01 IBP For Supply Planning Overview

SAP Integrated Business
Planning for supply

September 2014
SAP Integrated Business Planning for supply

Overview
Goal
Generate a mid to long-term time-series based supply plan based on forecasts, inventory
and inventory targets.
Utilize a multi level sourcing determination model for both distribution and Bills of Material
Development of rough cut capacity supply plan, with the ability to create and use
simulation capabilities for scenario planning
Creation of either a unconstrained or constrained production, distribution, and

procurement plan, using heuristics or optimization based algorithms.
Result
Supply simulation as integral part of the sales and

operations planning process
Times series bucketed supply plan that can be used

as constrained demand and for supply chain
decision-making
2013 SAP AG. All rights reserved.
Overview
IBP Sales and Operations Planning offers set of planning algorithms to

compute a complete plan for the supply chain network
An arbitrarily deep network of supply chain relevant locations and production

steps can be modeled and planned.
Planning algorithms utilize master data such as sourcing rules or quotas,

resources, bill-of materials, lead-times, lot-sizes, co-products etc. and input
planning data such as Consensus Demand, Inventory Target, Available
Capacity etc.
S&OP allows you to generate supply plan using two algorithms types:
Heuristics
Optimization.
Heuristics (Unconstrained Demand and Supply Planning )
The heuristic algorithm supports Unconstrained Demand and Supply Planning

mode.
In Unconstrained Heuristic, resource capacities are not taken into account to

compute supply.
The supply is computed based on the assumption that resource capacities are
infinite, i.e. they are unlimited. Resources might be overloaded, i.e. based on
the resulting computed plan some resources might have a utilization of more
than 100%.
Unconstrained planning mode does not compute a feasible plan.
Heuristics (Unconstrained Demand and Supply Planning )

Besides resources there can be other constraints in the supply chain network,
and these are also relevant for the Unconstrained Demand and Supply Planning
mode:
Due to the fact that there are lead times, in some situations products or components cannot be
transported or procured on time to fulfill demand
In general Adjusted key figures can be used to overwrite and fix the plan. This can be done for
production, for transports (between locations and from locations to customer) as well as for
external sources of supply. These are material constraints introduced by the user
The S&OP Unconstrained Demand and Supply Planning mode does not
propagate constraints upstream.
Rather it creates a shortage for the location product where a constraint occurs, so
that it becomes visible. This is aligned with the idea of an unconstrained plan,
which fulfills customer demand but shows the bottlenecks (similar to resource
capacities).
Infinite Complete Planning: Example 1

DC 1
D:
080 160
I: 020 000 000
N:
060 160
R:
060 160
S:
080 160
Customer 1
CD: 100 200
TD: 100 200
Plant A
D:
120 280
I: 010 000 000
N:
110 280
R:
110 280
S:
120 280
DC 2
Customer 2
CD: 040 080
TD: 040 080
DCD: 040 | 080

100%
CD: Consensus Demand

TD: Total Constrained Demand
D: Dependent Demand
I: Projected Inventory
TR:
040 | 080
D:
060 120
I: 000 000 000
N:
060 120
R:
060 120
S:
060 120
N: Net Demand
S: Supply
R: Total Receipts
TR: Transport / Constrained Demand
DCD: Dependent Customer

Demand
DLD: Dependent Location
Demand
6

C1 / P1
CD: 10 20
TD: 10 20
Plant A / K1
Plant A / P1
D:
120 200
I: 200 080 000
N:
000 120
R:
000 120
S:
120 200
D:
60 50
I: 20 00 00
N:
40 50
R:
40 50
S:
60 50
Plant A / K2
C2 / P1
D:
80 50
I: 00 00 00
N:
80 50
R:
80 50
S:
80 50
CD: 50 30
TD: 50 30
C1 / P2
CD: 20 40
TD: 20 40
Plant A / K3
C2 / P2
CD: 50 10
TD: 50 10
D:
70
I: 95 25
N:
00
R:
00
S:
70
50
00
25
25
50
DPD: 00 | 25
1:1
TR:
00 | 25
D:
00 25
I: 20 20 00
N:
00 05
R:
00 05
S:
00 25
Plant A / P2
D: Dependent Demand
N: Net Demand
S: Supply
R: Total Receipts

