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Transcript of Sappress Discover Sap Scm
Bonn � Boston
Shaun Snapp
Discover SAP® SCM
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Contents at a Glance
SAP SCM Basics 1 ......................................................... 31
SAP SCM Applications2 ................................................ 45
SAP Demand Planning (DP) 3 ........................................ 59
Supply Network Planning (SNP)4 .................................. 79
Production Planning and Detailed Scheduling 5 (PP/DS) ...................................................................... 99
Global Available to Promise (GATP)6 ........................... 121
SAP Transportation Management (TM)7 ..................... 139
SAP Event Management (EM)8 ................................... 161
Core Interface (CIF)9 ................................................... 183
SAP Service Parts Planning (SPP)10 ............................... 201
SAP Extended Warehouse Management (EWM)11 ....... 217
SAP Supplier Network Collaboration (SNC)12 .............. 239
SAP Forecasting and Replenishment (F&R)13 ............... 261
SAP SCM’s Direction as of Release 7.0 14 ..................... 277
Getting More from SAP SCM15 .................................... 299
SAP SCM and ROI16 ..................................................... 327
Conclusion17 ................................................................ 345
A Glossary .................................................................... 365
B Bibliography ............................................................. 373
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7
Contents
Acknowledgments ........................................................................ 21
Preface ......................................................................................... 23
SAP SCM Basics 1 ....................................................... 31
What is SAP SCM? ............................................................... 31
SAP SCM Origins .................................................................. 32
SAP’s Approach to Supply Chain Management ..................... 33
Optimization ........................................................................ 34
Linear Versus Discrete Optimization ............................... 34
Reduced Focus on Optimization ..................................... 35
Which Companies Are Right for SAP SCM? ......................... 37
Cross Application Components ............................................. 38
Product Location Master ...................................................... 38
Planning Areas and Planning Object Structures .................... 40
Planning Object Structure ................................................... 40
Planning Versions ................................................................. 41
Planning Versions and Mass Maintenance ....................... 41
Planning Book ...................................................................... 41
Conclusion ........................................................................... 43
SAP SCM Applications 2 .............................................. 45
SAP SCM Applications ......................................................... 48
SAP SCM Configuration Folders ...................................... 49
SAP SCM as a Visionary Application ..................................... 50
SAP SCM Application Interactions ........................................ 51
Common Application Interactions ................................... 52
SAP ERP to SAP SCM ........................................................... 54
Implementation Key Drivers ................................................. 56
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Contents
Conclusion ........................................................................... 57
SAP Demand Planning (DP) 3 ..................................... 59
Demand Planning as SAP SCM’s Most Popular Application .... 60
Two Halves of Demand Planning .......................................... 61
Basic Functionality and Concepts of SAP DP ......................... 62
Interactive Demand Planning .......................................... 64
Data Warehouse Workbench ................................................ 64
InfoObjects ..................................................................... 65
InfoCubes ............................................................................ 69
Forecasting .......................................................................... 71
Forecasting Methods ...................................................... 72
Characteristic Value Combinations ....................................... 73
Realignment ......................................................................... 73
Promotion Forecasting ......................................................... 74
Releasing the Plan ................................................................ 75
Plan Release and liveCache ............................................. 75
Plan Destination ............................................................. 76
SAP DP Release History ....................................................... 76
Case Study ........................................................................... 77
Company ........................................................................ 77
Challenge ....................................................................... 77
Solution ......................................................................... 77
Value Achieved ............................................................... 77
Conclusion ........................................................................... 78
Supply Network Planning (SNP) 4 ............................... 79
Basic Functionality and Concepts of SNP .............................. 81
Methods of Running SNP ............................................... 81
SNP Optimizer ................................................................ 82
Heuristics ....................................................................... 83
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Contents
Capable to Match ........................................................... 84
Capable to Match Configuration ..................................... 85
SNP Resources ..................................................................... 88
Common SNP Objects .......................................................... 89
Capacity Leveling ............................................................ 89
Capacity Leveling Profiles ............................................... 90
Planning Book ................................................................ 90
liveCache and Data Storage ............................................ 92
Safety Stock in SNP .............................................................. 92
SNP Subcontracting ............................................................. 93
SNP and Supplier Network Collaboration ........................ 93
SNP Product Location Tabs ................................................... 93
SNP Deployment .................................................................. 94
Deployment Heuristic ..................................................... 95
Deployment Optimizer ................................................... 95
SNP Release History ............................................................. 96
Case Study ........................................................................... 96
Company ........................................................................ 96
Challenge ....................................................................... 96
Solution ......................................................................... 97
Value Achieved ............................................................... 97
Conclusion ........................................................................... 97
Production Planning and Detailed Scheduling 5 (PP/DS) ..................................................................... 99
Basic Functionality and Concepts of PP/DS ......................... 100
Methods of Running PP/DS .......................................... 101
Capacity Leveling Versus Capacity Constraining............. 103
Settings for PP/DS in the Product Location Master ....... 103
Manufacturing Strategies .............................................. 104
Pegging ........................................................................ 105
Lot Size Setting ............................................................. 107
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Contents
Production Process Models and Production
Data Structures .................................................................. 110
Production Process Models (PPMs) ............................... 111
Production Data Structures (PDSs) ................................ 112
Constraining PDS and PPM ........................................... 113
Resources ........................................................................... 114
Process Industry Planning ................................................... 115
PP/DS Release History ........................................................ 116
Case Study ......................................................................... 117
Company ...................................................................... 117
Challenge ..................................................................... 117
Solution ....................................................................... 117
Value Achieved ............................................................. 118
Conclusion ......................................................................... 118
Global Available to Promise (GATP) 6 ........................ 121
GATP and CTM .................................................................. 122
Availability Checking .......................................................... 124
Available to Promise ..................................................... 125
Basic Functionality and Concepts of GATP .......................... 126
Different Levels of ATP Checks ........................................... 127
Multilevel ATP Check (M-ATP)...................................... 127
Availability Checking for Kits (or BOM) ......................... 128
Rules-Based Availability Checking ................................. 128
What Attaining ATP Proficiency Can Mean ................... 129
Capable to Promise ............................................................ 129
ATP Tree Structure ............................................................. 132
