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Modeling Multilevel Production

Objective

After completing this lesson, you will be able to model multilevel bills of material

Supply Chain Network

This lesson explains how to model multilevel production.

Overview of Multilevel Bills of Material

A multilevel BOM enables multilevel production processes with the production of components.

The number of levels is arbitrary, that is, not limited.

For example, product P is produced from component X. Component X is produced from component Y.

Illustration of how Qty Per is defined and can be modeled as master data or time-series

Simple Master Data Types for Sourcing and Production

Simple master data types for sourcing include production source (SOURCEPRODUCTION) and production source item (PRODUCTIONSOURCEITM).

Production Source

The production source of supply header is used to model production rules for internal production or external supply, such as procurement from a vendor. The header and item of production sources are linked via the source ID.

This master data type has 3 root attributes: PRDID, source ID and location ID.

Attribute SOURCETYPE can have the following values:

P for production
U for unlimited (and unspecified)
C for co-product

Other attributes include:

OUTPUTCOEFFICIENT:
This number needs to be set for products and co-products, and it is used with Source Types P and C. The system will ignore any Output Product Coefficient for Source Type U. For a BOM with a single output and component coefficients per base unit of output product, the value is one.
PRATIO:
This is the quota for production source. Quotas are used by the heuristics to choose a source of supply. Quotas must add up to one across all sources of supply, including location sources and production sources.
PPERIODSOFCOVERAGE:
This is the production lot size indirectly expressed as the number of coverage periods, for which demand is to be produced in one lot.
PMINLOTSIZE:
This is only relevant for the main output product.
PMAXLOTSIZE:
This is only relevant for the main output product. This setting is only used in optimization.

Production Source Item

This master data type describes the components that are required to make the product.

Quantities are determined by component coefficients relative to the produced quantity of the output product. The header table entries describe products and co-products, where the quantities of co-product and product are related by the output coefficients.

This master data type has 2 root attributes: PRDID, and source ID.

Production Source Resource

The production source resource connects the Production Source of Supply Header with the assigned Resource, including information about the capacity consumption.

Mapping Production Resources

Attribute CAPACONSUMPTION is a required attribute used to specify the capacity consumption rate (per unit of production receipts) for a production resource. This rate is used for all periods of the planning horizon.

Reference Master Data Types for Production

Reference master data types include component (COMPONENT).

Components

Components are products that are used as inputs in production.

In SAPIBP1 we reuse the entries already maintained as products by creating a Reference Master Data Type. Editing of reference master data type in SAP IBP, add-in for Microsoft Excel is not possible.

Example of Multilevel Bills of Material

Multilevel bills of material enable multilevel production processes with production of components.

Example of a multilevel bill of material

This figure shows an example of a multilevel bill of material.

Demonstration: How to Model Multi-Level Production

Model Multi-Level Production

Task 1: Display the P-Rules and U-Rules for Your Subnetwork

Task 2: Display the P-Rule

To become familiar with the supply chain model you will use in class, display the P-rule in the SAP IBP, add-in for Microsoft Excel.

Steps

In the SAP IBP, add-in for Microsoft Excel, use the Master Data section to display a list of the P-rules in your supply chain, filtered by all products ending in ##.
1. In the Master Data section, choose Master Data Workbook → Edit.
2. Select in the field Filter your planning filter My Group Products created in exercise 3 from the drop-down list.
3. On a first tab select Production Source Header in the Master Data Type field.
4. Continue adding tabs for Production Source Item and Production Source Resource.
5. Select OK and be sure to create a favorite. In the master data section use Favorites → Add.
6. Give it a name Production Sourcing Rules.
To become familiar with the supply chain model you will use in class, display the multilevel bill of material (BOM) components in the SAP IBP, add-in for Microsoft Excel.
Use your Sourcing Rules favorite to display a list of the components in your supply chain.
1. In the SAP IBP, add-in for Microsoft Excel, on the SAP IBP tab, in the Master Data section, choose Favorites → Production Sourcing Rules.
2. Select the Production Source Item tab.
To become familiar with the supply chain model you will use in class, display the planning results for production in the SAP IBP, add-in for Microsoft Excel.
If you made changes since your last execution of your heuristics operator Time-Series-Based Supply Planning Heuristic for your planning unit ##_PUMP, re-execute your heuristics operator Time-Series-Based Supply Planning Heuristic again and display the results of the planning run in the SAP IBP, add-in for Microsoft Excel in the Components tab of your Supply Planning favorite.
1. In the SAP IBP, add-in for Microsoft Excel, open your Supply Planning favorite.
2. In Microsoft Excel, ensure that you are on the SAP IBP tab. In the Application Jobs section, choose S&OP Operator → Run.
3. Choose Time-Series-Based Supply Planning Heuristic and choose Next.
4. You can also select a reason code and enter a comment.
5. Choose Run.
6. On the pop-up the status of the job will be displayed. To review the logs select Navigate to Status, to close the pop-up select OK. If you want to review the logs later, choose S&OP Operator → Status.
7. When the job has completed, choose the Components tab.
8. Refresh the data to be sure that you have the latest information.

