert monitor for exception-based supply

      chain management

      Key performance indicators

      Information retrieval from liveCache,



      Kumar Ayyagari

    • Re: General
      Currently Being Moderated

      Hi Somnath,

      For Demannd Planning, can't we have BW & live cache integrated to R/3?

      • Re: General
        Somnath Manna
        Currently Being Moderated

        Hi Sharad,

        Data in BW can be extracted from R/3. With ECC it becomes easier since it contains the BI stack as part of Netweaver which is same as in APO.

        For liveCache - Demand Planning uses Time Series data and NOT Order Series data. Order series data is basically all kind of transaction data (includes Stocks, PIRs, Procurement and Production Orders) which can be transferred between APO and R/3 using CIF.

        However that is not possible in case of Time Series data. The most common way of Transaction data in Time Series format in DP loading to the Planning Area is from an Infocube. For example you have Sales History which can be extract of your deliveries from R/3 to APO into an Infocube. That data can then be loaded to a particular keyfigure in APO-DP in the Planning Area. That way using BW and liveCache you can have transaction data integrated from R/3 to APO DP.

        Hope this helps.



    • Re: General
      Currently Being Moderated


      we are using ERP 6.0. Now we are planning for APO.

      Do we need separate licnse for APO.

      Do we need to install SAP SCM for APO or APO can be installed separatedly without SCM.


      please verify in detail.


      thanks and regards,


  • Re: General Discussion - Why to choose APO over R/3 for planning?
    k sahas
    Currently Being Moderated

    The basic problems of Planning and Scheduling stems from

    the requirements to compute in a multi product family, the requirements for Material, Manufacturing, Distribution, Customers etc., This is further required to be done at the  Corporate, Plant and Shop Floor level.


    Enterprise/Strategic- level ---enterprise material plg/production plg/distribution plg/demand plg


    Plant/tactical--level-plant material plg/plant production plg/drp/demand forecasting


    Shop floor/operational--material releasing/ scheduleing.dispatching/commodity deployment/order promising


    Strategic planning is the key element in a company's longterm success and has a critical impact on its future. Fastchanging market demands and short product life cycles force enterprises to continuously evaluate and optimize their supply chains. Companies have to use marketing and financial plans as a basis for deciding on the sourcing, production, and distribution of products to meet customer requirements at competitive costs. As strategic decisions are linked to costs, it is difficult to change them at short notice. It is therefore vital

    that companies make their long-term decisions carefully,

    achieving a long-term cost-effective and profitable solution to guarantee the company’s effectiveness.

    The following features support strategic planning

    problems--Network Definition: Networks used in demand

    planning, as well as in supply network planning,

    reflect a company's supply chain.. It can be used

    for feeding into simulation models. Planning can

    be executed based on this network. One can model every part of the supply chain (such as locations, transportation lanes, resources, products, and production process models) using the Supply Chain Engineer. The Supply Chain Engineer allows you to place locations on a map and link them with the corresponding transportation lanes.

    The direction of the lanes determines the product flow. Using the Supply Chain Engineer, one can drill down to all elements belonging to the supply network. Further, information about single or combined elements in the network, can be requested.

    For example, one has the ability to see which products belong to a particular location. Products can also be added to this location or modify the locations master data.


    Alerts: The Alert Monitor is a stand-alone component

    of APO that enables a unified approach to monitor planning situations. It notifies you of any critical situation occurring in one of the APO applications,

    such as Demand Planning and Supply Planning, Production Planning, and Detailed Scheduling, or Transportation Planning and Vehicle Scheduling. Alerts are displayed in various ways, either directly in the Supply Chain Cockpit, in the cockpits control panel, in the application, or through email. Using a series of event triggers and alarm conditions, the Alert Monitor can automatically identify problems in the supply chain. It can also monitor material, capacity, transportation,

    and storage constraints. In addition, it can handle

    metrics such as delivery performance, cost flow, and throughput. It reports exceptions, including orders that exceed forecasts or orders that fall short of forecast and therefore may lead to excess inventory if production is not adjusted accordingly. Based on this monitoring process, one can readjust plans whenever needed.


