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No Forecast Values for Low Volume Sales Items (S&OP)

Dear All,

It’s been a fortnight; I started accessing SCN actively… to read/write solutions in different Forums along with writing a Blog on few SAP learning’s. I am really enjoying it; thanks to all of you on SCN.

Coming back to my topic for this blog… As a PP consultant, S&OP (Sales & Operations Planning) is very close to my heart. This is an excellent & fabulous planning module available in SAP R/3.

So every time in any project whether it’s new implementation or roll-out or support to existing SAP system, I decide my own project strategy based on S&OP process being used by a particular business/client. And surely, it feels really good and relieving till the time it works fine with all relevant forecast data… But you start feeling heat when S&OP module doesn’t work as per the desired. Not to say because these forecast figures decides lots of business strategies.

During one of my previous SAP Support project in which I was responsible for PP function, a similar sort of show-stopper issue relating to S&OP had come up (as explained below).

We had implemented Info-structure based Sales & Operations Planning (Flexible Planning) module to carry out the forecasts using past historical data.

Forecast values were being created or calculated on Monthly basis whereas was getting split into Weeks while populating the same into Planning Type of a particular Sales Info Structure (SIS). Business had this situation of splitting of Monthly forecast into Weekly, not because of the forecast model but due to Weekly structure of Planning Table. These Weekly forecast values from Planning Table were then transferred to Demand Management for further planning & execution.

Business was able to get the correct forecast values for almost 90-92% materials having HIGH/AVERAGE Sales Volume. But during testing, business realized that they are not getting any forecast for few materials. During investigations, it was found that we were facing a challenge of not getting any forecast plan/value for the materials having Low Sales Volume i.e. 3-4 SUs/Month. i.e. if any monthly forecast value is less than 4, zero forecasts was populated as system was trying to split 4 or less quantities into Weeks.

Because of this, business was getting impacted due to inaccurate supply/inventory planning.

After lots of investigations/discussions with a third party SAP consulting company, solution was suggested to overcome the situation.

Solution was to create/generate one additional Planning Type with Monthly structure, to use only for Low Sales Items. So that it would have monthly forecast values saved in Planning Type and then the same would be transferred to Demand Management. So finally, we had two separate Planning Types (One, Weekly and another, Monthly) to fulfill the requirement of having forecast values for all SU’s to have accurate planning and inventory.

No other solution could be identified other than defining separate Planning Type.

Does anybody face similar problem? If yes, please share the thoughts on it? Thanks.

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