Advanced Planning Optimization (APO)

Advanced Planning Optimization (APO)


SAP Advanced Planning Optimization (APO) And Components

The solution of SAP AG, the leader in business application software of the world since 1998, in the area of advanced planning is SAP Advanced Planning Optimization. Nevertheless, it is hard to reach SAP Advanced Planning Optimization both over corporate publications and over the corporate website because the name APS (Advanced Planning System) is brought forward as a part of SAP SCM solution inside my SAP Business Suite. SAP Advanced Planning Optimization which is a part of SAP Supply Chain Management product consists of the following components;

  • Network Design (ended with the release 3.1)
  • Supply Network Planning
  • SAP APO Planning Algorithms
  • Production Planning Detailed Scheduling (PP/DS)
  • Deployment
  • Transportation Planning / Vehicle Scheduling
  • Demand Planning (DP)
  • Global Available to Promise (GATP)


SAP Advanced Planning Optimization MRP Relation and MySAP ERP Integration


MRP can be considered as a mechanism that creates supply components without taking notice of limitations such as usable capacity and material sufficiency, it is also a part of SAP Advanced Planning Optimization planning methods. It contains MRP in mySAP ERP. It can select which parts of the supply chain (for example which products) would be planned in SAP Advanced Planning Optimization and which parts would be planned in mySAP ERP. This selection option is a result of SAP Advanced Planning Optimization and mySAP ERP being linked to each other with Core Interface (CIF) as a standard. It provides an integration in real time between APS (SAP APO) and mySAP ERP which is a configured CIF connection process system.

Optimization in SAP APO

Although supply chain community does not use the word optimization in the original mathematical sense, certain components of SAP Advanced Planning Optimization offer various mathematical algorithms. The modules of SAP Advanced Planning Optimization that uses planning algorithms can be listed as follows;

  • Supply Network Planning (SNP): Middle term, multi-locational production and distribution planning
    • Full linear programming (LP) and mixed linear programming (MILP) algorithms
    • Heuristic algorithms / constraint propagation algorithms
  • Production Planning / Detailed Scheduling (PP/DS): Short term, single locational production planning and scheduling
    • Heuristic algorithms / constraint propagation algorithms
    • Evolutionary algorithms Transportation Planning / Vehicle Scheduling
  • Transportation Planning / Vehicle Scheduling (TP / VS): routing and load consolidation
    • Evolutionary algorithms


These planning algorithms / techniques can be separated into two categories.


    1. Heuristics: These are reasonable approaches that finds applicable solutions quickly.


  1. Optimizations: LP and MIPL are optimization algorithms that aim the optimal in terms of mathematical sciences but we cannot say the same thing for heuristic and evolutionary algorithms that are included under the optimizations title. Nevertheless, hybrid approaches that contain combination of these algorithms can sometimes yield the fully accurate result. A true optimization is not offered due to disadvantage of formulating standard multi-purpose models for vehicle routing, finite scheduling and ordering in SAP Advanced Planning Optimization. Supply Network module of SAP Advanced Planning Optimization is the only SAP APO module where the optimization is used in mathematical terms. Variations and equations used in SNP module of SAP Advanced Planning Optimization are pre-defined and cannot be changed by the user. The optimization model is calculated automatically by the model producer during the prologue stage according to information such as locations, products, resource capacities and late delivery charges in mySAP ERP and/or SAP Advanced Planning Optimization based on the parameters in the mySAP ERP system. Optimization machine solves the problem by handling this model together with the operational data (demand predictions, customer orders, etc.). Having turned the results into operational data after the optimization practice, these becomes ready for analysis both on SAP Advanced Planning Optimization and on mySAP ERP.
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