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1. Introduction
This document describes the meaning of the key figures relevant to the SCM
planning operator of S&OP on HANA. By the superordinate term SCM planning
operator we refer to SCM planning algorithms in S&OP, i.e. SCM heuristics and the
optimizer which are used to compute a supply plan.) In general, there are several
input key figures which contain input data for the SCM planning algorithms. Input key
figures are not updated or modified by the SCM planning algorithms. In addition,
there are several output key figures containing the result of these algorithms, i.e. the
supply plan and dependent demands computed by the algorithm.
As mentioned above, S&OP on HANA offers several SCM planning algorithms. Not
each of them reads all input key figures and not each updates each output key figure.
All cost and revenue related key figures are read by the optimizer but not by the
heuristics, for example. So, the usage of the key figures depends on the algorithm.
For only a few key figures it is possible to describe by a mathematical formula how to
compute them. This is possible, for instance, for the key figure Projected Stock. Most
key figures, however, are not computed by a simple formula rather than by a complex
algorithm. The key figure Supply, for instance, is at least when running a finite
planning algorithm the output of a very complex mathematical procedure, which
has to take into account entire supply chain networks. For that reason we will give in
most cases a description only, accompanied by an example picture in order to
explain the meaning of the key figures of the S&OP on HANA planning algorithms.
2. Customer Demands
Related to customer demands (also called consensus demands) there are two key
figures: Customer Demand and Total Customer Receipts. The key or planning level
of both is customer and product.
2.1 Customer Demand
Technical name: CONSENSUSDEMAND, key: Customer, Product.
Page 1
Customer Demand is an input key figure for supply planning. This key figure is not
changed by the planning algorithms. This key figure defines the requested or
forecasted demand of a customer for a certain product for each period of the
planning horizon.
2.2 Total Customer Receipts
Technical name: TOTALCONSTRAINEDDEMAND, key: Customer, Product.
This output key figures contains per period the computed supply for this customerproduct combination. Sometimes this key figure is also called Constrained Demand
because it reflects that demand that can actually be supplied by the network.
Figure 1 depicts a customer demand of customer C1 for product P1, along a horizon
of two periods. For the first period the customer requests 80 units, however, the
planning algorithm computed that the requested demand cannot be satisfied (for
some reason); the supply is 72 units only.
Lets note here that for different planning algorithms the output will in general be
different, so figure 1 is just an example to illustrate the point that the two numbers
can be different. This is even true for infinite heuristics as there can be adjusted key
figures or other constraints even if resources capacity is considered infinite and not
constraining the solution.
Customer C1 / Product P1
Customer Demand:
80 | 100
Tot. Custom. Receipts: 72 | 50
Page 2
Page 3
Plant A
Dep. Demand:
Supply:
100 | 200
90 | 100
Customer C2 / Product P1
Customer Demand:
20 | 100
Tot. Custom. Receipts: 18 | 50
Page 4
Page 5
Period
Stock on-hand
10
10
10
10
13
18
15
10
15
10
10
10
-8
18
Inventory Target
Dependent Demand
Net Demand
Receipts
Supply
Projected Stock
Deficit
Shortage
For the same reasons as mentioned in section 3.1 the key figure Dependent Demand
is computed only by an S&OP heuristic, but not by the optimizer. For that reason this
key figure is just set equal to key figure Supply after the optimizer computed a supply
plan.
4.5 Receipts
Technical name: TOTALRECEIPT, key: Product, Location
Page 6
This is an output key figure which equals (for each period) the sum of all receipts everything that is received (coming in) at a location for a product. The various
receipts types are:
- Production receipts, defining the amount received via a production sourcing rule
(source type P),
- Transport receipts, defining the amount received via a transport sourcing rule
(source type T) and
- External receipts which is the quantity that is received via an unspecified
sourcing rule (source type U)
This document will explain these receipts types in detail in a subsequent section.
4.6 Supply
Technical name: SUPPLY, key: Product, Location
This is an output key figure which is the sum of all supplies - everything that leaves a
location. These are quantities that are transported (in downstream direction) to
another location or transported to a customer or are consumed in a production
process.
If figure 2 plant A supplies 90 units to the two customers who have requested product
P1 in both periods.
4.7 Inventory
4.7.1 Projected Stock
Technical name: PROJECTEDINVENTORY, key: Product, Location
This output key figure contains the quantity in inventory, or in other words, the
planned stock on-hand for a location product at the end of each period. The formula
used to compute Projected Stock PS(t) in period t is:
PS(1) = Stock on-hand + Receipts(1) Supply(1)
where period 1 is assumed to be the planning period corresponding to the current
time.
