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SCM Master Data - 2 Master Data for Distribution & Production Processes EGN 5623 Enterprise Systems Optimization Fall, 2012. SCM Master Data - 2 Theories & Concepts EGN 5623 Enterprise Systems Optimization Fall, 2012. Distribution Planning in SCM (review).
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THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal
Distribution planning between the manufacturing plants and warehouses is important, as companies reduce inventory by changing their logistics processes to global inventory management, from non-coordinated local inventory management.
Distribution planning is performed based on demand and stock information with the result of planned stock transfers.
The most important issues are usually the netting of the local stocks, safety stock levels, sourcing options, transportation times and lot sizes for the planned stock transfers.
If required, restrictions are considered regarding storage capacity and handling capacity for goods issue and goods receipt.Distribution and Supply Chain Planning
SAP APO supports distribution and production planning, with the following 4 applications:
Distribution planning with SNP heuristic is often used in the environments where multiple sourcing is not an issue and production is usually able to meet the demands, so that the main task for SNP heuristic is to calculate the demands for production planning based on local inventories, transportation times, safety stocks and lot sizes.
The stock transfer order has two aspects – as a demand in the source location and as a supply in the target location. The documents differ in SAP ERP and SAP APO.
The creation of the planned stock transfer, deployment and transport load building (TLB) is performed in SAP APO.
The execution part from the creation of the outbound delivery in the source location until the goods receipt in the target location is performed in SAP ERP, and the information is displayed in SAP APO.Order Cycle for Stock Transfers
Stock transfer order is first scheduled in SAP APO, then transferred to SAP ERP and scheduled again in SAP ERP according to the delivery date. The scheduled dates in SAP ERP are not transferred back to SAP APO.
Stock transfers are executed according to the order dates in SAP ERP, therefore it is important to keep the scheduling in SAP APO and SAP ERP consistent.
The transport duration in SAP APO is calculated using the entry from the transportation lane, whereas SAP ERP uses the planned delivery time of the material master of the target location.Stock Transfer Order
Since SAP APO does not know any company codes, there is no difference in SAP APO whether stock transfers are planned within one company code or across company codes.
On SAP ERP side, cross-company stock transfers require the additional settings. The assignment of the sales area and the customer to the plant is made with maintenance view V_001W_IV.Setting for Stock Transfer within and across Company Codes in SAP ERP
Stock transfer across two SAP ERP systems is modelled by a purchase order in the target plant and a sales order in the source plant.Setting for Stock Transfer Across Systems
The idea of SNP is to perform an aggregated planning. Since SNP is an application for bucket-oriented planning, the resources for SNP offer a certain capacity per time bucket – usually per day. The bucket resources provide the capacity – e.g. the amount of working hours per day – of the resource which is used for the capacity consumption of the orders.
For the scheduling of the production orders, the factory calendar is assigned to the resources. The standard capacity is defined in the resource master.
Figure 13.13 shows these setting for the bucket resource. Another way to define the capacity is the use of a reference resource to save time.Resources for SNP
In PP/DS, scheduling and capacity consumption are not separate steps, but the capacity is consumed by the scheduled operation.
The basic resource property in PP/DS is the working time, which depends on the standard working hours, the break time, and factory calendar.
Usually the available working time is modelled per shift, and the shifts are assigned to a shift sequence to model circumstances.Resources for PP/DS
The Production Process Model (PPM) defines the detailed information required for manufacturing a product. The PPM combines routing and the bill of materials (BOM) into one master data object. Each PPM includes one or more operations. Each operation, in turn, includes one or more activities, for which materials, relationships and resources are maintained. The activities and resources defined in the PPM are assigned to costs that are used by the SNP Optimizer and for finite scheduling by Production Planning and Detailed Scheduling (PP/DS).Production Master Data Overview
Supply Network Planning (SNP) is a long term, rough cut planning tool. SNP requires a PPM with less information than the one used for production planning and detailed scheduling (PP/DS).
