Is Statistical Modeling an After thought?

Companies are rushing to upgrade from the APO 4.1 and 5.0 versions to the new SAP SCM 7.0  As the purse strings are loosening up this year, companies are spending more money in ECC and application upgrades.

What are the big differences between the 4.0/5.0 vs. 7.0?  There are some marginal improvements that the tech shop may admire but anything for the planning community?!

We also hear that the planners have not been using the Statistical modeling features in APO.  Will upgrading to 7.0 persuade the planners to use the Stat Models more?  Not just more, just even barely?

IT implementation teams say that Stat models are not a priority given the budget constraints they have.  So more millions before and no stat models.  Now five years and many millions later, we have a shiny new upgrade and again the stat models are not a priority.

I have been preaching Usability for the past few years.

Put together fine tools  – But help the users in making the transition to the tool – give them better understanding – Make the new tool more usable!

Give them the reports they need.  Provide them an exception based workflow!

APO has good statistical models.  They will help you move the peanut forward but only if these models are better understood and leveraged.

We just re-launched the marketing campaign for our Usability Consulting – Model tuning and model matching to product profiles are important elements of the Usability training. 

Once implemented the Usability project will harmonize the use of models across planners from various geographies for the same business/product family.  There will be streamlined work flow.

We help you answer the following questions:

  1. Am I using a Pareto Approach in my APO planning process?
  2. How can I leverage APO DP to improve our forecast accuracy?
  3. Why does APO mostly give me flat forecasts? How do I fix this?
  4. What are Alpha, Beta, Gamma, Sigma and Theta? How do I leverage these parameters?
  5. What is the correct level to model so as to improve the overall accuracy at the SKU level?
  6. What are weighting profiles? How does it affect my final forecast?
  7. How can I control time trend using trend dampening profiles?
  8. Are there products and customers that are better left to APO’s automated modeling strategy?
  9. Which models to choose for what family of SKUs?
  10. What are custom modeling profiles?
  11. How is APO helping us simplify and improve the promotional planning process?
  12. How do I create Multiple Linear Regression Models in APO?
  13. Are we using the system defined error metrics in APO? Why are they different from the classic MAPE calculations?
  14. How do you conduct phase-in/phase-out of products?
  15. When should I not use the Croston’s Model?
  16. Why am I getting 9,000+ alerts every morning?

Perhaps the stress test of your new implementation or upgrade will be to ask the team if they can answer the above questions.

Our Model tuning and training project can be launched any time -but it is better to launch it sometime during the middle of the configuration calendar before the go-live.  This way the training to the planners can be combined with the Navigation training.

The benefits will be substantial:  improved forecasting process, workflow and significant supply chain benefits and cost savings.

What does it cost you?  Not much – perhaps one-fiftieth of what you paid for the APO DP implementation or some where in that ball park.  We finish everything in ten to twelve calendar weeks.

The detailed brochure on this Model Tuning and Training service is available for download at

Happy Forecasting!

Mark Chockalingam

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