Forecasting with Bills of Material

Forecasting with Bills of Material 

Purpose

You can forecast dependent requirements in Demand Planning. The system determines the component parts of finished products through the production process model (PPM) or the production data structure(PDS).

This can be useful if material components represent practical constraints on the forecast at finished product level; that is, the available quantity of components is fixed but they can be used in different finished products. This situation arises in, for example, the chemical industry. The planner can immediately see the impact of the product forecast on the fixed component level.

This process can also be used in the consumer products industry to model a store display consisting of multiple products from one vendor. Both the display (the finished product) and the individual products (planned in Demand Planning as components) are released to Supply Network Planning.

In other industries, such as automotive part suppliers, actual demand occurs only at the component level while the finished product (for example, the car) has the role of making the part suppliers' forecast more transparent. For example, if one cassette box is built into each car, and it is known that 1000 cars will be manufactured, then the forecast for cassette boxes is also 1000. Demand for the finished product is not released to Supply Network Planning. The DP PPM/PDS allows you to model this situation.

Process Flow

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       1.      Create and activate a production process model (PPM) with usage D (BOM Demand Planning) or usage S (PPM Supply Network Planning). There are the following methods to create a PPM for use in Demand Planning

·         You can create and activate a PPM for Demand Planning manually (see Creation of PPMs for Use in Demand Planning).

·         You can generate a DP PPM from an SNP or PP/DS PPM automatically. For more details, see Automatically Generating PPMs for Demand Planning. In this case, you can skip steps 2 and 3.

·         You create a PPM for Supply Network Planning either manually or by converting a PP/DS PPM that was transferred from R/3 into an SNP PPM. For more details, see Generating SNP PPMs from PP/DS PPMs.

SAP recommends that for this process you use single-level PPMs; that is, PPMs where all components for the finished product have been entered as inputs on the same level. This usually requires some prior calculations of input-output quantities. If you generate a DP PPM automatically, the system creates a single-level PPM, irrespective of whether the PP-DS/SNP PPM is single-level or multi-level.

You can also use production data sources (PDS). These should have been generated for use in DP or SNP. For more details, see Working with Production Data Structures in DP.

       2.      Assign the PPM/PDS to the supply chain model you want to work with.

       3.      Assign the version you intend to work with to this supply chain model.

       4.      Create a master planning object structure and select DP BOMs relevant.

This adds the characteristics 9AMATNR, 9ABOMID, 9ABOMIO, and 9APPMNAME to the master planning object structure. You can add any other characteristics that are required.

If you assign navigational attributes to 9AMATNR, this can lead to problems in SNP.

You can however choose another characteristic to represent products. To do so, remove 9AMATNR from the structure, add the new characteristic, and choose Extras ® Assign prod./loc. You can then assign this characteristic navigational attributes and use it in SNP without problems.

       5.      Create a planning area and include in it a key figure for independent demand (finished product level) and a key figure for dependent demand (BOM level). In the key figure details:

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                            a.      Set up the key figures for independent demand and dependent demand. 

                            b.      Set linked semantic codes for the two key figures; for example, set the Key figure semantic 401 for the independent demand key figure and 501 for the dependent demand key figure. Semantic code 401 is linked to 501, 402 is linked to 502, and so on. Use each semantic code only once for one key figure in a planning area. If you have more than one set of independent demand/dependent demand key figures in the planning area, use different semantic codes for each pair.

LiveCache calculates with 3 decimal places. This means that if fractions are created during calculation of quantities, this may lead to unexpected rounding errors. For instance if the output quantity is 3 and the input quantity is 7 for one component, this corresponds to factors of 0.42857142857... or 2.33333333. You can avoid this problem by including a further pair of key figure and assigning them the key figure semantic 60x (for example 601 and 602). Internally the system then stores the nominator and denominator of the fraction, eliminating such errors. 

       6.      Create the master data for Demand Planning, the characteristic value combinations, based on the master planning object structure you created in step 4.

The field for the characteristic PPM is grayed out. The PPM information is not generated in this step.

       7.      At this stage you can also automatically generate a DP PPM. This functionm is not available for PDSs.

       8.      Add the PPM/PDS information to the DP master data by choosing the fourth option Add BOM information and specifying the version to which your PPM/PDSs are assigned.

       9.      The system reads all the characteristic value combinations and adds a PPM/PDS to the product combinations where a PPM/PDS exists.

This step generates additional characteristic value combinations for material components as entered in the BOMs.

Note that in the standard system the input products must have the same free characteristics as the output product. For instance if Output Product 1 belongs to Brand A, all the input products must also belong to Brand A. You should therefore be careful when deciding which characteristics to use in the planning area. Consider using navigational attributes in cases where this could cause problems.

As of release 4.0 it is possible to change the free characteristics. To do so, implement method COMBI_ENRICH in BAdI /SAPAPO/SDP_MASTER.

   10.      Initialize the planning area and the version:

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                            a.      From the current settings, choose Administration of Demand Planning and Supply Network Planning.

                            b.      Right mouse click the planning area you created in step 5.

                            c.      Choose Create time series objects.

                            d.      Enter the version you assigned in step 3.

                            e.      Choose Enter.

   11.      Configure the forecast settings for the planning area (right mouse click the planning area).

   12.      Design a planning book view with two grids, grid 1 for finished products and grid 2 for material components.

   13.      In interactive demand planning, plan the demand for the finished products in the upper table (this is the top grid, grid 1).

   14.      If you selected multiple products, drill to the All details level.

   15.      Choose  in the top table to view the dependent demand in the lower table (grid2).

   16.      If necessary, rearrange the sorting order of the drill-down path in grid 2 by right mouse clicking the top left cell of grid 2 and choosing Pivot sorting. To change the sorting sequence, drag and drop.

   17.      Release demand on the finished product level to Supply Network Planning where the dependent demand will be calculated based on SNP PPMs.

In some industries, you may wish to release material component demand to SNP instead of finished product demand; this is the case where the components are the products for which actual demand will occur (see Purpose above).

In cases where a product has both independent and dependent demand (such as consumer goods that can also form part of a store display), you can use a macro to sum the two demand types before releasing to Supply Network Planning.

Subsequent Changes to PPM/PDSs

If you change a PPM/PDS after including it in characteristic value combinations, you must update this information.

·        If you have added, changed or deleted components in the PPM, you must rerun the Add BOM information as in step 8. Do not set the Use only PPM/PDS space records indicator. Set the Create time series objects indicator.

·        If you have only changed the quantities in the PPM, run the time series consistency check for the planning area (see Consistency Checks for Planning Areas). Set the Repair indicator.