    SAP APO Supply Network Planning integrates purchasing,

    manufacturing, distribution, and transportation so that

    comprehensive tactical planning and sourcing decisions

    can be simulated and implemented on the basis of a single, global consistent model. Supply Network Planning uses advanced optimization techniques, based on constraints and penalties, to plan product flow along the supply chain.

    The results are optimal purchasing, production, and distribution decisions; reduced order fulfillment times and inventory levels; and improved customer service.

    Starting from a demand plan, Supply Network Planning

    determines a permissible short- to medium-term plan

    for fulfilling the estimated sales volumes. This plan covers both the quantities that must be transported between two locations (for example, distribution center to customer or production plant to distribution center), and the quantities to be produced and procured. When making a recommendation, Supply Network Planning compares all logistical activities to the available capacity.

    The Deployment function determines how and when inventory should be deployed to distribution centers, customers, and vendor-managed inventory accounts. It produces optimized distribution plans based on constraints (such as transportation capacities) and business rules (such as minimum cost approach, or replenishment strategies).

    The Transport Load Builder (TLB) function maximizes

    transport capacities by optimizing load building. In addition, the seamless integration with APO Demand

    Planning supports an efficient SOP process.

    APO is a planning tool on a global level and r3 is more

    an execution tool and effective integration of the two

    gives an efficient long term/medium term/and

    short term planning and execution capabilities

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Kiran Kute
    Currently Being Moderated

    I do aggree what other have mentioned .Here are specific inputs on newly desined process in APO in comparisosn with R/3



    1. Existing Processes in SAP R/3


    Forecasting enables companies to run statistical forecasting model, aggregate and disaggregate forecasts, as well as the capability to modify forecasting numbers manually


    Newly-Designed Processes

    Demand Planning DP (SAP APO)

    Demand Planning adds to forecasting capabilities to manage promotions, product introductions and phase outs, as well as the impact o causal factors, like weather or macro economic data.

    Additional forecasting techniques are available like Linear Regression (Causal Factors), Croston Method (Slow Moving Items) and Weighted Average

    Consensus based Planning enables Marketing, Sales, Logistics to share and collaborate on their forecast and create a final consensus forecast

    Forecasting based on characteristics instead of SKU for configured products


    2. Existing Processes in SAP R/3

    <b>Sales & Operations Planning</b>

    SOP allows to consolidate forecast based on supply capabilities, through reporting and interactive planning capabilities.


    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Demand and Supply Plans can be intelligently balanced leveraging cost or/and revenue based optimization techniques

    Trade-off Analysis to determine product-mix, inventory build ups for seasonal demand, capacity allocations for alternative manufacturing locations etc.

    Web based information sharing and collaborative interactive planning environment

    KPI Reporting



    3. Existing Processes in SAP R/3

    <b>Distribution Requirements Planning</b>

    Traditional DRP logic allows to calculate requirements for a single stage distribution network


    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Supply Network Heuristic enables to run DRP across the complete supply network generating requirements (production and purchasing) at each node.

    The planner can easily navigate through the network to view and modify demands and supply‘s in their different categories

    Demand Planning Units and Stock Keeping Units mapping can be done on quotations.



    4. Existing Processes in SAP R/3

    Not available

    Newly-Designed Processes

    <b>Deployment SNP (SAP APO)</b>

    The ability to deploy products through the supply network based on pull or push concepts. Different heuristics like fair share logics are supported.

    Transport Load Building allows to combine different products to a single load, interactive, as well as via heuristic to create full truck loads.



    5. Existing Processes in SAP R/3

    <b>Master Planning</b>

    Master Planning allows to plan production at an aggregated level including rough cut capacity planning.


    Newly-Designed Processes

    Supply Network Planning SNP (SAP APO)

    Supply Network Planning allows to consider distribution, production and transportation constraints concurrently.

    In addition to a generic SNP Optimizer based on Linear Programming and capacity leveling algorithms, industry specific optimization is available for

    Campaign Optimization

    Capable to Match


    6. Existing Processes in SAP R/3

    <b>Material Requirements Planning</b>

    MRP calculates material requirements based on BOM structures, lead times, lot sizes etc.

