Backorder Processing
with SAP R/3 vs.
SAP APO Global
Available-to-Promise
Patti Kimler
Product Manager
PTU Applications
SAP Labs, LLC
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 2
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 3
Backorder Processing (BOP) – the Basics
 When is an order a backorder?

When a schedule line doesn’t have a confirmed quantity
 What should a backorder processing solution do?


Simulate results
Lend visibility to the situation
Run in a reasonable amount of time
Allow selection of orders based on business requirements
Allocate product in a prioritized way

Allow results to be sorted in a meaningful way



 Note that both solutions — R/3 and SAP APO — can satisfy all
these items, to some extent
 SAP AG 2005, 4
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 5
Prerequisites
 ATP check for orders in question must be set to take
place in APO
 R/3, mySAP ERP, or SAP CRM as an order
management system
What does that mean?!
 Typically, in the setup of Global Available-to-Promise (gATP),
you specify (once) in the SAP APO Core Interface (CIF) that
you want your ATP customizing settings transferred from R/3
(or mySAP ERP) to SAP APO
 Then, in another integration model of the CIF, you must have
selected the ATP check switch for the materials you have
specified in that integration model
 SAP AG 2005, 6
Core Interface Settings – Integration Models
 SAP AG 2005, 7
mySAP ERP and mySAP Business Suite




SAP R/2
Real-time
Integration
International
Mainframe
SAP R/3
 Standardized
business
processes
 Client-server
 Distributed
processing
mySAP ERP
 Real-time business
 Powered by SAP NetWeaver
 Enterprise Services Architecture
mySAP Business Suite
mySAP PLM
mySAP
SRM
R/3
R/2
mySAP ERP
mySAP
CRM
mySAP SCM
SAP NetWeaver
1972
 SAP AG 2005, 8
1979
...
1992
2000
2003
mySAP Business Suite
SAP Enterprise Portal
Business Information Warehouse & SEM
Supply Chain Event Monitoring SCEM
PLM
SRM
TPVS
SCM
EWM
SPP
CRM
RR
mySAP ERP
Design
Buy
Make
Move
Sell
Service

Strategy- Product Innovation

Strategy- SRM, Global Visibility

Strategy- Operational Excellence

Strategy- Customer Intimacy

Value Based Initiatives

Value Based Initiatives

Value Based Initiatives

Value Based Initiatives

< Time to Market

< Supplier Consolidation

< Inventory

> Revenue

> Product Quality $

< Material Consolidation

> Customer Service

> Market Share

> Life Cycle Product $

< Maverick Spending

> Global Resource Mgmt.

> Profitability

> Collaboration

> Collaboration

> Operational Efficiency

> Customer Satisfaction
 ROI
 ROI
 ROI
 ROI

< 20% Development $

< 5-15% Material Cost

< 10-30% Inventory

> 2-3% Market share- AMR

< 21% Scrap & Rework

> Productivity 20-30%

> Rev.-Customer Service

> Margins-5%>25%- Bain

< 7% Manufacturing $

< Planning Cycles- Days

> Selling Efficiency-$10>1

< 20% Warranty

> Customer Satisfaction
 SAP AG 2005, 9
Where SAP APO Fits in SAP SCM
 SAP Advanced Planning
and Optimization
(SAP APO 4.1)
 SAP Inventory
Collaboration Hub
(SAP ICH 4.1)
 SAP Event Management
(SAP EM 4.1)
 SAP NetWeaver (Web AS, BW, …)
(SAP NetWeaver ‘04)
 SAP AG 2005, 10
Evolution of SAP SCM Functionality
SAP SCOPE
Initiative
• MRP II for Planning
• SAP R/3 MM/PP
• Transportation Mgmt.
• Warehouse Mgmt.
• Partnership with
ILOG
1997
SAP APO 2.0
mySAP SCM
SAP SCM 4.0
• Collaborative
Planning
• ASCN vision
announced
• SAP APO 4.0
• Collaborative
scenarios
• SAP is market leader
in Q2
• SAP EM 4.0
• SAP APO available
in mySAP.com
• Strategic
partnership with MIT
Auto ID Center
1998
1999
2000
2001
Default
SAP SCM
release
• SAP ICH 4.0
• SAP NetWeaver
integration
• RFID pilots for Metro
Store and P&G
2002
2003
2004
SAP APO 1.1
mySAP SCM
mySAP SCM
SAP SCM 4.1
• SAP enters APS
market with standalone solution
• SAP APO 3.0 SCM
Content Workplace
• SAP APO 3.1
Industry Release
• SAP APO 4.1
• SAP LES R/3 4.6 C
• Decentralized
warehouse mgmt.
system
• SAP EM 4.1
• Transportation
Planning
• Supply Chain Event
Management 1.1
• Radio frequency
• CRM SCM
integration
• SAP ICH 4.1
• SAP NetWeaver
Integration
• RFID-enabled SCM
SAP SCM release
in ramp-up since June 2004
 SAP AG 2005, 11
Global ATP – The Technical Perspective
 SAP AG 2005, 12
Key Capabilities
 Multiple Operating Modes

