Alternative-Based Confirmation – An Overview
Welcome to the first in a series of blog posts about Alternative-Based Confirmation (ABC) in SAP S/4HANA advanced ATP. The series aims to introduce the topic and the solution by highlighting individual features in separate blog posts. We will include the following topics:
- Activating Alternative-Based Confirmation
- Substitution strategy
- How to fine control what is substituted
- Substitution master data
- Consumption to improve
This blog entry will be updated so that it acts as an index to all blog posts in the series.
So, let’s get started…
Problem Statement – Motivation
Let’s think for a moment about a situation when there is always enough supply so that each customer order can be fulfilled 100%. What would this look like?
A new customer order arrives in the system via electronic data interchange (EDI) or it is captured by a sales representative – a new demand is born! To reliably confirm the customer’s request, an Available-to-Promise (ATP) check is executed and checks the demand and supply situation in our system to prevent, for example, over-confirmation situations. The ATP check confirms the requirement fully and on-time and subsequent steps in order processing, like outbound delivery creation, can be triggered.
Although this simple example depicts a situation that can occur, there are other cases which are more likely to occur:
- The customer request cannot be fulfilled from the requested plant but there might be another plant that can be used to fulfill the demand instead. How can I use a different plant – or multiple plants even – to fulfill the demand?
- Although a partial confirmation is possible from the distribution center, the remaining open quantity shall be shipped directly from the production plant later. How can I place the remaining open quantity in a different plant?
- The plant is shut down temporarily. How can I reflect this during an ATP check?
- The customer’s requested product is out-of-stock but an interchangeable product is available. How can I substitute the requested product?
- The customer’s requested product has been phased out and a successor product has been phased in. How can I substitute the requested product?
- A special product with season-specific labeling is to be used during the seasonal time frame instead of the standard product. How can I substitute the requested product?
- A partial confirmation can be achieved for the customer’s requested product but the remaining open quantity shall be fulfilled by another product. How can I achieve this?
Alternative-Based Confirmation (ABC) in SAP S/4HANA advanced ATP helps to improve the order fulfillment rate by intelligently selecting alternative locations or products based on the actual demand and supply situation. This empowers you to confirm orders with confidence and helps reduce inventory carrying costs and the number of backorders. Furthermore, disruptions within the supply chain, for example, when supply is delayed, can be mitigated dynamically by confirming orders from different locations or by using alternative products.
Blog Series Example
To help you understand Alternative-Based Confirmation more easily, this blog series uses a simplified, real-life example scenario of the substitution of milk products and different plants (see screenshots) based on different characteristics and circumstances.
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