    Capacity Planning

    CRP in a second step looks at the capacity requirements


    Newly-Designed Processes

    Production Planning PP/DS  (SAP APO)

    Production Planning allows to consider material and capacity constraints simultaneously to derive material, capacity requirements and dynamic lead times. BOMs and lot sizing will be also considered

    Pegging relationships between customer order, production orders, purchase orders will be stored and enable bi-directional propagation if changes occur on the demand or supply side


    7. Existing Processes in SAP R/3

    <b>Transportation Planning</b>

    Manual Planning of shipments, including predefined master routes.


    Newly-Designed Processes

    Transportation Planning TP/VS (SAP APO)

    Transportation Planning enables companies to determine the right shipment mode and route based on demand and supply situation, considering transportation constraints and costs.



    8. Existing Processes in SAP R/3

    <b>Shop Floor Scheduling and Assembly Processing</b>

    Planning Table to view in a Gant Chart the schedule.

    Heuristics like forward/backward scheduling (infinite)

    Manual scheduling


    Newly-Designed Processes

    Detailed Scheduling PP/DS  (SAP APO)

    Finite and infinite scheduling, considering material, capacity, time and market constraints.

    Manual scheduling

    Scheduling optimization via optimization algorithms, like

    Genetic Algorithm

    Constraint based Propagation



    Kiran Kute

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Pankaj Agarwal
    Currently Being Moderated

    APO is better compared to R/3 wrt following points-

    1) APO is an a planning & optimisation tool, means the results are optimised to the tune of optimised costs & capacities, the system will plan the orders considering the best available cost & the capacities across the planning chain defined in the system,

    2) APO is having the capabilities of planning the MRP & capacities simultaneously, means the planned orders fo the dependent requirements shall be generated provided the capacities are available on the defined work centres, wehreas in R/3 first the Qty. planning is done followed by capacity analysis.  This shall mean the planned order shall be generated irrespective of capacity available or not on the work centre.

    3) APO is capable of doing the global planning across the supply chain.

    4) APO can do the braod level panning in SNP where in it looks for the header level material across the supply chain globally & create the Planned orders or Purchase requisitions based on the shortfall qty. & PPDS is responsible for doing the minute based planning at the shop floor.

    5) The Demand Planning in APo is a very powerful tool in APO which is capable of doing the forecasting based on the historical data.


    Hope this shall be of some help to you.  Give poits if you find this useful.



  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Ashish Sawhney
    Currently Being Moderated

    In short difference is same as driving a Mercedez Vs Kia...

    APO is Mecedez and R/3 Kia ... when it comes to finite planning for Global SUpply Chians or constraint Supply Chain


  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Marcelo Tescari
    Currently Being Moderated

    The problem that I always see is that the users don´t know how to drive a Kia. I only recomend APO for the customers that have a good R/3 implementation and use.


  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Currently Being Moderated

    Apart from APO having advanced features there is a basic difference. Complex planning activities are time consuming. Sometimes you do not want to load your transactional system (R/3). Thats why you can use APO system which is both OLTP and OLAP to shift the load. Another advantage is global nature of planning (for example GATP ) in APO.

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Currently Being Moderated

    MRP is generally used for the planning in R/3 in general for all purpose requirement.


    But due to the important of the COST or due to the Import condition of the material, it is required to take so much care while doing this type of palnning. For thios purpose, APO is used where it will help you in the decision making to choose which ids the best for the planning of such type of material.


    Especislly for the BOTTLE NECK items, Through APO you will get the optimised solution from the diffretn solutions available  in the R/3

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    mani krishna
    Currently Being Moderated

    1)Becoz you can integrate multiple OLTP systems to 1 apo server.

    2)Standalone Macros

    3) Simultainious material and capacity planning.

    4) High performance live cache.

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Luiz Giani
    Currently Being Moderated

    Ashish replied it so properly that I'll just agree with it.


    I think that R/3 is so overloaded of functionalities, and having the SCM is way better than implementing a R/3-APO. It becomes more clear and friendly.


