Requirements Planning: Forecast With Alternative Historical Data 

Use

With forecasting using alternative historical data (AHD), you can create a forecast that is based on freely definable data. Forecasting using alternative historical data is therefore not based on past consumption values that were updated in sites during goods issue posting.

Using alternative historical data has the following advantages:

·        Improvement in the accuracy of the forecast for distribution centers (avoidance of the bullwhip effect).

·        Reduction of stock in the distribution center by lowering the safety stock.

·        Increase in revenue by avoiding missed sales.

However, note the following constraints that can arise as a result of using alternative historical data for the forecast.

·        The use of alternative historical data for forecasting is not a replacement for or an alternative to the forecast with consumption values from the past.

·        It only makes sense to use alternative historical data for the forecast if it is not possible or would be very difficult to show the requirements history for an article using the consumption values from the past.

·        Using alternative historical data increases the possibilities for the planning process as a whole. The function has to be incorporated into the whole process in addition to the other processes.

·        You should use the functions with caution as they do cause an increased load for the system and can impair performance for a long time.

Implementation Considerations

With the different MRP procedures, you use a forecast of future requirements to support requirements planning. Normally you would create such a forecast with data that is based on consumption values from the past.

However, using consumption values from the past for a forecast can in some circumstances lead to less than optimum results. You should use alternative historical data if the data basis of consumption data from the past for an article is incomplete, faulty or of poor quality. A second case when it makes sense to use alternative historical data is if the existing consumption values do not reflect the actual requirements adequately enough. 

Example

For example, the consumption value of an article may not be the optimum basis for a forecast if the consumption value is based on goods issues that are misleading due to shortages. In this case, you should consider a forecast using alternative historical data. The forecast should be carried out on the basis of purchase order quantities, provided that the purchase order quantities represent the requirement situation of the article more accurately. A further possibility would be to use aggregated sales quantities from the stores that are supplied.

Integration

In principle, alternative historical data can come from any data source.

·        In SAP R/3, a technical link to the component SAP BW is provided as standard, which you can use to load alternative historical data into SAP R/3.

·        You can link to any other data source using the Business Add-Ins (BAdI) provided.