Modelling Production Planning in SAP IBP Time Series Supply

Modelling Consensus Demand and Demand Fulfillment

Modelling Target Inventory and Lot Sizes

Modelling Distribution Planning in SAP IBP Time Series

Modelling Fair Share and Telescopic Planning in SAP IBP Time Series

Understanding Production Data for SAP IBP Time Series

Objective

After completing this lesson, you will be able to understand the key objectives for a production planner.

Production

The figure, Key Objectives for Production Planner, shows you the challenges with which the production planner has to deal.

In summary, production planners, while focused around releasing the plan for production in the immediate horizons, also need to keep their eyes open in a proactive manner to address potential issues before they become critical.

The figure, Set Production Source Priority Capacity shows you the Constraints and Alternatives for Production.

The production source header is modeled similarly to the production version in SAP ERP or SAP S/4HANA. The naming standard could be Plant_Product_Version.

4-letter version can be used as mmnn (mm = 00, 01 etc. to represent production line or resource; similarly nn can represent BOM versions).
Naming standards enable better troubleshooting later.

Typically, production facilities have multiple resources to produce the same product. Whether to model them collectively as single resource or not depends on factors such as:

Consumption rate, for example, fast vs. slow
Technical capability - can handle only certain sizes or packages or ingredients
Production costs

Priority is determined by production cost - this allows you to switch from the main production line to an alternate production line by modeling one production source header for each line. Relative production costs across multiple plants also enable sourcing of demands to alternate sites or to an external contract manufacturer.

In the case of a contract manufacturer, the vendor must be modeled as location type P (Plant) in SAP Integrated Business Planning to model capacity constraints.

The figure, Production Planning: Production Key Figures shows you the most common key figures to time-series-based heuristics and the optimizer.

There are many key figures in supply planning - most are common to time-series-based heuristics and the optimizer. However, the optimizer uses cost key figures. Additionally, the max key figures are respected by the optimizer and finite heuristic only.

Frozen horizon allows you to model the hand-off between planning and execution - for more information, see the next figure.

Additional Parameters in Production Source Header

Min and Incremental Lot Size - enabled for horizons specified globally in the optimizer profile.
Production Lead Time - controls when capacity or components are consumed, if not on finish date - in the production source header. For more information, see the help documentation for SAP Integrated Business Planning.

The figure, Use of Frozen Horizon shows you the Frozen Horizon and Planner Adjustments.

Since SAP IBP 2111 key figure Confirmed Production can be used to support firm production inputs from SAP ERP instead of Adjusted Production.

The following are the two types of planner adjustments:

Fixed: This is made possible by the Adjusted Production Interactive key figure.
Minimum: The planner wants the minimum quantity to be planned even if there is no demand in that period. Additional quantity may be planned on top, if the demand exceeds the minimum specified.

Both types of adjustments are specific to the periods they are entered - if there is not enough capacity or other constraints make it impossible to achieve the specified values, the system does NOT shift unmet quantity to other time buckets. Do not use these key figures in lieu of anticipated demands.

Also, minimum and incremental values are ignored when adjusted production is used. If there is inadequate capacity, the engine will plan for as much as possible, once again disregarding rounding values.

Using a Max Production of 0 will ensure that there is no production for that product in that period.

The figure, Production Planning shows you the Modeling Capacity and Capacity Extension.

Available Capacity acts as a hard constraint for production. It is not possible to model changeover and sequence dependent changeover costs - hence model average capacity as available capacity.

Min Capacity Utilization can be used to achieve capacity leveling. It could also result in push production; for example, boilers, furnaces, and reactors cannot be brought down easily without wasted time and additional costs. Min Capacity usage violation cost rates allows for violation if justified by other costs.

Capacity Expansion may be modeled for extra shift. This incurs additional costs. There are no step increments; that is, no minimum or incremental steps (not supported due to high optimizer performance degradation).

More commonly modeled to ensure that the adjusted production quantity is met by the optimizer, regardless of the line capacity.
Set Capacity Supply Expansion Cost Rate as higher than Non-Delivery Cost Rates - resulting in use of capacity expansion for only adjusted production (which carry very high internal costs) and not for customer demands or target inventory.