    Luiz Giani

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    sarfaraz lodhi
    Currently Being Moderated

    Forecasting enables companies to run statistical forecasting model, aggregate and disaggregate forecasts, as well as the capability to modify forecasting numbers manually


    Newly-Designed Processes

    Demand Planning DP (SAP APO)

    Demand Planning adds to forecasting capabilities to manage promotions, product introductions and phase outs, as well as the impact o causal factors, like weather or macro economic data.

    Additional forecasting techniques are available like Linear Regression (Causal Factors), Croston Method (Slow Moving Items) and Weighted Average

    Consensus based Planning enables Marketing, Sales, Logistics to share and collaborate on their forecast and create a final consensus forecast

    Forecasting based on characteristics instead of SKU for configured products

    and there are many such features which are available in APO like SNP, TP and so on which makes it an advance tool over R/3 system.

      • Re: General Discussion - Why to choose APO over R/3 for planning?
        Loknath Rao
        Currently Being Moderated

        Talking of solution apporach, nothing in APO (or any new dimension product) is a "better" substitute to some app in ECC. It can at best be called a complementary application to ECC. Though data models in ECC and APO are different, the business needs that mandate implementing APO can be complex production and distribution networks, complicated manufacturing processes (too many stages and physical movements incl. subcontracting), mulitple "lanes" in which the product moves, too many business rules, need to collaborate with customers and vendors on a different dimensions of planning and execution and model and monitor events real time etc and overcome "built in pain areas" of existing ECC system. Overall the four dimensions of Planning, Collaboration, Coordination and Exceution of supply chain management per SAP solution map, makes use of applications from both ECC and APO. SRM and CRM can compliment the landsacpe for even better collaboration by calling functionalities in APO and ECC. It would be safe to assume that those who dont need to give a damn to planning their capacities (own or someone elses) and make a fuss about forecast accuracies, ECC can do a fairly good job. I see more and more of new dimension product features being made a part of core ECC in the years to come.




  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Craig van der Walt
    Currently Being Moderated

    My first thought when reviewing a question like this is as follows:

    It does not matter which system you choose you should rather ask the question which system can the customer use?

    While there are numerous organizations that have really complex planning issues, there are even more that cannot really use the features found in APO.  Organizations that put in APO because this is the so called best tool for the Job need to first determine can they support this tool.  It does not help that the planner does all these wonderful planning iterations but then the business just cannot act on these results.  In such instances APO will just be an overkill.

    So if a company wants to decide between APO and R/3 they should first ask the question.  What can my company support.  Do I want the best theoretical and optimised production plan for my business or do I just want to make sure that my planning department is able to plan with more reliable planning data.

    To be honest if you cannot plan propperly in R/3 using Capacity planning and detailed scheduling then adding the advanced features of APO will not necessarily solve your problems.

    I firmly believe that only once you have exhausted all the available planning tools in R/3, are you really ready to move to the benefits that APO has to offer.

    Having said the above, there is one area that standard R/3 will have difficulty with and where APO obviously will excel, and that is when you plan accross multiple sites and where the transportation or availability accross sites needs to be coordinated.  In this area R/3 can only do so much.


    In summary look at your organizations capabilities and not at your "theoretical buzz word technologies"

    As an earlier post pointed out.  We might all want to drive the mercedes but not all of us can afford the cost of this luxury.  For those who can only afford the Kia, maybe you need to look at the owners manual again to see how to use some of those features you might have missed.  This could just give you the time you need to build up enough expertiese to be able to afford and drive the Mercedes.



    Craig van der walt

  • Re: General Discussion - Why to choose APO over R/3 for planning?
    khalid Abdullah
    Currently Being Moderated

    I wanna to mention some points that I notes that no body touch it,

    As I know the main difference between R/3 & SCM is

    R/3 is responsible for financial execution, but SCM is an intelligent tool or smarter system which provide you full planning and statistical forecasting depend on historical data then transfer all planning results to the execution system (R/3)


    please correct me if I'm wrong.


  • Re: General Discussion - Why to choose APO over R/3 for planning?
    Liangli Wu
    Currently Being Moderated

    Once you know clearly what are the constraints of Kia & they really impact your life, then it is the  time considering to buy a Mecedez.