Third-Party Order Processing ....................................... 132
Third-Party Order Processing at Amazon.com ............... 133
Scope of Checking .............................................................. 134
The GATP Time Horizon ..................................................... 134
liveCache ........................................................................... 136
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Contents
Integration ......................................................................... 136
GATP Release History ......................................................... 136
Case Study ......................................................................... 137
Company ...................................................................... 137
Challenge ..................................................................... 137
Solution ....................................................................... 137
Value Achieved ............................................................. 137
Conclusion ......................................................................... 138
SAP Transportation Management (TM) 7 .................. 139
Basic Functionality and Concepts of SAP TM ...................... 141
High-Level Processes .................................................... 141
Specific Processes ......................................................... 141
Shipment Creation ........................................................ 142
Carrier Tendering and Selection .................................... 143
Carrier Selection ........................................................... 143
Contract Management .................................................. 143
Vehicle Scheduling ....................................................... 144
Carrier Cost Estimation ................................................. 145
Transportation Load Builder .......................................... 146
Important SAP TM Structures ............................................. 146
Transportation Lanes..................................................... 147
Location Geo-coding .................................................... 148
Transportation Modes ................................................... 151
Transportation Zones .................................................... 152
Transportation Groups .................................................. 152
SAP TM Resources ........................................................ 153
Vehicle Resources ......................................................... 154
Transportation Versus Vehicle Resources ....................... 155
Freight Units ................................................................. 156
Integration to SAP Event Management ............................... 156
SAP TM Release History ..................................................... 157
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Contents
Case Study ......................................................................... 158
Company ...................................................................... 158
Challenge ..................................................................... 158
Solution ....................................................................... 158
Value Achieved ............................................................. 158
Conclusion ......................................................................... 159
SAP Event Management (EM) 8 ................................. 161
Basic Functionality and Concepts of SAP EM ...................... 162
The Event ..................................................................... 163
How Event Management Is New for SAP SCM .............. 164
SAP EM Processes Visibility .......................................... 166
Procurement ................................................................. 167
Manufacturing .............................................................. 167
Transportation .............................................................. 167
Asset Management ....................................................... 168
SAP EM Specific Areas ....................................................... 168
Major Components of SAP EM ........................................... 169
Event Handlers ............................................................. 169
Event Handler Questions to Ask ................................... 171
Event Handler Types ..................................................... 173
Reacting to Events ........................................................ 173
Event Notifications ............................................................. 174
Event Messages .................................................................. 175
Service Matching .......................................................... 176
Action Initiation ........................................................... 176
Analytics: SAP NetWeaver BW and Trend Analysis ........ 176
Web Interface and Access .................................................. 177
Integration ......................................................................... 178
Web Communication Layer ........................................... 178
SAP EM Release History ..................................................... 179
Case Study ......................................................................... 179
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Contents
Company ...................................................................... 179
Challenge ..................................................................... 180
Solution ....................................................................... 180
Value Achieved ............................................................. 180
Conclusion ......................................................................... 180
Core Interface (CIF) 9 ................................................. 183
The Technology Behind CIF ................................................ 184
Basic Functionality and Concepts of CIF ............................. 185
Master Data ....................................................................... 186
Master Data Volume and Sequence .............................. 187
Master Data Sequence .................................................. 188
Transactional Data .............................................................. 189
Integration Models ............................................................ 190
CIF Variants .................................................................. 192
Models in SAP SCM ........................................................... 193
Models and Versions .................................................... 193
CIF Tools ............................................................................ 194
CIF Versus BAPIs and Custom Integration Code .................. 195
Queues .............................................................................. 195
Error Management ............................................................. 196
CIF Error Management Components ............................. 196
Errors in Error ............................................................... 197
Complete Integration ......................................................... 198
Real-Time CIF? ................................................................... 199
Conclusion ......................................................................... 200
SAP Service Parts Planning (SPP) 10 ........................... 201
Basic Functionality and Concept of SAP SPP ....................... 202
Unique Features of Service Parts Planning .......................... 202
Important Functionality of SAP SPP .................................... 207
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Contents
The Bill of Distribution (BOD) ....................................... 207
Service Level Planning .................................................. 208
Surplus and Obsolescence Planning .............................. 208
Differential Planning ..................................................... 209
Kit to Stock .................................................................. 209
The Logic Creation of the BOD ..................................... 209
BOD in the Interface ..................................................... 211
Planning for External Locations ..................................... 211
VCL and the IBA ........................................................... 211
SAP SPP Release History .................................................... 212
SAP SPP First Releases in SAP SCM 5.0 ......................... 212
SAP SPP as of 5.1 SAP SCM 2007 ................................. 213
SAP SPP as of SAP SCM 7.0 .......................................... 214
Conclusion ......................................................................... 215
SAP Extended Warehouse Management (EWM) 11 ... 217
Differences Between SAP EWM and Warehouse
Management in SAP ERP ................................................... 218
Warehouse Organization .................................................... 219
Supported Processes .......................................................... 221
Slotting ......................................................................... 222
Rearrangement ............................................................. 223
VAS .............................................................................. 223
Kitting .......................................................................... 224
Waves .......................................................................... 225
Handling Units .............................................................. 226
Quality Inspection Engine (QIE) .................................... 226
Storage Control ............................................................ 227
SAP EWM and RFID ..................................................... 227
RFID and ASN .............................................................. 228
RFID and Serialization .................................................. 228
Stock Replenishment .................................................... 229
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Contents
Yard Management ........................................................ 230
Cross Docking ............................................................... 233
Labor Management ...................................................... 233
Process Types ..................................................................... 234
Integration to SAP Event Management (EM) ..................... 235
