Dynamic Safety Stock – The Quantity Float
In the documentSafety Stock and its Availability for Planning Purposes we discussed on the static safety stock feature usage along with availability aspects of the same during a planning run using MRP groups.
This document will focus on the dynamic aspect of the safety stock which is also categorised as a ‘Quantity Float’ in planning along with the static safety stock.
Apart from explaining the basics of calculations involved with the functionality with reference to a bigger data set to make understanding easier, the other objective is to ensure that consultants can answer queries raised in the forum related to the same merely by looking at a screen shot if provided on the same.
To smoothen the fluctuations always associated with planning, SAP comes up with what is called as ‘Range Of Coverage’/ROC. By definition, it is the number of days a material must be available to cover the requirements.
Again the ROC calculation/s can be carried out and visualised under 4 different categories, as applicable, after a planning run:
- Statistical Range of Coverage: Use existing/known requirements to determine the average daily requirements over a certain period of time. By statistical, it is not the requirements that are utilised in real sense. Rather we define certain levels (Minimum, Target, Maximum) that then bring in a time dimension to facilitate calculation of daily requirements again with in the time period specified/customised. This procedure helps in calculating what is called as dynamic safety stock that fluctuates again as it is obvious. This is configured as under OMIA tcode.
- Coverage with Safety time: We can use a pre-defined time in number of days which is then taken into consideration during a planning run to bring the requirements by the same number of days. This procedure helps in deciding the coverage in terms of fractions also and can be clubbed with the statistical coverage if required. Hence ROC can be calculated either statistically and/or based on safety time for the time periods we specify or require. Configuration is done using OM0D tcode.
- Days’ Supply and Receipts Days’ Supply: To check how long a material would cover the requirements using plant stock only and check the same by using customisable options with respect to availability of various receipt elements as maintained in OMIL tcode. Useful to planners for follow-up actions required specifically. The system calculates the days’ supplies in every planning run and every time the current stock/requirements list is called up. The system displays both of these types of days’ supply in the planning results, in the material overviews in collective access and in the header details in the MRP list and the current stock/requirements list. In the collective display of the MRP list, you can use these key figures to select MRP lists.
- Actual Range of Coverage: The actual range of coverage specifies how long the available quantity of a material at a particular date or in a particular period can cover the requirements in subsequent periods. This is specified in number of days.
The system calculates the actual range of coverage both during the planning run and in the stock/requirements list. It can then be displayed in the Period totals display in the MRP list or in the stock/requirements list.The system also displays the actual range of coverage in the planning table for repetitive
The actual range of coverage is calculated for all periods that are displayed in the Period totals display. The available quantity on the particular date is used to
carry out the calculation. This provides the work scheduler with an overview of the ranges of coverage in the future.
In contrast, the days’ supply only displays the current situation as it is calculated using the current available quantity.
Read SAP note 217080 – Documentation: range of coverage in MRP for further information.
Note: Contrasted to the static safety stock that can be seen in a stock requirements list for instance, the dynamic safety stock cannot be seen directly in a screen or using a transaction code and rather needs to be inferred in the calculations carried out post a planning run.
Configuration: OMIA tcode.
We define the Coverage profile as below and then we include it in the MRP2 view of the material concerned under the Net Requirements Calculation tab.
Current date is 23rd Dec’2012.
For the material with coverage profile PIRs are loaded for the next 10 months – Jan’13 through Dec’13
Month No of working days
Total 212 days (in the 10 month period)
Go to the Period totals Display:
Daily Requirements Calculation:
Total Reqmts in 10 months (Jan’13-Oct’13) = 1500
No of days in the 10 month period = 212
Average daily requirements (in Jan’13) = 1500/212 = 7.075
No.of working days in Nov’13 = 21
So when avg daily requirements are calculated for Feb’13, requirements are considered from Feb’13 through Nov’13 (10 month period).
Average daily requirements (as per Feb’13) =1400/211 = 6.635
Similarly No. of working days in Dec’13 = 20
Average daily requirements (as per Mar’13) =1200/211 = 5.687
And the calculation goes on till Oct’13 as with above logic.
Range of Coverage:
Today’s date is 22/12/2012 when MRP is run.
Range of coverage in first period covers No.of periods as 1 meaning Dec’12 is the period under question.
Range of coverage in second period covers No of periods as 3 meaning Jan’13, Feb’13 and Mar’13 fall in this period and have the coverage ranges (Target/Min/Max) values calculated.
To x-check we set changes in config as below and re-execute MRP.
As expected Jan’13 falls under the ROC first period and Feb/Mar/Apr’13 all get under the second period.
We revert back to the original config and MRP results as below:
If Minimum ROC is not entered it defaults to the Target ROC maintained. Max ROC always needs to be maintained.
We see planned orders created for 135.375, 197.800 and 95.260
a. PIR is 100 and the dynamic safety stock calculation based on the coverage profile has calculated as below:
Average Daily requirement = 7.075
Target Range of coverage = 5
Dynamic Safety stock = Avg daily requirement * Target ROC
= 7.075 * 5
So this quantity is added to the PIR qty of 100 and is created as 135.375.
b. Next PIR in line is 200 for Feb’13.
Based on available quantity of 35.375, the net requirements will be 200 – 35.375 = 164.625.
Again the dynamic safety stock for Feb’13 is 6.635 * 5 = 33.175
So Planned order for Feb’13 is 164.625 + 33.175 = 197.800
c. PIR for Mar’13 is 100.
Based on available quantity of 33.175, the net requirements will be 100 – 33.175 = 66.825.
Again the dynamic safety stock for Mar’13 is 5.687 * 5 = 28.435
So Planned order for Mar’13 is 66.825 + 28.435 = 95.26
As there are no dynamic stock requirements from Apr’13 the net requirement calculations become straight forward.
If we maintain the data in various period limits as below, then the settings here take precedence.
IMPORTANT: Values of Minimum Range of coverage and Maximum Range of coverage in Period 2 and Rest of the horizon are relevant only for MRP procedure and not relevant for Time-phased Planning procedure.
Basic thumb rule to remember:
If the stock level is less than Minimum Safety Stock Level then the system creates the procurement proposals to maintain the Target Safety Stock Level. Target stock level becomes the dynamic safety stock.
If the stock level is above Target Safety Stock Level no procurement proposals are generated.
If the stock level is above Maximum Safety Stock Level, the system first checks if procurement proposals are firmed & if they are firmed a exception message is generated.
The discussion focused on calculations with initial plant stock as zero. Try to set up available stock values greater than zero and observe the differences.
Observe that the Periods total display also has the actual coverage field/calculation showing up. Work out the details for further understanding.