Lot size mapping with Inventory optimization module

[former_member696146]

Hello Experts,

Kindly help me with my queries :

a) I understand that with IBP-Inventory optimization, we would calculate the target inventory position apart from recommended safety stock. I use S/4 HANA as my execution system and I would like to know as what would be the MRP type and Lot size mapping that has to be done for the material concerned. Since the customer is insisting on periodic review, I am not planning for a reorder point based planning.

b)With weekly review (PBR=1),does this mean my material in S/4 HANA should undergo a weekly MRP run rather than daily MRP run ?

c)Also what would be the mapping for target inventory position calculation number that had been determined by the system

Kindly let me know whether you need other details for the same.

Appreciate your inputs on the same.

Thanks,

Praveen

[lev_degtyarov]

Hello Praveen,

There are 2 key types for MRP.

#1. Cycle replenishment. This is when you review the inventory level and place the order at fixed dates, e.g. calendars. For example you review inventory each monday and then place and order if needed. For such MRP types you should use "safety stock" that is calculated by IBP IO. This types of planning is pretty common in CPG, FMCG, retail.

#2. Continuous replenishment

In this case you can place an order whenever you need. You monitor inventory levels on daily basis and when you "available on-hand stock + open supply orders" falls below "reorder point" then you place the order, Your order is

order = target inventory position - available on-hand stock - open supply orders

For such cases you should use "reorder point" and "target inventory position calculated" in IBP IO.

Sorry, but I don't remember exact MRP types. You can easily google it. Or ask colleagues above.

Regards,

Lev

[former_member696146]

Hello Lev,

Thank you very much for the detailed explanation.

For "Cycle replenishment " type of MRP, Do we map only the safety stock field alone or whether Target inventory position would also be mapped as well ? Like you explained,when the user reviews through the stock (say for instance every monday) then he need to procure some amount of X quantity from the vendor(for instance) ? This X quantity is purely depended on the target inventory position, since this is the quantity that the plant or the warehouse is expected to hold the stock for that week(having understood the concept of TIP).So i am keen on knowing the mapping of target inventory position to a relevant field in S/4 HANA.I am looking for customer use cases as how the same had been successfully implemented ? Can you please guide me through ?

Thanks,

Praveen

[lev_degtyarov]

Hello Praveen,

In my practice for cycle replenishment I saw both cases.

1) You send from IBP to execution system: safety stock and TIP, then (rough formula):

order = round by lot size (TIP - Current OH Stock - Open supply)

2) Or it can be you send only safety stock. Then MRP calculates the order as follows (rough formula):

order = round by lot size (Current OH + Open Supply - Safety stock - demand over (LT + PBR) )

It really depends how MRP is calculating.

Just ask you customer to explain it to you. Or take1 requisition and check how exactly it was calculated by MRP.

Regards,

Lev

[former_member696146]

Hello Lev,

Thank you for your expert comments.I would love to mark your reply as "Convert to answer" but not able to do so (for the benefit of others) and hence stopping with "Like" option.Appreciate greatly your efforts.Thanks.

BR,

Praveen

[lingaiahvanam · Accepted solution]

Hi,

You can map S/4HANA material master MRP types as PD and Lot size procedure as EX.

It depends on business decision, IBP and S/4HANA planning run can be weekly or Daily. My suggestion would be IBP planning run Weekly and S/4HANA MRP run Daily.

Best Regards,

Lingaiah

[former_member696146 · Accepted solution]

Hi Lingaiah,

Thank you very much for your inputs.Since IO module is integrated with SOP,and the outcome of the SOP being PIR,the same would be communicated with S/4 HANA system.If i go with "PD" and "EX" then the planned order quantity would be equal to the PIR quantity.Does this mean that the "target inventory position" number has no relevance to the production in execution system and it acts only as a information to the planners ? Kindly help me understand the same.

Thanks,

Praveen