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DDMRP for IBP-Inventory

In the recent past DDMRP is a buzz word around SAP, future innovations in S/4 HANA-Manufacturing and IBP-Inventory modules are around DDMRP. DDMRP is available to customers from 1709 version of S/4 HANA (on-premise) and from 1802 version of IBP.

DDMRP for IBP-covers all 5 components of Demand Driven Institute. In this Blog I am covering the DDMRP with 5 DDI components available as standard with IBP  module as on 1908 release.

Components of DDMRP

SAP Integrated Business Planning for inventory now(from 1905 version) supports all the five components of Demand Driven Materials Requirement Planning (DDMRP) as defined by the Demand-Driven Institute:

1.Strategic Inventory Positioning by creating decoupling point buffers

2.Buffer Profiles and Levels

3.Dynamic Buffer Adjustments to buffer levels

4.Demand Driven Planning

5.Visible and Collaborative Execution

DDMRP Setup

DDMRP is introduced with IBP-Inventory in 1802 version of IBP.Planning area SAP3B was used to Generate  Buffer levels. Planning and Execution are not covered in standard.

From IBP version 1905 DDMRP comes as separate module with separate licence. New Model Planning area SAP8 introduced with New and updated Key Figures (141 from 56) and Planning levels.

Now DDMRP is covering until Buffer Adjustments. Planning and Execution will happen in ECC-Add-in with CPI-DS. Same way it will work with S/4 HANA  in the coming releases.

Planning operators

Planning operators and copy operator nodes are now available under DDR not part of IO.

Recommend Decoupling Points (Solve) operator to recommend decoupling points across entire supply chain. This operator also recommends buffer levels and creates decouple point indicator and decoupled lead time.

To Identify the De-coupling position six major criteria as per DDI.How this is mapped in DDMRP for IBP  we will see in the below table:

Outcome of the Decoupling points will update the values in the Location product MDT for the product with reason for the decoupling point.

Calculate DDMRP Buffer Levels based on the Decoupling point decisions and run scenarios the app compares buffer levels and adjust the buffers according to buffer profile overrides. Buffer level algorithm also runs with the input and output KFs mentioned in the above picture.4 based on Decoupling point indicator highlighted in Decoupling constraints.

Note:DDMRP Planning operators will only run in Batch mode

DDMRP Apps

Manage Forecast error calculations Inventory Optimization app will now create predefined profile”ADU_Calculation_Historical CoV” along with model Planning area(SAP8). past and future values for ADU calculations will be automatic.

ADU Calculation

ADU calculation method has been changed now.Manage forecast error calculation app is no longer used to calculate ADU.Now ADU and variability of ADU key figures are calculated based on past,future or blended time horizons derived from Attributes of Location-Product MDT.If the value is blank in MDT attribute,then 1 day future horizon will be considered as default.

Planning view Template-ADU calculation

DDMRP buffer Analysis app is used to identify decoupling points and set buffer levels for DDMRP for the selected data set in the supply chain. In this app we can create, Run and Save, Delete (from 1902) the scenarios. If the results are ok, we can save the results to Baseline as well.

DDMRP Buffer analysis app will have the summary of Decoupled Lead Time, Average on -Hand and Average On-Hand value comparison between the selections. Also, to see the Decoupling points of individual Product location.

Supply Chain Network App

Below Analytics app helps to see the KF values in Selected supply chain network.Below example selected Key Figure is Decoupled Lead time

Master Data Type:

Buffer Profile

Buffer profile is used to maintain the Item type,Lead time and variability category indicator values for Make,Buy and Transfer products.Different values can be maintained for each category using Buffer profile set ID.The outcome of the Buffer levels generated based on the comparison with Input values given in the Location-Master data and decoupling point indicator.

Location Product

DDMRP relevant attributes related to Location-Product MDT are highlighted here.

All other MDT details refer SAP help.

Planning and Execution

Planning and Execution will be performed in ERP-Addon and IBP through CPI-DS Integration

Please refer the Process flow for Planning and Execution.

Source:SAP Help

 

Excel Planning view

Now Standard Excel templates are available as part of Best practice documents released by SAP.Refer Useful links

Buffer Zone Chart

Buffer Level caculation

Buffer Zone analysis based on for the above results

On-Hand Status

Conclusion

Now DDMRP of IBP comes with all the 5 components of DDI with ECC-Add on. S/4 HANA using CPI-DS Integration for Planning and Execution will be released soon.

Note:Please refer my S/4 HANA DDMRP blog to understand S/4 HANA offerings.

 

Useful links

https://www.demanddriveninstitute.com/ddmrp  – Demand Driven Institute

https://www.amazon.com/Demand-Driven-Material-Requirements-Planning/dp/0831136286   Demand Driven Material Requirements Planning (DDMRP), Version 2 by Carol Ptak, Chad Smith

https://help.sap.com/viewer/feae3cea3cc549aaa9d9de7d363a83e6/1908/en-US/dc87d46d18fe41718c92db3d642bf17d.html  SAP Help

https://rapid.sap.com/bp/#/rds_ibp Best Practice for IBP-DDR

https://blogs.sap.com/2019/03/19/demand-driven-replenishment-ddmrp-in-s4-hana-configuration-setup/    S/4 HANA -DDMRP- Part 1

https://blogs.sap.com/2019/04/28/demand-driven-replenishment-in-sap-s4-hana/  S/4 HANA-DDMRP-Part 2

3 Comments
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  • Dear Reader

    There is a small error in Vankatesh’s description of the IBP calculations,   which originated from an error in SAP documentation, which is in the process of being corrected.

    The IBP software does not multiply ADU by 7,  which would be an incorrect calculation.   Internally,  IBP  is working with decoupled lead time in weeks and multiplies by 7 to get DLT in days.  The final equation for each buffer level is a function of ADU and decoupled lead time in days.

    Sorry for any misunderstandings…

    Mike Lipton

    SAP Supply Chain Solution Management