Understanding Process Steps and Business Roles for Demand-Driven Buffer Level Management (1Y2)

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Define process steps for demand-driven buffer level management (1Y2)
  • Identify business roles for demand-driven buffer level management (1Y2)

Process Steps for Demand-Driven Buffer Level Management (1Y2)

Applicable Process Steps

Buffer Positioning

This process step shows you how to calculate three kinds of classification to make strategic buffer positioning for demand-driven replenishment materials. In other words, we could check the classification results to decide whether a material shall be positioned as a buffered product.

Process StepDescription
Schedule Product ClassificationThis process step shows you how to classify your products by systematically evaluating them based on their goods issue value (ABC classification), usage across BOMs (PQR classification) and variation in actual demand (XYZ classification) across a specified evaluation interval. Classifying your products helps identify whether they are relevant for Demand-Driven Replenishment, and define inputs for their buffer settings. Additionally, you can schedule runs to reclassify your products periodically to keep their classifications up-to-date, so that you get accurate results as you proceed with Demand-Driven Replenishment.
  • Classification type 1: Value (ABC, A for high, B for medium, C for low)

    Value is the percentage radio of absolute value for the specific material to whole absolute value in the plant. (Absolute value is relevant with price and consumption in past several days)

  • Classification type 2: Variability (XYZ, X for low, Y for medium, Z for high)
  • Classification type 3: BoM Usage (PQR, P for high, Q for medium, R for low).
Mass Maintenance of ProductsThis process step shows you how to display and change product details (master data records) relevant to Demand-Driven Replenishment. After you have classified or reclassified your products, you can view the results of the classifications in this app, decide whether the material is relevant for strategic stock positioning. You can use the mass change feature to change the master data records for several products simultaneously.

ABC Classification: Classifying a product or component into type A, B or C based on its goods issue value, with products classified as type A having the largest goods issue value and products classified as type C having the smallest goods issue value.

XYZ Classification: Classifying a product or component into type X, Y or Z based on the variation in its goods issue value, with products classified as type X having the lowest variation and products classified as type Z having the highest variation.

PQR Classification: Classifying a product or component into type P, Q or R based on its usage in BOMs, with products classified as type P being used in the highest number of BOMs and products classified as type R being used in the lowest number of BOMs.

Check Buffer PositioningThis process step shows you how to monitor and decide which products to buffer and unbuffer by checking buffer analysis.
Buffer Positioning - Inbound Protection (Optional)This process step shows you how to make strategic buffer positioning and adjust buffered or unbuffered product based on business requirements.

In real business, you can adjust buffer positioning with different strategies. In our standard scenario, we introduce inbound protection, which can compress lead time.

Buffer Sizing

This process step shows you how to calculate buffer levels – maximum stock level, reorder point and safety stock for buffered products.

  • Maximum stock - the cumulative sum of the quantities of the red, yellow and green zones, denoting the suggested stock buffer level above which the stored inventory quantity can be considered as excessive
  • Reorder point - the cumulative sum of the quantities of the red and yellow zones, which indicates a need for replenishment of the stock buffer, that is, creation of a supply order, whenever the available stock falls below this point
  • Safety stock - the minimum recommended stock buffer level that should be maintained, denoted by the buffer value at the top of the red zone

After buffer sizing execution, you could proceed with the scenario Demand-Driven Replenishment Planning and Execution (2QI) for detailed replenishment process.

Process StepDescription
Schedule Lead Time Classification of ProductsThis process step shows you how to classify your Demand-Driven Replenishment-relevant products by evaluating them based on their Decoupled Lead Time (EFG classification) across a specified evaluation interval. Classifying your products based on their Decoupled Lead Time (DLT) will help define inputs for their buffer settings. Additionally, you can schedule runs to reclassify your products periodically to keep their classifications up-to-date, so that you get accurate results as you proceed with Demand-Driven Replenishment.

Lead time (also called individual lead time) is defined as the total time required to receive a product in your inventory after placing an order, whether via manufacture, purchase or transfer from another location.

Decoupled lead time is calculated for buffered product (DD-relevant product) by considering the longest path in the BOM chain. In other words, decoupled lead time is a sum of the longest lead times of non-buffered products in a sequence headed by a buffered product in a BOM, adding up to a cumulative lead time for the buffered product.

Classification type 4: Lead Time (EFG, E for short, F for medium, G for long)

Classifying a product or component into type E, F or G based on its decoupled lead time, with products classified as type E having the shortest decoupled lead time and products classified as type G having the longest decoupled lead time. An EFG classification is typically used together with the procurement type for a product or component.

If there is transactional data (production order or purchase order) for buffered products, then the lead time is calculated as below:

  • In-house production material
    • Lead time = The production order final confirmation time - the production order creation time.

    • If there are several production orders during the horizon period, then the lead time is calculated as the average quantity of those lead times.

