Describing Types of Algorithms

Objective

After completing this lesson, you will be able to describe algorithm types for supply planning parameters

Supply Planning Parameters

The table, Algorithm Types, describes the main algorithm types in supply planning.

Algorithm Types

Algorithm TypeDescription
T-S BASED HEURISTIC

Creates a supply plan that ignores certain constraints.

FINITE HEURISTICCreates a supply plan that prioritizes demand, taking certain supply and resource constraints into account
T-S BASED OPTIMIZER

Creates a cost-optimized production, distribution, and procurement plan for the entire supply chain network taking into account constraints.

T-S BASED FORECAST CONSUMPTIONIs a planning process in which actual sales orders consume forecasted quantities.
CHECK MODE

Checks master data and key figures to reveal inconsistencies.

COMPUTE QUOTASCalculates quotas based on the current supply plan.
LOCAL UPDATES

Ensures that key figure values for deficit, shortage, and projected stock are consistent by recalculating within a particular location product without planning the entire network.

Of the algorithm types in the supply planning operator in SAP Integrated Business Planning (IBP) for Supply Chain, only the T-S Based Heuristic (all types) and the T-S Based Optimizer algorithms actually plan supply.

The other algorithm types have other functionality.

Several parameters control certain functionalities of the SCM planning operators, that is, of the heuristic or optimizer. This means that some of these parameters impact the heuristic only, others might affect the optimizer only, and others are relevant for both.

Infinite Without Shortages

This heuristic performs infinite demand and supply planning with no shortages. It creates a supply plan that ignores certain constraints (for example, finite resource capacities) to reveal whether there is an issue with supply for a location product, where the issue is, and how much capacity is required to fulfill all demands on time.

Constraints Not Considered byINFINITE_WITHOUT_SHORTAGE

  • Finite resource capacities:

    Supply is calculated based on the assumption that all resource capacities are infinite.

  • Projected stock equal to or greater than zero:

    Because the supply planning heuristic ignores this constraint, the stock of any location product can be negative at the end of a period.

  • Maximum values:

    Maximum values are defined in the corresponding key figures (for example, Maximum Inventory or Maximum Production Receipts). However, the supply planning heuristic might calculate values above the defined maximum.

  • Maximum lot sizes

  • Aggregated constraints

The supply plan might not be feasible, because projected stock could be below zero. However, it's still useful because it reveals for each location product whether there is an issue with supply, where the issue is, and how much capacity would actually be required to fulfill all demands on time. In addition, resources with a utilization of more than 100% indicate bottlenecks in the supply chain network.

To avoid supply shortages, the supply planning heuristic usually satisfies the entire demand for each location (even if the resulting stock of the location product is then negative) with some exceptions, for example, if any of the following apply:

The entire demand for each location is supplied with the following exception:

  • You've defined adjusted key figure values that prevent the system from fulfilling the entire demand.

  • You haven't defined a source of supply for a location product.

  • You're using subnetworks but an upstream subnetwork isn't yet providing any supply.

  • Lead times prevent delivery in time for the first few periods of the planning horizon.

Finite Heuristic

The time-series based constrained supply planning with SAP IBP finite heuristic is the only heuristic that enables you to create a supply plan based on priorities and, unlike the optimizer, prioritizes demand over costs.

This heuristic takes input key figure values and uses them to calculate a priority-based supply plan, taking certain supply and resource constraints into account, and writes the results to output key figures.

Demand costs (non-delivery and late delivery costs) and production, transport, and external receipt costs maintained for the time-series based constrained supply planning with SAP IBP optimizer are used by the finite heuristic to determine the order of priority in which demands are satisfied and sources of supply used. All costs are input key figures.

Constraints Not Considered byFINITE HEURISTIC

  • Time-series-dependent features

    Such as production output, transport, production and procurement cost rates, and resource requirements

  • Minimum Aggregated Constraints

    Supply is calculated based on the assumption that there are no minimum aggregated constraints

  • Co-Production

  • Component and Customer Production substitution

  • Dynamic periods of supply lot-sizing procedures

  • Receipts Balancing

  • Resource Capacity Expansion

  • Fair-share distribution for inventory target (Only fair share for customer product demands and location product demands are supported)

  • Handling resources

  • Storage resources

  • Subperiods of maximum coverage

  • Location product substitution

  • Time aggregation

If you use any of these features, the finite heuristic might not provide a solution because it doesn't take certain constraints into account. It could also fail to deliver a solution if a production or transport resource has a consumption policy of the value 2.

Local Updates of Key Figures

When data is imported from an external system, you can simulate the effect of the import on a particular location product using the local update algorithm. You would typically use the local update algorithm when changes are made to stock on hand, to see how these changes affect the projected stock and whether there is a deficit or a shortage.

Using this algorithm means you don't have to recalculate the supply plan across your entire supply chain to see the effect of such a change.

The local update algorithm only changes the key figure values for deficit, shortage, and projected stock and does not perform calculations across the network. For example, if the stock on hand for a location product has increased, the algorithm recalculates its projected stock for all periods but does not push the effect of that change to location products further up the supply chain network.

Even if customer demand or any other input key figures were changed (for example, target stock or adjusted values), the local update would not calculate the impact of these changes. The local update algorithm's calculation is only carried out "locally" for each location product, without affecting any other location products because it does not propagate calculations across the network. Instead, all calculations are location specific.

In addition, note that you can only use the interactive processing mode with this algorithm.

Note

Changes to Customer Demand or any other input key figures require a planning run (heuristic or optimizer) to calculate the effect.

