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Author's profile photo Ruthvik Chowdary

SAP S/4HANA Product Allocation Process

Dear SAP Friends,

Welcome to another interesting topic, Product Allocation

In this blog, I would like to share process steps involved in Product Allocation

If you would like to know first what exactly product allocation is, Hear is a high-level overview

Competitive order processing that aims to deliver the required quantity to the customer at the requested time demands precise planning and control mechanisms. Unpredictable problems, such as breakdowns in production or increased demand, can lead to critical situations in order processing and must be brought under control before they arise.

Product allocations provide this sort of control and enable your company to avoid these critical situations in demand and procurement. Equal allocation of products in short supply must be possible, as must speedy reaction to bottlenecks and changing market situations.

Depending on the period, you can allocate products for specific customers or regions. Using product allocations in situations in which a product is in short supply, you can avoid allocating the entire available quantity to the first customer, which either delays the confirmation of subsequent sales orders or makes confirmation impossible.

Source SAP Library:- Product Allocation

Now let’s see how to activate Product Allocation

The system I used to execute PAL is S/4HANA 1909 FPS01

Once Activated PAL in SPRO rest everything needs to be done in Fiori there is no GUI transactions for PAL


Below are 5 Applications required to execute PAL

  1. Open Configure Product Allocation App

Click Create

Maintain Required Fields as per business requirement

Based on the requirement we can select both Sales orders and Stock Transfer Orders as well

Once General Information has maintained Click Characteristics and maintain

We can select characteristics based on the business requirement from the available list, if the available list is not compatible with the business we can add more characteristics via “Manage Characteristic Catalogs” app


Once maintained General Information & Characteristics save

  1. Open Manage Product Allocation Planning Data App

Click on Go to see previously created Allocation

Click on edit and then Add option to add characteristics which we have selected previously

In the Selection Range, we can select as per requirement

In allocation planning Data maintain Characteristic values and planning figures

The graph will be generated as per the values maintained in planning its Planned and available Quantity

Once all data maintained Save

  1. Now Open Manage Product Allocation Sequences App

Click on Create

In General, Information Tab maintain Required Fields

Backward consumption & Forward Consumption data need to be given

Its how many months system need to consider for allocating, System first goes backwards if no quantity available then system checks in forward

From 1909 onward Capacity Sequence groups have been introduced

Sales sequence groups are checked against product allocation before the product availability check. Capacity sequence groups are considered after the product availability check.

 Open Sales sequence groups and from the drop-down select the Allocation Object which we created in 1st step

The time period can be given as per requirement

Once maintained all values click apply and save

  1. Open Assign Product to Product Allocation App

From Name itself, we can understand what needs to be done ?

We need to assign Material to Allocation Object

Note:- Unit of measure which we given initially while creation allocation object and materials which we add must be same or else system will give an error

We can add materials as per requirement and once added click save

  1. Open Product Allocation Overview App

To see allocation consumption

Allocation Object RUTHVIK PAL consumption is 0 now let us create a sales order and see

Created Sales order for FG126 with 20 Qty, but we have allocated only 10 in the month of April


From march to may it considered and allocated as per our allocation object

Now we can see Planned Qty Consumed Qty & available Qty

In this way, we can allocate product and delivery to customers without any delays


Please share, Like and Comment anything else you want to share or add points.

Thanks & Regards

Ruthvik Chowdary

SME – S/4HANA Logistics

SAP Ariba P2P


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      Author's profile photo Venkata Ravi Nanduri
      Venkata Ravi Nanduri

      Hi Ruthvik this a very good info. 

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Thank you ?

      Which document to share ?? By the way remove your mail id from comment as per SAP community policy mail id or personal information should not be posted

      Author's profile photo Jerry Janda
      Jerry Janda

      Ruthvik is correct. We have removed the email address. Please see rules of engagement:

      Kind regards,

      --Jerry (SAP Community moderator)

      Author's profile photo Pravin Mandgaonkar
      Pravin Mandgaonkar

      Nice document ! thanks for sharing

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Glad you liked Pravin Mandgaonkar?

      Author's profile photo Pravin Mandgaonkar
      Pravin Mandgaonkar

      Hi Ruthvik,

      I was expecting confirmation of qty 10 in the month of April, as per allocation data..isn't it?

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Yes But in March unused 5 Qty is available so taken that in to account and 15 it has taken

      Author's profile photo MAIDUL ISLAM

      Nice documents. Can you make a video on it??? I have one more question. What are the new features in product availability check as it was in already in classic ATP. 

