Sap demand management pdf

If these fields are filled in the material master, however, they override the MRP group parameters. If you run the report in test mode place an X in the Simulate field , it will provide you with a log which lists all unconfirmed sales orders. You could use this list as the basis for discussions between the sales and production departments to decide how to proceed. Example from Industry Contract-based industries, such as automotive suppliers for spare parts. Procurement is based on sales orders only.

No planning for the finished product is involved. This means that you usually have to know the sales order situation in advance which is why this strategy is sometimes combined with scheduling agreements regarding replenishment lead times of the components and the production time. Alternatively, you can procure the necessary components by means of the following: For more information, see Planning at Assembly Level 70 [Page 58]. An accurate availability check is performed according to ATP logic during sales order processing.

The lot size in this procedure depends on various aspects of production, such as pallet size or production optimization. Stock left over from previous procurement can be used for any other sales order. This is particularly useful for companies that mainly produce goods for major customers, but who also require the option of selling smaller requirements from stock. Planned independent requirements are not consumed by sales and stock orders.

However the delivery 'consumes' the schedule lines or sales order items, because it updates them accordingly. If an issue is made for a particular sales order, the system reduces the sales order quantity. Stock orders are reduced when the goods are sold from stock. Other Areas Availability Check You must maintain the ATP indicator Availability check field in the material master so that you can check with replenishment lead times. An order like this can be confirmed after the replenishment lead time.

Stage 1: Demand Management This stage does not apply to this strategy. Stage 2: Procurement Before Sales This stage is also not applicable in this strategy because production does not take place without a sales order. If there are advance sales orders in the system, production is carried out before the required delivery date.

Stage 3: Sales Order 1. Here it is important that you maintain the material master so that the replenishment lead time is used in the check, because you do not always have warehouse stock. The table of planning strategy assignments [Page ] shows this. One option would be to convert the planned order into a production order, then release the production order and a goods receipt of the yield quantity. You should choose this strategy if you want production to be determined by a production plan Demand Management and if you do not want sales orders to influence production directly.

One of the most important features of this planning strategy is that it enables you to smooth the demand program. For more information see the Other Areas section below. Procurement quantities can be planned relatively effectively by means of planned independent requirements.

It is possible to use information from the sales forecast, or from the Sales Information System, or other planning tools to plan production quantities. This means that production and procurement of the required components is triggered before receipt of sales orders. Procurement is determined by planned independent requirements only. This lends itself to a smoothing of production, which means you can create a smooth production plan that cannot be affected by irregular sales orders. Sales orders can be displayed for information purposes only; they do not affect production quantities.

Goods are sold from stock in this strategy. The planned independent requirements are reduced at goods issue for the delivery. This means that you can compare the planned independent requirements situation with the actual customer requirements. Planned independent requirements that are left unreduced increase the warehouse stock of the finished product and cause procurement to be decreased or not to take place at all in the next period, due to the netting.

If you want the system to reduce future planned independent requirements when it makes withdrawals for unplanned sales orders, you must maintain the appropriate consumption period. See Consumption Strategies and Logic [Page ] for more information. Do not leave the No MRP indicator field blank. If the requirement is transferred, the consequences may be serious. In this scenario, planned independent requirements are created as follows for the production plan.

The requirements are passed on to MRP. One option is to convert the planned order into a production order, then release the production order and a goods receipt of the yield quantity. The table of planning strategy assignments [Page ] shows this mechanism.

In net requirements planning according to strategy 10, the order does not create a requirement; the sales order is displayed, but does not generate planned orders.

In the above table, you can see that the order does not reduce the Available quantity in the right-hand column which remains at pieces. The planned quantity is still pieces. The source of the requirement is the independent requirement alone. The planned independent requirement is unchanged, and no allocation is carried out.

Stage 4: Procurement After Sales This stage does not apply to this strategy. The quantities issued are displayed in the Withdrawal quantity field. The system always reduces the oldest planned independent requirements unless the consumption fields Consumption mode, Fwd consumption per. The following graphic applies to both strategies: Sales orderSales order Independent requirements Independent requirements Production Push Production Push Warehouse stock Finished product 1 2 3 1 Consumption 5 Reduction The following table describes the differences between the two strategies: Strategy 10 40 Customer requirements passed on to production No Yes This means When defining the strategy group, use the planning strategy that you use most in your sales orders as the Main planning strategy.