You can optionally disable the LOCAL mode to improve performance. If you do so, the system no longer computes the location/product key figures Deficit, Shortage, and Projected Stock when the Stock on Hand key figure is updated and Save/Simulation is performed. If users then nevertheless want to see the updated plan, they can run one of the time-series-based supply planning algorithms.

You do this by adding the global configuration parameter SCM_LOCAL_MODE under parameter group PLCNTRL and setting it to NO.

Check Mode

You can use the check mode algorithm to perform a number of checks for master data and key figure data. The checks are performed by a separate call that is independent of the Supply Planning Operators. The check mode algorithm does not change any data, but it returns messages for violations detected by the checks. We recommend that you run this check mode periodically, especially after a data upload from an external source.

Note

When you run the check mode, the system runs all available checks. You cannot define a subset of checks.

The following table provides an overview of the available checks: in the descriptions below, heuristic refers to both the time-series based constrained supply planning with SAP IBP heuristic and the time-series based constrained supply planning with SAP IBP propagation heuristic.

CheckDescriptionInformation Returned by Check

Master-data-based cycle check

Checks whether the location products specified in the master data form a cycle in the supply chain network. Location products that are connected to each other in a cycle (for example, by a transportation lane) are grouped together in what are referred to as connected components.

The check reports all cycles created by location products, including cycles that do not cause any problems. For example, you have two distribution centers: DC1 in the United States and DC2 in Europe. DC1 delivers to DC2 in Europe in the spring, and DC2 delivers to DC1 in the United States in the fall. This constellation forms a cycle on node (master-data) level and is therefore reported by the check, but it is not a cycle from the perspective of the heuristic.

Existence of cycle, with the name of the location and product (or co-product) and the connected component ID

Heuristic-based cycle check

Checks whether the heuristic detects cycles formed by nodes (such as location products) in the supply chain network. This check runs the heuristic with the given planning data to detect a node that has been visited a substantial number of times by the algorithm.

Note that a cycle detected by the heuristic is also always detected by the master-data-based cycle check.

Existence of cycle, with the name of the location and product

Check for subsets of location products (connected components) not connected with a customer source of supply

Reports all subsets of location products (connected components) connected with each another via location sources, but not connected with a customer product via a customer source of supply.

A group of location products that are connected with each another by sources of supply form a connected component. If none of the location products of such a connected component are connected with a customer demand (via a customer source), the entire component is called isolated. Connected components typically become isolated after all their related customer sources of supply are deleted.

Existence of isolated location product, with the name of the location and product and the connected component ID

Key figure plausibility checks (with regards to master data)

Checks whether the required planning level master data exists for a subset of input key figures. The following input key figures are checked:

  • ADJDEPENDENTCUSTOMERDEMAND

  • ADJDEPENDENTCUSTOMERDEMANDDS

  • ADJUSTEDCONSTRAINEDDEMAND

  • ADJUSTEDCONSTRAINEDDEMANDDS

  • ADJUSTEDPRODUCTION

  • ADJUSTEDRECEIPT

  • ADJUSTEDTRANSPORT

  • ADJUSTEDTRANSPORTDS

  • COMPONENTCOEFFICIENT

  • CONSENSUSDEMAND

  • OUTPUTCOEFFICIENT

For example, if the check determines a customer demand that does not have the corresponding master data for customer sourcing, it returns the respective information message. Without this master data, the customer demand cannot be taken into account by the heuristic and optimizer.

Missing master data (for example, customer source, production source, or location source) for a specified key figure, with the name of the related master data (for example, customer and product; location, product, and ship-from location)

Master data plausibility check

Reports all customer and location products not connected with a source of supply.

Name of location and product for which sourcing master data is missing

Demonstration: How to Create a Planning Operator Using an Algorithm Type

Create a Planning Operator Using an Algorithm Type

Task 1: Create a New Planning Operator

Create a new check mode planning operator.

Steps

  1. Create a check mode planning operator. Enter the following data:

    FieldValue
    IDCHECK_MODE_##
    NameCHECK_MODE_##
    DescriptionGR## Check Mode
    Planning AreaZUNIFIED
    Processing ModeSelect Interactive and Batch

    1. On the SAP Fiori home screen, in the TS Supply Planning Configuration section, choose the S&OP Operator Profiles tile.

    2. Choose Create, choose the Check Mode algorithm, and choose OK.

    3. Enter the data from the table above.

    4. Accept the defaults for the rest of the fields and save.

Task 2: Execute a Planning Run Using Your New Operator

Steps

  1. In the SAP IBP, add-in for Microsoft Excel, use the supply planning operator to run your CHECK_MODE_## operator. You may need to log off and back on before you pick up the change in configuration.

    1. In Microsoft Excel, ensure that you are on the SAP IBP tab. In the Application Jobs section, choose SOP Operator → Run.

    2. Choose your CHECK_MODE_## operator and choose Next and then Run.

    3. When the job has completed, proceed to the next step.

  2. Check the messages for this planning run.

    1. In the Microsoft Excel Web user interface, in the Applications Jobs section, choose SOP Operator → Status.

    2. On the line of your planning run, choose the Show Business Log hyperlink.

    3. Choose OK.

    4. This opens a Microsoft Excel sheet with the messages.

    5. Compare these messages to those in the figures in the chapter, Check Mode, and fix any errors that appear.

    Note

    In exercise 17, we created the storage resource STOR##. Within the Check Mode run, the system realized that now 2 storage resources exists for location 2400 and product T-F2##. As a location product should only be stored on a unique storage resource this error will be displayed. A solution could be to remove the settings for the storage resource made in exercise 17.

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