Business Insights into Forecasting with SAP-APO DP
18 November 2013
18 November 2013
The Lancaster Centre for Forecasting organised another successful workshop on "Forecasting with SAP® APO DP" held 30 October 2013 at the Work Foundation in London, and free to attend for all practitioners and academics in forecasting and demand planning.
The seminar was formally opened by Dr Sven F Crone, Director of the Centre for Marketing Analytics and Forecasting. In his talk “Forecasting with SAP® APO DP - The State of the Art?” he presented results of a survey investigating the use of APO DP for forecasting in over 200 companies. The results indicate that SAP based forecasting in Enterprise Resource Planning (ERP) and Advanced Planning systems (APS) dominate the market with 38% of responses, with 11% using specialised Forecasting Support Systems (FSS) such as SAS, JDA, or ForecastX, and 17% still using only Excel. However, the survey also showed that 32% of all SAP APO DP implementations have implemented an additional FSS to support forecasting, indicating shortcomings of SAP’s standard forecasting capabilities. This is in accordance with the use of methods: 78% of those using only APO DP use simple time series methods (45% Exponential Smoothing, 22% Averages, and 11% Naïve), providing evidence that the use of APO drives use of simpler methods than other software packages.
The presentation concluded by reviewing the extent to which APO DP had implemented or ignored forecasting best practices, and identified major areas for improvement, e.g. ABC-XYZ analysis by forecast error, visualisations for data exploration, enhancing automatic forecasting model selection, support of judgmental adjustments and S&OP process flows. However, with new SAP forecasting solutions becoming available on HANA, and through careful setup and customisation of APO, critical gains in functionality and productivity of APO DP can be achieved within organisations, but only at significant additional costs. As such, the option of using APO DP plus an external FSS remains potentially cost efficient for now.
Next, the workshop hosted two industry presentations on the use of SAP APO. First, Demand Manager Adrian Bentley described enhancements made to SAP APO DP at McBride, a leading provider of household and personal care products in Europe. Based on a complex business environment, he highlighted the key challenges in enhancing the APO DP system to support the process. One such challenge was the automation of the sales correction history. With more than 1500 promotions a month the manual removal of promotional uplifts from sales history was both subjective and work intensive.
During his presentation, Adrian explained the process of planning such promotions into the future, and then automatically removing them from the sales history using macros. Another challenge not addressed by the standard functionality of SAP APO was the maintenance of like profiles in the presence of from frequent launches, relaunches and discontinuations of over 1500 products. In order to make this process more scalable, and to improve the quality of forecast adjustments, an improved in-house product lifecycle tool was developed within APO DP to manage lifecycle event dates and information across departments with split ownership of forecasts, significantly reducing the complexity of the task. The enhancements have already led to more effective forecasts while requiring less input. Future steps for McBride include the evaluation of statistical forecasting methods, within APO or in FSS.
Antoine Barbier and Pavel Bogdashov of Sanofi UK, a global provider of healthcare and pharmaceutical products, jointly presented a roadmap of Sanofi’s transition towards improving their forecasting processes and systems to achieve better forecasting accuracy. Their presentation highlighted the main APO DP software setup, and the use of an external tool “Intelligent Forecaster” to support their use of APO DP with external quarterly ABC/XYZ analysis, and robust forecasting model selection using few profiles outside of APO DP. These tools together with the processes developed following best practices of the Forecasting Centre, are presently at the heart of the company’s forecasting practices. They also identified forecasting training of the supply planning team as crucial to developing the skills of effective forecasting.
The workshop concluded with a panel discussion chaired by Prof. Robert Fildes, in which the four speakers and Uwe Decker of SAP responded to various questions form the audience. The discussion included the relative merit of training, means to enhancing APO through customising and external tools, steps to consider before and during going live with SAP APO DP, and an outlook unto future developments in forecasting functionality by SAP.
In total, 54 participants from a wide variety of industries (such as Consumer Packaged Goods, Food and Beverage, Telecommunications, Electronics, Pharmaceutical, Government, Consulting etc.) attended the workshop. Companies represented at the workshop included AB InBev, Beyond Analysis, Brakes foodservice, Cardiff University, CSM, Estee Lauder, Freudenberg Household Products, GE Healthcare, GSK, Janssen, KAO, Kimberly-Clark, Lindt and Sprungli, McBride, Openreach, PJN Business Solutions, Primrose Consulting, R. Twining & Co. Ltd, SC Johnson, Sanofi, SAP, Satori Partners Ltd, Shell, Supply Chain Solutions, Tata Consultancy Services, United Biscuits, University of Southampton, and Lancaster Centre for Forecasting.
Feedback on the workshop has been very positive, with more than 85% stating that the topics were interesting and suitable, that the presenters were knowledgeable, and 100% looking to return to attend future free workshops by the Centre. Sign up here to receive future invitations.
94% stated that the content was relevant to their jobs
98% believed that the presenters were knowledgeable about the topic
96% believed that the material was well presented
100% stated that the workshop was well organised
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“The seminar was well balanced and allowed ease of understanding for a wide spectrum of stakeholders. Discussing the subject matter with a backdrop to real business case scenarios provided a real and useful insight into future possibilities.” SAP Functional Specialist, International Tea Supply Chain at R.Twining and Company Limited
“The Workshop on Forecasting with SAP APO DP was very worthwhile. Excellent presentations with real challenges and issues.” Anonymous
“Few academics can make forecasting interesting. Dr. Sven Crone can.” Demand Planning Coordinator, AB InBev
“Lancaster Centre for Forecasting conferences provide an ideal environment to share knowledge with peers, as well as being part of an ever evolving Demand Planning Community. Thank you!” Demand Planner, Kao UK Ltd
“The seminar for Forecasting with SAP APO DP was excellent with the right combination of business reality and theoretical discussion. All presentations were excellently delivered and the panel discussion was lively and interesting. I really enjoyed such a value added use of my time, would love to attend another session, and whole heartedly recommend to others.” Senior Manager, Tata Consultancy Services)
Sven F. Crone (Lancaster Centre for Forecasting) - Forecasting with SAP®APO DP – the state of the art?
Adrian Bentley (McBride) - Enhancing SAP® APO DP to forecast for private label consumer goods
Antoine Barbier and Pavel Bogdashov (Sanofi UK) - SAP® APO DP: tools and processes that hold it together at Sanofi