Task 3: Display the Resources That Are Used for Production

To become familiar with the supply chain model you will use in class, display the resources in the SAP IBP, add-in for Microsoft Excel using your Supply Planning favorite.

Steps

To display a list of the resources in your supply chain, in the SAP IBP, add-in for Microsoft Excel, in the Master Data Workbook, choose Resource Master Data.
1. In Microsoft Excel, in the Master Data Workbook, choose Resource.
2. On the Resource tab, check the list of resources.
To display a list of the resources in your Source ID, in the SAP IBP, add-in for Microsoft Excel, in the Master Data Workbook section, choose Production Source Resource.
1. In the Microsoft Excel, in the Master Data Workbook, choose Production Source Resource.
2. Filter the list for any Source ID beginning with, for example, T-F2##.
In the SAP IBP, add-in for Microsoft Excel, display the capacity situation. Therefore adjust the planning view with a filter Resource ## for the Capacity tab with the following filter settings:
Attribute Value
Resource ID (I) all Resources for your ##
1. In the SAP IBP, add-in for Microsoft Excel, open your Supply Planning favorite and choose the Capacity tab.
2. Go to Edit View → Edit Planning View and create a filter for resources that have "##_" in the key.
3. Choose OK to return to the planning view and use the key figure data to answer the following questions.

Task 4: Create an Alternative Method of Production for T-F2## at Plant 2300

Steps

Create an alternative resource at plant 2300 that can be used for producing your T-F2## product. Use the values in the following table:
Field Value
Resource ID ALT##
Resource Desc. GR## Alternative Res
1. In the Master Data Workbook section, choose Create.
2. Choose the Master Data Type Resource and press OK.
3. Enter the Resource ID and Resource Desc. from the table and choose Save Changes.
Create a resource location combination for your new resource. Use the values in the following table and maintain a Capacity Supply of 5.000 per week:
Field Value
Location ID 2300
Resource ID ALT##
Capacity Supply Time Series Indicator X (we will use the capacity supply key figure)
Resource Type 0
Consider to adjust your filter Resource ## with your new created resource..
1. In the Master Data Workbook section, choose Edit.
2. Choose Master Data Type Location Resource and press OK.
3. Enter the values from the table and choose Save Changes.
4. Check in the Capacity tab of your Supply Planning Favorite. Choose (Ad Hoc Filter) → Edit from the SAP IBP ribbon.
5. Add your new ALT## resource to the filter so that it appears in the planning view. Be sure to update your Resource ## filter and choose OK to view the planning view.
6. If you do not see it after editing the planning view, create this planning object, using Master Data tab Planning Objects → New Planning Object. Click through any warning box that presents itself and ensure that capacity values are populated.
7. Maintain for the new resource on location 2300 for each week in Capacity Supply key figure a value of 5.000.

Create a production source header (P-rule) for your new resource. Use the values in the following table:

Field	Value
Location ID	`2300`
Product ID	`T-F2##`
Source ID	`T-F2##_2300_ALT##`
Maximum Production Lot Size
Minimum Production Lot Size
Output Product Coefficient	`1`
Output Product Coefficient Time Series Indicator
Production Lot Size Coverage of Periods of Demand
Production Sourcing Ratio	`1`
Production Lead Time	same as for other T-F2## headers
Production Ratio Time Series Indicator
Production Rounding Value
Source Type	`P`

In the Master Data Workbook section, choose Edit.
Choose Master Data Type Production Source Header and press OK.
Enter the values from the table and choose Save Changes.