PS(t) = MAX
for t = 2, 3, , T.
The term Max { PS(t-1); 0 } means that if the Projected Stock in period (t-1) is
negative the SCM Planning Operator assumes an inventory at the end of period (t-1)
of zero in order to compute the Net Demand in period t.
Note: the values of Projected Stock can be negative - after an heuristic run only. The
optimizer will never compute a supply plan leading to negative Projected Stocks.
Page 7
A user can enter positive or negative values into key figure Inventory Correction.
These values are added to the Projected Stock as explained by the formulas
above.
For the S&OP heuristic a non-initial value in key figure Inventory Correction,
however, does not merely impact the computation of the Projected Stock.
Additionally, it has an impact on the computation of the Net Demand ND(t) of that
period t for which an Inventory Correction is defined. We explain this effect along the
two following figures. In Figure 3a we see the initial plan, i.e. a supply plan for four
periods, consisting of one Consensus Demand and one location product (at DC1) for
product P. The S&OP heuristic has computed the supplies and receipts so that the
Consensus Demands and the Inventory Targets are met exactly.
Page 9
DCD:
20 | 20 | 20 | 20
CD:
20 | 20 | 20 | 20
D: Dependent Demand
I: Projected Stock
IC: Inventory Correction
D:
I:
IC:
IT:
N:
S:
R:
20
15
00
15
35
20
35
20
10
00
10
15
20
15
20
05
00
05
15
20
15
20
00
00
00
15
20
15
R: Receipts
Now, we assume that a user has entered the red colored (see Figure 3b) Inventory
Corrections in periods 1, 3 and 4. After calling the heuristic the supply plan as shown
in Figure 3b will be displayed. Values in red indicate a user entry (before the heuristic
was called), green colored values have changed in comparison to the initial plan of
Figure 3a.
The Inventory Correction of -10 in period 1 implies that beside of the Supply of 20
units additional 10 units will leave the inventory in period 1 so that the Projected
Stock would be decreased from 15 (Figure 3a) to 5. However, the heuristic tries to
satisfy this additional demand of 10 units and therefore it increases the Net Demand
in the same period (from 35 in Figure 3a up to 45 units in Figure 3b) and as the
heuristic is able to satisfy this additional demand (Receipts equal the Net Demand of
45!) the resulting Projected Inventory remains unchanged at 15 (which equals the
intended Inventory Target). This means that a negative Inventory Correction does not
primarily impact the Projected Stock but the Net Demand of the same period.
Negative Inventory Corrections have to be considered as additional supplies which
are supposed to leave the corresponding location product which is the reason why
the heuristic tries to balance them out by increasing the Net Demand.
Page 10
DCD:
20 | 20 | 20 | 20
CD:
20 | 20 | 20 | 20
D: Dependent Demand
I: Projected Stock
IC: Inventory Correction
D: 20
I: 15
IC: -10
IT: 15
N: 45
S: 20
R: 45
20
10
00
10
15
20
15
20
05
10
05
05
20
05
20
05
20
00
00
20
00
R: Receipts
In period 3 the user has entered a positive Inventory Correction of 10 units which the
system interprets as an additional receipt. Consequently, the S&OP heuristic
decreases the Net Demand accordingly as shown in Figure 3b and as
consequence to a lower Net Demand it computes a lower Receipt (of only 5 units).
The heuristic computes the Net Demand (ND) as follows:
ND(t) = MAX
Note: There exist cases in which the computation of the Net Demand is not
performed according to the above formulas. Up to S&OP 3.0 (June 2014) this is the
case for Production Cycles and Co-Products.
Page 11
The important thing related to Inventory Corrections is that they impact the Net
Demand in the same period they are defined and by impacting the Net Demand they
might impact the Projected Stock. As the heuristic usually can fulfill all demands (with
some exceptions) it usually can equalize the impact of negative Inventory Corrections
so that the Projected Stock remains unchanged. Positive Inventory Corrections, in
contrast, might lead to higher Projected Stocks, as in the example of Figure 3b in
period 4.
4.8 Deficit
Technical name: DEFICIT, key: Product, Location
Output key figure Deficit is the non-cumulative difference between the Net Demand
and Receipts for a location product for each period. It is computed according to this
formula:
Deficit(t) = Max { (Net Demand(t) Receipts(t)
);0}
for t = 1, , T.
Note: As explained in section 4.4 the optimizer does not compute key figure Net
Demand explicitly. Instead, the system copies all values of key figure Receipts into
key figure Net Demand so that key figure Deficit is always equal to zero after a plan
was computed by the optimizer.
