supply planning leadership exchange: sap pp/ds what you need to know part 1

November 15th , 2012 plan4demand

SUPPLY PLANNING LEADERSHIP EXCHANGE PRESENTS:

The web event will begin momentarily with your host:

Overview

What are the PP/DS Components

What does PP/DS really accomplish

What should it mean?

– Optimizing , Block Planning

PP/DS – Step by Step

– PP Heuristics Planning

– DS Optimization

– Set up Matrix

Bottom Line

Clearly Define the PP/DS Components and

Functionality

Differentiate Between Heuristics and Optimizer

Identify common Block Planning and Set up Matrix

requirements

Discuss some specific actions that can help you start to

get this difficult process under control and understood

in your organization

Strategic

• Strat Plan

• CapEx Plan

• Portfolio Plan/Product Roadmap

• IT Roadmap

Operational

• S&OP Forecast

• Annual Operating Plan (Budget)

• Standard Cost

• Brand Plan

• Strategic Logistics Plan

Tactical

• Demand Plan

• Supply Plan

• Rough Cut Capacity Plan

• Production Plan

• Finite Plan & Schedule

• Labor Plan

• Materials Plan

• Set Up Matrix

Production Planning

Detailed Scheduling

PP/DS is primarily divided in two areas

Release Demand

Plan to SNP

* PP heuristics

(Production Plan)

Interactive detailed planning in

DS planning board.

Convert supply elements Orders

(production or purchase )

Run SNP Optimizer to

produce Supply Plan

* DS Heuristics

(Detailed Feasible Plan)

* Depending on the business

requirement may require more than

one run

– Multi-Level Production Plan

– Capable-to-Promise

– Supports lot quantity calculations

– Supports the following business models

Make to Stock

Make to Order

Make to Order with Order BOM

Engineer to Order

Flow Manufacturing

– Order Pegging

– Integrated with Alert Monitor

– The How, When, and Where resources and materials should be deployed.

– Master Planning for Materials and capacity (Resource Loads)

– Realistic Delivery Date confirmation

Features Key Benefits

– Scheduling Optimizer

– Optimal Sequencing

– Flexible & Graphical

Activity Scheduling

– Backlog Resolution

Planning

– What-If Analysis &

Simulation

– Forward & Backward

Scheduling

– Optimal production sequence

(feasible and executable)

– Allows simulation of planning

scenarios for optimal schedule

– Optimization based on actual

constraints

Features Key Benefits

ECC

Release from SNP

to

PP/DS

PP Heuristic &

PP Optimizer

Evaluate the Planning

Results

Interactive Planning: Create,

Change, Reschedule Orders in

the Planning Board

Execution:

Process Order Release

& Production

Confirmation

Sales Orders

Stk. Trnsfr. Orders

Inventory

Process Orders

Purch. Orders

CIF

APO

Elements that compliment PP/DS

Alert Monitor (Exception Management)

Heuristic Framework (User Friendly Development Area)

Simulation versions (What If )

Standard Reports (Several Standard Reports)

5 1

time

2 3

4 6

Application of rules

Customer-specific rules using the Heuristic Framework

Scheduling result is easier to understand and influence

Mostly limited to one bottleneck resource (except

for Multi-Level Heuristics)

Only applicable to scheduling problems with limited

(modeled) complexity (e.g., no loops)

Better suited for workaround solutions if constraints

cannot be modeled properly

Heuristic finds only one solution which is always a result of the sequence of products or resources planned.

There are winners and losers in Heuristics. It is a step by step procedure

Sequence Optimization

Simultaneous consideration of multiple operations, resources, and BOM levels

Suited for complex (modeled) scheduling problems

Better suited if there is an optimization potential which cannot be described by simple rules

– e.g., if the structure of the scheduling problem changes depending on the order mix

Scheduling result are more difficult to understand and influence

Helicopter view over all resources and products and plans.

– A problem at one end of the resource network

– Caused by a good solution on the other end of the resource network

– Optimizer can go back and solve the issue over the whole network and come up with a solution that is feasible for all resources in the network.

Heuristic would have to have

reiterate runs with readjustment to runs and the problem moving around the resource network.

Optimizer – The benefit of minimizing sequence dependent setup times, reducing

lead-times and to schedule dependent demand according to the priority of the

demand.

Pegging Constraints & Shelf Life are the most common and complicated

requirements

Optimization: Change of Production dates/Sequences and resource assignment of

existing operations/activities with regard to the following criteria (no creation or

deletion of orders)

© SAP 2012

13

Final Forecast (12 Months) per product family (CBF)

HEURISTICS

Run with a

predefined

Horizon

•Capacity

Leveling must

be run to

achieve a

somewhat

constrained

capacity plan

Prod. Qty is transferred to

PP/DS to create the Blocks PP/DS

Create Blocks in Resource Master. Generate week schedule for the Production Lines.

Demand Planning

OPTIMIZER

Run in the sequence of the pre-defined

production cycle considering the following:

*Storage cost

*Order Cost (production cost & setup cost)

*Profit Margin

*Penalty of Late orders

*Non-delivery

*Procurement cost

The result: the Optimal Production Quantity for

the Product Family

SNP Engine

The Optimal Production Quantity is the preliminary size of the block.

This determines the frequency of the block in the production cycle.

