DDMRP Supply Generation with SAP ERP, Supply Chain Integration Add-On for SAP IBP

 

DDMRP Supply Generation with SAP ERP, Supply Chain Integration Add-On for SAP IBP

If you are using an SAP ECC landscape, you can leverage the demand-driven MRP heuristics in SAP ERP, supply chain integration add-on for SAP Integrated Business Planning for DDMRP supply generation.

Prerequisites

Before you can perform any of the steps in the overall demand-driven replenishment process, make sure you have done the following:

  • You have a planning area set up in Integrated Business Planning. See Sample Planning Area for Demand-Driven Replenishment for more information.

  • You have set up your time-series-based integration project (see Getting Started with Your Integration Project).

  • You have configured SAP ERP, supply chain integration add-on for SAP Integrated Business Planning for time-series-based integration (see Administrator’s Guide on SAP Help Portal at http://help.sap.com/ibp_erp_addon under Administration  Administrator's Guide - SAP ERP, Supply Chain Integration Add-On for SAP Integrated Business Planning 1.1  Configuration for Time-Series-Based Integration).

  • You have switched on the business function SCM-IBP-INT-ECC-DD, Demand-Driven Replenishment in SAP ERP, supply chain integration add-on for SAP Integrated Business Planning (see application help on SAP Help Portal at http://help.sap.com/ibp_erp_addon under Application Help  Application Help for SAP ERP, Supply Chain Integration Add-On for SAP Integrated Business Planning 1.1  Business Functions  SCM-IBP-INT-ECC-DD, Demand-Driven Replenishment).

High-level Demand-Driven Replenishment Process

SAP IBP for demand-driven replenishment facilitates DDMRP. There are five components to DDMRP, as defined by the Demand-Driven Institute, and are as follows:

  1. Buffer Positioning

  2. Buffer Sizing

  3. Dynamic adjustments

  4. Demand-driven planning

  5. Visible and collaborative execution.

In this implementation of SAP IBP for demand-driven replenishment, the first three components of DDMRP are performed primarily within SAP IBP, while the last two are performed primarily within the SAP ERP, supply chain integration add-on for SAP Integrated Business Planning. The following sections give a high-level overview of the process. The following figure illustrates the process:
The figure shows the steps of the demand-driven replenishment process and whether they're in SAP IBP or the SAP ERP, supply chain integration add-on for SAP Integrated Business Planning and how information flows between them. These steps are detailed in the following text.

Step 1: Data flow from ECC to SAP IBP

The first step in the process is importing data from an ECC system to SAP IBP using SAP Cloud Integration for data services, including the following data:

  • Confirmed external demand that has been aggregated to a daily quantity (including future forecast and past shipments)

  • Confirmed supply that has been aggregated to a daily quantity

  • On-hand inventories

  • Master data updates

You integrate this data to SAP IBP using SAP Cloud Integration for data services. Use the following templates to transfer the data:

For more information about data you can integrate from SAP ERP to SAP IBP, see application help on SAP Help Portal at http://help.sap.com/ibp_erp_addon under Application Help  Application Help for SAP ERP, Supply Chain Integration Add-On for SAP Integrated Business Planning 1.1  Data Integration  Integrating Data from SAP ERP to IBP Time-Series-Based Planning Areas.

Step 2: ADU Calculation in SAP IBP

Once the data is in your planning area in SAP IBP, you can calculate or update the average daily usage (ADU) value and manually adjust the demand adjustment factor, if necessary.

The ADU is calculated with a planning operator, using provided planing profile settings. For more information, see Buffer Zones and Average Daily Usage (ADU) and Planning Profiles for Demand-Driven Replenishment.

You can modify the demand adjustment factor, if needed, by using the SAP Integrated Business Planning, add-in for Microsoft Excel.

Step 3: Buffer Positioning and Buffer Zone Sizing

Once the ADU is calculated and adjusted, you can position the buffer by determining the decoupling point locations, then size the buffer zones at those decoupling points.

There are two main ways you can set the decoupling points and calculate the buffer zones in SAP IBP. You can do the following:

  • Run the Recommend Decoupling Points (Solve) operator in the SAP Integrated Business Planning, add-in for Microsoft Excel or by using an application job. This automatically recommends decoupling points and buffer zone values. See Using DDR Planning Operators.

