This post is for those who either have the question, or are questioned on the differences between traditional ERP and advanced planning.
Supply Chain Planning vs. Advanced Planning
It’s important to draw the distinction between supply chain planning and advanced planning. Supply chain planning is covered by the modules of SAP ERP Sales and Distribution (SD), Materials Management (MM) and Production Planning (PP). These provide supply chain execution functionality along with some basic planning functionality (safety stock and MRP, basic forecasting, availability checking, and production planning among a few others) but none of these modules cover advanced planning. Advanced planning is future based and deals in different scenarios, presenting them to planners, which then pick the best alternative. In advanced planning the plan may be recreated several times before it is firmed and sent to the execution system. True advanced planning systems cannot execute recommendations; they can only make recommendations. Thus while SAP had supply chain applications for some time before APO, APO was SAP’s first venture into advanced planning.
Looking historically back as SAP’s motivation for creating SAP APO, SAP at the time was being pressured by analyst firms and Wall Street to create a separate set of applications, rather than incorporate advanced planning within SAP ERP. Planning systems work fundamentally different from transaction processing systems. At one point, SAP felt that advanced planning was overly esoteric and would only ever be desired by a small fraction of their customer base. Somewhere along the line, and in the early stages we propose it was primarily driven by market expectations (as we explain further on) they changed their view and developed their own advanced planning suite.