Create a production source resource for your new resource. Use the values in the following table:
Field Value
Resource ID ALT##
Source ID T-F2##_2300_ALT##
Capacity Consumption Rate 1
Capacity Consumption Rate Time Series Indicator
1. In the Master Data Workbook section, choose Edit.
2. Choose Master Data Type Production Source Resource and press OK.
3. Enter the values from the table and choose Save Changes.
Create the multi-level BOM for your new production source. Use the values in the following table:
Field Value1 Value2
Product ID T-B3## T-B4##
Source ID T-F2##_2300_ALT## T-F2##_2300_ALT##
Component Coefficient 1 1
Source Item ID 10 20
1. In the Master Data Workbook section, choose Edit.
2. Choose Master Data Type Production Source Item and press OK.
3. Enter the values from the table and choose Save Changes.

Task 5: Update Your Supply Network Dashboard

Steps

Open your Supply Planning dashboard and refresh the network to see the changes you just created in the master data.
1. If your dashboard is already open simply choose the refresh icon to see the changes in your supply network. If not, continue with the following steps.
2. In the SAP IBP Web UI, in the General Planner section, choose the Dashboards Advanced tile.
3. Select your Supply Planning Dashboard from the list.
4. Select the refresh icon and you should see the changes in your supply network.
5. You should see a change with the sources of supply at location 2300.

Task 6: Execute a Planning Run and Check Your Sourcing

Steps

In the SAP IBP, add-in for Microsoft Excel, use the supply planning operator to run planning again and check the sourcing results.
1. In Microsoft Excel, ensure that you are on the SAP IBP tab. In the Application Jobs section, choose S&OP Operator → Run.
2. Choose Time-Series-Based Supply Planning Heuristic, and choose Next.
3. You can also select a reason code and enter a comment.
4. Choose Run.
5. On the pop-up the status of the job will be displayed. To review the logs select Navigate to Status, to close the pop-up select OK. To review the logs later, choose S&OP Operator → Status.
6. When the job has Completed, proceed to the next step.
Refresh your planning view favorite, Supply Planning and select the Capacity View tab, and ensure that both resources were used for production.
1. Open your T## Supply Planning favorite.
2. Select the Capacity tab.
3. Choose Refresh from the SAP IBP ribbon.
4. You should see the load on the resource as a result of the heuristic run, and the capacity supply will have values that you populated, and you should be able to see utilization.
5. Update your Favorite using Favorite → Update.

Multisourcing

Product demand at a certain location can be distributed according to quotas between different sourcing types.

It supports the following source types:

Production at its own location, which is described by the production sourcing rule (P-rule).
Stock-transfer from another location, which is described by the transportation sourcing rule (T-rule).
Supply from an external unspecified supplier, which is described by the unspecified sourcing rule (U-rule).

The sum of quotas must sum up to 100% (plus or minus a small epsilon, which is needed due to rounding errors).

Net Demand

It is possible to mix multiple source types. You can specify net demand to be distributed according to quotas between different sourcing types.

You can source a net demand from the following rules:

30% from production sourcing (P-rule)
50% from a transportation sourcing (T-rule)
20% from unspecified sourcing (U-rule)

This means that 30% of the net demand should be propagated to a production process, 50% to another location, and 20% of the net demand are assumed to be available without limitations.

The sum of quotas must sum up to 100%.

Demonstration: How to Multisource Products

Multisource Products

You decide to rebalance capacity by making some different sourcing decisions. Part of the demand will be satisfied from location 1000, 30% will be purchased from an external supplier, and location 2300 will be source for the remaining part of (in-house) production.

Task 1: Set Up Your T-B3## and T-B4## for In-House Production at Location 2300

Steps

Production Source Header for T-B3## and T-B4## should already exist, just change production sourcing ratio.
Production Source Header
Field Values 1 Values 2