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author
      MAIDUL ISLAM i will try to do
      Author's profile photo venu gopal
      venu gopal

      Hello Ruthvik,


      Very very nice document..keep it up, learning from your day by day.

      Author's profile photo Venkateshwarlu Cheedalla
      Venkateshwarlu Cheedalla

      Hi Ruthwik,


      Really a good blog to understand the product allocation process in new environment of S4 HANA.

      Once we allocate 50 Pcs qty based on certain levels (say Sales Org/Dist Chann/Customer Group 1000/10/ZA)  Is this 50 qty available for any other customer from other customer group ZB?

      I tried all the configuration as per your blog and did allocated qty as i said above, and observed that it can be consumed by other customer group ZB. How we can avoid consumption by cust group?

      Please suggest.

      Venkat Ch

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      If you want to control a cross customer group, that needs to be maintained in paramaters while maintaining

      Author's profile photo Oriana Mercado
      Oriana Mercado

      Hi Ruthvik,

      Thank you for sharing!

      Is there a function or  similar application to Product allocation Overview App for product allocation in SAP S4 Hana 1709 FPS02?

      We really need an option not necessarily in fiori, for our implementation.


      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Hi Oriana Mercado,

      Product Allocation functionality is available from 1909 version

      Author's profile photo venu gopal
      venu gopal

      Hello Ruthvik,


      I have maintained the same settings, but still sales order qnty is getting confirmed more what ever i give.


      Is there additional set up required?


      Please let me know if you need some other screen shots.

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      ​Hi venu gopal,

      Apart from the above-mentioned steps other aspects also matter like in Manage Product Allocation Sequences allowing past will also matter

      as you said from Feb you allocated 10 CS so the system will consider JAN and December as well that might be the reason for getting allocated full stock for SO you create

      Author's profile photo Rohit Zalani
      Rohit Zalani


      The new product allocation design is really very much simplified in terms of set up.

      In case there is a return of a product due to a quality issue, then the customer would return back and be sent a new replacement product. How do we make the system update quantities based on returns as well.

      In the above case, without the return being updated ( as increase in allocation ), the system would update the replacement being sent out to the customer resulting in an incorrect update of consumed quantity.

      How do we handle this in S4 HANA. ?

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      I'm Not sure this can be handled in PAL, If it's Customer Return it has to be having a Quality issue so bringing it back to stock is up on quality clearence.


      Author's profile photo Rohit Zalani
      Rohit Zalani

      Hi Rutvik

      The issue is if you want to use Product allocation to manage "customer quota" arrangement where you want to control the quantity of products that a customer can purchase in a given period ( say for products that have a promotional pricing and you need a balanced market spread ).

      In principle, you may be able to assign a product allocation object in the sequence that temporarily "bumps up" the quantity allowed for the same period based on the returns received, but that would be offline process.

      ECC allocation had possibility to define incoming returns as a key figure with update rules and with a move to S4 HANA, the clients would tend to loose that functionality.

      Let me know what you think.

      Author's profile photo Manoj Kansal
      Manoj Kansal

      Hello Ruthvik,

      Thanks for your effort and your post helps a lot . We are in middle of upgrading to S42020 and we want to ensure that our system delivers the same results as earlier.

      In S41809 we are using  PAL successfully by using two sequence groups in the Manage prodicut allocaiton with different product allcoation objects .

      Here the system used to confirm the max available qty which was available from both the allocation objects (e.g Req del date 01.05.2021 , order qty 300,  100kg maintained in Obj1 and 50 maintained in Obj 2) so system confirmed 150 .


      but now if I read the below information for S42020 (  , it says it will only confirm the max qty which is available in both the objects which means (  it will check Obj 1 and Obj 2 both but confirm only 50, as common qty on the same date across two objects is 50 )


      Can you throw some light on this if you have come across such case ? or my understanding is incorrect



      Author's profile photo Rohit Zalani
      Rohit Zalani

      Hi Manoj

      There is a flag on the Allocation Sequences where you can specify that it should take the values with the Consume overlapping quantities only.

      Does that use help you in this case ?


      Author's profile photo Hatem Moubarak
      Hatem Moubarak

      Hello Ruthvik,


      Thanks for this helpful information.

      I am wondering if I can set planning data for product allocation as a percentage from the available stock not quantities.