SAP APO Is Second To None In SCM Market

SAP Advanced Planner and Optimizer or SAP APO is a key planning tool designed to plan and optimize the supply chain processes in an organization by using APO’s sub-modules like Demand Planning, Supply Chain Planning, Global Available To Promise(GATP), Service Parts Planning, Transportation Planning, Detailed Scheduling and Supply Chain Cockpit. SAP APO can be integrated with SAP R/3 and ERP(Enterprise Resource Planning) legacy systems. There are plenty of ways integrating APO with ECC and they are very well detailed here in the APO Training sessions. .APO is an important module within SAP SCM(Supply Chain Management) and has travelled a long way and gained popularity in benefitting organizations in terms of planning, scheduling, optimizing the resources, supply chain management etc.

Business Benefits of SAP APO:

The advantages of enhanced demand and supply planning using APO includes three broad gains such as Enhanced Revenue, Reduced Costs and Improve Asset Management. For an in-depth understanding, these benefits are explained in detail in the following manner:

Enhanced Revenue:

  • Increase Revenue:

  • Increase customer fill rates by maintaining right item in the right place at the right time.

  • Improve onward visibility to in-market sales demand to have an understanding of supply needs or requirements.

  • Improve in predicting cost accuracy with right consent demand plan process.

  • Enhance time to market and validness in new product initiates.

  • Increase scalability of planning processes, organizations and systems.

  • Improve Margin:

  • Improve allocation of inventory in case of limited supply.

  • Ropes excellent service in price bargainings.

  • Discriminate service based on product and/or customer.

Reduced Costs:

  • Reduce Purchasing Costs:

  • Make low-cost country sourcing in consequence of better visibility and stability of supply needs.

  • Handle supplier capacity and improve supplier collaboration to reduce costs and improve service.

  • Enhance make vs buy decisions with improved visibility to supply needs and external & internal constraints.

  • Reduce Production Costs:

  • Better handling of organization’s global production capabilities empowering operations strategy via optimal sourcing.

  • Improve comprehensive supply dependability to master plan and streamline with pull-based production processes.

  • Better long-term production planning by forecasting supply-demand requirements.

  • Optimizes usage of contract manufacturers through improved visibility of supply – demand imbalances.

  • Reduce Logistics Cost:

  • Reduced premium freight charges and future time shipments.

  • Increase visibility of total inventory network and serve the customers better in taking orders.

  • Enable a profitable consumption with pull-based inventory revival process.

Improved Asset Management:

  • Improved Inventory Management:

  • Reduce finished goods inventory with matching requirements and accomplish service levels through supply and demand planning.

  • Increase product portfolio management to avoid complexity in handling inventories.

  • Optimize arrangement of inventories across the distribution networks.

  • Improve customer consignment inventory through improved inventory replenishment process.

  • Improve Fixed Asset Management:

  • Increase inputs to sales and production planning process to long-term capacity planning.

  • Enhanced transportation planning to improve asset productivity.


Despite there are many best-of-breed supply chain and planning solutions in the SCM market, SAP APO has emerged as a leading solution because of its unique selling proposition and that is easy integration to SAP R/3 legacy systems, and is the choice of many organizations such as TekSlate. Approaching SAP APO as a solution makes a better sense than as a product. Market is not slow for APO as SAP is focussing on each module in APO as the number of companies is growing in APO installation ahead.

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