DDMRP: Demand Driven MRP in S/4HANA – Use Cases
In this blog will give you detailed understanding of the below points in DDMRP in S4HANA.
- Decoupled Lead Time (DLT)
- Buffer Zones Calculations, ADU Value & PIR’s Impact.
- Sales Orders impact on buffer calculation and qualified spike.
- Decoupled Lead Time (DLT):
The sum of the longest lead times of non-buffered products in a sequence headed by a buffered or DD-relevant product in a BOM, adds up to a cumulative lead time for the DD-relevant product that is known as the Decoupled Lead Time.
- To check the Buffer products and to calculate the DLT we are going to use Buffer Positioning App.
- In real time, the production planner could adapt the filter conditions, for example filter by classification results or filter by candidates of buffered products, then you could decide buffer or un-buffer the product.
- View products based on filter criteria such as MRP area, plant, lead time indicator, variability indicator, and so on
- Calculate the decoupled lead time (DLT) for one or more products.
Where as in traditional MRP everything is Dependent, so the lead is accumulation of all components.
2. Buffer Zones Calculations, ADU Value & PIR’s Impact:
Buffer level proposals are calculated/generated after using the Schedule Buffer Proposal Calculation app.
Buffer (stock) level proposals help you manage the safety stock, reorder point and maximum stock for your products through the Manage Buffer Levels app. Several factors are taken under consideration when calculating buffer proposals for your Demand-Driven Replenishment-relevant products.
- Average Daily Usage
- Averaging Interval
- Decoupled Lead Time
- Minimum Order Quantity
After Adoption the proposed quantity will become current max stock today and material master records also will update (Re-order point, Safety stock and Maximum stock levels).
Click right side of line item F-01010 material and go inside.
Herein you can see the Buffer profile which is automatically picked based on your product classification and lead time classifications. So the variability factor is 0.80 and Lead time factor is 0.30. These are helpful for Buffer Zones Calculations.
Buffer Zones Calculations:
Average Daily Usage (ADU Value) & PIR’s Impact:
The average usage of a product or component on a daily basis, calculated based on the demand over a selected averaging interval (The Mass Maintenance of Products (DD) app is used to set an averaging interval, a rolling interval defined in the form [-x days], referring to the current date. This interval is used to calculate the Average Daily Usage (ADU) for that date based on the daily usage, and to calculate the Decoupled Lead Time (DLT).).
ADU Value Calculation:
Note: Actual PIRs Qty for the month of Feb 2020 is 2000 PC. For ADU calculations, DDMRP won’t consider past PIR’s Quantities (Proposal run happened on 06-Feb-2020). So the First 5 days of average daily usage is 344.8 PC (per day 68.9 PC). If you can subtract 5 days value from 2000 then the Forecast demand Qty become 1675 PC.
3. Sales Orders Impact On Buffer Calculation & Qualified Spike:
Qualified Spike Demand: When calculating qualified spike demand, the system considers the open, future quantities of aggregated daily demands. A qualified spike is a future daily demand that lies above the Spike Threshold and within the spike horizon.
Spike Horizon: It is a time interval that starts after today and ends after the number of calendar days of the decoupled lead time into the future at the earliest.
Stock Requirement list (MD04):
*Spike threshold factor maintained in Buffer Profile Maintenance.
So herein the end of spike horizon is 20-Feb-2020. See below
Now I have created FOUR Customer Orders with different parameters like below:
- Order with BELOW the Ord. Spike Threshold and WITHIN Spike Horizon (2000 PC with requested delivery date is 15-Feb-2020).
- Order with ABOVE the Ord. Spike Threshold and WITHIN Spike Horizon (2500 PC with requested delivery date is 18-Feb-2020).
- Order with BELOW the Ord. Spike Threshold and OUTSIDE Spike Horizon (1000 PC with requested delivery date is 25-Feb-2020).
- Order with ABOVE the Ord. Spike Threshold and OUTSIDE Spike Horizon (2500 PC with requested delivery date is 29-Feb-2020).
After creation of Four Customer Orders my Stock Requirement situation is as below:
304 & 305 are within spike horizon and 307 & 308 are outside the spike horizon. So the outside spike horizon requirements (307 & 308) will not consider as Qualified Spike Demand and it won’t change Planning Priority.
By using this Replenishment Planning app we can identify the list of spikes (i,e Qualified Spike Orders). 305 is above the Ord. Spike Threshold and within Spike Horizon. So it’s a qualified spike among four orders.
Now run the MRP or Create Supply tab in Replenishment Planning App. You can see the Planning Priority become 100% and if you go inside you can see the planned order. Here my maximum stock level of the material is 5,097 PC and Qualified Spike is 2,500 PC.
By using Edit button in the screen you have converted into Production Order.
Then completed the Manufacturing Execution steps like Release, Goods Issue, Confirmation and GR of Production Order. Once stock came into the Inventory then Planning Priority and Net flow equations will change.
In Stock Requirement List (MD04):
Note: Customer requirements will NOT change the ADU value and Buffer Zones Calculations. However, sales order requirements are considered as demand spikes depending on spike threshold and spike horizon.
To understand the basic concept of DDMRP please check the below link.
I would very much appreciate your comments and suggestions.
Pulla Rao Tulava