In this fast introduction of new features in SAP Integrated Business Planning (IBP), you’ll gain an understanding of how time series heuristic planning is impacted. The introduction of this new feature raises many questions on the usages and limitation.
As of 1711 SAP IBP supported two different types of algorithms:
1.) Supply planning heuristic to create an infinite supply plan
2.) Supply planning optimizer to create a cost based optimized supply plan
In 1802 SAP introduced the new algorithm in supply propagation heuristics to overcome some of the issues related to infinite planning. In this blog I’ll try to emphasize on difference between supply planning and supply propagation.
Supply planning heuristics calculates the supply based on the assumption that all capacities are infinite and all demand has to be met. To overcome any insufficient supply, the system uses the project stock calculations to identify such supply shortages and it is left to the planner to manage the shortages. This does not produce a feasible plan but does identify the bottlenecks. The planner uses the configured alerts to identify such cases and manually adjusts the quantiles to make the plan.
Supply propagation planning is a variation of the supply planning without shortages, while outputting different results when dealing with insufficient supply. This propagates only available supply downstream and as a result not all demand is fulfilled. In this case the supplier can see the impact on the supply shortages.
With the overview of how the supply propagation is different from the supply planning heuristics, we see how the results vary.
To illustrate the supply propagation the following supply network is used. Two identical products with the same data (Demand and Souring) is referenced, ran across the two algorithms and the results are explained.
The following simple Supply Network is used
Let’s Consider a product (AC1003) with a Constant Demand of 100 quantity / week from all 8 Customers. To explain the results the following Assumptions are observed, Just a demand in the future for 4 weeks and a constant lead time (1 Week) between all location. (So, a total of 4 Weeks from Raw Material to Finished Goods at the customer)
Check back as future blogs will highlight 3 scenarios specific to run supply propagation heuristics.