Outlining Planning Strategies in SAP S/4HANA

Objective

After completing this lesson, you will be able to explain the basics of Demand Management

Outline of Planning Strategies in SAP S/4HANA

Introduction

Note

See the following video to learn what Mike has to say about Demand Management in SAP S/4HANA and the concept of requirements classes:

Basic Types of Requirements

There are two basic types of independent requirements that refer to a plant and one type that has a cross-plant behavior. Let’s get to know these types using our Bike Company example:

Planned independent requirements (PIRs):
Planned independent requirements (PIR) are stock requirements and can initiate procurement or production without waiting for sales orders. These requirements for a certain material in a certain plant are derived from a forecast of the future requirements situation or can be created manually.
In the Bike Company example, past sales order quantities are used to predict the future demand of 200 bikes. Market intelligence and events like trade fairs also contribute to the forecast. Based on the demand plan, planned independent requirements are created, which guide procurement and production planning.
For example, forecast results can be released from SAP Integrated Business Planning (IBP), SAP Supply Chain Management (SCM/APO), or SAP S/4HANA (Flexible Planning or standard SOP). They are then transferred in material requirements planning as PIRs.
Sales orders:
Sales orders are entered by the sales department for a delivery plant.
For example, the Bike Company receives a sales order from a customer who requires their own logo on the frame of the bikes they purchase. This requirement needs a special handling during production.
Stock transfer requirements:
Stock transfer requirements are requirements from other locations in your own network (such as distribution centers). Like sales orders, they also must be considered in the demand program.
For example, the Bike Company has a distribution center, which needs 50 bikes to fulfill their local customer orders. The production plant of the Bike Company has an own independent requirement for 100 bikes.
The Bike Company combines all these requirements into their demand program. In total, the demand of 150 bikes is considered.

Note

The behavior and interactions of PIRs and customer requirements are controlled by their requirements classes determined to a requirement type in Customizing.

Planning Strategies

Note

See the following video to learn more about what Mike has to say about planning strategies in SAP S/4HANA:

Example: Planning Strategy 10 in SAP S/4HANA

Strategy group 10 is assigned to the finished product in a bill of material for a product you want to plan with planning strategy 10.

In SAP S/4HANA, planning strategies are numerical codes that represent different approaches to production planning and control.

The steps in pure make-to-stock planning are depicted.

Planning strategy 10 is one basic strategy for make-to-stock production. Let's take a closer look at how this strategy works:

Planning strategy 10 can be used, for example, for mass production or manufacturing of low-cost items (for example, C parts).

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