Location ID
2300
2300

Product ID
T-B3##
T-B4##

Production Sourcing Ratio
.2
.2

Source Type
P
P
1. In the IBP ribbon of the Excel UI, in the Master Data Workbook section, select Create.
2. Select Production Source Header from the drop-down list, and press OK.
3. Enter the values from the table and choose Save Changes.
Ensure that the Production Source Item exists for the components for your T-B3## and T-B4## products.
1. In the Master Data Workbook section, choose Edit → Production Source Item, and press OK.
2. Check entries associated with T-B3## and T-B4##.
Ensure that there is a resource at plant 2300 that can be used for producing your T-B3## and T-B4## products.
1. In the Master Data Workbook section, choose Edit → Resource.
2. Check for the relevant resources.
Ensure that there is a Resource Location combination for that resource.
1. In the Master Data Workbook section choose Edit → Location Resource.
2. Check for the relevant resources.
Ensure that there is a Production Source Resource for that resource.
1. In the Master Data Workbook section, choose Edit → Production Source Resource.
2. Check for the relevant resources.
Check the Production Source Header for T-T3## and T-T4## at Location 2300 to be sure you have components (they should be coming from a vendor).
1. In the IBP ribbon of the Excel UI, in the Master Data Workbook section, select Edit.
2. Select Production Source Header from the drop-down list.
3. Check the sourcing for these components.

Task 2: Create the T-Rule to Procure Your Products from Location 1000

Steps

Create a sourcing rule to source T-B4## and T-B3## products from location 1000 using the values in the following table.

Location Transport Ratio	Field	Value
	Location ID	2300
	Product ID	T-B3##
	Ship From Loc. ID	1000
	Lead Time	1
	Location Sourcing Ratio	.5

	Location ID	2300
	Product ID	T-B4##
	Ship From Loc. ID	1000
	Lead Time	1
	Location Sourcing Ratio	.5

In the Master Data Workbook section, choose Edit → Location Source, and press OK.
Enter the values from the table and choose Save Changes.

Task 3: Set Up Your T-B4## and T-B3## for External Procurement at Location 2300

Steps

Change the Production Source Header for T-B4## and T-B3## to procure 30% from VEND.

Production Source Header	Field	Values 1	Values 2
	Location ID	2300	2300
	Product ID	T-B3##	T-B4##
	Source ID	T-B3##_2300_VEND	T-B4##_2300_VEND
	Maximum Production Lot Size
	Minimum Production Lot Size
	Output Product Coefficient	1	1
	Output Product Coefficient Time Series Indicator
	Production Lot Size Coverage of Periods of Demand
	Production Ratio	.3	.3
	Production Ratio Time Series Indicator
	Production Rounding Value
	Source Type	U	U

In the IBP ribbon of the Excel UI, in the Master Data Workbook section, select Edit.
Select Production Source Header from the dropdown list, and press OK.
Enter the values from the table and choose Save Changes.

Task 4: Check the Results in the SAP IBP, add-in for Microsoft Excel to Confirm Your Setup Is Working Correctly

Steps

In the SAP IBP, add-in for Microsoft Excel, use the supply planning operator to run planning again and check the sourcing results.
1. In Microsoft Excel, ensure that you are on the SAP IBP tab. In the Applications Job section, choose SOP Operator → Run.
2. Choose Time-Series-Based Supply Planning Heuristic, and filter for your planning unit ##. Choose Next.
3. You can also select a reason code and enter a comment.
4. Choose Run.
5. On the pop-up the status of the job will be displayed. To review the logs, select Navigate to Status, to close the pop-up select OK. To review the logs later, choose S&OP Operator → Status.
6. When the job is complete, proceed to the next step.
In the SAP IBP, add-in for Microsoft Excel, refresh your External Receipts tab in your Supply Planning favorite to be sure 30% of the demand is being procured from the vendor.
1. In the SAP IBP, add-in for Microsoft Excel, open or refresh your Supply Planning favorite and select the External Receipts tab.
2. For T-B3## at location 2300 you should see the External Procurement is 30% of the Dependent Demand quantity in the same period which means 30% is being procured from the vendor.
  This is also true for T-B4##.
Now select the Production tab in your Supply Planning favorite and check the procurement for T-B4## and T-B3##.
1. In the SAP IBP, add-in for Microsoft Excel, open or refresh your Supply Planning favorite and select the Production tab.
2. Alternatively you can create a copy of the Production tab and remove the Source ID attribute and remove all key figures beside Dependent Demand and Production Receipts. Finally add the key figures Transport Receipts, Unspecified Receipts/External Procurement and Receipts.
3. For T-B3## at Location 2300 you should see that the Production Receipts quantity is 20% of the Dependent Demand quantity in the same period, the Unspecified Receipts/External Procurement quantity is 30% and the Transport Receipts quantity is 50%.
4. For T-B4## at Location 2300 the same holds true.

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