Maintain a material master with this new strategy group. Result You can now sell this material either way. You can change the requirements type by selecting the Procurement type tab title in the sales order menu. This strategy is particularly useful if you need to produce, regardless of whether you have stock or not. For instance, steel or cement producers might want to use this strategy because they cannot shut down production; a blast furnace or a cement factory must continue to produce, even if this means having to produce to stock.

Examples from Industry Heavy-duty industries such as steel manufacturing blast furnace and the cement industry. This planning strategy is to some extent similar to Net Requirements Planning 10 [Page 24].

However, the following differences exist: Strategy 10 11 Stock is taken into account Yes No Reduction of planned independent requirements takes place during … … goods issue for the delivery It is possible to use information from the Sales Information System, flexible planning, or other planning tools to plan production quantities.

This means that production and procurement of the required components is triggered before the sales order stage. Other Areas Availability Check You must work with an availability check that checks without checking the replenishment lead time.

In this scenario, planned independent requirements are created as shown in the following table for the production plan. The only difference is that the requirements have requirements type BSF because the strategy group has been set to See the table of planning strategy assignments [Page ].

Stage 2: Procurement Before Sales 1. The quantities received are displayed in the Withdrawal qty field. The Demand quantity as seen in the planned independent requirements, is reduced when the goods receipt is posted for the production order.

In this view the total demand is the sum of the goods movement quantity plus the Total quantity. In strategy 11, the order does not create a requirement; it is only displayed. It is possible to hide the display of the orders as described in the Other Areas section of Net Requirements Planning 10 [Page 24]. In the above table, you can see that the order does not reduce the Available quantity in the right-hand column, which remains at 90 pieces.

Stage 4: Procurement After Sales This does not apply to this strategy. Production of the finished product, however, is based on actual sales orders. This planning strategy ensures that you can react quickly to customer requirements, even if the finished product has a long overall lead time. You can avoid the main value-added process until you have a customer. This strategy is very similar to strategy 50, which uses make-to-order production.

For more information on the differences between these two strategies, see Planning Without Final Assembly 50 [Page 81]. You also must ensure that no rounding profile or rounding values are taken into account. A BOM is required for the finished product.

There are no major implications for the BOM components. Indicator to 2 on the MRP screen as a starting point for your master data setup. Production quantities can be planned relatively effectively by means of planned independent requirements for the finished product.

Only the procurement of the component is triggered before the sales order stage. Final assembly takes place after a sales order has been entered. The planned independent requirements are consumed during the sales order stage. This means that you can compare the planned independent requirements situation with the actual customer requirements situation. An availability check is performed on the basis of the planned independent requirements.

Demand from sales orders is passed on to production and triggers production after the sales order stage, even if insufficient components are planned. The sales orders, however, cannot be confirmed if there is insufficient coverage of components. Planned independent requirements of the finished goods that are left unconsumed increase the warehouse stock of the components and cause procurement to be decreased or not to take place at all in the next period.

This procedure is known as "netting. From the costing perspective, this strategy is a make-to-stock strategy, in contrast to strategy 50, which is make-to-order. This means that stock of the finished material is not linked to each customer order. This strategy does not take stock that exceeds the planned independent requirements unplanned stock due to, for example, customer Stock for finished goods should be handled through an exception process.

Other Areas Availability Check In this strategy, there is only an availability check against planned independent requirements. A material is considered to be available if a planned independent requirement can be consumed.

Selling Unplanned Stock Unplanned stock returns or unplanned production quantities such as overdeliveries is not taken into account in the availability check, and is therefore not automatically considered for sales. Sales personnel must be informed of this unplanned stock. The BOM has an item quantity of 1. Planned independent requirements are created for the production plan.

In MTO strategy, you only produce sales order, stock and products are delivered as per sales orders from a specific customer. You use Planning strategy 20 for MTO process and planning strategy 25 is used to produce product variants when there is a request for variant products from the customer. Sanjo Thomas.

Neha Gupta. Sumit Agarwal. Neha Malik. Previous Page. Make-to-stock production is implemented if you produce stock without waiting for sales orders to arrive because you want to deliver your customers immediately with materials from that stock later on. You might even want to build stock without having sales orders, if you predict that there might be customer demand in the near future.

PIR is reduced when you deliver the stock to the customer. You do not want to produce finished products until you receive a sales order from the customer. Enter single material or Reqmts plan for multiple materials for which demand needs to be created. Enter Key date before which you need to delete whole PIR data of the plant if no material is selected in the screen. There might be the case wherein material master record does not exist. For this, you need to create the material master for the material before creating PIR.

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