Batch
 Interactive
 Simulative
 Filter
 Sorter
 Support for Product Allocations
 SAP AG 2005, 13
Batch Backorder Processing
2 modes:
Direct update of batch backorder processing
 BOP runs and immediately updates the results to the database
without an intermediate step
Batch backorder processing with postprocessing
 BOP runs, saves the results to a buffer, and protects the
assigned quantities with temporary quantity assignments
 The results can be updated or rejected. If rejected, the
temporary quantity assignments are deleted
 SAP AG 2005, 14
Interactive Backorder Processing
 Similar to batch backorder processing with postprocessing,
except for the addition of a pre-configured worklist
 It can be accessed directly from the menu structure within
SAP APO, or used as a postprocessing function of Batch
backorder processing
 Filters and sorts are available to both operating modes
 SAP AG 2005, 15
Interactive Backorder Processing – With a Worklist
 SAP AG 2005, 16
Interactive Backorder Processing – Without a Worklist
 SAP AG 2005, 17
Simulative Backorder Processing
 No temporary quantity assignments are written to liveCache
 No orders are updated in R/3
 The results can be viewed in a log but cannot be
updated interactively
 The results can be saved in the buffer or deleted
 SAP AG 2005, 18
Filter
Plus a Userexit!
 SAP AG 2005, 19
Sorter
Plus a Userexit!
 SAP AG 2005, 20
Product Allocations and Backorder Processing
 As of SAP SCM release 4.1 (currently in Phase II Ramp-Up),
product allocations may be checked as part of
backorder processing
 In prior releases, product allocations are neither checked
nor updated
 Also as part of release 4.1, if product allocations are checked by
BOP, a new icon will display on the results screen telling you
that this occurred
 SAP AG 2005, 21
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 22
Prerequisites
 ATP check must be set to occur in R/3
What does that mean?!
 You’re using R/3 and not APO for ATP checks
 SAP AG 2005, 23
The Selection Screen
Selection
Sort
 SAP AG 2005, 24
The Results
 SAP AG 2005, 25
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 26
Comparison
APO
R/3 and mySAP ERP
 Redistribution flag
 No redistribution flag – releases
all orders’ assigned quantities,
then rechecks them if they
didn’t have a check before
 Redistribution for each
basic method
 No redistribution
 Filter has 28 fields plus userexit
 Fixed filter with <10 fields
 Sorter has 25 fields
plus userexit
 Fixed sorter
 Able to confirm new
results with old prior to
database commit
 SAP AG 2005, 27
 Changes are committed to
database with no comparison
Comparison (cont.)
APO
R/3 and mySAP ERP
 Schedule line check available
for all documents
 Schedule line checks for stock
transport orders only
 Date configuration – material
availability or goods Issue
 Date configuration – No
option (material availability
date is used)
 Possible to preserve the lesser
quantity that has been agreed
upon without giving more
 Possible to improve and not
degrade confirmations
 SAP AG 2005, 28
 R/3 and mySAP ERP do not
differentiate between confirmed
quantity and requested quantity
 No opportunity to preserve
what was done previously
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 29
The Highlights
 R/3 and mySAP ERP have limited sort and filter fields

With no user exits available to expand the selection
 R/3 and mySAP ERP are not as flexible as mySAP SCM
Dates aren’t configurable
 Operating modes are selectable
 Schedule line checks are limited to one document type