The figure, Additional Modeling Parameters and Inputs shows you the Master Data Attributes and Parameters.

The figure shows additional modeling parameters and inputs.

Running Optimizer and Checking Planning Results

ExerciseStart Exercise

Running Optimizer and Checking Planning Results

Business Example

In this exercise, you use the web UI to create a planning operator for use with the optimizer. Using the SAP Integrated Business Planning, add-in for Microsoft Excel, you can run planning operators to check master data, run the optimizer, and check the business logs. With the Microsoft Excel templates and planning views, you can review the results of the planning runs. The optimizer profile created will be for your own use – hence you should ensure the group ## matches with your student ID assigned. The first profile will be maintained without any fair share – later in the course you will create another profile for use with fair share. In this training we use daily buckets because this makes it easier to validate and explain results. Most customers run the time series supply optimizer with monthly or weekly buckets (also for performance reasons).

Check your planning area ZSAP4 and student group number assignment with the instructor before you start. Where this exercise uses ##, use your group number instead.

Steps

Create an S&OP operator with the ID 8000_XX and the name Profile 1_Optimizer_No Fairshare_## for the planning area ZSAP4 considering the following instructions (you may also copy from the sample Profile_1_Optimizer_No Fair Share_xx):
- Algorithm Type: TS Optimizer
- General Information
  - Processing Mode: Interactive and Batch
  - No values for time profile level
- Optimizer Parameters
  - Profit Maximization Mode
  - No fair-share parameters
  - Discretization
    - Default Horizon: 42 days
    - Default Horizon for Transports: 42 days
    - Horizon for Transports Minimum Lot Sizes: 42 days
    - Default Horizon for production: 42 days
    - Horizon for Production Minimum Lot Sizes: 42 days
    - Horizon for Production Incremental Lot Sizes: 42 days
  - No time-independent penalty costs
  - Global Cost Factors – No fixed costs
  - Other
    Consider Resource as Infinite when Capacity Supply is Null.
- Primary Parameters
  - Check Quotas: Warning
  - Include Zeros in Quota Check
  - Source of Supply Validity
  - Initialize Lead-Time Horizon of Transports
  - Initialize Lead-Time Horizon of Customer Receipts
  - Compute Expected Supply for Production
  - Value for infinite Coverage:999
  - Merger Policy for Key Figures: Downstream Key Figures Leading
  - Minimum Transport Handling Policy: Coupled
  - Calendar Reference Check Policy: Continue with Warning
1. On the SAP Fiori home screen, in the TS Supply Planning Configuration section, choose the S&OP Operator Profiles tile.
2. Choose Create→TS-Based Supply Optimizer.
3. Choose OK.
4. In the ID field enter the name 8000_XX.
5. In the Name field enter the name 8000_XX.
6. In the Description field enter the name Profile 1_Optimizer_No Fairshare_##.
7. In the Planning area field enter the name ZSAP4.
8. Apply the parameters as shown in the following screenshots:
9. Save the profile
Open Excel via the App SAP IBP, add-in for Microsoft Excel, go to IBP ribbon and log on. Access the IBP 700 - Pump template.
Hint
Save the template as favorite Group ## Pump for later exercises.
Remember to create and assign filters with your own group ## data in the planning views for all tabs in your favorite.
If you changed the filters before saving the template as Favorite, you will not have data in your planning views until you have completed Step 4.
In your favorite replace the filter in sheet component with following filter: Product ID = T-F2##; T-F3##; T-F4##.
1. Open the App SAP IBP, add-in for Microsoft Excel and choose the SAP IBP ribbon.
2. Choose the Log On button.
3. Create a new connection by completing steps d and e.
4. Choose the 3 dots icon next to connection box, as shown in the following figure:
5. Choose the Create connection button and enter the Server URL provided by the instructor. Now, enter a Connection Name. Choose the … button and select planning area ZSAP4. To log on to the new connection, press the Enter key on your computer's keyboard and afterwards click on OK to log On.
6. When you are in the new connection, choose Template Admin→Templates→Choose IBP700 - Pump to load the template.