SAP EWM Release History .................................................. 236
SAP EWM Server Setup ...................................................... 236
Conclusion ......................................................................... 237
SAP Supplier Network Collaboration (SNC) 12 ........... 239
SAP Supplier Network Collaboration? ................................. 239
Setting the Stage for Effective Collaboration ....................... 241
Basic Functionality and Concepts of SAP SNC ..................... 243
SAP SNC Collaboration Types ........................................ 243
Different Collaboration Methods and Objects .................... 245
Demand Collaboration .................................................. 246
Replenishment Collaboration ........................................ 246
Release Collaboration ................................................... 247
Purchase Order Collaboration ....................................... 247
Work Order Collaboration ............................................ 247
Attachments ................................................................. 248
Supply Network Inventory ............................................ 249
Delivery Collaboration .................................................. 249
Invoice Collaboration .................................................... 249
Supplier Managed Inventory (SMI) ..................................... 250
Confirmations .................................................................... 251
Third-Party Logistics Providers ............................................ 253
SAP NetWeaver PI Integration Scenarios ............................ 254
Visibility Profile .................................................................. 255
SAP SNC Web Browser ....................................................... 255
SAP SNC Release History .................................................... 256
Case Study ......................................................................... 257
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Contents
Company ...................................................................... 257
Challenge ..................................................................... 257
Solution ....................................................................... 258
Value Achieved ............................................................. 258
Conclusion ......................................................................... 258
SAP Forecasting and Replenishment (F&R) 13 ............ 261
Basic Functionality and Concepts of SAP F&R ..................... 263
SAP F&R Processor ....................................................... 264
Collaborative Planning, Forecasting, and
Replenishment (CPFR) .................................................. 264
Forecasting ................................................................... 265
Order Proposals ............................................................ 269
Substitution .................................................................. 271
Service-Level Planning .................................................. 272
SAP F&R Reporting ............................................................ 273
Order Optimization ............................................................ 274
SAP F&R Release History .................................................... 275
Conclusion ......................................................................... 276
SAP SCM’s Direction as of Release 7.0 14 .................. 277
High-Level Direction .......................................................... 278
New Approaches and Tools ................................................ 278
A Major New User Interface ..........................................278
Planning Service Manager ............................................. 283
Planning Service Manager Profiles ................................ 284
Service-Level Planning ...................................................... 285
Concepts of Service-Level Planning and
Finished Goods ............................................................ 286
Service-Level Planning in SAP ....................................... 287
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Contents
Service-Level Planning in SAP ERP ................................ 287
Service-Level Planning in SAP SCM ............................... 288
Service-Level Planning as an Evolved Approach ............ 289
Cross-Enterprise Capabilities ............................................. 290
Cross-Enterprise Monitoring ......................................... 290
Collaboration ................................................................ 292
Addition of the Warehouse and Retail Store ....................... 296
Conclusion ......................................................................... 298
Getting More from SAP SCM 15 .................................. 299
Where to Look for Improvement ........................................ 300
Recovering Failed SAP SCM Implementations ............... 300
The Recovery Analysis Team ......................................... 301
Accountability of Partners ............................................. 302
Improving or Enhancing Successful SAP SCM
Implementations .......................................................... 305
Areas of Functionality Worthy of Analysis ........................... 306
Subcontracting in SAP SCM .......................................... 306
Prioritizing Demand for the SNP Optimizer ................... 309
Repair Functionality in Service Parts Planning (SPP) ...... 309
Backward Consumption Enhancement for GATP ........... 311
Improving Safety Stock Management ............................ 313
Safety Stock Functionality Offered by Supply
Network Planning (SNP) ............................................... 314
Production Planning/Detailed Scheduling (PP/DS)
Implementation Tips ..................................................... 316
Real Constraints for Real Planning................................. 318
Don’t Rely Too Heavily on the Planning Book for
SAP SCM Success ......................................................... 319
Provide Ample Non-consulting SMEs or Super Users .... 320
After the Implementation ................................................... 321
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Contents
Improving Usage Efficiency with Model
Maintenance Methods ....................................................... 322
Conclusion ......................................................................... 324
SAP SCM and ROI 16 ................................................... 327
Return on Investment (ROI) ............................................... 328
Benefits .............................................................................. 328
Improvements in Sales .................................................. 329
Costs .................................................................................. 331
Inventory Management ................................................ 333
Labor Costs................................................................... 333
Transportation Costs ..................................................... 334
Key Financial Ratios ...................................................... 335
ROI Estimation Recommendations ..................................... 336
ROI Estimation: Managing the Process ............................... 337
Getting the Right Input ................................................. 337
Selecting the Right People ............................................ 338
Allowing Enough Time .................................................. 339
Don’t Overemphasize Finance ...................................... 340
Assign a Data Expert to the Team ................................. 340
Consider a Range or Sensitivity Analysis ........................ 341
Make the Assumptions Transparent ............................. 341
The Calculations .......................................................... 342
How to Set Up and Run the Value
Presentation Meeting ................................................... 342
ROI Presentations in Different Countries ....................... 343
Conclusion ......................................................................... 343
Conclusion 17 ............................................................... 345
Real-Life Supply Chain Modeling ........................................ 346
Changing Constraints .................................................... 348
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Contents
Missed Opportunities ......................................................... 349
Looking at SAP Transportation Management
More Broadly ................................................................349
SAP TM Functionality Covers Both Shipper Owned
and Outsourced Transportation ..................................... 349
SPP and the Industry Need for Service
Parts Planning ............................................................... 350
SAP SCM and Larger Supply Chain Trends .......................... 352
Energy Issues ................................................................ 352
Increased Rapidity of Inventory Turnover ........................... 354
Increased Supply Chain Monitoring .................................... 354
Collaborative Planning Trends ............................................ 355
Collaborative Aspects of SAP SCM Applications
Besides SAP SNC .......................................................... 357
Manufacturing Signals .................................................. 358
Conclusion ......................................................................... 360
Appendices ..................................................................... 363
A Glossary ............................................................................. 365
B Bibliography ...................................................................... 373
Index ......................................................................................... 377
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1
31
SAP SCM Basics
In this chapter, we’ll describe SAP SCM and how it’s used in today’s
economy, the SAP approaches to supply chain management, and how
companies can use and benefit from SAP SCM. A large amount of
functionality has been introduced since the last time many people
looked into SAP SCM, so even if you’ve seen it before, you’ll find a
lot of new information. Each chapter has a listing of some of the most
relevant new functionality as well as the enhancements that have
been made to existing functionality.
