Master data is the essential data (about products, locations, resources, production data structures (PDSs), and so on) that is necessary to build a supply chain model and execute planning. In addition to the general data mentioned, you also have to create specific master data for each of the planning methods used in PP Optimizer (PPO). For example, to execute extended safety stock planning, you can maintain time-dependent safety stock and penalties. This specific data includes information about safety stocks, the safety stock method, and so on. This section lists all the master data that must be created to successfully run the PPO:
- Material Master
- Resource Master
- Production Data Structure (PDS)
- Transportation Lanes for the PPO
- Time-Dependent Stock Levels and Penalties
The master data is both relevant to the definition of the objective function (costs) of the optimization model and the constraints. The accuracy of this information is crucial to the successful implementation and accurate output of the optimization model.
The material master holds the following information for the PPO. This information is maintained in transactions MM01 or MM02:
- Base unit of measure (Basic Data 1 tab)
- Procurement type, planned delivery time (MRP2 tab)
- Production storage cost, safety stock penalty, safety stock method, maximum days' of supply, maximum days' of supply penalty, goods receipt processing time, goods issue processing time, costs for external procurement, delay penalty per base unit per day, maximum delay in days, non delivery penalty per base unit, resource network name (Advanced Planning tab)
You can maintain PPO-related parameters such as demand penalty, procurement cost, product storage cost, maximum days' supply penalty, and so on, at the MRP area level as well. There is a special fall-back logic for considering product storage cost and safety stock penalty at the MRP area level. If you do not maintain any value for storage cost or safety stock penalty at the MRP area level, the system reads the value of these fields as being maintained at the plant level.
You can maintain demand penalties, maximum delay allowed, and nondelivery penalty of products for different demand classes using the transaction /SAPAPO/PPO_DPEN.
The work center (resource) master data is most important to define capacity constraints. For this purpose, the Relevant to Finite Scheduling indicator has to be selected in the work center capacity. If you want the optimizer to consider the available capacity of production resources as finite, you have to select the Production Capacity indicator in the General Constraints tab of a PPO profile. Furthermore, a Finiteness Level can be defined in the resource. If you are using the finiteness level, the finiteness level of the (PP/DS resource) capacity should be less than the finiteness level maintained in the optimizer profile to consider the resource as finite.
You can maintain the cost and capacity constraints for the resource under APO Resource (Change Work Center Capacity → Capacities → APO Resource → PPO Capacity Constraintstab). You can specify the time interval (in days) for which the capacity costs and constraints are applicable. And for each time interval, the following parameters are defined:
- Normal capacity costs
- Minimum capacity that must be used
- Penalty for not using the minimum capacity
- Threshold for capacity extension
- Penalty for extended capacity utilization
The optimizer considers the resource capacity as zero during downtimes and fixed intervals. PPO constraints do not get copied to the new work center, when you copy a work center with PPO constraints.
The production data structure that is maintained for a material is considered as a source of supply during the execution of the PPO.
A typical lot size represents the quantity for which the PDS is exploded and for which the details of that explosion are sent to the optimizer. This is important since the PPO engine considers the duration of a PDS to be fixed, that means it does not scale with quantity. If the typical lot size is maintained as a value very close to the typical size of a demand quantity, or a typical size of a production lot, then the plan suggested by the optimizer will be more accurate.
The typical lot size is calculated based on the following logic (which can be traced in the ET_PROMAT table of the optimizer log):
- If a fixed lot size is maintained in the material master, the typical lot size is equal to the fixed lot size.
- If a minimum lot size is maintained either in the material master or in the source of supply, the maximum of both minimum lot sizes is the typical lot size.
- If a rounding value is maintained in the material master, the rounding value is the typical lot size.
- If none of the above is applicable, the lot size quantity of 1 is the typical lot size (fallback).
When the optimizer proposes planned orders as a result of its execution, the quantity suggested by the optimizer is in multiples of this typical lot size.
To activate the discrete constraints relating to the production data structure, you have to select the Discrete Optimization method in the optimizer profile. A horizon must be maintained in the optimizer profile under the Discrete Constraints tab for the corresponding fields of Integral Production Lots, Minimum Production Lot Size, and Fixed Material and Resource Consumption. This horizon represents the duration starting from today, in which the discrete constraint is active.