7. Choose Edit View and, in each tab, adjust the Filter Values to work with your group XX master data. The template was created with group 11 master data. In the planning scope section only select your planning unit. Planning units for small group numbers only use one character (e.g. 8_PUMP instead of 08_PUMP).
8. To adopt new filter values, click on OK Ok.
9. Choose Favorites→Add.
10. In the Name field, enter Group ## Pump.
11. Choose Add.
  If you get a message "Some of your worksheets contain empty cells with formatting (or comments and notes) below or to the right of the planning view. This can have a significant negative impact on performance while opening a planning view. Do you want to delete the empty cells for better performance." click on Yes.
Run the SOP operator 99_Check Network Data (to execute the check mode algorithm to perform checks on master data and key figures) and check the job status.
1. In the Microsoft Excel SAP IBP tab, choose Application Jobs, and then S&OP Operator.
2. Select the planning operator 99_Check Network Data. An information pop-up may show up stating that the planning view settings have been copied to the application job template.
3. Under Scenarios, select the Baseline checkbox. In the current release the Scenario, Version and Planning Unit are defaulted from the planning view. Please accept the information message. In subsequent exercises only need to check the defaulted values for Scenario, Version and Planning Unit. If you start the operator without a planning view, then you need to manually select the Scenario, Version and Planning unit as described in this exercise.
4. Under Versions, select the Base Version checkbox.
5. Under Planning Unit, select the ##_PUMP checkbox.
6. Choose Next.
7. Choose Run.
8. Wait until the status pop-up shows finished.
Run the previously created operator Profile 1_Optimizer_No Fairshare_## for the planning unit ##_Pump. Add your favorite if you could not save it in step 2 or update your favorite with the new filter settings.
1. In the Microsoft Excel SAP IBP tab, choose Application Jobs, then S&OP Operator.
2. Select the planning operator Profile 1_Optimizer_No Fairshare_##.
3. Under Scenarios, check that the Baseline checkbox has been defaulted.
4. Under Versions, check that the Base Version checkbox has been defaulted.
5. Under Planning Unit, check that the ##_PUMP checkbox has been defaulted.
6. Choose Next.
7. Choose Run. After the job finished you can navigate to the log via the status pop-up directly or you can navigate to the log as described in the next step.
8. Choose Favorites→Add.
Consult the business log to observe the SOP run status.
1. In the Microsoft Excel SAP IBP tab, choose Application Jobs, then S&OP Operator. Now, choose the SOP Operator dropdown list.
2. Choose Status.
  Result
  The Status window opens. The status is displayed in the fourth column.
Check the planning results. Please note that you will get the first production receipts after the frozen horizon.
Result
Location 2200: You will get the first transport receipts in 9 days because there is a frozen horizon of 7 days in the production location 1000 and a lead time of 2 days for the transport from 1000 to 2400. No delays are allowed.
Location 2400: As you need additional 7 days of transport by truck from 2200 to 2400, demands are fulfilled by truck in 16 days. As soon as possible the optimizer will switch to the cheaper Mode of Transport Rail. This is possible in 30 days: 9 days to get the products to 2200. In addition, 21 days of transport duration for Rail from 2200 to 2400.

Modeling Constraints for Production

ExerciseStart Exercise

Modeling Constraints for Production

Business Example

In this exercise, you familiarize yourself first with running the optimizer with a basic scenario for production, and understand the results regarding capacity consumption, planned production, planned distribution, and demand fulfillment. Additionally, using SAP IBP, add-in for Microsoft Excel, you model minimum and incremental lot sizes, analyze the impact of a frozen horizon on planning, and execute planner adjustments to influence fixed or minimum production. You run the optimizer to understand how the engine behaves with planner overrides.

Check your planning area ZSAP4 and student group number assignment with the instructor before you start. Where this exercise uses ##, use your group number instead.

