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 Consolidating Demands and Generating Substitution Orders

Purpose

When you work with Form-Fit-Function Classes in service parts planning (SPP), distribution requirements planning (DRP) consolidates the net demands and overstocks of the non-leading products of a form-fit-function subset (FFF subset) in the leading product of that FFF subset. Additionally, DRP generates substitution orders.

Process

  1. DRP calculates the available stock and the unrounded net demand of all non-leading products in an FFF subset. For more information, see Distribution Requirements Planning (DRP) .

  2. For each non-leading product in the FFF subset, DRP checks whether an excess or a net demand is available. An excess is defined by DRP as the projected stock minus the safety stock.

  3. DRP generates substitution orders as follows:

    • If there is an excess, DRP generates a substitution order in the excess amount from the non-leading location product to the leading location product. DRP records the excess quantity as a substitution demand in the DRP matrix of the non-leading location product. DRP records the projected stock of this non-leading location product as the previously projected stock minus the quantity of the substitution order.

    • If there is a net demand, DRP generates a substitution order in the net amount of the non-leading location product from the leading location product to the non-leading location product. DRP records the amount of the net demand as a substitution receipt in the DRP matrix of the non-leading location product. DRP records the projected stock of this non-leading location product as the previously projected stock plus the quantity of the substitution order. The net demand of the non-leading location product is therefore zero.

      The following graphic shows, as described above, when DRP generates substitution orders from non-leading location products to leading location products and when DRP generates substitution orders from leading to non-leading location products:

    Note Note

    DRP does not generate substitution orders for virtual child locations. Demands from virtual child locations are aggregated by DRP in the bill of distribution (BOD). For more information, see Aggregation of Demands Within the BOD .

    End of the note.

    Note Note

    If you want DRP to generate substitution orders for contract packagers (CPs), you have to create a separate FFF subset for the CP.

    End of the note.