What Is SAP SCM?
SAP SCM is an umbrella term for a set of applications that provide
advanced planning capabilities. This set of applications is fed by stan-
dard SAP integration technologies, which include the Core Interface
(CIF) and BAdIs, among others, that connect the system to SAP ERP.
SAP SCM is used to improve and optimize the supply chain by en-
abling automated decision making, providing improved analytical
SAP SCM includes applications that provide advanced planning
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SAP SCM Basics 1
32
tools to users, and sharing information with internal system custom-
ers and external business partners.
SAP SCM Origins
SAP SCM was introduced as SAP Advanced Planning & Optimization
(SAP APO) at the height of the advanced planning trend back in 1998.
This was a period where i2 Technologies was the number one ad-
vanced planning vendor, and Manugistics was close on its heels. It’s
hard to believe because SAP SCM is so dominant in the advanced
planning space today, but at that time SAP wasn’t seen as a factor and
wasn’t even predicted to become one.
It’s important to draw the distinction between supply chain planning and advanced planning. Supply chain planning is covered by the applications and functions of SAP ERP Sales and Distribution (SD), Materials Man-agement (MM), and Production Planning (PP). These applications pro-vide supply chain execution functionality along with some basic planning functionality (safety stock and MRP, basic forecasting, availability check-ing, and production planning among a few others), but none of these applications cover advanced planning. Advanced planning is future based and deals in different scenarios that are presented to planners, who then pick the best alternative. In advanced planning, the plan may be recre-ated several times before it’s firmed and sent to the execution system. True advanced planning systems can’t execute recommendations; they can only make recommendations. So, while SAP had supply chain appli-cations for some time before SAP APO, SAP APO was SAP’s first venture into advanced planning.
But SAP needed to create a separate set of applications, rather than in-corporate advanced planning within SAP ERP because planning systems and transaction processing systems work differently. At one point, SAP felt that advanced planning was overly esoteric and would only be de-sired by a small fraction of its customer base. Somewhere along the line though, SAP changed its view and developed its own advanced planning suite. This was probably largely market driven, as we’ll explain later in this chapter.
Note: Supply Chain Planning Versus Advanced Planning
Although dominant in advanced
planning today, in 1998, SAP wasn’t
yet a strong player in the supply chain management area
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33
SAP’s Approach to Supply Chain Management1
SAP’s Approach to Supply Chain Management
SAP has a relatively, standard solution architecture for supply chain
management that has grown through time to reflect the trends of ad-
vanced planning. While SAP SCM began its life as SAP APO and was
originally intended to perform advanced planning only, it has since
evolved to essentially be a repository for all advanced supply chain
functionality not covered in SAP ERP. As an example, while the SAP
warehouse management functionality in SAP ERP has essentially been
stabilized, the more advanced functionality has and will continue to
migrate to the SAP SCM application known as SAP Extended Ware-
house Management (SAP EWM). Both applications cover warehous-
ing, but their capabilities are different (Figure 1.1).
ERP
APO
Supply Network Collaboration
SCM Infrastructure
Extended Warehouse Management
Transportation Management
DuetDemandPlanning
SupplyNetworkPlanning
DemandPlanning
GlobalATP
EventManager
SCMBasis
PP/DS
All
TP/VS
SAP SCM Solution MapFigure 1.1
SAP SCM has developed along with the trends in advanced planning
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SAP SCM Basics 1
34
Optimization
In its early years, SAP APO was sold on its ability to perform optimi-
zation. This is primarily because it was an industry-wide practice to
market advanced planning software in this way. In fact, SAP APO, or
SAP Advanced Planning & Optimization, had the term directly in its
name.
Optimization has two general meanings. One is more of a business na-
ture, which basically means to produce the best outcomes. The other
has to do with the area of operations research, from where the supply
chain optimization originates. For this book, we’ll define optimiza-
tion as the use of software tools and processes to ensure the optimal
operation of a supply chain, including the optimal location of inven-
tory within the supply chain and the minimizing of operating costs
(including manufacturing costs, transportation costs, and distribution
costs).
Linear Versus Discrete Optimization
Optimization works best in situations that are perfectly “linear,” so
that inputs can be increased or decreased in a continuous fashion. An
example of a linear input is an order quantity. In a perfectly linear op-
timization, any order quantity from zero to infinity can be placed and
fulfilled. But in reality, supply chains are not perfectly linear prob-
lems. For example, the lot size is a discrete value that limits the flex-
ibility of the order quantity. One item may be ordered in units of 50,
but if 135 units are desired, and the current inventory is less than 35,
then 150 must be ordered to meet this demand. SAP SCM has a num-
ber of techniques, such as lot size, that alter the problem being solved
from perfectly linear to discrete, or what is known as a step function.
This is very important for making the resulting recommendation re-
alistic (Figure 1.2).
The goal of optimization is to
ensure the “optimal” operation of your
supply chain
The step function is one of the most commonly used input functions
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35
Optimization1
Linear vs. Discrete Optimization
Time
Qua
ntit
y OptimalPurchaseQuantity
Actual PurchaseQuantity
Lot Size = 50
Linear Optimization in Supply Chain Figure 1.2 Must Be Moderated by Constraints
Reduced Focus on Optimization
Although optimization drove development in SAP SCM at one time, it
no longer does. The evidence for this is that optimization is an option
in three of the older applications (Supply Network Planning [SNP],
Production Planning and Detailed Scheduling [PP/DS], and SAP Trans-
portation Management [SAP TM], formerly known as Transportation
Planning and Vehicle Scheduling [TP/VS]), but isn’t an option in any
of the newer applications (SAP Extended Warehouse Management
[SAP EWM], SAP Supply Network Collaboration [SAP SNC], SAP
Event Management, SAP Service Parts Planning [SAP SPP], and SAP
Forecasting and Replenishment). In addition, the core optimization
functionality in SAP SCM has been stabilized for some time. This shift
is partly due to the fact that optimization didn’t meet its originally
envisioned potential. So, the newer applications in SAP SCM have
tended to downplay optimization in favor of other functionality.