Demand
Demand
7

C1 / P1
CD: 10 20
TD: 10 20
Plant A / K1
Plant A / P1
D:
120 200
I: 200 080 000
N:
000 120
R:
000 120
S:
120 200
D:
60 50
I: 20 00 00
N:
40 50
R:
40 50
S:
60 50
CR: 02
Plant A / K2
C2 / P1
CD: 50 30
TD: 50 30
R1 / P1
D:
80 50
I: 00 00 00
N:
80 50
R:
80 50
S:
80 50
CD: 080 100

CU: 080 100
R1
CD: 080 125

CS: 100 100
CU: 080 125
C1 / P2
CD: 20 40
TD: 20 40
R1 / P2
CD: 000 025

CU: 000 025
CR: 01
C2 / P2
CD: 50 10
TD: 50 10
D:
70
I: 95 25
N:
00
R:
00
S:
70
Plant A / K3
50
00
25
25
50
DLD: 00 | 25
1:1
TR:
00 | 25
D:
00 25
I: 20 20 00
N:
00 05
R:
00 05
S:
00 25
Plant A / P2
D: Dependent Demand
N: Net Demand
S: Supply
R: Total Receipts

Demand
Demand
CS:
CD:
CU:
CR:
Capa Supply
Capa Demand
Capa Usage
Consumption Rate
8
Optimizer
Two modes: Profit Maximization and Cost Minimization for full Delivery
The following costs are considered:
Non-Delivery Cost Rate of Customer Demand
Production Cost (fixed and per-unit rate)
Transportation Cost (fixed and per-unit rate)
External Procurement Cost (fixed and per-unit rate)
Inventory Holding Cost (per-unit rate)
Safety-Stock Violation Cost (per-unit rate)
Maximum Inventory Violation Cost (per-unit rate)
The following constraints are considered:

Minimum & maximum lot size
Non-Negative Projected Stock
Interactive manual adjustments (demand, customer & external receipts, production, transport)
Lead-times
Production & handling resources capacity
Optimizer
The objective of the Optimizer is to minimize the total costs of the supply plan.
Optimization is performed via a transformation of the S&OP-model into a

mathematical model (Mixed Integer Linear Programming (MILP)-model).
The output is an optimal and feasible production, distribution and procurement

plan for the entire supply chain network taking into account the constraints.
10
Master Data Types, Key Figures

Master Data Types
Products
Customers
Locations
Resources
Resource
Location
Customer
Source
Location
Source
Production
Source (BOM, Capacity Consumption Rates)
11
Input Key Figures

Supply planning algorithms use the following key figures as inputs:
Consensus demand
Inventory Target
Stock on hand
Customer sourcing ratio
Location sourcing ratio
Component Coefficient quantity, that is, quantity of component in a bill of material

(BOM)
Capacity consumption rate, that is, of products consuming a resource in a location
Capacity supply or Available Capacity
Output coefficient or Base Production Qty
12
Input Key Figures

In addition, the optimizer takes the following key figures as inputs:
Price or Non-Delivery Cost Rate
Production Cost (Fixed and per-unit rate)
Transportation Cost (Fixed and per-unit rate)
External Procurement Cost (Fixed and per-unit rate)
Inventory holding cost (per-unit rate)
Safety-stock violation cost (per-unit rate)
13
Optimizer Input Key Figures

DC101
Plant 101
Product1, Product2
Fixed Production Cost

Production Rate
Fixed Procurement Cost
Procurement Unit Rate
101
Inventory Holding Cost Rate

Safety Stock Violation Rate
Product1, Product2
DC102
Plant 102
Supplier
Transport Costs
Plant
102
Inventory Holding Cost Rate
Fixed Production Cost
Safety Stock Violation Rate
Production Rate
Fixed Procurement Cost
Procurement Unit Rate
DC
Customer
14
S&OP Supply Planning Capabilities

