Understanding the Advantages and Disadvantages of SAP DP

ByPrimary Researcher

Executive Summary

  • This article answers questions about the advantages and disadvantages of SAP DP.

Question Posed to Me on SAP DP

I was recently asked a question regarding the advantages and disadvantages of DP. I thought I would take part in the email exchange and post it here.

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Question 1

“What type of exception reporting (eg actual greater than forecast) are available in APO? How difficult is to create your own report (does this require coding or is it similar to combining fields like in access DB)? Short-term forecasting (the way you described it) is managed a lot better via retail inventory management solutions or VMI.

Does APO support:”

  1. “Easy elimination of certain data points (to exclude from forecast)?
  2. Good graphical depiction of interpolation (past data) and extrapolation (future forecast)?
  3. Causal analysis (or factor-based regression)
  4. Fair share logic (when forecasting is done at a sub-assembly level and then allocated to final SKUs using %%)
  5. Profile-based forecasting (with some factors impacting profile characteristics – e.g., slope)
  6. Calculation of statistical parameters (which helps to determine the quality of forecast)
  7. If a client outsourced all manufacturing and only drops orders to be fulfilled using APO DP for demand planning and its tool for VMI (on the customer side), does it make sense to use CTM (with VMI generating replenishment orders)?”

Answer 1

  1. The alert monitor handles exceptions. It is flexible, and access can be given to whoever the project sees fit. However, in practice, planners tend not to use the alerts set up on DP projects.
  2. DP does not support the elimination of outliers.
  3. The graphical depiction is weak. The charting in DP is nonexistent. I am a big fan of the charts in the SPP module forecasting, but that is not DP, so it does not apply. (DP and SPP development teams don’t seem to talk)
  4. DP can do some causal-based forecasting. I have never seen it used anywhere. SPP has a stronger functionality called “Leading Indicator” forecasting, which is causal, but since it’s not implemented in more than a few places, it’s not very well-tested. My take is it’s not that important because very few clients do causal forecasting.
  5. Yes, the forecast can be disaggregated this way and some other ways as well. SAP makes a big thing about this functionality. However, in fact, it is quite limited. Advanced forecasting solutions like DemandWorks Smoothie and ForecastPro have moved beyond the hierarchical forecasting aggregation used in SAP and can perform pivot forecasting, far more flexible.
  6. I am not sure what profile forecasting is. I think this is just forecast parameters (i.e., a field for the trend component and so on). If that is what you mean, then yes.
  7. DP has the best fit, but the problem is no client I have worked with can get it to work. Forecast parameters are not optimized and must be manually set.
  8. No, but I can’t entirely agree with VMI as a model, so I am not a good person to ask this question of.