  • External procurement material:
    • Lead time = The date of goods receipt for purchase order - the date of purchase order creation.

    • If there are several purchase orders during the horizon period, then the lead time is calculated as the average quantity.

If there is no transactional data for buffered products, then the lead time is derived from material master data.

Buffer Profile Maintenance (Optional)This process step shows you how to execute to maintain a buffer profile, which is a set of buffer control parameters. They are assigned to DD-relevant products based on their classification with respect to lead time, variability, and procurement type.

In our pre-delivered scenario, we have the created buffer profile DEFAULT. You can review or change the detailed control parameters and plant assignment of the buffer profile DEFAULT.

You can also create a new buffer profile and make plant assignment in this activity.

Note
Only one buffer profile can be assigned to one plant.
Schedule Buffer Proposal CalculationThis process step shows you how to generate buffer (stock) level proposals for your Demand-Driven Replenishment-relevant products based on their average daily usage, decoupled lead time, buffer profiles, and several other factors. Additionally, you can schedule runs to recalculate the buffer proposals periodically to keep them up-to-date, so that you maintain appropriate levels of inventory while using Demand-Driven Replenishment.
Manage Buffer LevelsThis process step shows you how to ensure that products are available when needed by managing the safety stock, reorder point, and maximum stock through buffer proposals for optimized Demand-Driven Replenishment. Buffer level proposals are necessary to adjust the buffer levels to the ever changing reality and thereby ensure that a product is sufficiently stocked to meet average demand, but in low enough quantities to prevent excessive storage costs or losses due to expiry.

Business Roles for Demand-Driven Buffer Level Management (1Y2)

Click on the available pictogram to display according information and the relevant piece of the hierarchy.

Access to business applications is controlled by role-based authorization management. You assign Business Roles to Business Users, and the roles provide access to business tasks. Business Users are defined as employees, contractors, or other individuals that need access to the SAP S/4HANA Cloud, public edition system.

How to find Business Roles for a Scope Item

  1. Navigate to SAP Best Practices for SAP S/4HANA Cloud, public edition for Enterprise Management.
  2. Select your country localization from the Version drop-down list.
  3. In the Solution Scope section, expand the relevant scope item group.
  4. Select a scope item.
  5. Download the test script.
  6. Navigate to the Roles section of the test script.

A business role is assigned to a business user to grant permission to access applications in SAP S/4HANA Cloud, public edition.

One or more business catalogs are assigned to a business role. Business catalogs include access to one or more applications, dashboards, or displays of data.

Administrators can control visibility to the data granted through the catalog by applying general restrictions to business catalogs. By maintaining access restrictions, you can define the subset of all existing business objects a user can view (read) or edit (write) when working with a particular business role.

The business catalog defines which access categories are available (Value Help, Read, Write), and for which fields restriction values can be maintained. The fields vary by catalog, as they are based on the fields within the apps in the catalog. The business role aggregates restrictions for all business catalogs.

Administrators define a restriction based on a supported field (such as company code, country, controlling area, and so on). Supported restriction fields vary by business catalog, as they are based on the fields within the apps in the catalog. You can restrict data access for the Value Help, Read, and Write separately. Read access always includes Value Help access, and Write access always includes Read access.

How to Identify the Business Catalog(s) Mapped to a Business Role and the SAP Fiori App(s) Mapped to a Business Catalog:

  1. Log into the SAP S/4HANA Cloud, public edition system.
  2. Select the Manage Business Roles app from the launchpad.
  3. Select a business role.
  4. Select the Assigned Business Catalogs tab to view the standard business catalogs assigned to the standard business role.
  5. Select a business catalog.
  6. Select the Catalog Description tab to view the Functional Description, Authorization Criteria, and Associated Catalogs information.
  7. Select the Applications tab to view the SAP Fiori apps mapped to the business catalog.
Note
Do not edit SAP standard business roles directly. To customize business roles, always make a copy of the SAP standard business Role or use the option Create From Template in the Maintain Business Roles app.

To apply general restrictions, an administrator should first make a copy of the SAP standard business role, or create a new role based on the SAP standard business role template. For example, if you need to restrict access in the Accounts Payable Accountant business role for some users to only company code 1710 (United States), and for some users to only company code 1010 (Germany), you create two new business roles based on the SAP Standard Accounts Payable Accountant role. You should name the roles accordingly (for example, Accounts Payable Accountant_1710). In the first business role, you edit the role and maintain the restriction value(s) for the entire business role (that is, you define the Company Code field as 1710). Then, you may edit the individual business catalogs within the role and define the access category (Value Help, Read, or Write) as restricted. When you create a new business role, the Read access is set to Unrestricted and the Write access is set to No Access by default. When an access category is restricted, you must select a specific field value (such as company code = 1710) or grant unrestricted access. If you leave fields empty within a business catalog, a user will be assigned no access to the field in the business catalog's granted apps.

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