Explaining Segmentation

Objectives

After completing this lesson, you will be able to:

  • Explain the difference between logical a physical segmentation
  • Name some examples for segmentation
  • Create characteristics for segmentation
  • Set up segmentation
  • Outline where in the material master segmentation is relevant

Difference Between Logical and Physical Segmentation

Position of the Topic in the Complete Training Scenario

The figure illustrates the position of the core concepts in the complete training scenario.

Scenario

You want to segment demand or stock elements in a structured way, without creating additional material master data.

Segmentation Reasons

Segmentation offers the possibility to categorize demand as well as supply based on logical and/or physical aspects of a product without the need to create additional material/Material master data for each possible segmentation value.

Segmentation (LO_SEGMENTATION) is a new SAP ERP component, integrated into:

  • LO Material Master
  • SD Sales
  • MM Purchasing
Note
It is not limited to SAP S/4HANA for Fashion and Vertical Business and has to be activated as business function.

Elements of Segmentation

Technically there is no difference between physical and logical reasons for segmentation.

Several segmentation characteristics can be combined into a segmentation structure.

Examples for Segmentation

Segmentation when used typically influences all logistics processes. Depending on the scope of usage, the supply and/or demand processes and the relevant documents pertaining to them are influenced and carry this information.

In cases of merchandise moving from a segmented location to a non-segmented location the following rules are observed:

  • Stock transfer from segmented location to segmented location: STO can carry requirement and stock segment.
  • Stock transfer from segmented location to not segmented location: STO can only carry requirement segment.

The segmentation strategy has the information how stock segments can be matched to requirement segments:

Note
First of all it has to be defined which segment value combinations are allowed. From a business point of view some combinations might not be needed.
ARun/MRP/Requirement/Stock Allocation

How the supply assignment (ARun – see unit Logistics Execution) and MRP cover requirements with stock.

ATP

Pool Segments and check level: Optional ATP logic to pool together different stock segments if they can all be used to fulfill requirements.

Dependent Requirements/Stock transfer

To support stock transfer from one plant to another.

Requirement to stock conversion

Which stock segments are created by material requirement planning (MRP) to cover requirements.

PIR consumption:

If planned independent requirements (PIRs) are used to record planned demand in the system these planning figures are typically consumed/reduced by real demand (sales orders etc.) and a definition is necessary how PIR requirement segments are to be consumed by e.g. sales order requirement segments.

Segmentation Structure Creation

Segmentation characteristics are defined in transaction CT04.

Relevance are defined under additional data in transaction CT04.

Flagging allows additional master data maintenance or enables additional functionality.

Segmentation Set Up

Relevant transaction: SGT_SETUP - Segmentation Setup.

Further facts about segmentation set up:

  • A segmentation structure is defined with a name.

  • Characteristics can be added in a defined sequence.

  • With segmentation active the system requires a valid segmentation value in the corresponding document field.

  • "Enable Blank" allows for a blank entry during document maintenance. In the screenshot the value "blank" for the special stock segment means "normal stock" as shown in the structure test. Therefore "blank" has a meaning.

Scope and Value Combinations

Relevant transaction is SGT_SETUP - Segmentation Setup.

Segmentation Strategy Scope: The scope option defines the mapping rules for segment combinations in segmentation strategy.

Following scope options are available:

  • Scope 1: Requirements and Stock Segments maintained and considered in MRP run accordingly.
  • Scope 2: Only Requirements Segments are maintained and considered in MRP run, stock segment is not applicable. With this scenario it is possible to identify the segment of the requirements, e.g. from which channel Planned Independent Requirement quantities were entered or from which channel sales orders come in. However all requirements would be covered by common stock, and subsequently procurement would be done for common stock too.

Segmentation Strategy Creation

The figure illustrates the available activities to create segmentation strategies.

Segmentation Scenarios: 1:1 and N:1

Explanations:

1:1
  • A particular requirement segment can be mapped to a particular stock segment.

  • The particular stock segment is mapped to a particular requirement segment.

N:1

  • Any requirement segment can be mapped to a particular stock segment.

  • The particular stock segment is mapped to a certain set of requirement segments.

Segmentation Scenarios: 1:N and N:M

Explanations:

1:N
  • A particular requirement segment can be mapped to a certain set of stock segments.

  • The particular stock segment is mapped to a particular requirement segment.

N:M

  • Any requirement segment can be mapped to a certain set of stock segments.

  • A certain set of stock segments is mapped to a any requirement segment.

Segmentation Scenarios: Pool Segmentation

Pool

  • The Pool segment specifies an individual or a combination of valid requirement segments or stock segments.

  • All requirement segments from a pool are mapped to all stock segments (n:n).

Default Segmentation Values in Documents

Relevant transaction: SGT_SETUP - Segmentation Setup.

In this example shown in the slide the system will check during sales order creation the field KVGR1 of table VBAK for the value and use it as default value of the segment "channel"

Defaulting is possible for:

  • Sales Order.

  • Purchase Order: Stock Segment.

  • Purchase Order: Requirement Segment.

  • Purchase Requisition: Stock Segment.

  • Purchase Requisition: Requirement Segment.

