Show TOC

Process documentationMaking Repair-or-Buy Decisions

 

If you have activated the repair-or-buy function for a location product and there is demand for this location product, distribution requirements planning (DRP) checks whether it is possible to cover the requirement using repaired products. If this is possible, DRP decides on repair, if not, it decides to procure.

Prerequisites

  • In the location product master data, you have selected the X - On entry in the Repair or Buy field on the SPP DRP tab page.

  • You have entered the costs for delayed requirement coverage for each product and period in the location product master data in the Costs of Late Reqt Cov. per Prod./Period field on the SPP DRP tab page.

    Note Note

    These costs are fictitious costs and, although they do not accrue in reality, you can use them to specify how important it is to fulfill a demand on time.

    End of the note.

  • You have made the settings for rounding to lot size. For more information, see Rounding in Distribution Requirements Planning (DRP) in Rounding for Repair or Buy and Kit to Stock.

For more information about the prerequisites for the repair or buy function, see Repair or Buy.

Process

  1. DRP determines the demand for serviceable products. The system only continues to step 2 if there is a demand for serviceable products, otherwise it terminates at this point.

  2. DRP determines the available quantity of repairable products in the following way:

    1. DRP adds up the following quantities:

      • Projected unserviceable stock from the previous period

        You can see this quantity in the DRP matrix in the Overdue column in the key figure Initial Unserviceable Stock.

      • Projected quantity of returns

        For more information about how the system creates the returns forecast, see Creating a Returns Forecast.

      • Substitution receipts of unserviceable products from supersession in one-to-one substitution or in the form-fit-function classes

        You can see this quantity in the DRP matrix key figure Subst.Rcpt:Forw.Exc.Unserv.St.(1:1/FFF).

    2. DRP subtracts the following quantities from the quantity calculated in step 2a:

      • Frozen unserviceable products demand

        You can see this quantity in the DRP matrix key figure Unserviceable Products Demand (Frozen).

      • Unfrozen unserviceable products demand

        You can see this quantity in the DRP matrix key figure Unserviceable Products Demand (Not Frozen).

      • Substitution demand for unserviceable products from supersession in one-to-one substitution or in the form-fit-function classes

        You can see this quantity in the DRP matrix key figure Subs.Dem.:Forw.Exc.Unserv.St.(1:1/FFF).

  3. The system checks whether the quantity calculated in step 2 exceeds the maximum allowed quantity of repairs per day. You can specify how the maximum allowed quantity of repairs per day is calculated in the Business Add-In (BAdI) BAdI: Define Repair or Buy Logic (/SAPAPO/DRP_REPAIR_OR_BUY).

    • If this is not the case, DRP continues with the quantity calculated in step 1.

    • If this is the case, DRP reduces the quantity calculated in step 1 to the maximum allowed quantity.

  4. DRP rounds the quantity calculated in step 2 to a lot size.

    For more information, see Rounding in Distribution Requirements Planning (DRP) in Rounding for Repair or Buy and Kit to Stock.

  5. DRP checks whether the rounded quantity matches the minimum and maximum quantities and adjusts the rounded quantity (if necessary):

    For more information, see Rounding in Distribution Requirements Planning (DRP) in Rounding for Repair or Buy and Kit to Stock.

  6. DRP checks whether the quantity calculated in step 5 is larger than the quantity of available repairable products calculated in step 3.

    • If this is not the case, DRP continues with the quantity calculated in step 5.

    • If this is the case, the system checks the entry you made in the RoB: Conflict at Lot Size Rounding field in the DRP service profile

      • If you have selected the entry Ignore Lot Size in this field, the field ignores the rounded quantity. In this case, the system compares the unrounded net demand calculated in step 2 with the available quantity calculated in step 3, selects the smaller of the two values, and rounds it to the next integer.

      • If you have selected the entry Greatest Qty acc. to Lot Size <= Maximum Quantity in this field, the system adopts the largest possible lot size that is less than or equal to the available quantity and that is (if possible) larger than or equal to the unrounded net demand calculated in step 1.

      For more information, see the Implementation Guide (IMG) for Advanced Planning and Optimization under Start of the navigation path Supply Chain Planning Next navigation step Service Parts Planning (SPP) Next navigation step Distribution Requirements Planning (DRP) Next navigation step Define Service Profile for DRP End of the navigation path.

  7. DRP checks whether the quantity calculated in step 6 can be covered by the quantity calculated in step 3.

    • If this is the case, the system makes a repair decision.

    • If this is not the case, the system calculates the quantity that it cannot cover using repaired products. For this quantity, the system checks whether the repair costs and the costs of delayed requirement coverage are larger than the external procurement costs. You can specify how the system checks this in the BAdI BAdI: Define Repair or Buy Logic (/SAPAPO/DRP_REPAIR_OR_BUY). In the standard implementation of the BAdI, the system proceeds as follows:

      The BAdI uses the following formula to calculate the number of delay periods after which external procurement costs are as high as the repair costs and the costs of delayed requirement coverage combined.

      • If, in order to cover the remaining quantity with repaired products, you require more periods than the calculated number of periods, the system decides to procure the remaining quantity externally.

      • If, in order to cover the remaining quantity with repaired products, you require fewer than or the same number of periods as the calculated number of periods, the system decides to cover this remaining quantity with repaired products.

      DRP takes account of the remaining quantity for each individual product, not just the total remaining quantity.

      Example Example

      The remaining quantity consists of 10 pieces.

      The system checks when serviceable products will be available again:

      In two days, four more repaired products will be available. For these products, it is more cost-effective to delay delivery by two days than to procure them externally. In other words, DRP accepts a shortage for four pieces and decides to repair.

      In ten days, six more repaired products will be available. For these products, it is more expensive to delay delivery by ten days than to procure them externally. In other words, DRP decides against a shortage and procures six pieces externally.

      End of the example.

      Note Note

      DRP also rounds the calculated quantities to a lot size. In lot size rounding, the rounded quantity may exceed the remaining quantity. This can lead to the system procuring the entire remaining quantity externally rather than covering any part of the requirement with repaired products.

      End of the note.