If optimization didn’t “change the world” of supply chain, the ques-
tion naturally becomes “Why not?” There are a number of reasons,
but one of the most prominent was the implementation and mainte-
nance difficulty combined with the lack of company knowledge.
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SAP SCM Basics 1
36
There is a story about an advanced planning vendor that was running the optimizer engine in the background, but when the engine actually went down for a few days, no one even noticed. This was because the plan-ning was primarily being performed by heuristics that had been custom coded with scripts, and the solution was not using the optimizer at all. Whether the client knew the optimizer was not being used is unknown. This is more common than reading press releases and industry periodicals in the area would make you think. While optimization sold a lot of supply chain software, it wasn’t necessarily what the customers went live with, as evidenced from this example.
Example
Implementing and maintaining optimization methods requires much
effort and long-term investment. Secondly, optimization requires a
great deal of discipline and knowledge on the part of the implement-
ing company. Many companies want the benefit of advanced plan-
ning but are not culturally, financially, or skills-wise prepared to make
the sacrifices required to get the outcomes they desire.
More often than not, companies want simple solutions that deliver
value quickly. That isn’t how optimization works. And this is partly
because the software has historically been designed to be more com-
plex than is necessary (Figure 1.3).
Planning Continuum
Heuristics
Optimizer
Solution Quality
Effo
rt a
nd C
osts
Req
uire
d
CTM
Costs Versus Benefits in Planning Solutions for SNPFigure 1.3
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37
Which Companies Are Right for SAP SCM? 1
Which Companies Are Right for SAP SCM?
Some companies are better suited to undertaking an SAP SCM imple-
mentation than others, and Table 1.1 shows the typical characteristics
that allow a company to be successful with SAP SCM.
Company Characteristics
Description
Current SAP ERP users A few SAP SCM implementations have been performed on accounts without SAP ERP, but, in general, this is a major precondition.
Already have effective planning processes
SAP SCM is very flexible and can adjust to most planning processes, but it can’t fix a broken process. As with other planning software, the best successes typically come from companies that are already good at planning.
Make planning a priority If the commitment isn’t there in terms of management support and finance, it’s better not to begin an SAP SCM implementation. SAP SCM implementations are complex affairs, so companies must be ready for this complexity. Part of this is content knowledge of planning, but another component is open mindedness to new approaches. This is because there are a number of best practices inherent to the SAP SCM processes.
Focused on improvement
Transaction processing systems such as SAP ERP are a necessity, but a business can still run without a planning system. SAP SCM implementations cause companies to evaluate their priorities. Some applications request the estimation of a cost of a lost sale, so those successful with SAP SCM are effective at asking these questions and getting answers.
Current users of SAP ERP are good candidates for SAP SCM
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SAP SCM Basics 1
38
One way of looking at whether your company is appropriate for SAP
SCM is to determine if it has maximized the planning functionality
within SAP ERP. And in some cases, requirements will naturally lead
to the consideration of SAP SCM. In Chapter 2, SAP SCM Applica-
tions, we’ll cover the specific needs that often drive the decision to
implement different applications. However, more generally, SAP SCM
is most beneficial to companies that are dedicated to improving their
planning processes and that already have good planning processes to
begin with.
This statement isn’t only true of SAP SCM but of advanced planning
tools generally. While we’re not able to find specific research to back
this up, our anecdotal evidence from our experience on projects indi-
cates that the better the company is at planning before it implements
an advanced planning system, the more the company gets from the
implementation. Being effective at planning helps the company know
how to design the system and also allows the company to better le-
verage what it ends up implementing.
Cross Application Components
As mentioned earlier, this book is broken into a format of one chap-
ter per application. However, there are some important concepts and
components that cut across the applications, so even though all of the
components will be addressed in the same form in individual chap-
ters, they may also be covered in other chapters.
Product Location Master
SAP SCM is based upon a supply chain network, which is a combina-
tion of locations, products, and transportation lanes (Figure 1.4).
305_BOOK_loose.indb 38 11/3/09 4:17:51 PM
39
Product Location Master1
Supply Network
TransportationLane
Locations
Combination of Transportation Lanes and Figure 1.4 Locations Is Referred to as the Supply Network
SAP SCM, as with the plant and material master in SAP ERP, stores
a large amount of configuration information in the product master, location master, and the product location master. We refer to these
masters throughout the book, so it’s important to know the differ-
ences between them.
The 1. product master contains the information and attributes that
relate to the product across all locations. Data elements such as
the product number, the material group, and the gross weight and
volume are all attributes of the product master. The product mas-
ter is set up once per product.
The 2. location master deals with the attributes of the location. This
includes the location name, address, any calendars associated with
the location, and specific settings that apply to a few of the differ-
ent applications, such as SNP, TM, SAP Forecasting and Replenish-
ment, and SAP SPP.
The 3. product location master is essentially the product master with
added fields and added tabs to hold these fields that modify the
product per location.
Product master, location master, and product location store data in SAP SCM
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SAP SCM Basics 1
40
For instance, in SAP SCM, safety stock isn’t set at the product or lo-
cation level but at the product location level, so there’s no field for
safety stock control on the location master or on the product master,
but there are safety stock control fields on the product location mas-
ter. This not only holds true for safety stock but also for many other
attributes that only come into play at the product location master.
Planning Areas and Planning Object Structures
Planning areas and planning object structures are important cross ap-
plication items. They are high-level data groupings that control the
entire supply chain model. They have a central administration that al-
lows the areas and structures to be copied, maintained, and deleted.
Planning areas are the central data structures of Demand Planning (DP) and Supply Network Planning (SNP). A planning area is a container for key figures. Planning areas feed an interface object called a planning book, which is a spreadsheet view with a number of aggregation and macro capabilities. At the most basic level, key figures are the numerical values in the spreadsheet.