  • Planned Order.

  • Production Order.

  • Safety Stock.

  • Outline Agreement.

  • Planned Independent Requirements.

Relevance of Material Master Segmentation

Segmentation assignment and usage is defined in MM41 or MM42 in the material master views Basic Data 2 and Logistics DC 2.

Once segmentation structures are assigned and the material is in use they can not be changed any more (for data consistency reasons)

Segmentation Specific Material Data e.g. for the Sales Status

Defining segment characteristics relevant for specific business areas results in the option to maintain further material master data.

The example shown above shows the sales status not only being maintained for the material / material variant itself but also per segmentation value. (Actually a combination of two segment values which are both relevant for SDS)

Segmentation - Valuation Types

Material ledger (ML): It helps to calculate actual cost for materials and also provide the facility of multiple parallel valuations in multiple currencies. ML has two major functionalities, first to calculate actual cost of materials, semi/finished goods, and second provide an opportunity to calculate actual cost on multiple valuation such as Legal, Group, & Profit center valuation.

ML data forms the basis of actual costing and is used to manage valuation prices in multiple currencies and valuations. Consequently, material ledger data supplements the material master record. In addition, material ledger data can refer to materials that are part of sales order stock and project stock.

For SAP S/4HANA for fashion and vertical business, the material has been integrated in material master for distribution channels and stores. The ML related entries (fields) are displayed in the material master only if ML is activated for a particular DC/store. If you have maintained the Moving price, Standard price & Future price values in the standard accounting screens before navigating to any of the ML enabled plants, then these values are copied to the ML fields.

Split Valuation: For certain materials, it is necessary to individually valuate the various stocks in a particular valuation area. If a material is subject to split valuation, then the material is managed as several partial stock and each partial stock is valuated separately.

Every transaction that is relevant for valuation, be it a goods receipt, goods issue, invoice receipt or physical inventory, is executed at the level of the partial stock. When you process one of these transactions, you must always specify which partial stock is involved. This is to ensure that only the partial stock in question is affected by a change in value, the other partial stocks remain unaffected. Along with the partial stock, the total stock is also updated. The calculation of the value of the total stock results from the total of the stock values and stock quantities of the partial stock. Using split valuation, separate valuation of partial quantities of a material can be carried out.

Segmentation Mapping Details

Examples

The segmentation strategy has the information which stock segments can be used to cover requirement segments.

This coverage can be set up individually for different steps like available to promise (ATP), material requirement planning (MRP), supply assignment (ARun) and others.

Example:

  1. A sales order for 100, requirement segment W is created. ATP (available to promise) checks against existing stock, in this case warehouse stock of 50 W and 50 R is available. The segmentation strategy is defined to cover W-requirements with W-stock and R-requirements with R-stock. Therefore the sales order is partially confirmed with 50.
  2. The requirement planning (MRP) identifies the partially open requirement and triggers the procurement of more stock. The segmentation strategy is defined to purchase stock segment W if the demand requires segment W
  3. As a result more stock is received and now a new ATP can confirm the sales order completely

The segmentation strategy has the information which stock segments can be used to cover requirement segments.

This coverage can be set up individually for different steps like available to promise (ATP), material requirement planning (MRP), supply assignment (ARun) and others.

Example:

  1. A sales order for 100, requirement segment W is created. ATP (available to promise) checks against existing stock, in this case warehouse stock of 50 W and 50 R is available. The segmentation strategy is defined to cover W-requirements with W-stock and R-requirements with R-stock. Therefore the sales order is partially confirmed with 50. There are also planning figures in the form of PIR in the system: 150 W and 100 R.
  2. The requirement planning (MRP) identifies the partially open requirement and triggers the procurement of more stock. The segmentation strategy is defined to purchase stock segment W if the demand requires segment W. In addition MRP finds the open PIR quantities. Because of the consumption logic the existing 100 W of the sales order are taken into consideration and only the difference of 50 (150 - 100) is planned by MRP. There is also a planning quantity of 100 for R-segment. MRP identifies that 50 R are already on stock and therefore triggers only the procurement of another 50.
  3. As a result more stock is received and now a new ATP can confirm the sales order completely and ARun can assign the full requested quantity of 100 W to the sales order which can then fully be delivered

Segmentation Strategy in Processes – Example 3

The segmentation strategy has the information which stock segments can be used to cover requirement segments.

This coverage can be set up individually for different steps like available to promise (ATP), material requirement planning (MRP), supply assignment (ARun) and others.

Example

  1. A sales order for 100, requirement segment W is created. ATP (available to promise) checks against future stock, in this case a vendor purchase order of 60 R and 90 W is available. The segmentation strategy is defined to use pooling to cover W-requirements and R-requirements together. Therefore the sales order is fully confirmed. The store order (R-segment) can also be confirmed with the pool even though there is less R-stock than required.

  2. During the goods receipt it turns out that only 70 W are delivered instead of the expected 90 W.

  3. ARun does not use pooling but matches W with W while R requirements are fulfilled primarily with R and secondly with W. If the store order is assigned first it will consume the available R-stock and some of the W-stock. The sales order can only be assigned partially with the remaining W-stock.

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