Load Building (SAP Library

Load Building

Purpose

Load building is used to:

Minimize transport costs by making best possible use of the means of transport (for example, ship, rail freight container, truck)

Reduce stock on-hand as much as possible by ordering as late as possible

Achieve more favorable purchase price conditions by ordering whole truck loads, for example

To support you in this, SAP Retail attempts to optimize quantities for procurement and converts existing purchase requisitions to purchase orders, if necessary generating new purchase orders (for example, if the range of coverage is increased). Several purchase orders are combined in a load under the one collective number.

In making its calculations, the load-building function does not take any scales, free-goods discounts or any quantities and values agreed in contracts into account. If, for example, a contract has been agreed for 50 cartons with a value of $ 10,000, the terms of the contract would not be complied with if the range-of-coverage calculation made in load building resulted in higher quantities.

For further information on how Load Building is integrated into the process of Order Optimizing, see Ordering: Order Optimizing and the first figure in Ordering.

Prerequisites

You can only use load building if you use SAP R/3 Retail.

The vendor for which the system is to optimize order quantities has to be an external vendor.

The vendor must be assigned a restriction profile. A restriction profile includes information on the minimum and maximum loading capacity of the means of transport used.

Example

A truck is only allowed to begin its route once it has a minimum load of 300 kg. It can, however, only take a maximum of 27 pallets.

Restriction profiles are maintained in Customizing in the Materials Management section under Purchasing ® Order Optimizing ® PO-Based Load Building

Think about the constraints you want to use (such as quantity, weight, value or minimum quantities, maximum quantities or multiples).

The Automatic purchase order indicator in the purchasing data of the vendor master and the Automatic purchase orders allowed indicator in the master records of the articles concerned must be selected before a load can be built for the articles from a vendor.

For Load Building to be used properly, article dimensions, weights and units have to be maintained in the master data (see Article: Basic Data).

If you use Load Building, you should also use Forecasting so that the system can calculate the range of coverage of the stock and determine the additional items and quantities required. You have to decide which forecasting method to use for each combination of article and site.

For further information on this topic, see MM – Consumption-Based Planning: Forecast Parameters.

Load building generally is based on the purchase requisitions and purchase orders created in Requirements Planning. You have to decide which planning method to use for each combination of article and site.

For further information on this topic, see Requirements Planning.

For many articles, it is better not to forecast exact requirements (such as 288 pieces), but larger requirements based on logistics units (such as 3 pallets). In this case, you should use dynamic rounding profiles. Rounding profiles enable you to meet constraints, such as a full truck load. You have to decide how to define your rounding profiles and to which unit of measure the system should round off the quantities.

For more information about this topic, see Dynamic Rounding Profiles.

When you implement load building, you should begin with a smaller selection of vendors and one distribution center to gather initial experience with the effects of load building. You can then include further vendors and distribution centers as time goes on.

You have to decide which vendors and distribution centers you want to use load building for. You can use vendor sub-ranges as splitting criteria for purchase orders. The system then optimizes documents for each vendor sub-range.

Process Flow

Load building can be run automatically or manually. Both methods differ in terms of the prerequisites applying to them and the functions available. They can also be used in combination:

You can have the system simulate automatic load building and you can then convert the results in the results list manually to purchase orders (without the purchase orders being given a collective number and marked as optimized).

You always have the automatic load building program generate purchase orders. You optimize quantities using the manual load building program. In manual load building, you can optimize further and assign the purchase orders collective numbers (thus flagging them as optimized).

You only have the automatic load building program generate purchase orders if the system can flag the purchase orders as optimized. You optimize quantities using the automatic load building program. Manual load building is only necessary in cases where the automatic load building program cannot find an optimal solution.

The following process variants are possible:

Variant 1:

You run automatic load building in simulation mode.

See Order Optimizing: Automatic Load Building

You check the results and convert them to purchase orders in the results list.

See Order Optimizing: Results List from Automatic Load Building

You flag the purchase orders as being optimized by issuing a collective purchase order number.

See Order Optimizing: Manual Load Building

You add quantities to purchase orders that are not optimized.

See Additional Planning

Variant 2:

You run automatic load building and have the system generate purchase orders immediately.

See Order Optimizing: Automatic Load Building

You check the results and flag the purchase orders as being optimized by issuing a collective purchase order number.

See Order Optimizing: Manual Load Building

You add quantities to purchase orders that are not optimized.

See Additional Items

Variant 3:

You have the system automatically convert purchase requisitions to purchase orders, with no automatic load building.

See Automatic Generation of Purchase Orders from Purchase Requisitions

You check the purchase orders, build a load from several purchase orders and flag the purchase orders as being optimized by issuing a collective purchase order number.

See Order Optimizing: Manual Load Building

You add quantities to purchase orders that are not optimized.

See Additional Items

Variant 4:

You manually create a purchase order.

See Manual Creation of Purchase Orders (Vendor Known)

You check the purchase orders, build a load from several purchase orders and flag the purchase orders as being optimized by issuing a collective purchase order number.

See Order Optimizing: Manual Load Building

The following special cases are only of minor importance in load building or cannot always be predicted:

Achieving better scale conditions
Discounts such as free-goods discounts
Additional packaging
Reduced packaging

As a result, the system does not take these factors into account, in particular in view of performance.

Results

Purchase orders that meet all the restrictions are logically combined under a collective number and flagged as optimized.