Algorith
m Type
Heuristic
Mode
Unconstrained Demand and Supply

Planning
(Infinite Without Shortage)
Planning Capabilities
Supports Supply Chain Network with Customer-Products and Location-Products as nodes

and sourcing links between these, plus production sources
Arbitrarily deep network can be modeled
Computes a complete plan (Demand and Supply Propagation) with no shortage. The
generated plan in general is infeasible (for instance, negative Projected Stocks, capacity
over-utilization, etc.).
Production and Handling Resources can be modeled
Resource capacities are not taken into account. Considered as infinite
Mixed Sourcing (Combination of Production and/or Transportation and/or External

unspecified split via quotas)
Lead times for customer sourcing i.e. shipment from own location to a customer
Lead times for location sourcing i.e. shipment from own ship-from location to ship-to location
Multi-Level BOM with components and co-products. Number of levels can be arbitrarily deep
Minimum lot-size on transportation lanes and production sources
Periodic lot-size with granular sub-periods. Relevant only for production
Target Inventory can be modeled
Manual Adjustments from end-user can overwrite and fix the plan. This acts as a constraint
17

Algorith
m Type
Heuristic
Mode
Infinite Demand and Supply

Planning

Supports Supply Chain Network with customer-products and location-products as nodes and
sourcing links between these, plus production sources
Computes a complete plan (Demand and Supply Propagation) based on infinite resource
capacities
Only Production resources can be modeled.
Target Inventory is modeled
End-user simulation on time-dependent master-data input key figures. For e.g. Consensus
Demand, sourcing ratio or quotas, Component Coefficient, Capacity Supply
Single-Level BOM with components
Does Not support
Multi-level BOM with components and co-products

Lead times
Lot sizes (Transportation and Production)
Mixed Sourcing
18

Algorith
m Type
Heuristic
Mode
Finite Demand and Supply
Planning
Supports Supply Chain Network with customer-products and location-products as nodes and
sourcing links between these, plus production sources
Computes a complete plan (Demand and Supply Propagation). The generated plan is feasible from
a resource perspective. Supply is propagated downstream so that one sees constraints on customer
demand
Only Production resources can be modeled. Resource constraints are taken into account.
In constrained situation fair-share method is used to distribute available capacity supply
Only feasible dependent demand is propagated to downstream nodes (either components or
locations) to prevent inventory build-up
Target Inventory is modeled
End-user simulation on time-dependent master-data input key figures. For e.g. Consensus Demand,
sourcing ratio or quotas, Component Coefficient, Capacity Supply
Does Not support

Multi-Level BOM with components and co-products
Lead times
Lot sizes (Transportation and Production)
Mixed Sourcing
Only one constraining resource per path (there can be additional unconstraining
resources)
19

Algorithm
Type
Optimizer
Modes
Two Modes:
Profit
Maximization
Cost
Minimization for
Full Delivery
Supports Supply Chain Network with Customer-Products and Location-Products as nodes and sourcing links
between these, plus production sources
Computes a feasible plan
Optimization is performed via a transformation of S&OP-model into a mathematical model (Mixed Integer Linear
Programming (MILP)-model).
Production and Handling Resources can be modeled
Resources can modeled as Finite or Infinite
Mixed Sourcing (Combination of Production and/or Transportation and/or External unspecified). Quotas are not
considered
Lead times for Customer and Location Sourcing
Multi-Level BOM with Components and Co-Products. Number of levels can be arbitrarily deep
Min-Max Lot-Sizes on Transportation lane and Production Sources
Periodic Lot-Sizes with granular sub-periods. Relevant only for Production
End-user Simulation on time-dependent master-data input key figures. For e.g. Costs, Consensus Demand,
Sourcing ratio, Capacity Supply
Optimizer Costs:
Non-Delivery Cost Rate