4.9 Shortage
Technical name: SHORTAGE, key: Product, Location
Output key figure Shortage stores the non-cumulative difference between Dependent
Demand and Supply for a location product. It is computed according to this formula:
Shortage(t) = Max { (Dependent Demand(t) Supply(t) ) ; 0 } for t = 1, , T.
Note: Shortage is greater or equal to zero. (No negative values.)
Note: As explained in section 4.3 the optimizer does not compute key figure
Dependent Demand which is therefore set equal to key figure Supply after an
optimization run. Consequently, key figure Shortage is always equal to zero after the
current supply plan was computed by the optimizer.
Note: When using the S&OP heuristic Infinite without Shortages the key figure
Shortage also will be zero in all buckets. The reason is that the strategy of this
heuristic is to supply always the requested Dependent Demand which can result in a
negative Projected Stock.
Distrib. Center 1 /
Product P
Dep. Dem.:
Proj. Stock: 4
Net Demand:
Receipts:
Supply:
10
0
6
5
9
3
0
3
2
2
10
0
10
7
7
20
0
20
15
15
Plant B / Prod. P
Dep. Dem.:
Proj. Stock: 5
Net Demand:
Receipts:
Supply:
3
2
0
0
3
5.2 Transport
5.2.1 Transport Receipts
Technical name: TRANSPORT, key: Product, Location, Ship-from location
Page 14
10
0
8
6
8
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Prod. Receipts:
Supply:
3
0
3
3
3
10
0
10
10
10
3
0
3
3
3
10
0
10
10
10
Plant A / Prod. P /
SourceID S1
Prod.
Receipts: 3 10
Plant A / Component Y
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
9
0
9
9
9
30
0
30
30
30
Note: As for the reasons explained in section 3.1 the optimizer does not compute
Outbound Production Demand. Therefore, key figure Component Usage is copied
into Outbound Production Demand after the optimizer has computed a plan.
Figure 5 shows the Component Usage as an arc-related key figure. Note, the
quantities of this key figure are multiplied by the Component Coefficients. So, for
component Y the Component Usage is 9 units in period 1 which is needed to
produce 3 units of the output product P.
Plant A / Component Y
DC 1 / Component Y
Dep. Dem.:
Proj. Stock:
Net Demand:
Receipts:
Supply:
20
0
20
20
20
20
0
20
20
20
Plant A / Product P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Prod. Receipts:
Supply:
2
0
2
2
2
4
0
4
4
4
20 | 20
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
Plant A / Prod. P /
SourceID S1
Prod.
Receipts: 2 4
32
-2
32
30
32
34
-4
34
30
34
This output key figure is node-related. It models the receipts of a component which is
supplied for the corresponding production process. In figure 5 the Production
Receipts of product P at Plant A are 3 and 10 units in the first two periods. We come
back to this key figure in section 6.
Page 18
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
8
0
8
8
8
10
0
10
10
10
Transport Receipts
8 | 10
Resource R / Product P
Cap. Demand:
Cap. Usage:
40 50
40 50
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
3
0
3
3
3
10
0
10
10
10
Plant A / Prod. P /
SourceID S1
Prod.
Receipts: 3 10
15 50
Figure 6c illustrates a situation in which only a portion of 50% of the Net Demand of
the location-product Plant A, Product P is sourced via a P-rule to a Production
Source S1, while the remaining 50% are sourced via a T-rule. The Net Demand of 4
pieces is split according to this quota so that 2 units are to be produced and 2 are to
be satisfied by a stock transfer from another location. At the location-product
handling resource R1 is defined, on the level of the Production Source we have a
production resource R2. To compute the Capacity Demand of handling resource R1
the entire Net Demand of 4 units is taken into account and multiplied by the Capacity
Consumption Rate of 2 resulting in a Capacity Demand of 8 and 20 in the two
periods. In contrast to this, for computing the Capacity Demand of the production
resource R2 we consider only that portion of the Net Demand sourced to the
Production Source S1, which are 2 units. So in period 1 the 2 units as a Net
Demand of Production are multiplied by the Capacity Consumption Rate of
Production which is 1 resulting in a Capacity Demand of Production for resource R2
and product P for Production Source S1 of 2 [capacity units].
Page 20
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
4
0
4
4
4
10
0
10
10
10
Resource R2 / Prod. P /
SourceID S1
Cap. Demand
of Production: 2 5
Cap. Usage
of Production: 2 5
8 20
8 20
The Capacity Usage of Production Resource can easily be computed by this formula
(for production resources):
Capacity Usage(t) = Production Receipts(t) *
Capacity Consumption Rate of Production Resource(t)
Page 22
External Receipts
Plant A / Component X
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Ext. Receipts:
Receipts:
Supply:
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Prod. Receipts:
Supply:
3
0
3
3
3
3
0
3
3
3
3
10
0
10
10
10
10
10
0
10
10
10
Plant A / Component Y
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Ext. Receipts:
Receipts:
Supply:
9
0
9
9
9
9
30
0
30
30
30
30
Consequently, the optimizer also will not compute key figures for location-products
belonging to isolated sub-networks.
