Microsoft
Microsoft APO implementation
Project objectives
Microsoft has identified Supply Chain
Optimisation as a strategic initiative for their global business
operations. More specifically, their objective is: To deliver a
forecasting and planning system infrastructure that supports
business processes that enable Microsoft to achieve a competitive
advantage in costs and responsiveness.
The company selected SAP APO (Advanced Planning and
Optimisation) as their global Supply Chain optimisation provider.
APO 2.0 was chosen for a combination of reasons including
functionality, integration, and strategic direction.
Microsoft selected Deloitte Consulting and SAP to assist in
the implementation of the first wave of transformation. This
focused on optimisation of business processes, replacing their
legacy planning software for Worldwide Hardware and the North
America Software businesses and integration with back-end
R/3.
Project scope
Microsoft set target implementation dates
of April 2001 for worldwide hardware and May 2001 for the North
America software businesses. This allowed just nine months to
pilot the project, set functional and technical definitions and
implement Demand Planning, Supply Network Planning and the Core
Interface Modules.
Deloitte Consultings personnel were able to efficiently
integrate with Microsoft employees at all levels across the
geographies. The 20 Microsoft employees who made up over the
majority of the core team ensured global buy-in, provided local
business process input and ensured solid capability transfer.
Approach
Demand Planning is used for forecasting and
collaboration. It allows users to generate a statistical forecast
and potentially override it before it is released to Supply
Network Planning. Product, distribution centre, and customer
define the planning hierarchy. Key functionality includes
aggregation, disaggregation, modeling, and univariate
forecasting.
Supply Network Planning utilises the optimiser to build and
plan loads. Business processes includes flexible capacity limits,
discrete optimisation, with time decomposition.
Core Interfaces include integration of APO R/3. Purchase
requisitions which are transferred in batch mode on a weekly
basis. Sales orders and purchase orders are integrated in
real-time.
The APO production system runs on 5 servers (Compaq): 1 DB
server, 2 Application Servers, 1 Optimiser Server and 1 Live
Cache Server.
The Live Cache server runs on Windows NT 4.0 Advanced Server,
all 4 other server run on Windows 2000 Advanced Server. The RDBMS
used is Microsoft SQL Server 7.0.
Business benefits
The implementation resulted in
forecasting and reporting enhancements as well as system business
process compression. It also achieved strategic capacity
management; build optimisation and optimised load planning.
The solution is providing Microsoft with a real time
understanding of their value chain metrics across the enterprise
enabling them to plan, commit, produce, and fulfil with an
increased degree of certainty.
Some of the benefits include demand collaboration,
optimisation of resources and costs, modelling capability,
component modelling, integration with R/3, archival of supply
chain performance, and increased reporting capability.
Microsoft is planning an upgrade to SAP APO 3.0 in the near
future.