Three-Way Pegging

Purpose

You useThree-WayPegging to plan and schedule bulk shipments based on supply and demand information. The term three-way refers to demand items (stock requirements or customer requests), supply avails (what is produced, purchased, or in stock), and transportation avails (vehicles, vessels, or pipelines available to complete the shipment).

The term pegging refers to the matching of demand items to supply avails and transportation avails for the purpose of scheduling of bulk shipments, such as marine voyages or pipeline batches. You plan and schedule bulk shipments, by assigning the pegged items to the Distribution Schedule inThree-WayPegging. From the Distribution Schedule you can create carrier nominations, as well as continuously update the schedule.

DuringThree-WayPegging the system uses supply avails and demand items that you create or change during the following processes:

Resolving imbalances during Location Balancing

Entering what-if (simulated) quantities during Stock Projection

Generating the Stock Projection Worksheet (SPW) using sales and purchase orders, as well as contracts (TSW relevance and SPW relevance required)

You can display the quantities from purchase requisitions and reservations as consumed items in the Demand Items and Supply Avails areas ofThree-WayPegging. However, you can not assign these items to the Distribution Schedule.

You accessThree-WayPegging from the SAP Easy Access Menu by choosing Logistics → Sales and Distribution   →   Bulk scheduling   →   Workbench   →   Three way pegging

The Three-way pegging - Maintain screen is divided into an object hierarchy on the left and a work area in the main part of the screen. Because the system does not automatically display the object hierarchy when you enterThree-WayPegging, you must select Toggle selection view to display the hierarchy. The object hierarchy shows the results of the selection criteria you enter. The work area at the top of the screen is divided into separate areas that display supply avails, demand items, and transportation avails. In the lower part of the work area is the Distribution Schedule where you assign the supply, demand and transportation combinations for scheduling.

Prerequisites

Document Assignments

You must create the sales orders, purchase orders, purchase requisitions, quotations, reservations, freight contracts, and stock transfer orders that form the basis for the demand, supply, and transportation items inThree-WayPegging.

To publish what-if (simulated) nominations from the Distribution Schedule, you must first activate TSW-relevance in the documents that you intend to assign to those nominations.

Master Data

You must create the master data records for transport systems, business locations, materials, vehicles, and partners (customers).

Customizing

In Customizing you can define certain parameters to adapt theThree-WayPegging function to your company-specific requirements.

Document Relevance forThree-WayPegging

You must assign stock projection relevance toThree-WayPegging, so that the system updates the quantities inThree-WayPegging using the quantities initially generated by the Stock Projection Worksheet. You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Stock Projection → Specify stock projection relevance.

The system does not update quantities based on the SPW, if you manually change the scheduled quantity in the Distribution Schedule. You can view any discrepancies between the SPW quantities and the scheduled quantities in a work list.

Activate use of What-If (Simulated) Nominations

You must activate the simulated schedules function forThree-WayPegging to create what-if (simulated) nominations from the Distribution Schedule. You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Basic Functions   →   Define usage of simulated schedules

Pegging Types and Validation Checks

You define pegging types to determine the processing parameters that the system uses during pegging. You can change the pegging types delivered with the system to determine what document assignments the system allows for carrier nominations (CN) or demand and supply items (DS) duringThree-WayPegging.

You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Basic Functions   →   Pegging → Define pegging type

You canimplement a filter-dependent Business Add-In (BAdI) to defineadditional check routines for the pegging types that you use forThree-WayPegging. The system performs these validation checks when you peg, unpeg, assign or unassign items.

You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Basic Functions   →   Pegging → Maintain Business Add-Ins for Pegging → Business Add-In for processing based on pegging type.

In addition to implementing the BAdI, you must assign the check routine to the pegging type.

Define Carrier Nomination Types

You must define a nomination type for carrier nominations. You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   ®   Nomination ®   Basic Settings ® Define nomination types

Use Document Quantities from Real-Time Stock Projection

So that the quantities inThree-WayPegging are always based on the most current data available fromnominations, tickets, or a TSW-relevant sales or purchase orders, you must activate Real-Time Stock Projection . You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Stock Projection   → Specify parameters for stock projection

Alternatively, you can generate the Stock Projection Worksheet each time you want to see the most up-to-date inventory figures.