Page 24
Distrib. Center 1 /
Product P
Dep. Dem.:
Proj. Stock: 4
Net Demand:
Ext. Receipts
Receipts:
Supply:
10
0
6
3
5
9
3
0
3
2
2
10
0
10
7
7
20
0
20
10
17
17
A finite algorithm might not be able to supply the whole Outbound Location Demand
sourced to Plant A, the U-rule however always will supply the complete Net Demand
sourced to this rule as indicated by the numbers in figure 8.
As mentioned in section 5.3 Production Source Nodes are used in the diagrams to
illustrate multiple Production Sources. Figure 9 depicts a model with two alternative
Production Sources S1 and S2. In the example of figure 9 the Net Demand of
product P at Plant A is satisfied by two alternative Production Sources S1 and S2
(with a quota of 50% for each). Consequently, the Net Demand of 6 pieces in period
1 is split into 3 pieces for S1 and S2. From the Production Source Node the demand
is propagated to the components and the Component Usage (number of receiving
components) is receipted at the Production Source Node level (documented in key
figure Production Receipts).
Page 25
Plant A / Component Y
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
6
0
6
6
6
Dep. Dem.:
3 10
Proj. Stock: 0 0 0
Net Demand:
3 10
Receipts:
3 10
Supply:
3 10
20
0
20
20
20
Plant A / Prod. P /
SourceID S2
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
9
0
9
9
9
30
0
30
30
30
Prod.
Receipts: 3 10
Plant A / Component Z
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
6
0
6
6
6
20
0
20
20
20
Page 26
Plant A / Prod. P /
SourceID S1
Prod.
Receipts: 5 10
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Ext. Receipts:
Receipts:
Supply:
10
0
10
2
10
10
DC 1 / Prod. P
20
0 30% Outb. Loc. Demand 3 | 6
20
4
Transport Receipts 3 | 6
20
20
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
3
0
3
3
3
6
0
6
6
6
Page 27
Quota for both given Production Sources is 50% meaning that the Net Demand of
product P1 at Plant A is propagated to 50% to each of the two Production Sources
S1 and S2.
Location sources can be combined with production sources und unspecified sources.
The sum of the quotas for each location-product and time period has to be 1 if there
are no unspecified sources and less than or equal to 1 if there is an unspecified
source.
In figure 10, the Net Demand of product A at Plant A is sourced to 50% to the
Production Source S1 as the corresponding Production Source Quota is equal to
50%. 30% of this Net Demand is sourced via a transport because the corresponding
Location Sourcing Quota is set to 30%. The remaining 20% are automatically
sourced via the U-rule as an External Receipt.
Note, these quotas are respected by the S&OP heuristics but not by the optimizer.
The optimizer itself computes cost- and / or profit optimal distributions of supply
between own locations - independently of the Production Sourcing Quotas.
are not intended to store real costs. If for an example, there are no real costs related
to production setup, in an implementation one still might decide to set a non-zero
Fixed Production Costs to prevent the optimizer to plan too small production lot sizes
in too many separate periods. This could be helpful if spread out production should
be avoided due to technical, organizational or business reasons. Conversely if the
Fixed Production Costs are zero in all periods and the Inventory Holding Cost Rates
are greater than zero, the optimizer will probably follow a lot-for-lot-strategy, so that
in all periods the demand of the period is produced but nothing put on stock.
Obviously, the purpose of such artificial costs is to push the optimizer towards a
certain planning pattern.
Beside of cost key figures there exist other key figures, storing quantities in most
cases, which are relevant for only the optimizer and not the heuristic.
Page 31
This key figure contains the costs per quantity unit of product and per period that the
Projected Stock is below the safety stock. These costs are typically not directly
related to real costs but they are entered as penalty costs.
Example: Assume the following situation for a given location-product:
Period
Inventory Target
Projected Inventory
12
The Inventory Target Violation Cost Rate is two EURO in all periods. The total
penalty costs (computed as part of the objective function) for not reaching the Target
Inventory is computed for all 4 periods as follows:
0 * 2 + 0 * 2 + (6 5) * 2 + (6 0) * 2 = 14 EURO.