Note
Planning Object Structure
Just as a planning area is a container for key figures, a planning object
structure (POS) is a container for characteristics. The combination of
characteristics is called characteristic value combinations (CVCs). The
POS stores every unique combination of CVCs, which is then used
to help control disaggregation when data is manipulated at summary
levels. In the previous analogy, we stated that key figures are the nu-
merical values in the planning book spreadsheet. Characteristics are
like the textural column and row headings, with the time characteris-
tic on the horizontal axis, and the product characteristics on the verti-
cal axis.
Planning areas are containers for
key figures
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41
Planning Versions1
Planning Versions
The planning versions set up the data that are available for use. A
model with the same supply network can have slight alterations in
terms of control fields on, say, the product location master, making
the version create different planning results than a different version
of the same model that has the original product location master set-
tings. Multiple versions can be kept over time and run to see how the
results change. Because only the active version planning results are
communicated back to SAP ERP, multiple versions can be run in per-
petuity along with a live active version, without ever impacting the
active version. If the changes are deemed desirable, then the settings
from the inactive version can be migrated over to the active version.
However, it’s important to remember that this all takes maintenance effort. It’s one thing to talk about the benefits of simulation and say that SAP SCM supports it, but it’s another thing to support simulation modeling with the resources necessary to make it happen.
Planning Versions and Mass Maintenance
Planning versions can be particularly effective when used with the
MASSD or the mass maintenance transaction. This allows the person
performing the configuration to make wholesale changes in the mas-
ter data; however, this transaction should not be used on the active
version. Instead, by using the simulation planning version and then
mass maintenance to make changes, the changes can be fully tested
before mass maintenance to make the tested changes on the active
version.
Planning Book
DP and SNP are two SAP SCM applications that use the planning book
intensively. The planning book is the window into the planning data
Planning versions are variations of the planning models
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SAP SCM Basics 1
42
for most planners and other users. Planning books consist of the fol-
lowing areas:
Characteristics ›Key figures ›Data views ›Macros ›Forecasting functionality ›Promotional functionality ›Interactive graphics ›
Planning books provide views of various levels of aggregation as well
as ad-hoc viewing of planning data. Planning books allow you to com-
bine characteristics and key figures in a flexible way for presentation
to the planners. In fact, the planning book is the main user interface
into SAP, and SAP SNP also uses it, but it uses other views as well.
Creating the planning books is a significant part of the implementa-
tion because there are many different combinations of planning books
that can be created. Here are some of the important characteristics of
planning books:
› Different planners are responsible for different products and geog-
raphies, so the planning book can be customized for each planner
or for groups of planners.
As planners become more familiar with the planning book, they ›can be trained to create planning books for themselves.
The act of creating a planning book doesn’t change or affect the ›underlying data that the planning book displays.
The planning book is provided with the capability to perform com- ›plex calculations through its own macro builders. The results of the
macro calculation are displayed through extra rows in the planning
book.
Planners can be assigned to as many
planning books as you like
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43
Conclusion1
SAP SCM comes with some standard macros, but they aren’t sufficient to cover all of the implementation needs. Unfortunately, creating macros in a planning book is nothing like creating calculations and formulas in Excel. So, because of the substantial learning curve, planners typically can’t create their own macros.
Tip
Conclusion
This book is designed to provide an introduction to the entire SAP
SCM suite by providing the broadest possible exposure to SAP SCM
with the lowest possible effort on your part. Areas of detail that are
not covered in the book can be found from the many references in-
cluded in the Bibliography of other SAP SCM books that go into more
detail on the different topics. For the older applications such as SNP,
DP, and PP/DS, this will be relatively simple. For the newer applica-
tions such as SAP EM, SAP SNC, and SAP EWM, this will be a bit more
challenging. Of course, SAP training offers courses in all of these top-
ics.
But let’s move on to the next chapter and get a broad overview of all
of the applications offered in SAP SCM.
305_BOOK_loose.indb 43 11/3/09 4:17:52 PM
377
3PL, 254
4PL, 254
A
Active model, 193
Active version, 41
Activity Areas, 220
Advanced shipment notification, 228
Advanced shipping notification, 292
Alert Framework, 173
Alert Manager, 291
Alert Monitor, 164
Amazon.com, 133, 294
APO, 100
ASN, 228, 245, 355
Assemble to order, 127
Assemble-to-order, 99, 104
Assortments, 263
ATP, 113, 135, 224
ATP category, 123
ATP requests, 185
ATP tab, 134
ATP tree structure, 127, 132
Automotive returns processing, 168
Availability checking, 124
Availability checking for kits, 128
Available to promise, 125, 294, 312
B
Backorder processing, 132
Backward consumption, 94, 137, 311
BAdI, 309
BAPI, 169
BAPIs, 195
Batch management, 219
Best-fit functionality, 71