  • Manually set decoupling points in the DDMRP Buffer Analysis app, run the scenario, then and promote it to the baseline. See DDMRP Buffer Analysis.

Once the buffer zone level recommendations are set, you can manually adjust them in the SAP Integrated Business Planning, add-in for Microsoft Excel.

Step 4: Replenishment Order Recommendation

Replenishment order recommendations are calculated automatically when you configure the planning area for SAP IBP for demand-driven replenishment. Buffer status values are updated automatically by the calculated key figures, once the relevant demand and supply key figures are updated.

Step 5: Data flow from SAP IBP to ECC system

The DDMRP-based order recommendations, for today, are transferred from SAP IBP to the ECC system using SAP Cloud Integration for data services. The template IBP_DDR_to_ERP_AddOn_via_RFC is available to transfer data (see http://help.sap.com/ibp under Integrate  SAP Cloud Integration Guide  Templates for SAP Integrated Business Planning  Key Figure Templates for Application-Specific Planing Areas  IBP_DDR_to_ERP_AddOn_via_RFC).

For more information about how to integrate data from SAP IBP to SAP ERP, see application help on SAP Help Portal at http://help.sap.com/ibp_erp_addon under Application Help  Application Help for SAP ERP, Supply Chain Integration Add-On for SAP Integrated Business Planning 1.1  Data Integration  Integrating DDR-Relevant Data from IBP to SAP ERP).

Step 6: Order Generation from Recommendations and their Propagation

Once the data has been transferred to the SAP ERP, supply chain integration add-on for SAP Integrated Business Planning, you can use the DDR Cockpit to view the data in the system and maintain global and plant level settings for Demand-Driven Planning. You can access the DDR Cockpit using transaction /IBP/EDD_COCKPIT.

Run Demand-Driven Planning to run the DDMRP heuristic and generate orders using transaction /IBP/EDD_RUN_MRP. This converts the SAP IBP order recommendations into orders, such as planned orders and purchase requisitions. These are considered pull-order within the decoupled lead time, and are for operational action.

The heuristic also creates demand and supply data that is used for planning. Along with on-hand inventories and master data updates, this information flows back to SAP IBP, as in Step 1.

Please note that running the heuristic also generates supply elements beyond the decoupled lead time horizon. The heuristic generates these (unfixed) supply elements based on projecting the DDMRP setup in future periods, beyond the decoupled lead time. These elements provide projection and visibility into the future supply plan beyond the decoupled lead time.

Supply elements beyond the DLT are positioned in such a way that beyond the DLT horizon, the projected stock moves between a reorder point and a target stock level. The initial projected stock at the end of DLT is calculated as follows:

Net flow ‒ ADU × DLT supply from order recommendation

Beyond the DLT, stock projection considers all demand and supply elements (as long as they are not already considered in the net flow). The reorder point is the top of red zone of buffer, and the target stock is the top of red green zone, as illustrated in the following figure:

Planning supplies beyond DLT is useful to support processes that need a longer planning horizon, or in environments where DDMRP and non-DDMRP material are planned together. However, we do not recommend using these supply elements within the execution steps.

Step 7: Review and Execution of Supply Elements

In the SAP ERP, supply chain integration add-on for SAP Integrated Business Planning, you can use Monitor DDMRP Planning Runs (transaction /IBP/EDD_MONITOR) to analyze and view the results of the DDMRP heuristic run and review the priorities of execution tasks such as product planning and material replenishment planning.

You can also use theAnalytics - Advanced app, the Dashboards - Advanced app, the DDMRP Buffer Analysis app, and SAP Integrated Business Planning, add-in for Microsoft Excel, for example, to visualize and review inventory projections or review different decoupling point positioning scenarios.

Step 8: Buffer Performance Review

If you have been running DDMRP supply generation for some time, you can use the DDMRP Buffer Status Monitoring app (see DDMRP Buffer Status Monitoring) to review buffer and signal integrity status, as well as review future stock projection. By reviewing the buffer performance, you can visualize bottlenecks and investigate opportunities to improve flow. Then you can make recommendations to adjust ADU values, buffer positioning, and sizing.

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