Deployment & Available-to-promise (ATP) in SCM EIN 5346 Logistics Engineering Fall, 2014

1. Deployment & Available-to-promise (ATP)in SCMEIN 5346 Logistics EngineeringFall, 2014

2. Deployment & Available-to-promise (ATP)in SCM Theories & Concepts

3. Review • Deployment • Deployment setting • Available-to-deploy (ATD) • Available-to-receipts (ATR) • Available-to-issues (ATI) • 3) Deployment strategy • 4) Transport Load Builder (TLB) • 3. Available-to–promise (ATP) • 1) Capable-to-promise (CTP) • 2) Multi-level ATP (ML-ATP) check Deployment & ATP CTP Modules in SCM

4. Deployment and ATP CTP Modules in SCM

5. Basic Components of SAP SCM SAPECCERP SAP SCM(includes SAP BW) Core Interface (CIF) • Demand Planning • Supply Network Planning and optimization • Production Planning with capacity considerations • ATP • CTP • Detailed Scheduling • Deployment • Transportation planning • Vehicle routing and scheduling • Mater data • Materials • Locations • Partner • Plants • Info records • Transactional data • Customer orders • Production orders • Purchasing orders • Execution Planning with SAP ERP & SCM

6. Work Flow in SAP SCM

7. Deployment determines which distribution requirements of the distribution centers or VMI customers can be covered by the existing supply • Deployment is required after SNP (mid to long term) planning and after detailed PP/DS planning for production Deployment

8. Deployment Setting

9. If the available quantities are not sufficient to meet demand or if they exceed the demand, deployment makes adjustments to the stock transfers created by the SNP run. • The system reduces the stock transfer and decides how much will be deployed to each distribution center. • The deployment heuristic reaches this decision by using defined rules. Deployment Setting

10. If the quantities that are actually produced, procured and the demands match the Supply Network Planning (SNP) planning quantities, deployment merely confirms the stock transfers. • The quantities of different products confirmed by deployment can be combined into stock transport orders by the Transport Load Builder (TLB). • Deployment and TLB are used to confirm stock transfers. Deployment Setting

11. When procurement and production are finished, the system checks which product quantities are actually available in the source location (location with stock). • The total of these product quantities is referred to as the available to deploy (ATD) quantity. Available-to-deployment (ATD)

12. In standard category group ATR (available-to-receipts), you group together all the ATP (available-to-promise) categories that are to be taken into account as receipts for deployment. • Receipts include stock, production orders, and purchase orders. Available-to-receipts (ATR)

13. In standard category group ATI (available-to-issues), you group together all the ATP categories that are to be taken into account as issues for deployment. • Issues include sales orders and reservations. • The ATD (available-to-deploy) quantity is calculated from category groups ATR and ATI. Available-to-issues (ATI)

14. Available-to-Deploy (ATD)

15. Deployment Strategies • Pull deployment • Pull horizon

16. If demand exceeds supply, the system can use fair share rules to calculate deployment using the available-to-deploy (ATD) quantity. Various methods use fair share rules to assign a limited amount of available product to sources of demand. The following rules are available • Rule A: Percentage distribution by demand • Rule B: Same absolute quantity of shortage for target locations • Rule C: Percentage division by quote arrangement of source location • Rule D: Division by priority of target locations. Fair Share (Review)

17. Fair Share Rules A and B (review)

18. Fair Share Rules A and B (review) 200 200

19. Incoming quota arrangement: • Use an incoming quota arrangement to specify which proportion of a requirement is to be procured from which source location (e.g. vendor). • Outgoing quota arrangement: • Use an outgoing quota arrangement to determine which proportion of the receipts is to be delivered onward to which destination location (e.g. one of your distribution centers). Incoming/Outgoing Quota Arrangement

20. Quota Arrangement

21. SNP only uses push rules to calculate deployment if the ATD quantity covers the demand. The following rules are available: • Pull deployment: • Deployment fulfills all of the demand within the pull deployment horizon. Products are distributed according to the due date specified at the demand locations. The system does not distribute any supply to the demand source in advance of the demand date. • Pull/Push deployment: • The system immediately distributes all supply to the demand locations (ignoring the demand dates specified at the demand locations) to fulfill all demands within the pull deployment horizon.. • Push by demand: • System immediately distributes the entire supply for the entire planning horizon to the demand locations to fulfill all demands. The pull deployment horizon is ignored. Deployment Strategy for Heuristic (Review)