Page 33
Page 34
The purpose of this key figure is to define a constraint for the optimizer, which is the
maximum inventory level for a location product. The optimizer respects this constraint
by limiting the production, the purchase or the transport of this location-product so
that the Projected Inventory remains at or under below the value stored in key figure
in each period.
The Maximum Inventory is modelled as a soft constraint for the optimizer, i.e.
violations (quantities above the given limit) causing penalty costs in the optimizers
objective function. The corresponding penalty costs are to be defined via the
following key figure Maximum Inventory Violation Cost Rate:
8.15.2 Maximum Inventory Violation Cost Rate
Technical name: MAXINVENTORYVIOLATIONCOSTRATE, key: Product, Location
This key figure contains the costs per quantity unit of product and per period that the
Projected Stock is above the Maximum Inventory which is defined in the master data.
These costs are typically not directly related to real costs but they are entered as
penalty costs. These costs should be significantly higher as the normal cost rates (for
instance such as the values in Inventory Holding Cost Rate) to ensure that the
Maximum Inventory constraint usually will be respected and will be violated only in
exceptional cases, for example, if a user entry in key figures Adjusted Transport or
Minimum Transport forces the system to increase the Projected Stock beyond the
Maximum Inventory level.
8.15.3 Maximum Customer Receipts
Technical name: MAXCONSTRAINEDDEMAND, key: Customer, Product, Location
This key figure limits the output key figure Customer Receipts, i.e. the supply of a
Consensus Demand.
8.15.4 Maximum Customer Supply
Technical name: MAXCONSTRAINEDDEMANDDS, key: Customer, Product,
Location
This key figure is the corresponding Downstream Key Figure (see chapter 9. of this
document) to key figure Maximum Customer Receipts. It limits the quantities
computed by the optimizer for key figure Customer Supply.
8.15.5 Maximum Transport Receipts
Technical name: MAXTRANSPORT key: Product, Location, Ship-from location
This key figure limits the output key figure Transport Receipts.
8.15.6 Maximum Transport Supply
Technical name: MAXTRANSPORTDS, key: Product, Location, Ship-to location
Page 35
This key figure is the corresponding Downstream Key Figure (see chapter 9. of this
document) to key figure Maximum Transport Receipts.
8.15.7 Maximum Production Receipts
Technical name: MAXPRODUCTION, key: Product, Location, SourceID
This key figure limits the output key figure Production Receipts.
8.15.8 Maximum External Receipts
Technical name: MAXRECEIPT, key: Product, Location
This key figure limits the output key figure External Receipts.
Page 36
Period 1
Period 2
Customer Demand
10
10
11
Total Delivered
Page 37
Lead Time: 1
DC1/P1
DC0/P1
D: 12 13 14
I: -12 0 0
N: 12 13 14
R: _ 13 14
S: 12 13 14
OLD: 11 | 12 | 13 | 14
TR: _ | 12 | 13 | 14
DC2 / P1
OLD: 12 | 13 | 14 | _
_
0
0
_
_
D: 13 14 _ _
S: 13 14 _ _
TR: _ | 13 | 14 | _
Key Figure
ProdId LocId
LocFrom
P1
DC1
DC2
P1
DC1
DC2
Receipts (R)
P1
DC1
Supply (S)
P1
DC1
12
13
14
13
14
13
14
13
14
12
how much will leave from DC1 by comparing key figures Transport Receipts with
Transport Supply (in the table of figure 12). In addition, these two arc-related key
figures can be compared with key figures Receipts and Supply which belong to the
location-product and which do have the same lead time shift.
Lead Time: 1
DC1/P1
DC0/P1
D: 11 12 13 14 OLD: 11 | 12 | 13 | 14
I: -11 0 0 0
DLD: 12 | 13 | 14 | _
N: 11 12 13 14
R: _ 12 13 14
TS: 12 | 13 | 14 | _
S: 11 12 13 14
TR: _ | 12 | 13 | 14
D: 12 13 14
I: -12 0 0
N: 12 13 14
R: _ 13 14
S: 12 13 14
DC2 / P1
_
0
0
_
_
OLD: 12 | 13 | 14 | _
D: 13 14 _ _
DLD DS: 13 | 14 | _ | _
TS: 13 | 14 | _ | _
S: 13 14 _ _
TR: _ | 13 | 14 | _
P1
P1
P1
P1
DC1
Receipts (R)
P1
DC1
Supply (S)
P1
DC1
DC0
DC1
DC1
DC0
LocFrom
DC2
DC1
12
13
14
12
13
14
12
13
14
13
14
13
14
13
14
DC2
12
Analogously, the planner can compare the inbound and outbound dependent
demands by comparing the Outbound Location Demand with the related Dependent
Location Demand. The inbound Dependent Location Demand is lead time shifted in
order to be comparable with the Outbound Location Demand and with node-related
key figure Dependent Demand.