During a planning run, SNP can schedule resources down to the day. In order to perform scheduling at the day level, the PPMs and resources must be simplified. Additionally, when using optimization technologies, it is important to limit the number of inputs (materials) to find a proper solution in a reasonable runtime.
SAP SCM allows you to generate SNP production process models (PPMs) based on existing PP/DS PPMs. Restriction to a specific lot size is required to determine the exact production consumption or mode duration.Production Master Data Overview
SAP initially developed the Production Process Model (PPM) to model manufacturing master data. It was replaced in SCM 4.1 by PDS. However PPMs are still supported.
In some industries modeling the production and evolution of a certain product can be very complicated. When a product has many variations due to customers choosing a combination of features and options they typically used the variant configuration solution in standard SAP ERP.Production Master Data Overview
The main motivation to develop the PDS was to have an integration of the Engineering Change Management (ECM) and the Variant Configuration between SAP ERP and APO.
From SCM 4.1 on, the Production Data Structure (PDS) is the key master data for all kinds of production planning related processes. The PDS is supported by the applications of PP/DS, SNP, CTM and DP.
Like the PPM, the PDS corresponds to the production version on SAP ERP system. Though both PPM and PDS are still available as alternatives, there is no further development for the PPM since SCM 4.0.Production Master Data Overview
If a supply chain contains alternative production plans (possibilities), the process becomes more complex. It often requires an integrated distribution and production planning.
The complexity of production planning increases with the number of BOM-levels, number of operations, and finite resources, the use of fixed, or minimized lot sizes and sequence dependent set-up.
The result of production planning are planned orders which contain the information about the dependent demand and the capacity requirement in SAP APO.
SAP APO offers different applications for production planning and detailed scheduling. Production planning is supported by the SNP and PP/DS modules with two different levels of details.
- rough-cut and bucket-oriented planning (SNP), and
- time-continuous planning (PP/DS).
Detailed scheduling with the purpose of creating a sequence for order execution is only supported by PP/DS since SNP is limited to bucket-oriented planning and there is no sequence within a bucket.Production Planning Applications
Based on the applications there are several options for creating a feasible plan in SAP APO. Each has its advantages and disadvantages.
3. Production planning for medium-term and short-term horizon with higher level of detail in PP/DS using PP heuristics or TM and detailed scheduling with DS heuristic or PP/DS optimiser.
4. Demand planning in SAP ERP – especially when there is already a sufficient solution using SOP or long-term planning. Production planning is performed with PP heuristics, scheduling with DS heuristics or PP/DS optimiser.
5. Demand planning and production in SAP ERP – SAP APO is used only for scheduling.Production Planning Applications
6. Only medium-term production planning on rough-cut level is performed in SAP APO – either by SNP heuristic, SNP optimiser or CTM. The benefit is having a capacity check and purchase requisitions for components with long lead time. Planned orders are transferred to SAP ERP, where production planning and scheduling on detailed level are for the short-term horizon.
Lot sizes have a significant impact on the production planning result and challenges for scheduling. The fixed, minimum and periodical lot sizes in material master data increase the complexity of the planning problem.Lot Size
Though CTM supports minimum and fixed lot sizes, but CTM performs a finite planning and does not split orders across buckets which might lead to a very low utilisation.Lot Size
SCMMaster Data - 2 Master Data for Distribution & Production Processes SAP Implementation EGN 5623 Enterprise Systems OptimizationFall, 2012
The outbound delivery for the stock transfer order is created with transaction VL10B in SAP ERP, picking and posting of goods issue is done with the transaction VL02N in the delivery.
Using the message type LAVA, the inbound delivery in source location can be triggered with posting of the goods issue (or manually with the transaction VL31N).
For the use of deliveries it is necessary that a vendor is assigned to the source location and that an info record exists in SAP ERP.
The inbound delivery is transferred to SAP APO as a purchase order memo of the stock transit.Order Cycle for Stock Transfers