Task 1: Review the Demand and Supply Situation for the Pump T-F2##

Steps

Compare the T-F2## demand with T-F3## and T-F4## aggregated on product and demand category level.
1. Access and log on to the SAP IBP, add-in for Microsoft Excel.
2. Go to Favorites→Group ## Pump.
3. Choose Edit View and make the following changes in the Customer Demand tab.
  In the Attributes tab, deselect the Customer ID.
  In the Filter tab, add products T-F3## and T-F4## to the filter.
4. Open the Customer Demand tab.
  Result
  - There is delay for T-F3## demands.
  - T-F2## and T-F4## demands are met later after the frozen horizon and lead time.
5. Choose Master Data Workbook.
6. In the Create Master Data Workbook window, choose the master data type Customer Product Category in the General section. Filter on your data set in the Filter Section. Check the late delivery settings for your products.
Review the capacity by product for T-F2## in your planning view favorite. Discuss the capacity situation considering the existing demand.
1. Choose the Capacity by Products tab. Filter for your resources WT-L##* by adding an attribute based filter to the planning view sheet.
  Result
  - T-F2## was planned in two production lines.
    Reason: Demand is higher than line 1's available capacity
  - Line 1 has Capacity Supply = 700
  - Line 2 has Capacity Supply = 500
  - Both lines are maxed out
    Reason: Demand exceeds total capacity
  - In addition, capacity is not consumed in the frozen period if there is no firm production orders modeled using Min Production or Adjusted Production Interactive. The standard delivered calculation is revised as follows:
  Code Snippet
```
123
ADJUSTEDPRODUCTION@DAYPRODLOCSRC = IF ( "PERIODID0" < "$$PERIODID0CU$$" + IF(ISNULL ( "FROZENHORIZON" ),0, "FROZENHORIZON" ),IF (ISNULL ( "ADJUSTEDPRODUCTIONRECEIPT@DAYPRODLOCSRC" ), IF (ISNULL ( "MINPRODUCTION@DAYPRODLOCSRC" ), 0, "MINPRODUCTION@DAYPRODLOCSRC" ) , "ADJUSTEDPRODUCTIONRECEIPT@DAYPRODLOCSRC" ), "ADJUSTEDPRODUCTIONRECEIPT@DAYPRODLOCSRC" ) 
```
Regarding inventory for T-F2##, what are the projected stock and projected periods of coverage? Why?
1. Choose the Inventory tab and add an attribute based filter for product T-F2##.
  Result
  - Projected Stock is empty
  - Projected Periods of Coverage is empty.
    Reason: No on-hand inventory is set for T-F2##. In addition, there is no target inventory modeled (yet).
Review the inbound and outbound distribution. Validate the lead times between lanes to explain the shipments.
1. Open the Inbound Lanes tab.
2. Choose Master Data Workbook.
3. In the Create Master Data Workbook window, choose the master data type Location Source. Filter on your data.
4. In the Attributes Section remove all attributes apart from lead time and sort the mandatory attributes in following order: Ship-From Loc. ID, Location ID, Mode of Transport ID, Product ID.
5. Choose OK.
  Result
  In column F, the lead time for each route combination is displayed.
6. Open the Outbound Lanes tab of your planning view favorite.
  Result
  The lead times applied to this tab also originate from the location source master data.
  Also notice that multiple modes of transportation are modeled here – Truck shipments can be seen in the early part of the horizon, where Rail would not be possible. In addition we also have some outbound customer demands that increase the transport quantities.
Review the dependent demands that were generated for the raw materials. Was demand generated?
1. Open the Components tab.
  Result
  Demand was generated.

Task 2: Set Production Lot-Size Rounding and Minimum Lot Size for Product T-F2##

Steps

Review the production source header and set the lot-size rounding value for production receipts to 64. Use the data from the table:
Column Value
Lot-Size Rounding Value for Production Receipts 64
1. Choose Master Data Workbook.
2. In the Create Master Data Workbook window, choose the master data type Production Source Header.
3. Filter the Product ID column by T-F2##.
4. Enter the data from the table in both lines.
Set the minimum production lot size to 128. Use the data from the table:
Column Value
Minimum Production Lot Size 128
1. In the Minimum Production Lot Size column, enter the value 128 in both lines.
2. Choose Save Changes.
Review the production source resource consumption.
1. Review the production source resource consumption. In the Group ## Pump template, choose the Production by Source ID tab.
  Result
  Line 1 produces T-F2## based on Source ID T-F2##_1000_0001. Line 2 is also used, but we will concentrate on line 1 in the next step.

