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Hi everyone,

 

My name is Nob Kusumoto, Solution Manager out of Industry Business Unit Wholesale (SAP Labs).

 

A little bit about my background – Who I am

I celebrated my 13th anniversary in SAP on July 1, 2009 and experienced consulting, sales/customer support, software development and solution management within SAP.

 

I am focus on the procurement business processes and also SAP modules/functionalities resides under that area and am going to write a series of procurement topics which may be interested in Wholesale Distribution industry ( of course they are used in other industries).

 

Before jumping on the first topic, please let me clarify my intention of this Blog.

I am neither an expert of the functionalities which I am going to introduce from now on nor a business expert for a specific procurement.

So I try to be a facilitator to drive the communication on these topics.

   

My first topic is ‘Load Building (LB)’ functionality.

 

What is ‘Load Building (LB)’?

LB is one of SAP functionality resides in SAP ERP and it’s been available since SAP ERP 6.0.

The original development requirement of LB came from Retail industry, but SAP made LB available for any industries, so any SAP customers, who runs SAP ERP 6.0, can benefit out of it without purchasing additional license to implement.

 

 

Here are key values of LB

  • Minimize transport costs by making best possible use of the means of transport (for example, ship, rail freight container, truck)
  • Minimize the merchandise in the warehouse by placing a purchase order at the latest possible moment.
  • Achieve the best purchase prices, for example, by ordering complete truck loads.

 

This has really ‘Retail flavor’, so I would rephrase this from wholesale business point of view.

 

LB is a powerful tool for Wholesale Distributor

  • To optimize purchasing requirements of purchasing associates (buyer) quantities regarding business factors like scaled allowance, discount, rebate and so on
  • To save wholesale distributors money to adopt ‘suggested buy’ quantity which is based on wholesaler’s specific ATP, MRP Type, Minimum Lot Size, Rounding Value, Vendor Restriction Profile and Average Daily Forecast Values.
  • To increase purchasing efficiency by automatically generating purchase orders without user manual intervention
  • To give purchasing associates (buyer) flexibility in changing quantities for ‘suggested buy’ as well as changing assigned suppliers prior to generating a LB purchase order

  

Does this sound good?

 

 

 

Key features of LB.

LB can be run automatically or manually. Both methods differ in terms of the prerequisites that apply and the functions that are available. They can also be used in different combinations:

 

You are able to allow the system to simulate automatic load building and you then manually convert the result in the results list (without the purchase order being flagged as optimal, following the assignment of a collective number) to purchase orders.

 

You have always the automatic load building program to generate purchase orders. You optimize quantities using the manual load building program. You can optimize and flag optimized purchase orders (achieved by assigning a collective number) further in manual load building.

 

You can control that only allow load building to create purchase orders when the system can flag the purchase order as optimized. You optimize quantities using the automatic load building program. You only use manual load building in cases where the automatic load building program cannot find an optimal solution.

 

How can we use LB and what process looks like?

The following process variants are useful:

 

Variant 1:

1. Starting automatic load building as a simulation run

2. Controlling and converting the results in purchase orders in the results list

3. Flagging optimized purchase orders by assigning a collective number

4. Using additional quantities to enhance purchase orders that have not been optimized

 Variant 2:

1. Automatic load building with immediate creation of purchase orders

2. Controlling results and flagging optimized purchase orders by assigning a collective number

3. Using additional quantities to enhance purchase orders that have not been optimized

 Variant 3:

1. Automatic purchase order creation from purchase requisitions, no automatic load building

2. Controlling purchase orders, optimizing by combining several purchase orders and flagging the optimized purchase orders by assigning a collective number for requests for quotations

3. Using additional quantities to enhance purchase orders that have not been optimized

 Variant 4:

1. Creating purchase orders manually

2. Controlling purchase orders, optimizing by combining several purchase orders and flagging the optimized purchase orders by assigning a collective number

 

LB is in the SAP Best Practices for Wholesale

So now you are interested in LB? But don’t know where you can start from.

 

If so, please go to the SAP Best Practices for Wholesale web site by clicking the following link or paste the address ‘http://help.sap.com/bp_cpwsd603/CP_WSD_US/html/index.htm’ into your browser.

 

Go to ‘Business Information’ – ‘Preconfigured Scenarios’ from the left navigation menu.

Drill down ‘Procure to Pay’ from ‘Scenarios – by Business Areas

You will see ‘Load Building’ out there.

By clicking the link, a popup window shows up and you can get more detail information (Scenario Overview, Business Process Procedure, Configuration Guide and Master List) around LB.

 

Want the latest SAP Best Practices?

Go to SAP Software Distribution Center by clicking the following link or paste ‘https://websmp102.sap-ag.de/swdc’ into your browser.

Search by Application Group under Download section.

You will see the SAP Best Practices there and learn how to get.

 

 

Thank you for your reading.

Should you have any question, please feel free to send an email at nobuhiro.kusumoto@sap.com.

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2 Comments

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  1. Vinay Chaudhary
    I have a couple of question if you don’t mind me asking them:

    1. Manual load build:
              1. a. Part of that challenge is to prevent the orders from being sent to the vendor if the restriction is not met. Would I need a release strategy to prevent that? Or would the restriction profile be sufficient?
              1. b. Since in the manual load build the original Pos are retained (No consolidated order is built) sending the outputs separately by PO will likely confuse the vendor who might think that we are not respecting his minimums. What provisions exist in standard system to communicate the collective number to the vendor

    2. Automatic load build
              1. It is mentioned that the load build is only supported for external vendors. How challenging would it be to enhance it to support STOs.

    3. Vendor minimums
              1. On dollar based restriction, the client may not want to create restriction profile for each dollar limit. Can the vendor minimum field in the vendor master be leveraged for this process? If not is there any other master data setting that could be referenced to the restriction profiles.

    (0) 
    1. Nobuhiro Kusumoto
      Hi Vinay,

      Very sorry for my delayed res.

      I have been waiting for a SAP expert to respond back to your questions because your questions require much deeper level of application knowledge.

      Here are his responses;
      1. Manual load build:
      1.a. To maintain a release strategy is the save way to prevent that PO´s are sent early to the vendor.
      1.b. We don’t understand this question

      2. Automatic load build
      This will cause high effort, since a couple of programs have to be adjusted or re-written, e.g. automatic load build, result list, planning workbench. Also some master data has to be adjusted, e.g. since the restriction profile is defined in the vender master data

      3. Vendor minimums
      It is necessary to maintain different restriction profiles in case dollar minimum are unique per vendor. I suggest to have more streamlined minimum dollar restrictions.

      Hope this helps.

      (0) 

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