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Advanced Available to Promise (aATP) – Part 1
SAP S/4HANA Advanced Available-to-Promise (aATP) is a critical component of the S/4HANA suite that enhances the standard ATP (Available-to-Promise) functionality with more advanced and flexible features. It is designed to meet complex order fulfilment processes and ensure higher accuracy and efficiency in inventory allocation and customer order management.
Key Features and Functionalities of aATP
Product Allocation (PAL)
Product Allocation (PAL) in SAP S/4HANA's Advanced Available-to-Promise (aATP) is a feature that enables businesses to control the distribution of limited products or resources across various customers, channels, or regions. It ensures that constrained products are allocated according to established rules and priorities, preventing overselling and ensuring that key customers or markets receive an appropriate share.
- Purpose: Ensures products are distributed according to predefined rules and limits, preventing overselling and prioritizing important customers or channels.
- Process: During order processing, the system verifies these allocations to determine the amount of product that can be confirmed for each customer.
- Benefits: Aids in managing limited products, balancing supply and demand, and safeguarding key customer relationships.
In aATP following aaps are applicable for product allocation –
- Configure Product Allocation
- Manage Product Allocation Planning Data
- Manage Product Allocation Sequences
- Assign Product to Product Allocation
- Product Allocation Overview
Concepts of Product Allocation (PAL)
- Product Allocation Object (PAO) steps
- The core of PAL is the Product Allocation Object (PAO), which defines the framework and scope for allocation. It includes relevant materials (products), customers, customer groups, and parameters such as sales organizations or regions.
- A PAO simplifies the grouping and management of allocation rules.
- The Configure Product Allocation app is used to set up a PAO, allowing you to incorporate various characteristics into the product allocation object.
- The first step involves defining allocation rules within the PAO, which includes establishing relevant dimensions (such as products, customers, and regions) and assigning quotas. Allocation rules are time-phased, meaning they can vary across different periods (e.g., weekly, monthly).
Example Scenario
Imagine a company that manufactures a highly demanded mobile phone but has limited production capacity. The company has key customers across various regions and wants to ensure fair distribution to each region. To achieve this, the company creates a Product Allocation Object with rules that allocate specific quantities to each region based on historical sales data and strategic priorities.
Order processing: When orders are placed from different regions, the system checks the available allocation for each region before confirming the order. If a region's quota is exhausted, no additional orders from that region will be confirmed unless the allocation is increased or unused quotas from other regions are available for redistribution.
In this example, instead of using regions, the allocation is based on a combination of sales organizations and sold-to parties.
Created product allocation objects –
With required characteristics –
2. Product allocation sequence
In our example Mobile allocation sequence consists of two sequence groups in a specific order. This order ensures that we first attempt to fulfil the requested quantity from the specific allocation per customer. If the allocation quantity is insufficient, the system will then use the second allocation during the Available-to-Promise (ATP) check. Consequently, important customers have access to two pools, while other customers can only use the quantity from the general pool.
The capacity sequence section contains a single sequence group that represents transport capacity. This group includes two allocation objects—one for the trailer and one for the battery. During the ATP check, all constraints within a sequence group are considered using AND logic.
3. Allocation planning
- Allocation rules are the core of PAL, determining how much of a product can be allocated to different customers or groups. Quotas are set based on historical data, forecasts, or strategic priorities.
- These rules can be time-dependent, allowing businesses to adjust allocations based on seasonal demand or other factors as per their business relevancy.
- For this ‘Manage Product allocation Planning data’ app is available where we can allocate the quantity.
Creation of Product allocation objects -
Planning data to be setup for each allocation object -
MOBILE_STANDARD_SALES
Capacity Sequence is nothing but the available capacity –
Planning data setup for MOBILE_TRANS_CAPACITY -
4. Assign product to Product allocation -
Product allocation output
Sales order creation to check confirm quantity after PAL set up. As per below scenario even though my capacity is 30 system has considered 15 qty after considering sequence and planning data by considering current period.
The actual ATP quantity is 100 in the system but system is showing confirm quantity in sales order after Product allocation setup,
5. Product allocation overview app–
This will give end to end overview of product allocation and order confirmation.
Integration with Other aATP Features
- Backorder Processing (BOP): PAL works in conjunction with BOP to reallocate inventory to high-priority orders if the allocations allow.
- Supply Protection: PAL can be used in combination with supply protection to reserve inventory for specific customer segments or markets, ensuring that critical orders are always fulfilled.
Benefits of Product Allocation (PAL)
- Prioritization of Key Customers: PAL ensures that key customers or markets receive the products they need, even in situations of limited supply.
- Controlled Distribution: Prevents overselling by enforcing quotas and ensuring that sales commitments are within the limits of available resources.
- Flexibility and Responsiveness: Time-dependent allocation rules allow businesses to adjust to changing market conditions, seasonal demand, or strategic priorities.
- Improved Decision-Making: Real-time tracking of allocation consumption provides actionable insights for sales and operations teams, enabling better decision-making.
Reference link -
https://help.sap.com/docs/SAP_S4HANA_ON-PREMISE/f132c385e0234fe68ae9ff35b2da178c/a004ec57a7b5bc12e10...
To be continue with S/4HANA Back-order processing in Part II …
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