Elements of an Allocation Process
Product Allocation in aATP
Being able to deliver the required quantity of a material to the customer at the requested time demands precise planning and control mechanisms. Unpredictable problems, such as breakdowns in production or increased demand, can lead to critical situations in order processing and must be avoided wherever possible.
In advanced Available-to-Promise (aATP) in SAP S/4HANA, you can use Product Allocation (PAL) to avoid critical situations in demand and procurement by allocating materials in short supply to, for example, specific regions and customers for a specific time period. This can help avoid the situation whereby, for example, the entire available quantity of a material in short supply is allocated to a single customer, thereby making it impossible for you to confirm subsequent order requirements for the same material from other customers.
However, the functionality of an allocation check exists in earlier releases of SAP ERP, and so is not new.
Unfortunately, the data modeling process in SAP ERP has been complex and included significant limitations.
In SAP ERP the allocation process was based on the data model in Logistic Information System (LIS).
LIS has the following limitations:
LIS operates on redundant data. Every business transaction not only updates the business documents, but also pre-aggregated data in LIS.
Performance suffers, locking conflicts might occur, and memory is wasted. Whether or not LIS causes locking conflicts depends on the frequency of change of the aggregated information. If several transactions want to update the same aggregated dataset in parallel, then you will experience a locking conflict.
LIS operates on pre-aggregated data. It is not possible to drill down into the individual business documents. Multi-dimensional reporting (aka Slicing and dicing) is only possible for dimensions provided in the pre-aggregated data.
LIS uses an old UI technology making multi-dimensional reporting clumsy.
LIS only supports material numbers with up to 30 characters.
Therefore a new solution was requested.
What is the main idea behind the check against allocation?
Product allocation enables you to control the confirmation behavior of the advanced available-to-promise (aATP) check by specifying restrictions. It is usually combined with the product availability check. The table Features of Product Allocation provides an overview of its main features and advantages.
Features of Product Allocation
| Features | Advantages |
|---|---|
Combination of restrictions:
| Ensures a fair distribution of goods in short supply (not "first come first served"). |
In defining the restrictions in product allocation, you have flexibility regarding the characteristics that you can use. You can also combine several restrictions. For products where there is a bottleneck (for example, in stock or production), you can use these restrictions to ensure that goods in short supply are correctly distributed.
Definition of Product Allocation
Competitive order processing—which aims to deliver the requested quantity to the customer at the requested time—demands precise planning and control mechanisms. Unpredictable problems, such as drops in production or increased demand, can lead to critical situations in order processing. In order processing, they must be identified and controlled early on.
Product allocation provides this sort of control. It enables your company to avoid critical situations in demand and procurement. It must be possible to have both an equal allocation of products that are in short supply. It must also be possible to have a speedy reaction to bottlenecks or changing market situations.
You can use product allocation to allocate products on a period-specific basis—for example, for specific customers or regions. If you use product allocation in situations in which a product is in short supply, you can avoid allocating the entire available quantity to the first customer. Allocating all of the quantity to the first customer would either delay the confirmation of subsequent sales orders or make confirmation impossible.
The product allocation function allows you to manage the supply of scarce products to customers so that each customer receives an allocated amount.
A product allocation check can act as a secondary check against the quantity requested in the sales order. First, a basic ATP check can be performed against stock and receipts, possibly resulting in a lower confirmed quantity due to insufficient stock. This confirmed quantity can be checked against the product allocation quota, possibly further reducing the confirmed quantity.
Check Against Product Allocations
Product allocation encompasses internal product allocations for sales organizations and distribution channels, as well as for external customer groups and specific customers. For example, the control process for product allocations enables the user to manage product allocations at specific product levels. It also enables management allocations for different product groups.
During the overall constraint period, the system takes into account the different control phases that exist for product allocations. There might be phases without constraints. There might be a change over time in the reason for the check against product allocations.
Discrete Product Allocation
If you use discrete product allocation, only single-level product allocation is possible.
Cumulative Product Allocation
If you set the Cumulative indicator in the Customizing activity Maintain Product Allocation Procedure, then the system uses the cumulative product allocation method.
Through the cumulative product allocation method, you can use the following:
Product allocation steps: You can define multiple product allocation steps with different product allocation groups.
A consumption period: You can define a number of past and future periods to be used as valid consumption periods.
The number of past periods identifies the number of periods before the product allocation date (taken from the order) that can be used for calculating unused product allocations. The unused product allocation quantities of these past periods are then cumulated before product allocation is checked for the current period. The number of future periods identifies the number of periods after the product allocation date. It can be used to calculate future product allocations. If the requested quantity is not confirmed within the future periods, then it remains unconfirmed.
Product Allocation Consumption Period
If you are using cumulative product allocation, then you can define a consumption period for each product allocation group. The consumption period defines how many past and future periods are accounted for in the check against product allocations. Unused product allocation quantities from past periods are cumulated. Future periods can only be used for creating a delivery proposal consisting of multiple partial deliveries.
Product Allocation Procedure
Multilevel Product Allocations
Product allocation can be single-level or multilevel.
Single-Level Versus multilevel Product Allocation
Single-level product allocation uses a sequence group which is linked to the Sales sequent goups. Sales sequent groups can contain multiple sequence groups. The allocation object is linked to the sequence groups.
For an allocation check using multiple sequence groups (sales and capacity) the system calculates the sum of the allocation in the Sales Sequence Group and in the Capacity Sequence Group and confirms the minimum of both.
Therefore Sequence Groups are linked with a logical "AND".
Multilevel Product Allocation with the AND Link
Multilevel steps of product allocation groups form product allocation procedures. When a new order is checked, each step in the procedure–a step which is a product allocation group—is evaluated. The result of the preceding step is applied to the subsequent step. The final result of the product allocation check in the product allocation procedure is calculated from a logical AND link proposed by each of the product allocation groups.
For example, in the figure Product Allocation: Multilevel with AND Link, the smallest quantity (50 pieces) is determined by the product allocation group in regards to the characteristics combinations of the customer.
However, in SAP APO, you can use a sequence of product allocation procedures to confirm additional quantities that have been planned in a different planning area. Product allocation procedures containing more than one allocation group are only possible for a cumulated check against product allocations.
