A crucial testing period is starting for SAP AG's supply-chain planning software.
Until last week, only two users had gone live with Advanced Planner and Optimizer (APO) since it was released late last year. But Eastman Chemical Co., a $4.5 billion chemical maker in Kingsport, Tenn., is now running pieces of the software to plan inventory replenishment for customers.
Two more users -- Mott's North America Inc. and a division of Litton Industries Inc. -- are aiming to turn on parts of APO this month.
Beyond Back Office
The expanded usage is expected to finally begin providing a clear picture of the stability and functional maturity of APO, which is a key cog in SAP's effort to extend its reach beyond the back-office domain of R/3.
But most users are starting small. For example, Eastman initially is working with one customer and using two of the four planning modules that make up APO.
At this early stage, APO "is looking pretty good," said Craig Niermann, Eastman's technology team leader on the project. "I'm not going to say everything is smooth as ice. But data's flowing, and so far, so good."
But he added that Eastman hasn't delved deeply into APO's production planning module or fully tested its demand forecasting component.
APO's promised functionality is impressive, "but it's just a beta product right now," said Karen Peterson, an analyst at Gartner Group Inc. in Stamford, Conn. "It's still untested."
Colgate-Palmolive Co. is the only other U.S. user live with APO now. Like Eastman, the New York-based consumer products company is migrating its vendor-managed inventory program to APO. It's also shifting all internal product distribution planning in North America to the software -- a process due to be wrapped up next week.
There have been "no major snags," said Jim Capraro, director of supply-chain systems at Colgate-Palmolive. "We keep moving forward and bringing up plants and [more customers]."
But the company hasn't started using the demand forecasting or production planning modules yet, he added.
Mott's, a maker of juice and applesauce in Stamford, Conn., had hoped to start using APO in May [News, April 5]. But it was held up by bugs and functional issues that led the company to send a team to Germany to work directly with SAP's developers, said Tom Carey, a consultant at Grant Thornton LLC in Chicago. Grant Thornton is working with Mott's and Eastman on their APO projects.
Now Mott's is testing APO in parallel with its existing inventory replenishment system as a prelude to going live, Carey said. Mott's officials declined to comment.
"The product has been stabilized," said Mike Lipton, an APO marketing official at SAP. "It's fair to say there are still people out there who are waiting and seeing, but I think we're seeing signs of progress every day."