Column	Value
Lot-Size Rounding Value for Production Receipts	64

Column	Value
Minimum Production Lot Size	128

Task 3: Set Planner Adjustments for Production of T-F2## Against Line 1 in Location 1000

Steps

Set Production Receipts Adj Interactive using data from the table:
Key Figure Day Value
Production Receipts Adj Interactive 1-7 100
Production Receipts Adj Interactive 20 1000
1. In the Group ## Pump favorite, choose the Production by Source ID tab.
2. For product T-F2##, enter the values into the Key Figures table (if necessary, change the tab filter):
  Days 1-7: Production Receipts Adj Interactive: 100/day
  Day 20: Production Receipts Adj Interactive: 1000
Set the minimum production as described in the table:
Key Figure Day Value
Minimum Production Receipts Day 21 300
Minimum Production Receipts Day 22 1200
1. In the Group ## Pump template choose the Production by Source ID tab.
2. For product T-F2##, enter the values from the table into the Key Figures table (if necessary, change the tab filter).
Set the maximum production as instructed in the table:
Key Figure Day Value
Maximum Production Receipts Day 23 0
Maximum Production Receipts Day 24 300
1. In the Group ## Pump template, choose the Production by Source ID tab.
2. For product T-F2##, enter the data from the table into the Key Figures table (if needed change the tab filter).
3. Choose Save Data.

Key Figure	Day	Value
Production Receipts Adj Interactive	1-7	100
Production Receipts Adj Interactive	20	1000

Key Figure	Day	Value
Minimum Production Receipts	Day 21	300
Minimum Production Receipts	Day 22	1200

Key Figure	Day	Value
Maximum Production Receipts	Day 23	0
Maximum Production Receipts	Day 24	300

Task 4: Run the Optimizer and Validate the Results

Steps

Run the optimizer and validate the results.
1. In the Microsoft Excel SAP IBP tab, choose Application Jobs, then S&OP Operator, then Run.
2. Select the Planning Operator Profile 1_Optimizer_No Fairshare_##.
3. Under Scenarios, check that the Baseline checkbox has been defaulted.
4. Under Versions, check that the Base Version checkbox has been defaulted.
5. Under Planning Unit, check that the ##_PUMP checkbox has been defaulted.
6. Choose Next.
7. Choose Run and wait for the pop-up status Finished.
Is there production above 100 for days 1-7?
1. Open the Production by Source ID Microsoft Excel tab.
  Result
  There is no production over 100 within the frozen horizon.
What are the impacts of lot sizes and adjustments to production?
1. Open the Production by Source ID Microsoft Excel tab.
  Result
  - Production receipts were limited to a capacity of 700 on day 20, even though the planner adjustment was 1000 – hard constraint vs. pseudo-hard constraint. Hard constraints (here production capacity supply of 700) cannot be violated by the optimizer. Pseudo hard constraints are prioritized automatically via very high costs, but they can be violated if in conflict with a hard constraint.
  - Day 21. Minimum Production and Production Lot Size Respected.
  - Day 22 – the plan was limited by production capacity (hard constraint), although Min Production of 1200 was set (Pseudo-hard constraint). Furthermore, if Min Production is used, rounding applies and therefore just 640 is fulfilled.
  - Day 23 – the max resulted in 0 units.
  - Day 24 – the max of 300 is a hard constraint, so once again the production was limited to 300 or less. Due to the rounding values the system had to round down.

Task 5: Revert Key Figure Changes from Task 3

Steps

Undo changes in Production Receipts Adj Interactive, Minimum Production Receipts, and Maximum Production Receipts.

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