These additional key figures are called Downstream Key Figures as they belong
logically to the downstream (left) side of a location-product. Their technical names
always end with the suffix DS (which is a shortcut for DownStream). All Downstream
Key Figures are input key figures to the SCM Operator.
Page 39
The following sections describe briefly all available Downstream Key Figures (except
for the Adjusted Downstream Key Figures which are listed in subsequent section
Adjusted Key Figures).
Plant A / P1
Dep. Demand:
Supply:
100 | 200
90 | 100
Customer C2 / Product P1
Customer Demand:
20 | 100
Tot. Custom. Receipts: 18 | 50
As shown in figure 13, Dependent Customer Demand is the Downstream Key Figure
corresponding to the Upstream Key Figure Outbound Customer Demand
Note, figure 13 depicts the same example as figure 2, however figure 2 contains only
the Upstream Key Figures.
Page 40
Distrib. Center 1 /
Product P
Dep. Dem.:
Proj. Stock: 4
Net Demand:
Receipts:
Supply:
10
0
6
5
9
3
0
3
2
2
10
0
10
7
7
20
0
20
15
15
Plant B / Prod. P
Dep. Dem.:
Proj. Stock: 5
Net Demand:
Receipts:
Supply:
3
2
0
0
3
10
0
8
6
8
For a more detailed example with Dependent Location Demand see figure 12.
Page 41
3
0
3
3
3
10
0
10
10
10
Plant A / Prod. P
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Prod. Receipts:
Supply:
3
0
3
3
3
10
0
10
10
10
Prod.
Receipts:
Plant A / Component Y
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
2013 SAP AG. All rights reserved.
Page 42
9
0
9
9
9
30
0
30
30
30
Adjusted key figures are provided for the following key figures:
- Dependent Demand:
- Outbound Customer Demand:
- Dependent Customer Demand:
- Customer Receipts:
- Customer Supply:
- Production Receipts:
- External Receipts:
- Transport Receipts:
- Transport Supply:
Adjusted Demand
Adjusted Outbound Customer Demand
Adjusted Dependent Customer Demand
Adjusted Customer Receipts
Adjusted Customer Supply
Adjusted Production Receipts
Adjusted External Receipts
Adjusted Transport Receipts
Adjusted Transport Supply
Adjusted Key Figures are not available for all output key figure. As it does not make
any sense to overwrite, for instance the output key figure Projected Stock, S&OP on
HANA does not offer an Adjusted Key Figure for Projected Stock. The value of this
key figure is computed according to a formula (see section 4.7) and to overwrite the
formulas results would result in inconsistencies.
This key figure allows manual adjustments to key figure Production Receipts. If the
adjusted values are non-initial the planning algorithms takes the given values instead
of computing the corresponding production quantities itself. Note: A planning
algorithm takes into account the availability of all components and usually it takes the
minimal available component quantity to determine the Production Receipts.
Page 46
capacities, lead times etc. Quotas for Customer Sourcing rules are computed
analogously, but based on Customer Receipts. Quotas for Production Sourcing rules
are computed according to a special procedure when a Production Cycle is defined
for that P-rule as we will see below.
The quotas along the sourcing rule to Plant B in Figure 16 are computed accordingly.
25
0
25
25
25
50
0
50
50
50
10
0
10
10
10
DC 1 / Product P
Dep. Dem.: 100
Proj. Stock:
0
Net Demand: 100
Receipts:
100
Supply:
100
100
0
100
100
100
100
0
100
100
100
Plant B / Product P
Dep. Dem.:
Proj. Stock:
Net Demand:
Receipts:
Supply:
75
0
75
75
75
50
0
50
50
50
90
0
90
90
90
Figure 17 illustrates an example with a location product (DC 1 / product P) with two
sourcing rules: one T-rule going to Plant A / product P and one P-rule invoking
Production Source S1 whereas for the P-rule a Production Cycle with a period of
coverage (POC) of 3 periods is defined. Due to the POC of 3 periods a production
event occurs only every 3 periods and not in between. For that reason the supply
plan of Figure 17 produces the production demand of 450 units in period 1 for all
three periods. It is important to be aware that this production lot in period 1 covers
the demand of all periods within that Production Cycle, i.e. the demands of perios1 to
3. Hence, it would be unreasonable to compute the quotas of this P-rule based on
this build-ahead quantity as the quotas are related to demand. To compute the
quotas of the P-rule the SCM Operator therefore equally distributes the production
quantity of the first period over all periods of that Production Cycle, as indicated by
the grey key figure called Production Receipts* showing a production quantity of 150
Page 48
= 450 / 3 units in each period. The quotas for the P-rule are then derived out of the
fraction of this equally distributed production quantities and the sum of these
production quantities and the Transport Receipts, i.e.:
Quota[Period 1] = 150 / (150 + 150) = 50%
Quota[Period 2] = 150 / (150 + 75) = 66,66% => 67%
Quota[Period 3] = 150 / (150 + 225) = 40%
75
0
75
75
75
225
0
225
225
225
DC 1 / Product P
Dep. Dem.: 300 300 300
Proj. Stock: 300 75
0
Net Demand: 600 75 225
Receipts:
600 75 225
Supply:
300 300 300
DC 1 / Product P /
Production Source S1
Prod. Receipts:
450
150
150
Figure 17: Computing Quotas for one T- and one P-rule with a Production Cycle
For the example of Figure 17 it is assumed that the production event occurs in the
first sub-period of period 1 and that the next production event occurs outside of the
shown planning horizon (or in the first sub-period of period 4 which is not depicted).
