Hi IBP Folks,
In SAP IBP Consulting community we often try to look up for the best algorithm which suits the customer’s business and when it comes to constraint planning the Time Series Supply Planning propagation , Finite Heuristics and Optimizer always have an edge.
In this blog post I would like to draw some key business benefits which the TS based Heuristics Supply planning brings to the customers.
Identifying the issues in Supply Chain :
When it comes to identifying the bottlenecks in our supply chain we can rely on the TS based Heuristics algorithm as it will always plan the receipts irrespective of the capacity there by going above the available Capacities of a resource/work center. We then through an alert shown up , when our Capacity Utilization goes above certain threshold . This means that all the resources having alerts are our bottleneck resources and we need to plan them with utmost care.
In the above example , we have some capacity supply issues in Week 17. Might be resource is down or some maintenance activity going on .
Transportation Lanes / Production:
Some times in the business we also need to identify the problems in our supply chain from transportation lanes. Since TS based Heuristics always generates the receipts against the Demand whether you have preferred source of supply or not . The Projected stocks goes negative in these cases and satisfies the demand . We then can throw an alert when the Projected stock is negative right from time when IBP planning starts and in future. This shows that we have issues in our transportation lanes or Production . May be the Vendor is not preferred , Quotas are not maintained correctly etc.
In the above example you see that you have Net Demand for a Material at a plant . Since no preferred sourcing transportation lanes are found , the projected stock goes negative in all future to cover for this Demand. The alert generated on negative values of projected stock for longer periods can indicate an issue in supply chain.
Respecting the business Decisions via Sourcing Rules :
For multi-sourcing scenarios : If the business has decided to follow the production or transportation in certain quota fashion , The TS Planning heuristics always follows the those sourcing ratios there by adhering to business decision.
Easy to understand :
The best benefit of the TS based Heuristics is that the planning results out of this algorithm run is easy to understand and you can trace the demand – Receipts -Supply quantities right from the Customer till the Vendor. Since the Mathematical model behind this algorithm does not follow any complex cost calculations it’s also always good baseline point to start with.
Also respects other key constraints :
Though it sounds like unconstrained planning but the algorithm do consider some of the other important constraints For e. g:
- Lead Times
- Manual Adjustment to Receipt KFs ( Setting Constraints)
- Lot-Sizes and Rounding Values
- Inventory Corrections and Inventory Targets
Once we have a good starting point for Supply plan, we can always go for constraint based Supply planning algorithm like Supply Propagation , Optimizer and Order Based Supply Planning.
Hope this is good read for many of the people starting with TS Supply Planning.