Scheduling Agreement Processing Using APO and an OLTP System

Purpose

APO allows you to plan externally procured products in the same planning interface as the products produced in-house, thereby providing an overview of the complete pegging structure. Extensive planning functions, such as, finite scheduling of products, purchase order quantity optimization, and sophisticated planning tools, enable you to effectively plan critical materials that are procured externally in APO.

Scheduling agreements increase collaboration between the plant and the vendor. Vendors require shorter lead times as they are better informed on requirement quantities which allows them to allocate their resources more efficiently.

Scheduling agreement processing in APO is performed using a Materials Management component of an OLTP System (for example, an R/3 System) and the planning functions of the APO System.

The OLTP system described in this process is an R/3 System.

Prerequisites

Process Flow

The diagram below shows in which system the various functions are performed during the complete process.

Scheduling Agreement Processing in an OLTP System and APO

* The Internet option is only possible if you also use the Supplier Workplace. For more information, see the point 5 below.

  1. You create scheduling agreement in the R/3 System

For scheduling agreements to be considered in APO, you must define that the Leading System is an external system in the maintenance of the scheduling agreement and enter the scheduling agreements into the integration model of the APO core interface (CIF) in the Plug-In system. This master data is transferred to the APO System in an initial data transfer. Changes to scheduling agreements in the R/3 System are stored for the next incremental data transfer.

  1. APO creates an external procurement relationship

The scheduling agreement transferred from the R/3 System is created as an external procurement relationship in the APO System. The external procurement relationship is product-specific and is assigned to a transportation lane. The external procurement relationship thus contains the contractual details of the relationship between a source location (vendor or plant) and a target location (plant).

You are able to display and maintain the master and transaction data of the scheduling agreement in the external procurement relationship. This data includes:

APO-specific settings include:

You can define when the information is to be made available in LiveCache, for example, when the scheduling agreement releases are created, or when the releases are outputted.

You can define whether a forecast/planning delivery schedule is to be created in addition to the operative delivery schedule, and sent to the vendor.

This option if available is you also use the Supplier Workplace to enhance collaborative procurement. You can define that the scheduling agreement releases are to be confirmed by the vendor via the internet.

You can control how and when scheduling agreements are created by defining a release creation profile in Customizing for Supply Chain Planning (under Collaborative Procurement ® Maintain Release Profile) and assigning the release creation profile to a procurement relationship.

The scheduling agreement releases are sent in XML format (Extensible Markup Language) to the address maintained here. If you have not maintained an address here, the e-mail is sent to the address maintained in the source location.

Additional functions include:

You can display the exact costs for the procurement relationship, that is, fixed and variable costs for a minimum no. of units.

You can display all transactions/events for a scheduling agreement, for example, goods receipt and invoice receipts.

Here you branch into Customizing and can display the release creation profile.

You can display the scheduling agreement release that have already been created for a scheduling agreement item.
  1. You create schedule lines in APO

In APO, you can create schedule lines interactively in the Product View or the Product Planning Table. When determining the source of supply for the order, the scheduling agreement, in addition to any other possible sources of supply are displayed. If you select the scheduling agreement, schedule lines are created for the desired quantities.

During automatic planning and planning during the production planning run, the system automatically creates an order when planning is triggered. The system selects the procurement option that can supply the goods on time and according to the priority and costs. If a scheduling agreement is selected, schedule lines are automatically created.
  1. You create scheduling agreement releases in APO

In APO, you can create scheduling agreement releases:

In Customizing for Supply Chain Planning, under Collaborative Procurement ® Maintain Release Creation Profile, you can define how scheduling agreement releases are to be created, for example, you can define when and how often releases are to be created, how the release/forecast horizon is to be determined, and so on.

You are also able to define how the release is to be outputted, that is, whether the releases are outputted immediately (that is, when the releases are generated), or in the form of a background job. You define this in Customizing for Supply Chain Planning, under Collaborative Procurement ® Define Message Trigger. You can define that APO is to send a message to the vendor automatically informing him/her of the scheduling agreement releases as soon as they are created. This is achieved using IDOCs or XML (Extensible Markup Language) and a business connector to the vendor's system.

For information on how to display scheduling agreement releases, see Displaying Scheduling Agreement Releases.
  1. Vendor displays/confirms releases via the Internet (optional)

You are now able to use the Supplier Workplace (SWP) together with the APO System and an R/3 System (currently available with Release 4.6C and Automotive Release 2.0) to further enhance collaborative procurement across the supply chain. The Supplier Workplace (SWP) allows a vendor to display and confirm scheduling agreement releases via the Internet.

To be able to confirm scheduling agreements via the Internet, you must set the Internet Release indicator to 1 for Quantity and date confirmation: Internet release.

The vendor can view certain information on scheduling agreement, schedule lines, goods receipt, pricing agreements, and so on, in the customer's system. The quick and easy access to this information enables the vendor to plan resources more effectively and helps to strengthen vendor-customer relationships.

For more information see the R/3 documentation in Material Management (MM) - Supplier Workplace and Internet Release.
  1. The releases are stored in the scheduling agreement as schedule lines in the R/3 System

The scheduling agreement releases created in the APO System are transferred to the R/3 System and are stored in the scheduling agreement as schedule lines.
  1. You create shipping notification in the R/3 System

You create a shipping notification in the R/3 System. This is automatically transferred to the APO System.

  1. APO reduces schedule lines/releases

In APO, the schedule lines and scheduling agreement releases are reduced by the notified quantity.

  1. You create goods receipt

You create the good receipt in the R/3 System. The goods receipt is automatically transferred to the APO System.
  1. APO increases stock and reduces schedule lines/releases

In APO, the shipping notification, if used, is reduced by the goods receipt quantity. The schedule lines and scheduling agreement releases are also reduced accordingly.