Search Results for: forecasting

  • How to Best Use Aggregate Supply Planning in SAP APO

    ByPrimary Researcher

    … and how it is configured in APO.
    What is Aggregate Supply Planning?
    Aggregate supply planning is the aggregation of planning by a supply element. Aggregate supply planning can be performed by product, by location, or by time.
    Background on Aggregate Supply Planning
    Supply planning primarily deals at the product location. Forecasting applications, such as SAP DP, will often perform a variety of aggregations. Understanding how to aggregate is one of the significant challenges to effective forecasting. And many companies cannot aggregate the way they would like because, in my opinion, is some limitations on aggregation and disaggregation vis-à-vis …

  • The Differing Supply Network and Unmatched STOs and STRs in APO

    ByPrimary Researcher

    … not even be a “real” location.

    There can be several reasons for the design above. Not only are transportation lanes significant maintenance, but more locations for DP means more characteristic value combinations (CVCs), which means more hardware space and more processing. Companies can reduce the number of CVCs by not forecasting non-essential locations. This is a weakness in general with APO. The maintenance effort required to represent reality fully is too overwhelming, so various shortcuts are often taken to reduce this overhead.
    The Problem With the Design
    While the design seems reasonable at first blush, unfortunately, APO is not …

  • How to Delete Old Forecasts from SNP

    ByPrimary Researcher

    … lead time are not forecasting, although they can be useful, such as in this scenario. However, it should never be used to “adjust” the forecast, or the forecast accuracy will be wrong – this is something that is lost on proponents of demand sensing.
    This brings up the topic of when forecasting changes can be made. As explained in the graphic above, after a certain point, changes are no longer part of forecasting/demand planning, and they do not improve the forecast for apparent reasons. For more on demand sensing – see this article.
    The Forecast Exceeds the Sales Orders within the …

  • How to Understand The History of MRP and DRP

    ByPrimary Researcher

    … large segment of companies have not been able to move beyond MRP/DRP and that so many companies have still not mastered MRP/DRP. I entered the field in 1998, working for an advanced planning software vendor. The assumption was generally accepted within this vendor that companies had mastered MRP and time for more advanced methods. This was the philosophy throughout the software vendor, but roughly 14 years of experience in the field later, it seems an entirely incorrect assumption. This shows how one’s financial incentives can distort the interpretation of a market.
    In addition to forecasting well …

  • The Connection Between BOMs, Routings, Work Centers in ERP and PPMs, PDSs in APO

    ByPrimary Researcher

    … The PPM or PDS as a Container
    PPMs and PDSs are used in the Following SCM Modules.

    DP
    PPDS
    SNP
    CTM

    PPMs and PDS are designed to manage capacity constraints and material consumptions, so a natural question would be why DP uses PPMs and PDSs. It turns out this is a particular case of the PPM. DP is not doing anything with capacity or resources, and DP-PPMs/PDSs do not have resources. Instead, they are used to perform BOM forecasting. BOM forecasting is merely a form of hierarchical or dependent prediction, where the top-level is forecasted, and then

  • How to Understand GATP and the Supply Plan Quality and the Order Promise Horizon

    ByPrimary Researcher

    Executive Summary

    How does master data quality impact how GATP is run?
    What are the two basic ways that GATP can be run?
    Why is it important to ascertain the supply planning accuracy at different intervals of the supply planning horizon and important to publish the forecasting accuracy to customers who will receive sales order confirmations?
    What are the implications for order promising in a time horizon in which the supply planning accuracy is low?

    Introduction to GATP
    GATP is an enhanced functionality of what exists in SAP SD. The naming of GATP that is Global Available to Promise implies …

  • Who Was the First to Engage in Mass Production?

    ByPrimary Researcher

    … became popularized with the Japanese at the lead, but using primarily non-computer techniques such as Kanban to manage factory production efficiently. Morton and Pentico further propose that software designed for one type of scheduling problem can not be readily adapted to other scheduling problems. This would be opposed to forecasting solutions that can generally be adapted between clients and situations more readily.
    A Historical Perspective on the Development of Production Scheduling
    Frederic Taylor and Henry Gantt were two of the most influential people in production scheduling. Frederic Taylor created planning as a separate group from execution (an issue many …

  • How to Use Reorder Point Planning in SAP ERP and SAP APO

    ByPrimary Researcher

    … forecasting program.(emphasis added) The system determines the forecast values for future requirements by means of historical data. From these forecast values, the system then calculates the reorder level and the safety stock level, taking the service level,(emphasis added) which is specified by the MRP controller, and the material’s replenishment lead time into account. The system then records these two values in the appropriate material master record. Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that …

  • Supply Chain Enterprise Software Books FAQ

    ByPrimary Researcher

    … in each of the topic areas?
     I teach a class on supply chain and or software. Would these books be good candidates to include in my curriculum?

    Do these books cover the mathematics in each of the topic areas?
    Yes, but only the more basic math. For instance simple statistical forecasting models are demonstrated in “Supply Chain Forecasting Software.” In “Supply Planning with MRP, DRP and APS Software,” MRP and DRP are explained somewhat mathematically by showing the logic within their application tables. Both MRP and DRP and simple approaches that don’t require a great deal of math. (in …

  • My Experiences with Dynamic or Extended Safety Stock

    ByPrimary Researcher

    … Dimension

    1. Zero Periods of Demand
    The standard dynamic SS formula does not use a forecast error but instead a standard deviation of demand. However, when you create a custom dynamic SS formula, you can use forecast error. This has advantages because forecast error is far more often discussed within forecasting departments and companies generally regarding the forecast than the standard deviation of demand.
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    Conclusion
    While many people have attempted to list the standard SS formulas, I think what needs to be discussed is why the dynamic SS calculation is not used in companies. Rather than spending …