Bill of distribution (BOD), 207, 209
Bill of Material, (BOM), 109
Bucket resource, 88
Bulk storage type, 220
C
Calendar, 114
Calendar mixed resource, 88, 114
Capable to match, 82, 122, 347
Capable to promise, 125, 127
Capacity leveling, 82, 89
Capacity leveling profile, 90
Carrier capacity, 150
Carrier cost estimation, 142, 145
Carrier tendering and selection, 141,
143
Causal, 72, 207
Change pointer, 188
Characteristic, 65, 89
Characteristic-based forecast, 63
Characteristic-dependent planning, 76
Characteristics, 40, 41, 42, 65
Characteristic value combinations
(CVCs) , 40, 73
Checking horizon, 134
Checkpoint, 231
Ciber, 226
CIF, 111, 148, 183
CIF variants, 192
Collaboration, 358
Collaborative forecasting, 74
Collaborative manufacturing, 358
Collaborative manufacturing environ-
ment, 358
Collaborative Planning, Forecasting,
and Replenishment (CPFR), 246, 264,
296
Index
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Index
378
Collaborative Sales and Forecasting,
293
Collaborative transportation planning,
143
Collective processing run, 142
Composite, 72
Configurable product, 127
Consignment indicator, 137
Consignment stock in transit, 137
Contract management, 142, 143
Contract manufacturer, 354
Core Interface (CIF), 48
Create a shipment function, 142
CRM 5.0, 224
Cross docking, 233, 354
Cross-enterprise monitoring, 290
Cross-enterprise system, 294
CTM, 82, 122
CTM profile, 85
Customer, 243
D
DataSource, 68
Data views, 42
Data Warehouse Workbench, 61, 66,
67
Date calculation, 175
Date tolerance, 175
Days of Receivables, 335
Delivery collaboration, 246
Delivery window, 144
Demand collaboration, 245, 246
Demand Influencing Factor, 288
Demand plan, 80
Demand Planning (DP), 47, 60, 329,
357
Demand selection, 85
Deployment heuristic, 94
Deployment optimizer, 94
Depot location, 144
Design drawing, 248
Deviation of demand, 313
Disaggregation process , 76
Discrete manufacturing, 348
Doors, 231
DP, 40, 41, 42, 43, 100
DRP, 91, 213
DRP Matrix, 211, 279
Dynamic pegging, 86, 123
E
Electronic Data Interchange (EDI),
163, 294, 355
Enhanced method, 315
Equipment initiation, 205
Event, 163
Event code, 175
Event handler, 169, 170
Event manager, 251
Event notification, 169
Excel, 314
Expected event list, 163
Expected Event Overdue Event, 165
Expected event profile, 176
Expected goods receipt, 218
Extended safety stock, 289
Extended Warehouse Management,
217
F
Factory Calendar, 198
Factory collaboration, 358
Fixed bin, 220
Fixed lot size, 94
Fixed pegging, 86
Forecasting, 71
Forecasting and Replenishment, 246,
329
Forecasting functionality, 42
305_BOOK_loose.indb 378 11/3/09 4:18:55 PM
379
Index
Forecasting with BOM, 72
Forecast quality, 273
Forecasts, 245
Formula, 116
Fourth-party logistics, 355
Fourth-party logistics providers, 355
F&R, 60, 261
Freight unit, 146
Fulfillment, 168
Fulfillment by Amazon, 294
G
GATP, 113, 121, 147, 224
GATP time horizon, 134
Geo-coding, 148
Global Available to Promise (GATP),
48, 121, 293, 308, 311
Global service-level planning, 287
Goods issue, 94
Goods release, 94
GPS, 168, 235
GR/GI, 94
Group code, 175
H
Handling resources, 145
Handling units in outbound ship-
ments, 168
Heuristic, 82, 347
Heuristics, 283
Hierarchical planning, 91
High rack, 220
I
IDoc, 169
Implementation Guide (IMG), 49
InfoCube, 68, 92
InfoObjects, 65
InfoProvider, 68
Installed base, 205
Integrated rule maintenance, 128
Integration model, 194
Interactive demand planning, 64
Interactive graphics, 42
Interactive Scheduling Agreements, 91
Interactive SNP and Transport Load
Builder, 91
International sea transportation, 168
Inventory balancing, 203
Inventory Balancing Area, 212
Inventory turnover, 335
Invoice, 246, 292
Invoice collaboration, 246, 293
iPPE, 72, 128
J
JIT, 358
K
Key figures, 40, 42, 65, 89
Kitting, 224
Kit to order, 224
Kit to stock, 224
L
Labeling, 224
Labor management, 219, 233, 354
Layout-oriented storage control, 227
Leading indicator forecasting, 205
Light assembly, 224
Limits on distance, duration, and stop-
over, 145
Linear optimization , 34
liveCache, 75, 92, 126, 136
Location master , 39
Logistical rounding, 275
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Index
380
Lost sales, 273
Lot-for-lot, 94
Lot sizing procedure, 94
M
Machine breakdown, 167
Macros, 42
Make-to-order, 99, 104
Make-to-stock, 99, 104
Malfunction and repair, 167
MASSD, 41
Mass maintenance , 41
Mass Maintenance transaction, 149
Master planning object structure, 89
Materials Management (MM), 32, 361
Maximum storage time at location,
145
MCA, 213
MRP, 82
Multi-activity, 114
Multidimensional data object, 70
Multi-echelon inventory optimiza-
tion, 203
Multilevel ATP, 127
Multi-mixed, 114
Multimixed, 88
N
Negative Binomial, 202
Number of periods, 75
O
Opening hours of locations, 145
Operations research, 34
Optimization, 82, 347
Optimizer, 101, 307
Order creation, 219
Order Forecast Monitor, 293
Order proposal, 263
Outbound delivery request, 229
Outsourced manufacturing, 306
Outsource manufacturing partner, 243
Over stock, 273
P
Packing, 224
Packing instructions, 248
Parking space, 231
Part number, 292
Party entitled to dispose, 220
PDS, 110, 245
Pegging, 84, 105
Performance- based logistics, 285
Performance indicator, 177
Period consumption strategy, 311
Phase, 245
Picking waves, 225
Planned independent requirements,
63
Planned order, 185
Planned production order, 100
Planning areas, 40, 89
Planning book, 41, 42, 90, 281
Planning models, 41
Planning object structure (POS), 40,
67, 68
Planning proposal, 142
Planning Service Manager, 283, 298
Planning versions, 41
Plant Maintenance (PM), 168, 310
Poisson, 202
Portal, 163
PP/DS, 43, 60, 88, 99, 127
PPM, 111, 191, 245, 307
Process-oriented storage control, 227
Process profile, 283
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381
Index
Process types, 234
Production data structure, 110, 307,
348
Production line, 114
Production line mixed, 114
Production line mixed resource, 88
Production line resource, 88