When computing such quotas the SCM Planning Operator takes into account the
actual sub-periods in which production events occur to equally distribute the
production quantity over the cycle. Assuming that production events occur in subperiod 10 of period 1 and period 4 the system would use the equally distributed
production quantities of 20/30 * 150 = 100 units for period 1, 150 units for periods 2
and 3 and again 50 units for period 4 to compute the P-rule quotas.
Page 49
There are several reasons why the supply might be equal to zero. Reasons might be:
-
User has set the supply to zero by an Adjusted Key Figure (for instance
Adjusted Transport Receipts as in period 2 in Figure 18)
The optimizer has decided to set supply to zero at certain sourcing rules
A neighboring Planning Unit was not yet planned so that supply key figures
have not yet been populated at all.
U-rules do not store quotas at all. As we explained in conjunction with Figures 8 and
10 the S&OP Heuristic uses U-rules to fill up the sum of the quotas along all T- and
P-rules to 100%. Nevertheless, the SCM Planning Operator will compute costoptimal quotas for U-rules and this is done in the same way as it computes quotas for
other sourcing rules: the computation is based on the supply provided along each
sourcing rule. If in Figure 17 the P-rule was substituted by a U-rule and the system
had computed External Receipts of 150 units in each period (as the equally
distributed Production Receipts of Figure 17) then the computed quotas for the U-rule
would be the same as the ones shown in Figure 17.
Figure 18 gives an example in which the supply (Transport Receipts) from Plant A to
DC 1 is zero in all three periods for different reasons. In period 1 the reason is that
the SCM Planning Operator has decided to satisfy the entire demand of DC 1 from
Plant B and nothing from Plant A. The system therefore computes a quota of 0% for
this T-rule and of 100% for the second T-rule going to Plant B.
In period 2 the user has fixed the supply to zero by an Adjusted Transport Receipts
(ATR) equal to zero so that the Transport Receipts is zero as well. The computed
quotas are the same as in period 1.
In period 3 there is a special case as supply is zero in all lanes connected with that
location product. It is obvious that in such a case the quotas cannot be computed.
For that reason the SCM Planning Operator returns a NULL (initial value) for such
periods. A further processing step (for instance in a calculated key figure of S&OP on
HANA) then is enabled to differentiate between a quota of 0% and a NULL value. So,
for instance, if the computed quotas are used to overwrite the quotas in the master
data this might not be reasonable for the cases in which a quota could not be
computed.
Page 50
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
DC 1 / Product P
Dep. Dem.:
Proj. Stock:
Net Demand:
Receipts:
Supply:
10
0
10
10
10
20
0
20
20
20
0
0
0
0
0
Plant B / Product P
Dep. Dem.:
Proj. Stock:
Net Demand:
Receipts:
Supply:
10
0
10
10
10
20
0
20
20
20
0
0
0
0
0
Page 51
Page 52
The SCM Planning Operator returns the computed supply for Independent Demand
in output key figure Independent Demand Supply (technical name:
INDEPENDENTDEMANDSUPPLY, key: location, product).
12.5 Coverage
Technical name: COVERAGE key: location, product
Output key figure Coverage returns for each period t the number of future periods for
which the Dependent Demand can be satisfied by the Projected Stock of period t. In
other words, this key figure stores for each period the range of the Projected
Inventory. If, for example the Projected Stock of t (which is the inventory at the end of
period t) is 20 and the Dependent Demand of periods (t+1) and (t+2) is 15 and 5, key
figure Coverage will return the value 2 for period t. If the Dependent Demand of
period (t+1) is 40 units, Coverage in period t would be 0.5.