22. The following example illustrates the three push rules: Pull distribution, pull/push distribution, and push distribution by demands. Example of Deployment Strategy (review)

23. The following example illustrates the three push rules: Pull distribution, pull/push distribution, and push distribution by demands. Example of Deployment Strategy (review)

24. Transport Load Builder (TLB)

25. In the TLB profile, the minimum and maximum values for volume, weight, and pallets are defined per load. • System automatically groups transportation recommendations for individual products together until the minimum values for volume, weight, and number of pallets specified in the TLB profile for creating a load have been reached. • If transportation recommendations cannot be converted, the system generates an alert and the planner can convert the transfers manually. Transport Load Builder (TLB)

26. In Customizing, you defines if you want deployment to create stock transport orders or VMI sales orders. • Alternatively, you can use TLB to group together stock transfer of different products and generate stock transport orders or VMI sales orders with many items for different products. Available-to-deployment (ATD)

27. TLB groups planned stock transfers into practical freight units. System can create full pallets with mixed products. • User can also define flexible rule relationships for linking the upper and lower limits. Transport Load Builder (TLB)

28. Connecting upper limits with “and”, & lower limits with “or”: The TLB cannot exceed the defined upper limits when the shipments are built. In addition, at least one of the lower limits must be reached or exceeded in line with how you defined the rule. • Connecting upper limits with “and”, & lower limits with “and”: The TLB cannot exceed any of the defined upper limits. In addition, all defined lower limits must be reached or exceeded. • 3. As well as the standard connections, you can also establish user-defined relationship between the rules. Using the AND and OR operators as well as brackets, you can define which combination of these rules the TLB should use while building the shipments. TLB Rules

29. Summary • Deployment determines which distribution requirements of the distribution centers (or VMI customers) can be covered by the existing supply. If quantities are sufficient to match demand, Deployment merely confirms the plan. If not it will adjust the stock transfer to take in account the missing quantities. • The TLB, ensure that the means of transport are loaded close to their full capacity or, at least, over their minimum capacity Deployment and Transport Load Builder (TLB)

30. ATP check – also known as the availability check – represents an online search that should ensure that a company can provide the requested product at the requested time in the quantity requested by the customer. • The ATP check can use the basic methods below to determine if a requirement can be confirmed. • Basic methods: • Capable-to-Promise (CTP) • Multilevel ATP Check Available-to-promise (ATP)

31. CTP allows to check for free capacity, which normally performs at finished goods level. • There are two options to make CTP check: • Bucket-oriented CTP • Time-continuous CTP • Bucket-oriented CTP is to check the capacity based on a finite bucket capacity and doesn’t regard the detailed sequence of orders within the bucket. • CTP triggers the creation of planned orders by ATP check. Capable-to-promise (CTP)

32. Procedure of Capable-to- promise (CTP)

33. ML-ATP checks components according to ATP setting. It confirms a customer request if components for the product are available in time, i.e. taking the lead time to produce the finished product into account. If the components have a late availability, the availability of the finished product is recalculated in ATP using correlations. Multi-level-ATP (ML-ATP)

34. Multi-level ATP (ML-ATP)

35. Deployment & Available-to-promise (ATP)in SCM SAP Implementation

36. Define SNP Deployment Profile

37. Define SNP Deployment Profile

38. Define SNP Deployment Profile

39. Define SNP Deployment Profile

40. Transport Load Builder (TLB)

41. Create Means of Transport to Transportation Lane

42. Assign TLB Profile to Means of Transport

43. Transportation Lanes on Planning Book

44. TLB Shipments

45. Network planning with heuristic • Network plan with multilevel heuristic • Check results in ERP • Deployment planning settings • Available to deploy • Define SNP deployment profile • Define transport load builder (TLB) profile SCM Homework (Due date: 11/14/2014)