Production Cost (fixed and per-unit rate)
Transportation Cost (fixed and per-unit rate)
External Procurement Cost (fixed and per-unit rate)
Inventory Holding Cost (per-unit rate)
Safety-Stock Violation Cost (per-unit rate)
Optimizer Hard Constraints
Interactive manual adjustments (demand, customer & external receipts, production, transport)
Maximum inventory
Non-Negative Projected Stock
Minimum & maximum lot size
Lead-times
Production & handling resources
20

IBP 4.0 FP1 Release
Supply Simulation as an extension of the Sales and Operations Planning process

Multi-level supply planning, including distribution and capacity planning in a constrained mode
Two Algorithm types:
Heuristics - unconstrained by capacity
Optimization
Profit Optimization and Maximize Delivery mode
Constrained by resource (production, handling) capacity and material availability
Multi level BOMs with components and co-products
Manual user adjustments to plan become constraint
Frozen horizons for distribution and production

Build-Ahead
Production Cycles with granular time-buckets
Sub-Network Planning
Product Interchangeability
Aggregated constraints for the optimizer
Sourcing and Lot Sizes
Multi-level sourcing
Time-dependent sourcing rules
Lead time for customer and location sourcing
Mixed sourcing for various supply sources (Production, Stock Transfers and External Procurement)
In-transit inventory visibility
Min Lot Sizing as a constraint for heuristic and optimizer, available for transportation lanes and production
Max Lot Sizing as a constraint for optimizer
21

IBP Release
Planning level
Planning on most granular level

Visibility at different levels of aggregation
Versions/
Simulation Scenarios
End-user Simulation on time-dependent master-data input key figures. For e.g. Costs, Consensus Demand, Sourcing
ratio, Capacity Supply
Version specific transactional data
User-Defined simulation scenarios on top of versions
Publish simulations to version
Promote transactional data across versions
Version specific master data
Data Model \ Integration
Planning on time series (input & output)

No planning on orders
Planning output is time series values
Customer specific usage of planning output
Generic, tool-supported ETL integration with templates (HANA Cloud Integration)

Project defined integration with source system, demand elements as output
Extensibility
Flexibility through system configuration
22
Real-Time Planning &

Simulation Tools
Utilize either heuristic or
optimization algorithms to develop
a constrained or unconstrained
supply plan
Meet optimized inventory targets

set by IBP for inventory
Gain visibility for projected stock

or shortages at relevant levels of
aggregation
Use the embedded alerting

capabilities to pinpoint where
potential issues have been
detected
23
Supply Planning
Environment
Develop the Rough Cut Capacity
Plan based upon various
resources
Plan based upon financial

aspects that ensure the most
profitable solution.
Constraints at both material and

capacity level can be modeled
and used to constrain the plan.
Use collaboration capabilities

both internally and externally to
make manual adjustements
24
Multi-level supply chain model example

Demand- Forecast
or Orders
On-Hand/Target
Inventory
Customer 1
A
On-Hand/Target
Inventory
Required /
Available Supply
Capacity Limit
SUP 301
MFG 201
Customer 2
DC 101
A
A
Multi-level
BOM
SUP 302
DC 102
Customer 3
MFG 202
Product
A
3
Sourcing Ratio
& Lead Times
Sourcing Ratio
& Lead Times
Location
Capacity
Resource
Material
Multi-level
BOM
Sourcing Ratio
& Lead Times
Production
Source
25
AGENDA
Business Scenario
Overview of Key Concepts
Hands-On Exercises
Review Supply Chain Master Data Set-Up

Execute Heuristics and Review the Output
Execute Profit Optimization and Review the Output
Manual Adjustments
Extend Master Data
26
Exercise 1A: Products
In a Supply Chain Network products are produced, transported and stored. The S&OP
product ID corresponds to a material number in ERP and a product number in APO
Note:
Only the Product ID field is mandatory. Its represented by the attribute PRDID. The
other fields & attributes are an example only.
Components are products that are used as inputs in production process. You can define
a separate master data type for components (with key attribute PRDFR)., which then
comes with its own set of master data entries, or you can reuse the entries already
maintained as products by defining reference master data type. In the training model
we are using it is defined as reference master data
27
Exercise 1B: Customers
Products are sold to and shipped to customers. S&OP customer ID corresponds to