 No way to preserve previous check

Orders are opened, quantities are released, check is redone
 No new development taking place
 SAP AG 2005, 30
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 31
SCM 4.1 – gATP Developments
 Better support for time zones
 Usability of ATP

Configurable rules-based ATP results screen
 Usability of Backorder Processing

Enhanced usability
 Better icons to explain what occurred
 Correct and reject individual orders

 SAP AG 2005, 32
Improved links from the results display
 Product Allocations
 Link to TP/VS added in 4.0
But SCM 5.0 Is Coming, and …
... It’s HUGE!
(my boss said I should keep saying that, to get everyone ready for it)
 SAP AG 2005, 33
gATP Highlights in SCM 5.0
 Temporary facility closure
 A hurricane just hit my Florida distribution center
 Alternate locations to use when a primary facility is closed
 Ship out of Texas and Georgia instead
 Maximum numbers of substitutions in RBA
 Locations and location products, not products
 Consolidation
 I’d like to take all these orders sourced from different
locations and consolidate them at this single location before
I ship them to the customer
 Drop ships/Third party
 I’d like the vendor to deliver this to the customer
 SAP AG 2005, 34
gATP Highlights in SCM 5.0 – More!
 RBA in Stock Transport Orders (not location, just
product substitution)
 The product you requested is not available,
substitute another
 Reassignment of order confirmations
 I’d like to borrow from Peter to pay Paul, automatically,
not manually, based on criteria that I specify
 Event-driven backorder processing
 I’ve just gotten stock in and I want to allocate it to a
group of high-priority orders that are waiting for it
 This is not a complete list
 SAP AG 2005, 35
Event-Driven Backorder Processing?!
 Uses something new called the Order Due List, which is also
used by reassignment of order confirmations
 Uses Workflow
 Allows an event, like a stock receipt or a return order, to trigger
a run of BOP against the Order Due List
 The Order Due List will contain your highest priority,
unconfirmed orders
 Brilliant!
 SAP AG 2005, 36
How to Decide?
 If R/3 or mySAP ERP’s ATP functionality just isn’t enough
of a solution anymore, consider the APO gATP solution in
mySAP SCM. However, don’t wait for SCM 5.0!
(Remember, it’s HUGE)
 Prioritize what you need and figure out what release it’s in

SCM release notes are posted on http://help.sap.com/
 How many APO releases back are you?
If you’re on APO 3.0 or 3.1, consider upgrading now to at least
4.0, if not 4.1
 Why? Chances are there’s a lot in 5.0 that you’ll want to roll-out,
and it’ll be a smaller bite if you’re not tackling all the interim
releases before you can get to 5.0
 Also, 4.0 and 4.1 are smaller releases from a gATP perspective
(Remember, 5.0 is HUGE)

 SAP AG 2005, 37
What We’ll Cover …
 What is Backorder Processing and what should it do?
 SAP APO’s Backorder Processing
 R/3’s Backorder Processing
 Let’s look at them both now – SAP APO vs. R/3
 The gaps – Where R/3 falls short
 What’s new in Global Available-to-Promise and coming up soon
 Key takeaways
 SAP AG 2005, 38
Key Takeaways
 The BOP program you use is dependent on the system in which your
ATP check takes place
 APO’s Backorder Processing has more Sort and Filter options than
R/3 or mySAP ERP, with user exits to add even more fields
 APO’s BOP is scalable – no need to do a full run every time
 With any BOP solution, force it to do what you really need it to do.
Use variants, etc., to tailor your BOP runs
 If R/3’s ATP solution just isn’t a solution for you, and you’ve already
got all or part of mySAP SCM in place (i.e. APO DP), consider
implementing gATP and attaining the benefit of the BOP program,
among other things
 Never assume that the product as it is today is the product that you’ll
be using tomorrow. New enhancements and opportunities are always
right around the corner
 It is possible to implement BOP without an ATP check in the order,
and there are successful implementations that have done it!
 SAP AG 2005, 39
Your Turn!
Questions?
 SAP AG 2005, 40
To Contact the Speaker
Patti Kimler
Product Manager SCM
PTU Applications
SAP Labs, LLC
M 386-334-4756
HO 386-960-5257
patricia.kimler@sap.com
 SAP AG 2005, 41