Process documentationInventory Balancing

 

The aim of inventory balancing is to balance excess and shortage at individual locations. An excess occurs if the projected demand is greater than the safety stock at a certain point in time. A shortage occurs if the projected demand is less than the safety stock at a certain point in time.

Inventory balancing is an optional process in Service Parts Planning (SPP) that is executed as a planning service in the Planning Service Manager. You can schedule the inventory balancing service periodically. The following triggers also lead to inventory balancing:

Note Note

If you do not want to carry out inventory balancing for a product or location product, you can specify this in the location product master data on the SPP Inv. Balancing/Surplus tab page or in the product master data on the Properties of SPP tab page.

End of the note.

The system can decide to balance stock within an inventory balancing area only. An inventory balancing area is part of a bill of distribution (BOD) and consists of locations that can balance stock with one another. One location can thus belong to several inventory balancing areas. However, within an inventory balancing area, parent locations cannot release stock to their direct or indirect child locations. Inventory balancing from a child location to a parent location is possible.

The inventory balancing service calculates excess and shortage of a product for all locations in the BOD in the existing areas, and corrects the stock imbalance. However, inventory balancing only occurs if the benefits of a stock transfer are greater than the costs. In this way, the inventory balancing service ensures that existing stock is evenly distributed.

Note Note

If you use form-fit-function classes in your product interchangeability work, inventory balancing takes account of this in planning. You can find further information under Form-Fit-Function Classes and Inventory Balancing for the Products of an FFF Subset.

End of the note.

Prerequisites

  • You have created inventory balancing areas. For more information, see Creation of Inventory Balancing Areas.

  • You have defined packaging specifications for rounding in the SAP Easy Access menu under Start of the navigation path Advanced Planning and Optimization Next navigation step Service Parts Planning (SPP) Next navigation step Environment Next navigation step Packaging Specification Next navigation step Maintain Packaging Specification End of the navigation path. For more information, see Making Settings for Rounding.

  • You have executed the following IMG activities in Customizing for Advanced Planning and Optimization under Start of the navigation path Supply Chain Planning Next navigation step Service Parts Planning (SPP) Next navigation step Inventory Balancing End of the navigation path:

    • Make General Settings for Inventory Balancing

    • Define Service Profile for Inventory Balancing

    • Define Warehouse Space Savings Storage Type

    For more information, see the Implementation Guide (IMG).

  • You have defined a planning profile that contains inventory balancing in Customizing for SCM Basis under Start of the navigation path Planning Service Manager Next navigation step Define Planning Profile End of the navigation path.

    For more information, see Use of the Planning Service Manager in SPP and PSM Services for Inventory Balancing.

Process

  1. The system calculates excess and shortage of a product at all locations within a BOD and the inventory balancing areas.

  2. The system balances excess and shortage within one area. For more information, see Balancing Excess and Shortage. The system rounds the potential stock transfer quantities. For more information, see Rounding and Rounding in Inventory Balancing. The system executes a cost-benefit analysis for each potential stock transfer. If the calculated benefit is greater than the cost, the system creates the recommended stock transport requisitions.

  3. The system sorts the recommended stock transport requisitions in descending order according to quantity and checks the maximum number of stock transport orders per day from every location that releases stock. The system then creates stock transport orders and either executes these immediately, or forwards them for manual release.