Showing results for 
Search instead for 
Did you mean: 

IBP Supply and Response - clarifications needed

0 Kudos

Hi Experts,

We have completed design and realization of IBP Demand Planning and moving on to design implementing the Supply Planning using IBP Supply & Response module. I have some very generic questions and your guidance/feedback on these is highly appreciated.

- Does SAP IBP has a pooled list of constraints that could be used specific to industries (Pharma, Auto, Mill etc.) and/or based on manufacturing process like discreet vs repetitive vs process industry etc, ??

- How to identify the Constraints that best suit/fit fir a business and to achieve best cost optimization from Supply planning


Nagesh Vempali

Accepted Solutions (0)

Answers (1)

Answers (1)

0 Kudos

Hi Nagesh,

IBP Supply Planning has 3 categories (Hard, Pseudo Hard, Soft) of the constraints which can be utilized based on the industry specific business scenarios:

-- Hard Constraints

These are not violated by SOP optimizer

Master Data Hard Constraints

  • All sourcing rules (customer, location, and production sources)
  • Minimum lot size
  • Maximum lot size
  • Incremental lot size
  • Validity of sources (can be utilized in industry where there are frequent engineering changes, recipe changes are there)
  • Initial inventory
  • Maximum number of periods that demands can be delivered late

Key figures hard constraints

  • Production resource capacity (including the optional capacity expansion; both can also be defined as attributes)
  • Maximum customer transport
  • Maximum transport
  • Maximum production
  • Maximum External Receipts
  • Maximum aggregated constraints key figures, if left at the default.

-- Pseudo-hard constraints

Violation causes very high penalty costs.

  • Minimum Customer Transport
  • Minimum Transport
  • Minimum Production
  • Minimum External Receipts
  • Adjusted Customer Transport
  • Adjusted Transport
  • Adjusted Production
  • Adjusted External Receipts
  • Inventory Correction
  • Storage Resource Capacity (including the optional capacity expansion; both can also be defined as attributes)
  • Minimum aggerated constraints key figures, if left at the default.
  • Quota arrangement key figures

-- Soft Constraints

Violation causes penalty costs. These are generally used to define the business priorities like which customer's demand should be prioritized using high non-delivery penalty costrate or which source of the production has be prioritized, if multiple sources are available; but choosing lower production cost rate.

  • Inventory Target Violation Cost Rate
  • Maximum Inventory Violation Cost Rate
  • Non-Delivery Cost Rate for Customer Demand
  • Independent Demand Non-Delivery Cost Rate
  • Late-Delivery Cost Rate for Customer Demand
  • Late-Delivery Cost Rate for Independent Demand
  • Minimum Resource Capacity Violation Cost Rate
  • Capacity Supply Expansion Cost Rate
  • Maximum Subperiods of Coverage
  • Target Subperiods of Coverage
  • Safety Stock Violation Cost Rate
  • Maximum Stock Violation Cost Rate
  • Fixed Transportation Cost
  • Transportation Cost Rate
  • Fixed Production Cost
  • Production Cost Rate
  • Target Subperiods of Coverage
  • Inventory Holding Cost Rate
  • Substitution Cost Rate

Based on the client's industry specific processes (Pharma, Auto, Mill, Retail), you chose and model the case accordingly.

Hope this helps.


Rahul Mohnot