The use of Integral Production Lots ensures that the PDS is discretized for the optimizer run which means that the individual PDSs are only executed in multiples of the lot size within the discretization horizon (these multiples must be whole numbers). The basis for an integral multiple is the Rounding Value that has been defined in the material master. If no such value has been maintained, the optimizer uses the typical lot size.
When proposing production quantities, the optimizer considers the Minimum Lot Sizes maintained either in the PDS or in the material master.
The PPO considers fixed resource consumption in a production data structure (PDS) only if Discrete Optimization has been selected and the Fixed Material and Resource Consumption discretization option has been activated in the optimizer profile. Therefore, fixed resource consumption is not considered when using linear optimization. However, fixed resource consumption is considered when creating orders in liveCache. If a PDS has fixed resource consumption and linear optimization has been chosen (that is, no discretization), then excess capacity is consumed compared to what is shown in the PPO result log file. This means that if the optimizer consumes 100% of the available capacity, you can see an overload in the Capacity view.
The optimizer respects the maximum PDS lot size of the product and suggests order quantities that do not exceed the maximum lot size. Since the optimizer follows time bucket-based planning, it calculates the maximum order quantity to be produced in a bucket, based on this value. Furthermore, the validity periods of the PDS are considered by the optimizer when planning for a product.
The resource of the last operation of the routing is considered by the optimizer for the scheduling step of planning, for instance, the operating time of this resource is used to plan all the operations of the order. The operating times of all other resources of the routing are ignored. Once the timing of the order is fixed, the capacity planning respects the capacity of each resource.
You can influence the optimizer's decision to choose which PDS to use for production by defining the corresponding production costs in the PDS. For example, if you want to define priorities for three different PDSs, you can specify the lowest production costs for the PDS with the highest priority, higher costs for the PDS with medium priority, and the highest costs for the PDS with the lowest priority. To do this, define single-level production costs in the PDS via transactions /SAPAPO/CURTO_EDIT or PDS_MAINT.
Watch the simulation Review Master Data for Production Planning Optimization to learn how to review and change production data structures and how to review the PPO relevant data elements in production data structures. By completing this simulation, you can experience the look and feel of the solution and explore the supported business processes. The simulations serve as an entry point for the exercises that you can complete by yourself in the SAP Practice System, in which you can explore the features and functions in greater depth. Even though the simulations in this course are labeled exercises, they are not as comprehensive as the end-to-end exercises offered through SAP Practice Systems. They are merely intended to provide initial hands-on practice before attempting the end-to-end exercises.
A transportation lane helps you plan for the procurement of products using stock transfers between two locations. The transportation lane is also used to plan procurement from a vendor defined as a business partner location. Transportation lanes are used in PPO to represent and create stock transfer orders between two locations or procurement requisitions between a business partner and a location. The value of the procurement type in the material master governs which sources of supply are selected by the optimizer. For example, procurement type X or F could mean that the transportation lane is selected by the optimizer for creating stock transfers.
The transportation lane priority can be used to filter the transportation lanes to be considered by the optimizer. While selecting the transportation lane for optimizer, the priority maintained in the product-specific transportation lane is compared with the Lowest Transportation Lane Procurement Priority in the PPO profile (Extended settings tab).
A prerequisite for the optimizer to take information on the transportation lane into account is that you have assigned a means of transport to the transportation lane which is valid for selected products. The following parameters of the transportation lane are important for the PPO:
- The start date, end date, minimum lot size, maximum lot size, procurement priority, and good receipt processing time defined for the product at the transportation lane.
- The start date, end date, transportation duration, transportation costs, and bucket offset defined for the means of transport.
- The start date, end date, transportation cost, and lot size profile defined for the product-specific means of transport.
- In case an external procurement relationship is assigned to the transportation lane, then the following is considered from the external procurement relationship:
- Status of external procurement relationship (must be active)
- Validity of external procurement relationship
- Planned delivery time in external procurement relationship
You can define time-dependent values for stock levels and penalties in transaction /SAPAPO/TDS.