Production order schedule, 167
Production plan, 100
Production Planning, 119
Production Planning and Detailed
Scheduling (PP/DS), 47, 99, 307, 334,
348
Production Planning (PP), 32
Production process model, 110, 111,
307, 348
Production staging area, 236
Product location master, 39, 41, 135,
186, 292, 314
Product master, 39
Product postponement, 223
Promotional functionality, 42
Promotion base, 75
Promotion forecasting, 74
PSA, 236
PSM, 204
Purchase order, 245, 292
Purchase order collaboration, 245
Purchase order processing, 293
Purchasing info record, 148
Pure transportation company, 355
Q
QIE, 226
Quality inspection engine, 226
R
Radio Frequency Identification, 227
Rail car management, 169
Reactions to event, 169
Realignment, 74
Real time deployment, 94
Rearrangement, 219, 354
Receipt, 246
Receipt and requirements list, 255
Recipe, 116
Red Prairie, 226
Refurbishment order, 214
Release collaboration, 245
Remote function call, 164
Reorder point, 94
Repair planning, 310
Replacement type, 206
Replenishment collaboration, 245, 246
Replenishment indicator, 210
Replenishment order, 244, 245
Replenishment order processing, 293
Requirement, 246
Resource, 88, 114
Resource management, 219
Responsive Replenishment Monitor,
292
Return on Assets, 336
Reverse kitting, 225
RF device, 163, 178
RFID, 168, 227, 297
Routing, 219
S
Safety stock, 287, 313
Sales and Distribution (SD), 32
Sales and Operations Planning, 91
Sales order processing, 168
SAP Advanced Planning & Optimiza-
tion (SAP APO), 32, 49, 60
SAP BusinessObjects Global Trade Ser-
vices, 158
SAP BusinessObjects Supply Chain
Management, 174
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Index
382
SAP Business Workflow, 173
SAP DP, 60, 80
SAP DP Data Mart, 64, 92
SAP Easy Access , 49
SAP Event Management (SAP EM),
48, 97, 161, 235, 240, 334, 348, 355
SAP Extended Warehouse Manage-
ment (EWM), 48, 60, 88, 262, 296,
334
SAP Forecasting and Replenishment
processor, 265
SAP Forecasting and Replenishment,
48, 261, 288, 358
SAP F&R processor, 264
SAP IS Retail, 262
SAP_MRP_001, 102
SAP NetWeaver BI, 64
SAP NetWeaver BW, 163
SAP NetWeaver Identity Management,
214
SAP NetWeaver PI, 184, 254
SAP NetWeaver Portal, 174
SAP NetWeaver Process Integration,
169
SAP_PMAN_001, 102
SAP_PP_003, 131
SAP_PP_005, 102
SAP_PP_18, 102
SAP_PP_CTM, 131
SAP PRESS, 262
SAP SCM SMEs, 320
SAP Service Parts Planning (SPP), 46,
48, 350, 353
SAP SNC, 43, 165, 212
SAP SNC web browser, 251
SAP SNC Web UI, 248
SAP SPP, 60
SAP Supplier Network Collaboration
(SNC), 47, 48, 165, 288, 355
SAP Transportation Management,
348, 353
Scanner, 178, 235
Schedules of vehicle types, 144
Scheduling agreement, 148
Scheduling agreement release, 292
Serial number, 228
Service fill monitor, 212
Service Inventory Optimization, 213
Service level, 273, 315
Service level agreement, 249
Service-level planning, 285
Service matching, 176
Service parts delivery and tool man-
agement, 169
Service Parts Optimization, 213
Service Parts Planning, 288, 308, 333
Set rules, 176
Shipment creation, 141
Simulation planning version, 41
Single activity, 114
Single mixed, 114
Single-mixed resource, 88
SIO, 213
SIT, 358
Slotting, 219, 354
SNP, 40, 41, 42, 43, 60, 79, 88, 100,
147
SNP1, 94
SNP2, 94
SNP deployment, 94
SNP optimizer, 82
SNP Product Location tab, 93
Solution Manager, 323
Specifications, 248
SPO, 213
SPP, 147, 202
Standard Deviation of Lead Time, 313
Star schema, 68, 70
Step function, 34
Stock replenishment, 229
Stock requirements list, 255
Stock transfer order, 185
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383
Index
Storage bin, 220
Storage control, 227
Storage section, 220
Storage type, 220
Subcontracting, 93, 306
Subcontractor agreement, 307
Subcontract order, 214
Subcontractors, 355
Subcontract reservation, 246
Supersession, 205
One-to-many supersession, 205One-way supersession, 205Two-way supersession, 205
Supplier, 243
Supplier collaboration, 243
Supplier delivery performance rat-
ing, 288
Supplier managed iventory (SMI), 250
Supplier Network Collaboration, 93
Supplier network inventory collabora-
tion, 246
Supply chain engineer, 323
Supply chain monitoring exchange,
294
Supply chain network, 38
Supply chain unit, 220, 311
Supply network , 41
Supply Network Planning (SNP), 45,
47, 79, 307
Supply selection, 85, 122
T
Target service level, 288
Task interleaving, 219
Test program, 248
The Master Data Selection, 85
Third-party logistics provider, 243,
253, 354
Third-party order processing, 132
Time horizon, 135
Time-related supply unit, 214
TPVS, 88
Transportation Booking Agent, 157
Transportation Charge Clerk, 157
Transportation Dispatcher, 157
Transportation lane, 81, 146
Transportation load builder, 142, 146
Transportation Management , 48
Transportation Manager, 157
Transportation mode, 146
Transportation Network Admin, 157
Transportation Planning and Vehicle
Scheduling (TP/VS), 48
Transportation resource, 88, 146, 153
Transportation tendering, 168
Transportation unit, 226
Transportation zone, 146
Transport order, 214
TSL, 214
U
Unconstrained planning, 82
Under stock, 273
Univariate, 72
Unplanned cross docking, 236
Unserviceable, 204, 206
Usage hour, 205
User interface, 169
V
Value added services, 223
Variants, 192
Vehicle capacity, 144
Vehicle incompatibility, 144
Vehicle resource, 88, 153
Vehicle scheduling, 142, 144
Vendor managed inventory (VMI),
250
Vendor restriction, 275
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Index
384
Virtual Consolidation Location, 212
VMI, 91
W
Wal-Mart, 264
Warehouse number, 220, 311
Warehouse task, 231
Warehousing, 354
Warner Lambert, 264
Wave, 225
Web Communication Layer, 178
Wireless Application Protocol, 175
WordPress, 324
Work instructions, 248
Worklist, 211
Work order, 244, 292
Work order collaboration, 245
Work Order Processing, 293
Work package, 234
X
xApp, 213
Y
Yard location management, 231
Yard management, 146, 230, 354
Yard movement, 231
Yard stock, 231
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