Identifying the supplier constraints in mid/long term planning using predictive MRP (pMRP) in S/4HANA Cloud, essentials edition
In SAP ECC implementations, always there is a question from supply chain planning consultants on how to consider the capacity constraints of suppliers in mid-term or long term planning of supply chain. In SAP ECC, consultants have addressed this question using their own custom methods or custom models. Now, SAP has released an innovative functionality in SAP S/4HANA cloud, essentials edition, to consider supplier constraints. In this blog post, I would like to show you how to use the functionality of modelling the Supplier constraints in mid-term /long term planning using predictive Material and Resource Planning (pMRP)in SAP S/4HANA Cloud, essentials edition’.
Predictive MRP functionality in SAP S/4HANA is used for Mid/Long term demand scenario simulation for capacity, production, purchasing and internal material flow in production plants on detailed level. Predictive Material and Resource Planning functionality is released by SAP in SAP S/4HANA as a successor of classical ERP ‘Long-term planning’, but not with identical functionality. It is very important to note that predictive Material and Resource Planning (pMRP) does not replace operational MRP or MRP live functionality provided in SAP S/4HANA. Here in this blog post, I will explain the process of considering the capacity constraints of supplier in mid-term or long term planning with an example. This functionality is currently available in SAP S/4HANA Cloud, essentials edition.
In this blog post, I am considering a simple example scenario to explain the setup: A finished good ( VJ-FERT1) is produced out of 2 raw materials (VJ-RAW1, VJ-RAW2) in a plant. Each of these raw materials are procured from separate individual external vendors. i.e. VJ-RAW1 is procured from vendor VJ-VEND1 and VJ-RAW2 is procured from vendor VJ-VEND2. Each of these vendors can supply a limited amount of quantity per month. In certain months, quantity supplied by vendors is less than the normal quantity and this is due to various reasons. There is a forecast (demand) quantity available for VJ-FERT1 for the next 12 months.
Data needed in S/4HANA Cloud Essentials Edition:
- Material master maintained for Finished goods, raw materials. MRP type PD maintained for Raw materials and Finished goods. Lot for Lot Planning maintained in MRP views. Other planning data , work scheduling data maintained appropriately as needed.
- BOM for finished goods and raw materials are maintained as components along with component quantity.
- Work center, Routing data maintained along with operations.
- Production version maintained.
- Vendor master for Suppliers as Business Partner.
- Purchase Info records maintained for raw materials with the vendors.
- Demand quantity of Finished good is maintained as PIR.
To consider the capacity of suppliers, SAP has provided a new Fiori App: ‘Define Flexible Constraints’. Along with this app, we have to also use the existing Fiori apps: ‘Schedule pMRP Simulation Creation’ and ‘Process pMRP Simulations’.
1. Use the Fiori App: ‘Maintain PIRs’ and maintain the Planned Independent Requirement (PIR) quantity. In this example, I have maintained PIR for the finished goods material in an active version. Maintained PIR for quantity of 100 per month for August, September, October, November and December of 2020. Also for Jan and Feb for 2021.
2. Use the Fiori App: ‘Define Flexible Constraints’ and maintain the quantity that can be supplied by vendors for raw material as shown in below screenshot. In this example, for raw material VJ-RAW1, we could see that in the months of October, November and December, supplier supplies less quantity than the normal quantity of 100PC. For the other Raw material VJ-RAW2, other supplier supplies a fixed quantity of 100PC per month. You have to perform this step for raw materials where there is a necessity to consider the supplier constraints.
3.Use Fiori App: Schedule pMRP simulation creation and execute pMPRP run. There are three ways to select the selection criteria and I have used the option: Creation of pMRP Data via Work Centers. In the selection criteria make sure that you select ‘Consider Inactive PIRs’ and also to key in the Inactive PIR versions in the field ‘consider inactive PIR versions’. Because, in this example, PIRs were loaded onto an inactive version and hence it is mandatory to select these parameters as part of selection criteria.
4.After the successful execution of pMRP run, use Fiori App: Process pMRP Simulation. Select the simulation which you have created in previous step. Upon selection of simulation session, system displays the screen ‘Demand Plan Simulation’ as shown in below screenshot. Here, system displays the total number of all violated constraints in simulation, if there are any. As there is a constraint from supplier for raw material VJ-RAW1 in months of October, November and December, system highlights the plan for those months in red color. Upon selecting the cell, inspector panel is displayed on the right part of screen and there system displays the details of supplier constraint. Based on this, planner can look for other options like to shift or reduce the demand of Finished Good or look for another vendor, etc.
With this procedure you got to know how to consider the capacity of the suppliers (supplier constraints) in the long term planning or mid-term planning in SAP S/4HANA Cloud, essentials edition.
Link that provides information on Predictive Material and Resource Planning: