- SAP Managed Tags
Business Requirements
Supply Network Planning is a process around Distribution Requirement Planning, Deployment, Demand and Supply Matching and Optimization. It aims to plan purchasing, manufacturing, distribution, and transportation through the supply chain network so that comprehensive tactical and operational planning and sourcing decisions can be simulated and implemented on the basis of a single, global consistent model.
Effective Supply Network Planning enhances demand forecasting accuracy, optimizes inventory and production capacities, and ensures efficient supplier collaboration. By integrating Advanced Planning systems with operational ERP (like ECC or SAP S/4HANA) and leveraging analytics. Companies can minimize costs, improve service levels, and ensure timely order fulfillment. These capabilities enable businesses to maintain optimal inventory levels, streamline operations, and enhance overall supply chain resilience, driving better customer satisfaction and competitive advantage.
According to SAP Reference Business Architecture the Supply Network Planning comprises the following capabilities (Figure 1 - available to view in SAP Signavio Process Explorer):
Figure 1: Business Capability - Supply Network PlanningSolution Options
Typical solution operations for Supply Network Planning are the following:
- SAP Integrated Business Planning
- IBP for Sales and Operations(S&OP)
- IBP for Response and Supply (R&S)
- SAP S/4HANA Production Planning
- Material Requirements Planning (MRP) /MRP Live
- Production Planning and Detailed Scheduling PP/DS in S/4HANA (ePP/DS)
- Embedded Production Planning and Detailed Scheduling - Production Planning Optimizer (ePP/DS PPO)
Characterization of the Solution Options
SAP Integrated Business Planning:
SAP IBP offers advanced planning algorithms to plan and optimize the whole supply chain. It helps you to develop an initial feasible supply plan and provide for breaching supply-demand gaps. Supply plan will be generated in the most profitable way. It is a cloud-based solution which offers flexibility, scalability, and ease of integration with other cloud applications.
The supply network planning is one of the key function in IBP for Sales and Operations Planning (S&OP) and IBP for Response & Supply (R&S) module. Normally we will separate the planning in SAP IBP as Time-series planning and Order-Based planning.
IBP for Sales and Operations (S&OP): Support strategic and tactical management decision processes.
IBP for S&OP offers SNP capabilities based on time series planning and will introduce a new planning process on top of demand forecast. The outcome of the classical S&OP Planning process is a "Constrained Demand Plan".
The key capabilities of S&OP are:
- Perform multi-level supply planning with Heuristic (finite and infinite) and Optimizer (cost-driven optimization).
- Develop an unconstrained \ constrained mid to long term supply plan
- Manage risks, assumptions and opportunities in supply network
- Create the optimal business plan to drive revenue growth and increase market share
For more information about IBP for S&OP, please refer to:
Solution Summary Digital Supply Chain - Sales and Operations Planning
Drive Value into Your S&OP/ IBP Process
IBP for Response and Supply (R&S): Support operational supply planning
IBP for R&S (Order-based planning) aims to create a supply plan using operational data and react to short-term changes. This approach enables supply planning from an operational perspective: It uses detailed data from external systems, and takes into account, for example, planned orders, production orders, sales orders, and purchase orders. Compared to the Time series planning, the order-based approach takes a shorter-term view.
The key capabilities of R&S are:
- Support of operational supply planning and response planning (orders)
- Creates supply orders (planned orders, purchase req., stock transfer req.)
- Generate allocations, can feed to live ATP process
- Constrained priority rules-driven planning, optimization, and heuristics (roadmap)
- Order data store with tight integration with ERP
- Adjust \ create supply orders (planned orders, purchase req., stock transfer req.)
- Re-Confirmation of sales orders
- Deployment planning
For more information about IBP for R&S, please refer to:
SAP IBP for Response and Supply Transportation Load Building
Production Planning and Detailed Scheduling PP/DS in S/4HANA (ePP/DS)
SAP S/4HANA ePP/DS allows the creation of feasible production plans and schedules that optimize scarce resources to stabilize production and help to make reliable commitments to your internal and external customers. It aims to optimize the production plan as part of the global plan and create feasible production schedules - ready for execution.
The key capabilities of ePP/DS are:
- Provide feasible and optimal production schedules
- Consider the material and capacity constraints
- Time-continuous scheduling (i.e. down to the second), supporting features like alternative resources, min/max constraints, dynamic setup times and costs
- Multi-level pegging (i.e. material flow), connecting demand and supply elements
- Alerting enabling exception-based planning
- Advanced Planning & Scheduling Optimization Solvers and Heuristics
For more information about S/4HANA ePP/DS, please refer to:
Production Planning and Detailed Scheduling PP/DS in S/4HANA
ePP/DS Production Planning Optimizer (ePP/DS PPO)
The Embedded Production Planning and Detailed Scheduling (PP/DS) Production Planning Optimizer in SAP S/4HANA is a powerful tool designed to enhance production planning and scheduling processes. It integrates seamlessly with the core ERP functions, providing advanced capabilities for optimizing production plans and schedules. By leveraging advanced optimization algorithms, and interactive planning tools.
PPO complements the existing planning process in PP/DS by providing the following capabilities:
- Ensure material flow end-to-end: from components to finished goods, across plants, MRP Areas and distribution centers.
- Consider capacity constraints and initial allocated capacities (on time-bucket level).
- Propose PP/DS orders in time buckets which could be defined on a sub-daily level.
- Create the orders in right lot sizes (across BOM levels), promoting a smoother transition from time-bucket-based planning to time-continuous scheduling.
- Consider penalties (safety stock, maximum stock), costs (procurement, production, storage) and constraints (production capacity and lot sizes).
For more information, please refer to: Production Planning Optimization | SAP Help Portal
S/4HANA Material Requirements Planning (MRP) / MRR Live
Material Requirements Planning (MRP): The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.
MRP Live: Compared to classic MRP, MRP Live benefits from improved performance and execute the planning run in much frequency cycles. This means that we can execute daily providing the MRP controller with more benefits.
Criteria to determine the most suitable target solution
ePP/DS PPO integrates purchasing, manufacturing, and distribution so that comprehensive tactical planning and sourcing decisions can be simulated and implemented on the basis of a consistent model.
Decision Tree
You can find all the possible solution combination from the picture below, for a PDF-Version, please refer to: Decision Tree for Supply Network Planning
Conclusion
- SAP IBP is considered as a powerful planning tool, offering advanced analytics and collaboration features at both strategic level and operational levels.
- S/4 MRP is mainly used for orders creation process at operational level, providing a straightforward planning process without constraints.
- ePP/DS and ePP/DS PPO provide advanced planning and scheduling features for manufacturing process, considering the material and capacity constraints.