customer number in ERP or APO.
Note: Only the Customer ID field is mandatory. Its represented by the attribute CUSTID.
The other fields & attributes are an example only.
28
Exercise 1C: Locations
A location is often a physical place where products are stored, produced, shipped to or
shipped from (via a transport). The locations can be of type Distribution Centers,
Manufacturing Plants.
In S&OP suppliers can also be modeled as locations.
Note: only the Location ID field is mandatory. Its represented by the attribute LOCID. The
other fields & attributes are an example only.
29
Exercise 1D: Resources
S&OP on HANA offers two types of resources: production and handling

resources.
Production resources model a production or assembly process. Their capacity

is consumed per produced or assembled unit of product.
Handling resources apply to all goods receipts at a location in the sense that
each arriving unit of a product consumes a certain capacity unit of the
resource. This resource type is relevant for all receipts of the location product,
which are Transport, Production and External Receipts.
Resource in S&OP can be modeled as finite or infinite.
Available Capacity or Capacity Supply is defined at Resource Location level
30
Exercise 1E: Sourcing Rules Or Quotas
Sourcing rules define how a demand for customer or at a certain location has to be
satisfied.
S&OP distinguishes between sourcing rules for Customer demand (Customer Ratio or
C-Rule), for transportation (Transportation Ratio or T-Rule), production (P-Rule) and
unspecified (U-Rule).
Customer Source (C-Rule):
Defines from which location (distribution center, plant or supplier) of the supply network a
customer demand has to be satisfied in what percentage.
Customer Sourcing can be maintained as time-dependent or time-independent
Transportation Source (T-Rule):
To plan supply through stock transfer from another location one has to specify a suitable
transport sourcing rule (T-rule).
Transport Sourcing can be maintained as time-dependent or time-independent
31
Exercise 1E: Sourcing Rules And Quotas
Production Source (P-Rule):
Another way to satisfy a demand is to manufacture the required product at the given location.
The meaning of a production sourcing rule is that Product is produced at the location where the
demand for Product exists
Production rule can comprise of BOM and Production resources
Unspecified Source (U-Rule):
U sourcing role is specified when the source of supply to meet the demand is not required to be
modeled explicitly.
If, for instance, the supply network terminates at a location product where components are
purchased and the supply chain of the supplier should not be taken into account one needs
sourcing rules indicating the planning algorithms to stop the network propagation but to make
supply available. This is the task of un-specified sourcing; U stands for unspecified.
U SOURCES DO NOT HAVE A SOURCING QUOTA. There can only be one U rule per product location
32

Multi-Sourcing :
It is possible to mix multiple source types, one can specify Net Demand to be distributed
according to quotas between different sourcing types.
Its possible to source a Net Demand
30% from Production Sourcing (P-rule)

50% from a Transportation Sourcing (T-rule)
Remaining 20% from Unspecified Sourcing (U-rule)
Meaning that 30% of the Net Demand should be propagated to a production process, 50% to
another location and 20% of the Net Demand are assumed to be available without limitations
The sum of quotas has to sum up to <= 100%.
33
MULTI-SOURCING
Product demand at a certain location can be distributed according to quotas between

different sourcing types:
Following Source types are supported
Production at own location specified via Production Sourcing Rule (P-Rule)
Stock-Transfer from another location via Transportation Sourcing (T-Rule)
External Unspecified Source (U-Rule)
The sum of quotas has to sum up to 100% (+/- a small epsilon which is needed due to
rounding errors).
34
35

Plant A / Prod. P
T- and U-rule
Dep. Dem.:
Proj. Stock: 0
Net Demand:
Receipts:
Supply:
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
36
Exercise 1F: Production And Transportation Lot-Sizes
Lot sizing allows to model production and transportation quantities per period to be set
within limits and / or according to a certain strategy.
The Following Lot-Sizing procedures are supported