Figure 19 shows four examples. Each example is illustrated along one location
product (which is DC1 / P1 in all cases). The relevant key figures are described by a
shortcut of one letter (D, I, N, etc.). The meaning of each shortcut is explained in the
legend below: D stands for Dependent Demand, I for Projected Stock, C for
Coverage, etc. All examples have a planning horizon of three periods.
In example 1 the coverage of the Projected Inventory of period 1 is two periods as
the inventory at the end of period 1 is 20 and hence equal to the sum of the
Dependent Demand of the next two periods (i.e. period 2 and 3).
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As the Projected Inventory of period 2 covers the Dependent Demand of period 3 the
Coverage of period 2 is 1.
Example 1b is similar to example 1, the only difference is that the Receipts in period
1 is not 30 but 31 pieces. As now the Projected Stock of period 1 is greater than the
sum of the Dependent Demand of all remaining periods of the planning horizon, the
resulting Coverage is considered as infinite which is indicated by a 99.
Via the parameter COVERAGE_INFINITE_VALUE of the SCM Planning Operator
the user can specify the integer value to be returned in key figure Coverage for an
infinite coverage, i.e. when a Projected Stock covers more than the Dependent
Demand of all future periods within the planning horizon. Its default value is
999999.999999. In order to get a better readable value with less digits the parameter
could be set, for example, to 999.0.
Coverage
DC1 P1
Example 1:
D:
I:
N:
S:
R:
C:
10 10
20 10
10 00
10 10
30 00
02 01
DC1 P1
10
00
00
10
00
00
Example 2:
D:
I:
N:
S:
R:
C:
DC1 P1
Example 1b:
D:
I:
N:
S:
Dependent Demand
Projected Stock
Net Demand
Supply
D:
I:
N:
S:
R:
C:
10 10
21 11
10 00
10 10
31 00
99 99
00 00
00 00
00 00
00 00
00 00
00 00
00
00
00
00
00
00
DC1 P1
10
01
00
10
00
99
Example 3:
D:
I:
N:
S:
R:
C:
10 10
10 00
10 00
10 10
20 00
01 00
20
00
20
20
20
00
R: Total Receipts
C: Coverage
IC: Inventory Correction
Example 2 explains that a Projected Stock of zero does not cover any future demand
even of the future demand is zero.
In example 3 the coverage in period 1 is one period as the Projected Stock of period
1 covers exactly the Dependent Demand of the second period. As the Projected
Page 54
Stock of period 2 is zero, it cannot cover any future demand and hence the coverage
is zero. The same is true for period 3.
If key figure Independent Demand has a value greater than zero in period t then the
SCM Planning Operator adds (internally / temporarily only) the value of Independent
Demand to the value of Dependent Demand of period t right before computing the
coverage. Output key figure Dependent Demand, however, will not return this
increased value.
Figure 20 illustrates how key figure Inventory Correction impacts the coverage
computation. Example 4 shows that a negative Inventory Correction increases the
Dependent Demand. This is the reason why the Projected Stock of period 1 (30
units) does cover only the Dependent Demand plus the demand defined by the
Inventory Correction of 20 units (given by a negative value) of period 2. The
Coverage of period 1 therefore is one period.
Example 4:
D:
I:
IC:
N:
S:
R:
C:
10
30
00
00
10
40
01
10 10
00 00
-20 00
00 00
10 10
00 00
00 00
DC1 P1
Example 4b:
D:
I:
N:
S:
Dependent Demand
Projected Stock
Net Demand
Supply
D:
I:
IC:
N:
S:
R:
C:
10
10
00
00
10
20
01
10 10
18 08
18 00
00 00
10 10
00 00
99 99
R: Total Receipts
C: Coverage
IC: Inventory Correction
computed. Output key figure Dependent Demand, however, will not return this
increased value.
If both, a negative Inventory and an Independent Demand are defined, the operator
adds (internally / temporarily only) the absolute Inventory Correction and the
Independent Demand to the Dependent Demand before it calculates the coverage.
A positive value in key figure Inventory Correction specifies additional receipts which
are not considered while computed the coverage. Example 4b shows that a positive
Inventory Correction is ignored while computing the coverage of period 1. However,
the consequence of a positive Inventory Correction is a higher Projected Inventory
(as the Projected Inventory of period 2 goes up to 18) and this higher Projected
Inventory of course leads to a higher Coverage of that period. Period 2 therefore has
an infinite coverage as the Dependent Demand of period 3 is 10 units only, i.e.
smaller than the Projected Stock of period 2.
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