CAPABLE TO MATCH

• Plans the whole Network (Multilevel Planning)

• CTM can execute Bucket and Time Continuous Planning

• Mixed Resources can be used by SNP with bucket and

time continuous definitions

• Prioritize demand and categorize your supply accordingly

• Block Planning - considers characteristic values of orders

during planning and creates orders with corresponding

characteristic values relevant for variant configuration or

for characteristics-dependent planning (CDP)

• Planning with products configured for CDP, considers

block definitions of resources and fixed blocks.

SNP make the following decisions.

Source of Supply

Approximate Production Date

Quantity

SNP Orders

– Take place in Planning Periods or Buckets

– No defined sequence

– Lot sizes correspond to Maximum quantity for Planning Period

Private party on Saturday….. No Private party on Saturday….. No

PP/DS order - (continuous time scale with

start time and end time)

100

SNP: Planned orders in

weekly buckets

PPDS: Calculates daily, hourly

schedules

Today

PP/DS Horizon

SNP horizon

SNP horizon

W3 W5 W4

SNP order(Bucketed Order)

W2 W1

W3 W5 W4 W2 WK6

Last Week

PP/DS Horizon

100

Conversion of Detail Plan

to Process orders Optimization /

Sequencing

SNP planned orders in the SNP horizon will be

converted to detailed schedule (PPDS orders)

The SNP and PP/DS differences

Are you running or planning to run PP/DS

on a single or multiple plants?

Answer on the right hand side of your screen

A. Single

B. Multiple

17

© SAP 2012

t

Shift schedule

Blocks

© SAP 2012

Customer orders

Requirement get automatically scheduled

according to blocks schedule

A Matrix contains

– For each possible setup transition at a single resource

The setup times

The setup costs that are necessary to change the setup status of the resource to another setup status.

You can use a setup matrix to model sequence-dependent setup times and setup costs for a single resource.

Based on the setup matrix, the system will do the following:

– Determines the correct setup

– Determine optimal operation sequences (with regard to setup time or setup costs) during optimization

– Determine the production process model for creating a setup order and clean-out order during campaign optimization

Prod A

Prod A

Prod B

Prod B

Prod C

Prod C

Prod B

Prod C

Prod A

Prod C

Prod A

Prod B

Time

Time

Time

Time

Time

Time

Maintain Setup Matrix-

/n/sapapo/cdpsc7

Display Setup Matrix-

/n/sapapo/cdps_setup

Setup Group: Classification of an operation according to a characteristic that is

relevant to planning and which the system should consider during scheduling and

rescheduling.

Group A

Group A

Group B

Group B

Group C

Group C

Group B

Group C

Group A

Group C

Group A

Group B

Time

Time

Time

Time

Time

Time

Maintain Setup Group-

/n/sapapo/cdpsc6

While performing detailed scheduling

– System will read the setup matrix that defines the sequence-

dependent setup time.

B A C Setup Setup

Finite Schedule

A

time 20 30 30

10 10

Setup time on resource

Prod. A B C

A 0 10 20

B 30 0 10

C 40 30 0

Setup time in minutes

Product A:

Product B:

Product C:

Setup

Set- up B A C A

Set- up

Optimal Schedule

A A C B Demand

What is the level of constraints you currently face

in your production environment ?

Answer on the right hand side of your screen

A. High Fixed Constraints

B. High Variable Constraints

C. Medium Fixed Constraints

D. Medium Variable Constraints

E. Low Fixed Constraints

F. Low Variable Constraints

27

© SAP 2012

Shows the planning elements graphically in a highly customizable interface

Reports can be triggered on the fly.

Interactive What If analysis can be adopted for the

actual plan

28

© SAP 2012

Multiple schedules can be developed and then merged with the active plan

29

Custom Capacity Alert Sent to

the planner (e.g. 70% ).

Action 1. Do nothing.

2. Extend the block.

3. Fix the block.

4. Yell at Demand Planner for the forecast being too high.

Requirement/Receipt Alerts:

– Product Too Late/Early

Shelf Life Alerts:

– Shelf Life too short/ long

– Receipt with out Pegging Relationship

Orders in Past Alerts:

– Sales Order in the past

– Receipt due date/time in past.

Order Alerts-Product Dependent:

– Order creates surplus

– Order has shortage

Days’ Supply Alerts:

– Below minimum days’ supply

– Required days’ supply exceeded

Average Resource Utilization(PP/DS):

– Average resource overload

– Average resource underutilization

– Capacity overload on bucket resource

Inventory Alerts:

– Stock fallen below safety stock level

Setup PP/DS

Alert Profile

Run PP/DS

Planning

View Alerts

Analyze Alert

Situation Notify Person

Responsible

Adjust Plan

Interactively

Opt: Run what if analysis if extended the block

Re-schedule if the block is adjusted.

PP/DS fulfills the need of production planner by

– Creating feasible plan taking into consideration constraints

– Provides the tools needed to plan and schedule

Insure a crisp transition from SNP to PP/DS

– SNP should do the heavy lifting with PP/DS putting the icing on the cake

– Insure high transparency between SNP and PP/DS

Understand the type of scheduling you what to do

– Block, Campaign …

Understand the engine that will drive your PP/DS

– A large variety of heuristics are available to plan products

– The ability to build your own Heuristics

Page30

December 5th

S&OP Leadership Exchange:

S&OP KPIs & Metrics Setting a course to achieve ROI

December 14th Special Event

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For More Information Contact:

Jaime Reints

412.733.5011

[email protected]

supply planning leadership exchange: sap pp/ds what you need to know part 1

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