Minimum Lot-Size:
o Transportation and Production quantity cannot be lower than a minimum.
o If production or transport is triggered, the quantity has to be equal or higher than the minimum lot size.
o Heuristic algorithm and optimizer will respect the minimum lot size
Maximum Lot-Size
o Defines the maximum production or transportation quantity
o Only optimizer respects the Maximum lot size
Periodic Lot-Size
o The system plans to produce the demand of N future successive periods, where the parameter N is called
the periods of coverage
o Relevant for production only.
o Only infinite planning heuristic respects the periodic lot-size.
37
Lot sizes are time-independent master data settings.
Examples:
Transportation Lot-Size (SOURCELOCATION)
PRDID
LOCID
LOCFR
TMINLOTSIZE
TMAXLOTSIZE
LEADTIME
TRATIO
P1
L1
L2
500
1000
0.5
P1
L1
L3
100
5000
0.5
Production Lot-Size (SOURCEPRODUCTION)

PRDID
LOCID
P2
L1
SOURCETYPE
PRATIO
PERIODSOF
COVERAGE
PMINLOTSIZE
PMAXLOTSIZE
1.0
1000
10000
38

Notes:
If No values are specified for the minimum and maximum lot-size, lot-for-lot planning
procedure is used
If a minimum and a periodic lot size is specified the system will plan to produce at least
the quantity specified by the minimum lot size.
If periodic lot size is defined in conjunction with a maximum lot size the optimizer will
limit the periodic lot size to the quantity specified by the maximum lot size, which can
have the result that the demand of the N periods might not be covered in one period.
39
Exercise 1G: Multi-Level Bill Of Material
Enables multi-level production processes with production of components
Number of Levels is arbitrary i.e. not limited
Example: Product P is produced from component X. Component X is produced from

component Y
Defines the base

production qty
Header (SOURCEPRODUCTION)
SOURCEID
PRDID
LOCID
SOURCETYPE
OUTPUTCOEFFICIENT
S1
S2
P
X
L1
L1
P
P
1.0
1.0
Detail: (PRODUCTIONSOURCEITM)
SOURCEID
SOURCEITEMID
PRDID
COMPONENT-COEFFICIENT
S1
S2
10
10
X
Y
1.0
2.0
Defines the Qty

Per. Can be
modeled as
master data or
time-series
40
Enables to model co-products
Example:
Product P1 is the finished product. C1 is the Co-product.

A and B are components to produce Product P1
For every 10 units

of P1 produced, 5
units of C1 is
produced
Header
SOURCEID
PRDID
LOCID
SOURCETYPE
OUTPUTCOEFFICIENT
S1
S1
P1
C1
L1
L1
P
C
10.0
5.0
Detail:
SOURCEID
SOURCEITEMID
PRDID
COMPONENT-COEFFICIENT
S1
S1
1
2
A
B
1.0
2.0
Output co-efficient
can be modeled
as master data or
time-series
41

Product 1
Subassembly
Component 1
Product 2
Component 1
Component 3
Component 2
Finished Product
Component
42
43
EXERCISE 1H: CAPACITY CONSUMPTION RATES FOR PRODUCTION RESOURCES
This master data type describes resource consumption rate for production source.
PRODUCTIONRESOURCE table is used
44
EXERCISE 2A: EXECUTE UNCONSTRAINED DEMAND AND SUPPLY PLANNING HEURISTIC
1.
Execute the plan from Simulate mode Unconstrained Demand and Supply
2.
Review results
Open Location Centric View Locaton View Favorite

Open Transportation View DC to Customer Transport View favorite
Open Transportation Views Plant-to-DC Transportation View favorite
Open Capacity View Capacity View Favorite
Open BOM View Parent-Child BOM view Favorite
45
EXERCISE 2B: Profit Optimization
1.
Execute the plan from Simulate mode Profit Optimization
2.
Review results
Now lower the Consensus Demand Price(Non-Delivery Cost Rate) for

Product1/Cust101 to 10 for few buckets and Click Profit Optimization under Simulate
button in Consensus Demand View
3.
4.
Open Location Centric View Location View Favorite

