Exploring Technical Steps of a Planning Run in SAP S/4HANA PP/DS

The Production Planning in SAP S/4HANA follows a sequence of predefined planning steps:

In previous releases (before release 2023) of SAP S/4HANA, the handling of a safety stock was done differently in SAP S/4HANA and SAP S/4HANA PP/DS.

In SAP S/4HANA, the configurations were performed via the MRP2 view in the material master.

The most common procedures were:

• Static Safety Stock
• Minimum Safety Stock
• Safety Time

The Static Safety Stock specifies the quantity that you want the system to cover in addition to the existing demands to satisfy a future, unexpectedly high demand. Static safety stock (SB) is a fixed safety stock quantity that does not vary over time. The quantity of this stock is derived from the material master and taken into account during planning. Safety requirements are always additional requirements from the point of view of planning. Static safety stock is also the most (time) critical safety stock because it represents a demand for today.

The Minimum Safety Stock represents a partial quantity of the safety stock. It defines the lower limit of the safety stock that should never be fallen below (internal stock).

The Safety Time is a safety time stock. It causes requirements in MRP to be brought forward by the number of workdays defined here. The range of coverage profile is defined in Customizing. It contains the parameters for calculating a dynamic safety stock. This is a statistical calculation of the safety stock on the basis of average daily requirements.

Up to and including SAP S/4HANA Release 2022, the usage of safety stock in PP/DS was fundamentally different. It was based on the use of the service heuristic SAP_PP_018: Generation of Safety Stock in LC. The safety stock levels taken into account here were determined dynamically.

Starting from SAP S/4HANA release 2023, the safety stock planning function has been enhanced, whereby this function has now also been adjusted/updated in PP/DS. However, this enhanced functionality is only available in an SAP Fiori environment (on-premise or Cloud). Based on the parameters for safety stock planning defined in the MRP 2 view, the configuration is automatically transferred to the Advanced Planning view. The assignment of the settings follows the logic shown in the following figure:

As shown in figure, the system determines the PP/DS safety stock method based on the Safety Stock and Safety Time fields from the material master (MRP 2 view). Regardless of the MRP type used, the PP/DS safety stock method SB (safety stock from location product) is stored in the material master of Advanced Planning if both a safety stock and a safety time are defined in the material master in the MRP 2 view. This also applies if the safety stock is maintained, but the safety time is initial.

If the safety stock is initial and one safety time has been maintained, the system automatically uses the PP/DS safety stock method SZ (safety days' supply from location product).These parameters are automatically transferred to the Advanced Planning view.

As you can see in the figure, due to the activated parameter Safety Stock Method – Automatic Determination, the SFT method has been transferred and is not editable. By removing this parameter, you can subsequently edit the Safety Stock Method again. Once you have selected a time-dependent method, the material appears in the SAP Fiori app Maintain Time-Dependent Stock Levels.

With lot-for-lot order quantities, the system creates an order proposal for the material shortage amount. If there are several requirements on one day, leading to a shortage, procurement proposals are generated using exact (to-the-minute) times. If you want to create a procurement proposal for the total shortage quantity for one day, use the daily lot size.

With a fixed lot size, the system uses the fixed lot size defined in the product master record if a product shortage occurs. If the quantity of the fixed lot size does not cover the shortage sufficiently, several lots in the amount of the fixed lot size are scheduled for the same time until the shortage is completely covered.

With replenishment to the maximum stock level, a procurement proposal is created for the amount of a defined maximum stock level (in the Maximum Stock Level field in the product master). However, if the shortage quantity for one day is larger than the maximum stock level, the lot size is the same as the shortage quantity. Replenishment to maximum stock level can only be used in PP/DS in combination with heuristic SAP_PP_007 (Reorder Point Planning). It is also possible to combine reorder point planning with other lot-sizing procedures. For example, the fixed lot size can be defined or rounding values can be used.

If the Lot Size Always indicator is set in the PP/DS product master, the lot-sizing procedure defined in the product master is always used, even in make-to-order planning. If you do not set the indicator, a lot-for-lot order quantity is always used in make-to-order planning or individual project planning and the system ignores additional constraints, such as the minimum and maximum lot size or the rounding values. This indicator is also transferred from SAP S/4HANA using the CIF.