Default Values for Pegging to Stock

You can select the schedule item type and the reference document indicator that the system is to use by default inThree-WayPegging (serves as placeholder for the required demand or supply items at specific location). You specify these parameters in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Three-Way Pegging   →   Define parameters for pegging stock

Append Text Fields in Distribution Schedule

You can implement a BAdI to move comment text from the text box inThree-WayPegging and add the text to fields in the Distribution Schedule. You do this in Customizing by choosing TSW (Trader's and Scheduler's Workbench)   →   Three-Way Pegging   →   Maintain Business Add-Ins for Three-Way Pegging → Business Add-In for comment texts.

Process Flow

  1. You enter the selection criteria that the system then uses to determine the demand, supply, and transport data forThree-WayPegging.
  2. You can select the supply avails and demand items that you want to peg. When you peg a combination of supply and demand, the system displays the items in the Distribution Schedule at which point you can no longer change their quantities. Later, you can assign the pegged items to create a single, simulated carrier nomination.

or

  1. You select the supply avails, demand items, and transport avails that you want to assign to a single, simulated carrier nomination. The system displays the combination in the Distribution Schedule.
  2. You can change the schedule lines in the Distribution Schedule.
  3. You can publish schedule lines in the Distribution Schedule to create actual carrier nominations.
  4. You can now update the published nominations in nomination maintenance. Alternatively, you can continue to adjust schedule lines and update the carrier nominations from withinThree-WayPegging, whereby the nomination reverts to a simulated nomination which you must publish again. When you publish again, the system overwrites the original schedule data.
  5. Save theThree-WayPegging data.

Integration

Three-Way Pegging also involves the following processes and functions:

  • Stock Projection

During Stock Projection you create demand items and supply avails based on contracts, production updates (from external systems), or inventory levels. Three Way Pegging uses the results from the Stock Projection as the basis for scheduling carrier nominations.

  • Location Balancing

The Location Balancing process involves comparing and balancing demand and supply (generated during Stock Projection) for a given period to achieve a supply chain balance. You can use the supply and demand items that you create or change during the Location Balancing process to create a Distribution Schedule inThree-WayPegging.

  • Nomination Maintenance

You can use the Distribution Schedule as the basis for creating carrier nominations. You can assign schedule line items to a simulated carrier nomination and publish the carrier nomination. When you publish a carrier nomination, you have the option to have the system create the nomination in the background or to manually complete the nomination in Nomination Maintenance.

Three-Way Pegging also provides a validation routine that checks to ensure the data entered in the fields is correct. The validation routine is based on the same Customizing settings that you define for nomination validation. To define the validation checks, in Customizing choose TSW   (Trader's and Scheduler's Workbench) → Nomination → Maintain Business Add-Ins for Nomination → Business Add-In for nomination header validation and Business Add-In for nomination item validation.

Result

You have created a schedule of bulk shipments based on your supply, demand and available transportation. You have created nominations that you can use to communicate with your partners, such as a carrier.

As long as the nominations are not confirmed, you can continue to change the nominations either in nomination maintenance or from the Distribution Schedule. You can update carrier nominations based on factors such as, customer requests for a different product, request for a different quantity or a different delivery date.

Example

Your customer SouthernOil requests light-grade crude and medium-grade crude, while your customer WesternOil also requests light-grade crude. UsingThree-WayPegging, you find that the supply location Adria can fulfill both of these demands. You match these customer demands to the supply location. You then check the transportation avails to find the most suitable vessel for the shipment. You select the chartered vessel Lone Star. You assign the supply, demand and transportation combinations to the Distribution Schedule. You select the schedule item in the Distribution Schedule and publish a carrier nomination.

Your customer SouthernOil requests more light-grade crude. You return to the Distribution Schedule and change the scheduled quantity. You review the impact of your changes in the what-if column of the Stock Projection Worksheet. You are satisfied with the effect and return to the Distribution Schedule to publish the simulated nomination line again.