Open Transportation View DC to Customer Transport View favorite
Open Transportation Views Plant-to-DC Transportation View favorite
Open Capacity View Capacity View Favorite
Open BOM View Parent-Child BOM view Favorite
Non-Profitable demand is not met or shorted
Open Capacity View. Reduce the Capacity Supply for Resource 2 to 2000 from (Jan,
Feb and March 15). Run the Optimizer
46
EXERCISE 2C: Manual Adjustments
Adjusted key figures are special type of Key Figures that allow adjusting (i.e.
overwriting) the input or the output of an algorithm.
The main use case of Adjusted Key Figures is interactive planning, where a
user changes these key figures manually to influence the output of a planning
algorithm. For that reason, Adjusted Key Figures are also called manual
adjustments.
For example, if the algorithm computes that the dependent demand at a

location is X, you can over-write this dependent demand by inserting a value of
your liking for the key figure Adjusted Demand.
47
EXERCISE 2C: Manual Adjustments

The following are the Adjusted Key figure types currently available:
Adjusted Transport Receipts
Adjusted Customer Receipts
Adjusted External Receipts
Adjusted Production Receipts
48
EXERCISE 2D: Extend Master Data

ACME Company has introduced a new product (PRODUCT3) to market and would like to model
the Supply Chain master data.
PRODUCT3 will be sold to Customer 101 and will be supplied from DC101. PRODUCT3 at DC101
will be procured from PLANT101.
The PRODUCT3 will be manufactured at PLANT101 on RESOURCE1 by consuming
COMPONENT1
49

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SAP Integrated Business

Planning for supply

SAP Integrated Business Planning for supply

Creation of either a unconstrained or constrained production, distribution, and

Supply simulation as integral part of the sales and

Times series bucketed supply plan that can be used

2013 SAP AG. All rights reserved.

IBP Sales and Operations Planning offers set of planning algorithms to

An arbitrarily deep network of supply chain relevant locations and production

Planning algorithms utilize master data such as sourcing rules or quotas,

2013 SAP AG. All rights reserved.

Heuristics (Unconstrained Demand and Supply Planning )

The heuristic algorithm supports Unconstrained Demand and Supply Planning

In Unconstrained Heuristic, resource capacities are not taken into account to

Unconstrained planning mode does not compute a feasible plan.

2013 SAP AG. All rights reserved.

Heuristics (Unconstrained Demand and Supply Planning )

2013 SAP AG. All rights reserved.

Infinite Complete Planning: Example 1

DCD: 040 | 080

CD: Consensus Demand

DCD: Dependent Customer

Infinite Complete Planning: Example 2

DCD: Dependent Customer

Infinite Complete Planning: Example 2

CD: 080 100

CD: 080 125

CD: 000 025

DCD: Dependent Customer

The following constraints are considered:

2013 SAP AG. All rights reserved.

Optimization is performed via a transformation of the S&OP-model into a

The output is an optimal and feasible production, distribution and procurement

2013 SAP AG. All rights reserved.

Master Data Types, Key Figures

Source (BOM, Capacity Consumption Rates)

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Input Key Figures

Customer sourcing ratio

Location sourcing ratio

Component Coefficient quantity, that is, quantity of component in a bill of material

Capacity consumption rate, that is, of products consuming a resource in a location

Capacity supply or Available Capacity

Output coefficient or Base Production Qty

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Input Key Figures

Price or Non-Delivery Cost Rate

Production Cost (Fixed and per-unit rate)

Transportation Cost (Fixed and per-unit rate)

External Procurement Cost (Fixed and per-unit rate)

Inventory holding cost (per-unit rate)

Safety-stock violation cost (per-unit rate)

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Optimizer Input Key Figures

Fixed Production Cost

Inventory Holding Cost Rate

Fixed Production Cost

Safety Stock Violation Rate

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S&OP Supply Planning Capabilities

Unconstrained Demand and Supply

Supports Supply Chain Network with Customer-Products and Location-Products as nodes

Mixed Sourcing (Combination of Production and/or Transportation and/or External