Safety Stock Limitations

Objective

After completing this lesson, you will be able to understand the usage of minimum and maximum limitations.

Usage of Safety Stock Limitations

It is possible to force the safety stocks proposed by SAP IBP for inventory to a certain corridor by the specification of lower and upper limits.

These lower and upper limits can be defined as absolute quantities (IO Minimum Safety Stock and IO Maximum Safety Stock). Another approach would be to intervene in the generation of results by specifying ranges in days (IO Minimum Safety Days and IO Maximum Safety Days).

If you specify both procedures (quantities and days) simultaneously as planning inputs, the optimization run will take into account the more restrictive of the respective inputs.

These restrictions are taken into account in the multi-stage stock optimization run (with or without target inventory components calculation).

In order for the restrictions to be taken into account, you must have set the consideration in the inventory profile (Min Max Safety Stock → Consider).

Please note that the limitations are only taken into account by the Multi-stage Inventory Planning Operator if the Inventory Holding Costs are set consistently. For more information, see the SAP Help Portal at help.sap.com/IBP.

Overview Planning Operator Behavior with Minimum/Maximum Safety Stock Limitations

Minimum and Maximum Safety Stock

ExerciseStart Exercise

Business Example

As inventory planner you would like to add limitations regarding the safety stock to the plan. To do that we will work during this exercise with the connectionZIOUNIFIED within the Planning Area ZIOUNIFIED.

Prerequisites

  • Planning Views used for this exercise: IO 210 Input Data Review ## and IO 220 Planning Result ##
  • All previous exercises are prerequisites
  • For this exercise we will work with the planning filter FG1##
  • Use the filters within the planning view based on Macros to activate the Graphs.

Steps

  1. Create Inventory Profile INVPROF_MINMAXSAFSTOCK_## that enables the usage of safety stock limitations such as minimum or maximum safety stock.

    1. Log on to the SAP Fiori UI with the credentials provided by the instructor.

    2. Navigate to the Inventory Planner Group and open the Inventory Profiles app.

    3. Click on Create.

    4. Maintain planning area ZIOUNIFIED and enter as name INVPROF_MINMAXSAFSTOCK_## .

    5. Change under Safety Stock the Min Max Safety Stock setting to Consider by choosing this option in the dropdown.

    6. Click on Create in the lower right corner of the window.

  2. Open favorite IO 210 Input Data Review ## to maintain holding cost rates.

    1. Go to the Excel front-end, log off if needed and log in to planning area ZIOUNIFIED again using the connection created in a previous exercise.

    2. Open favorite IO 210 Input Data Review ## by using the Favorites option in the upper part of the excel window. .

    3. On tab Cost Input, maintain in location LOC3## (Bangalore) 50 as Inventory Holding Cost Rate for all Finished Products (FG1##, FG2##, FG3##, FG4##, FG5##) in the current period.

    4. Save the data by using the option Save data in the upper part of the planning view.

  3. Open favorite IO 220 Planning Result ## . Add the key figures IO Minimum Safety Stock and IO Maximum Safety Stock to the tab HighLevel Results and maintain a minimum safety stock of 2000 units for product FG4## in location LOC11## for the next 5 weeks. Save the planning view as favorite using the name IO 220 Min Max Safety Stock ##.

    1. In the Excel front-end, open favorite IO 220 Planning Result ## by using the Favorites option in the upper part of the excel window.

    2. Edit the planning view by using the option Edit View in the upper part of the Excel window.

    3. For tab HighLevel Results delete all selected key figures beside Recommended Safety Stock (LPA).

    4. Add the key figures IO Minimum Safety Stock and IO Maximum Safety Stock to the tab HighLevel Results.

    5. Add attribute Product ID to tab HighLevel Results and deselect Product Family.

    6. Confirm your changes by clicking on OK in the lower right corner of the Edit Planning View popup.

    7. For product FG4## in location LOC11##, maintain a minimum safety stock of two times the Recommended Safety Stock (LPA) for the next 5 weeks. In case there is no data in recommended safety stock key figure use 2000 units.

    8. Save the data by using the option Save data in the upper part of the planning view.

    9. Save your favorite using the name IO 220 Min Max Safety Stock ##.

  4. Run multistage inventory optimization with inventory profile INVPROF_MINMAXSAFSTOCK_##. Refresh the planning view and validate the adherence to the maintained limitations.

    1. Under Application Jobs, open the drop down Inventory Planning (Advanced), click on Run. Confirm all popups with OK if needed.

    2. Select Global (multistage) inventory optimization as Function and Planning Operator INVPROF_MINMAXSAFSTOCK_##. If the Planning Operator INVPROF_MINMAXSAFSTOCK_## is not visible re-logon to Excel again.

    3. Select all planning units which correspond to your group number ## with Planning Units: Brasil##, Europe##, India##, US## and Venezuela##.

    4. Select Scenarios: Baseline, Versions: Base Version.

    5. A filter is not needed. Click on Next.

    6. Select as Reason Code: Inventory and add a comment Running IO with Limitations if a reason code is requested.

    7. Click on Run and click on OK to confirm that you have scheduled a job.

    8. Watch the progress in the dialog box. When the run is finished, choose Navigate to Status to view the list of logs. Close to return to planning view.

    9. Select Refresh in the Data Input section.

    10. Go to the current period.

    11. Verify that Recommended Safety Stock (LPA) for product FG4## in location LOC11## considers the minimum limitation maintained.

    Result

    Now you have seen how you can utilize safety stock limitations.

Learning

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