Future target inventory

[mlittell]

Is it possible to set a future target or safety stock inventory, e.g. year-end inventory minimum.

SAP ECC 6.0

[sveabecker]

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SAP Community moderator

[Dominik_Tylczynski]

Hello mlittell

Your comment has shed some light on the problem you're facing. However safety stock is not the right tool here. The safety stock is your buffer or safety net that protects you against unexpected high demand. It's not a tool to manage sales seasonality.

What you need is a proper demand planning or planned independent requirements. They are to drive your production process and build the stock during off-season periods.

See the following diagram from SAP Help page on Information Flow Between SOP and Other Applications

The diagram shows an integrated MRPII planning process. It starts with a sales plan in SOP (Sales & Operations Planning). The sales plan in your case will have peaks during hot season. As you said, you don't have enough capacity to produce synchronously with sales. Therefore you need to expedite production and build the stock during off-season periods. You do that with the second part of SOP i.e. the production plan. Here, SOP provides rough-cut capacity checks that help to see if the production plan fits the production capacity constraints.

The SOP production plan is transferred to the demand management as planned independent requirements. Notice that the demand plan is expedited as compared to the sales plan. That is the most important difference between the demand plan and the sales plan. You mustn't mix those two - I've been seen companies misusing demand plan as just a sales forecast with disastrous results.

Once you have a sound demand plan, it'll drive your MRP process, trigger production and build the stock during off-season periods.

The demand plan (planned independent requirements) are then consumed by actual sales orders.

You may also build your demand plan out of the system and just upload planned independent requirements. That'll also work. The key point is that the demand plan shows what you want to produce, not what you are going to sell.

That's integrated MRPII planning in a nutshell. However the details of the implementation are a bit out of the scope of a simple Q&A.

Best regards

Dominik Tylczynski

[Dominik_Tylczynski]

Hello mlittell

Yes, it's possible - the generic response to the generic question.

Please provide more detailed description of what you're trying to achieve so the community can get you more precise responses.

Best regards

Dominik Tylczynski

[mlittell]

We are a highly seasonal business and require utilization of capacity during off-season periods. This demands producing product further ahead of demand. That, coupled with other reasons, created a need to set a year-end inventory (minimum) target. We currently do not utilize SAP safety stock. We currently do not have capacity to produce so we have loaded this demand into our forecast for a future month (May) to drive labor and raw goods demand. Once the product is produced we will convert to using a static safety stock in SAP. This will account for some of the year-end value but we will still need to "pull in" demand from Q1 2022 to drive the year-end inventory target. How can we future date this demand pull so that we do not impact current capacity/supply constraints?

I hope that was a better explanation.