In the period lot-sizing procedure, the system groups together the procurement of requirements quantities within a period in one lot size. The period lengths can be hours, days, weeks, months, or user-defined periods in accordance with the planning calendar.

You can choose the number of periods within which the procurement quantities are to be grouped together. If the number is to be larger than one, the number is entered in the No. of Periods field in the SAP S/4HANA Customizing step Check Lot-Sizing Procedure for the lot-sizing procedure selected in the SAP S/4HANA material master. This value is transferred to the PP/DS product master.

The resulting receipt can be placed at the start of the period, at the end of the period, or on the date of the first requirement. This setting is transferred to the PP/DS product master.

In the PP/DS product master, you can also use any period factor (for example, 0.5) so that the availability date of the procurement element falls exactly mid-way through (0.5) the period. If you want such a setting to not equal 0 or 1, and transfer the data from SAP S/4HANA, you can use a customer exit to do this using the CIF.

• Minimum lot size: Minimum procurement quantity for each lot, below which the lot size must not fall
• Maximum lot size: Maximum procurement quantity for each lot that must not be exceeded
• Rounding value: The system rounds up to a multiple of the rounding value

You use rounding to adjust units of measure to production, delivery, or transportation units of measure when you plan product requirements.

You can maintain the following rounding options in the product master: minimum lot size (minimum procurement quantity for each lot below which the lot size must not fall), maximum lot size (maximum procurement quantity for each lot that may not be exceeded), and rounding value (the system rounds up to a multiple of the rounding value).

The settings can be transferred from SAP S/4HANA to PP/DS using the CIF. You can also transfer the key for a rounding profile from SAP S/4HANA to PP/DS but you need to create the profile itself in PP/DS (the profiles cannot be transferred).

Product heuristics can be entered in the product master and they then influence the planning of this product in the planning run. In particular, special lot-sizing procedures can be implemented using these heuristics. The "Planning Standard Lots" heuristic is especially important because: this heuristic corresponds to the normal planning of a product using the lot size defined in the product master. This heuristic is defined as a standard heuristic for planning in PP/DS Customizing.

With the "Planning shortage quantities" heuristic, new procurement proposals are only created for new shortages.

If planning is to be executed using the continuous input / output function in the PDS, this can be achieved using the relevant heuristic in the product master.

Manual reorder point planning is a consumption-based planning procedure. This procedure is especially simple to use and is primarily used for B items and C items, that is, for products that are produced in high quantity but have a low value. These products are often only planned in SAP S/4HANA and not transferred to PP/DS. However, this procedure is also possible in PP/DS if you use the corresponding heuristic. The reorder point and maximum stock level can be transferred from the SAP S/4HANA material master record to the PP/DS product master. In addition, the "reorder point planning" heuristic is to be entered in the PP/DS product master.

The reorder point (for example, 1000 pieces) controls material requirements planning. During the production planning run, the system then only checks whether the stock level has dropped below the reorder point. Procurement is triggered in the specified quantity when the stock level drops below this point. The procurement element is then scheduled from today's date using forward scheduling. Procurement is not triggered if sufficient fixed receipts (for example, fixed purchase requisitions or planned orders) already exist.

Optimizing lot-sizing procedures attempt to minimize the total procurement costs resulting from ordering costs and storage costs.

In the various optimizing procedures, current and future requirements are grouped together in one lot based on various costing criteria to optimize the total costs.

The following procedures are available in PP/DS:

• Part period balancing (heuristic SAP_PP_005): In this heuristic, the setup costs and storage costs are taken into consideration in the lot-size calculation (procurement costs and stock costs on the Procurement tab page in the product master). Starting from the date of the product shortage, sequential requirements are collected in a lot until the total storage costs exceed the setup costs. This procedure takes lot-size parameters into account. The Groff procedure (SAP_PP_013 heuristic) works in the same way.

• Least unit cost procedure: External procurement (heuristic SAP_PP_006): You use this heuristic to optimize order quantities while taking requirements, storage costs, and suppliers into account. The system considers the different delivery periods and discount levels of the suppliers and determines the costs per unit for each supplier, while also taking the storage costs into account (discount levels are also taken into account in static and period lot-sizing procedures, but not in optimizing procedure SAP_PP_005). Lot sizes are formed based on optimum discount levels and costs per unit.