SAP IBP Adjusted Transport Supply is not getting fulfilled even if there is enough initial inventory

[jewel28]

In Supply Optimizer, IBP doesn't fulfill the Adjusted Transport Supply requirement even if there is enough initial inventory. IBP is retaining some inventory to be supplied to future weeks.

The cost model assigned was no safety stock violation and there is a high inventory holding cost. 

The requirement of business is to push all available stock to fulfill the transport supply.

Thanks. J

[dlellou]

J

You are right setting Inventory Holding Cost IHC where you wish not to keep stock. Hence on Factory only you set a high value like 1000 compared to much lower cost on DC like 1. 

I am however questioning, based on your explanations,  why would you maintain a safety stock on a factory location, which is not meant to hold any stock, hence safety stock violation looks weird and goes against what you are aiming at doing, in other words by setting this penalty on factory you instruct Optim to keep stock there.

These 2 statements being said, I am not sure adjusted supply, therefore a planner's action, is required to force the Optimizer to act as expected. I would not maintain this and check what the optimizer is calculating. My guess all stock will be deployed on DC.

Did you assessed the global cost formula of your case, considering quantities and periods of possible delay, versus non deliv cost or late deliv cost and max delay?

Cheers, Daniel

[jewel28]

Hi Daniel,

I am still testing the optimizer by assigning very high Inventory Holding Cost IHC for those locations that should not keep inventory for current week (no safety stock). However, some SKUs are still retaining the inventory and system is opting to supply the remaining inventory to future weeks. 

In case I achieve the expected results for this latest run, I know I am may still encounter it next time because the Demand requirement and Inventories are variable and will affect the result.

Thanks, 

J

[carsten_schumm]

Hi,

if the optimizer retains some inventory to fulfill later pseudo-hard constraints, there must be some cost benefit to do this. E.g. inventory targets or SDOS. You can try using numerical pre-optimization. In the pre-solve step such secondary costs aren't considered.

Best regards, Carsten

[jewel28]

Hi Carsten,

Thank you for the help. I did try enabling the Pre-Optimization but the result is not what I am expecting. Prior to my run, there are only 3 out of 358 SKUs that is not fulfilling the adjusted transport supply. However, when I executed the S&OP with pre-optimization, there are now 140 out of 358 SKUs that did not fulfill adjusted transport supply.

Thanks, J

[carsten_schumm]

Hi J. Sounds strange - do you now get also different adjusted transport fulfillments? Probably best to open an according support case, so that all the details can be seen.

[jewel28]

Hi Carsten, I have raised this concern to the support and we are currently checking on this. One of the factors they mentioned as well is the cost model.