Business Scenarios Involving Interchangeability
Purpose
There are several business scenarios in which one product is replaced by another. This topic describes some common scenarios that can be mapped in SAP APO using Product Interchangeability.
Process Flow
Supersession
Immediate Change
On a particular date Product 1 is discontinued and replaced by Product 2. There are two variants of this scenario:
With Use-Up
In this variant after the discontinuation date any remaining stock of Product 1 can be used up before new orders are generated for Product 2. This could be the case in a production environment where a component is superceded by an improved version. However to avoid unnecessary costs you want to ensure that Product 1 is removed completely from the warehouse before ordering Product 2.
Without Use-Up
This is the more extreme case in which after the discontinuation date Product 1 is no longer used anywhere. This could be the case where the discontinuation is due to legal requirements. Finished articles containing Product 1 should under no circumstances be sold. Such a scenario can obviously result in additional costs for disposing of the remaining stocks of Product1.
How this scenario is treated in the SAP APO system depends on your time fence. For more details see Interchangeability Scenarios in the Applications .
Controlled Phase-In/Phase-Out
In this scenario the predecessor product is gradually phased out while the successor product is being phased in. Both products are planned and produced/procured consecutively.
This scenario can only be realized currently using Demand Planning functionality. The gradual decrease of demand for the predecessor product is modeled using a phase-out profile, the gradual increase in demand for the successor product using a phase-in profile.
For an example of how to model this behavior see Phase-In/Out Example .
When using this scenario make sure that the discontinuation date is after the end of the phase-out period. Otherwise any remaining demand for the predecessor product in the phase-out period may be substituted by the successor product in subsequent applications (for example SNP or PP/DS).
Periodic Demand
The demand for one product is purely periodic. This demand is deducted from the demand for the main product.
If the demand for product 1 exists in all periods, this scenario can only be accounted for in Demand Planning, using a product split (see also Which Interchangeability Method Should I Use? ).
However if demand does not exist for both products simultaneously, SNP can also be used. PP/DS and CTM cannot be used. In SNP you create an interchangeability group A
B
A
B
…This means you can vary the length of time between the substitutions.
Form Fit Function (FFF) classes
This scenario is common in the aerospace and automotive industries. It is known under various names such as (Inventory-Managed) Manufacturer Part Number or in the defense industry the NATO stock number.
The business scenario is always similar. You buy in components and assemble them to an end product. One component is supplied by several vendors. In order to facilitate purchasing the product from each vendor has a separate product number. You have specified the product exactly so that there are few if any physical differences between the products from the different vendors – the form , fit , and function are identical. However you only actually order from one vendor. You choose the vendor based on a variety of business reasons, for example price, quality, or reliability. The chosen product is the leading product in the FFF subset (see Form-Fit-Function Class (FFF Class) ). Which vendor is actually chosen can change frequently. You only need to change the leading product in the FFF subset and any subsequent requirements result in orders for the correct product.
Since different vendors may supply the product in different locations, the FFF subset is location specific.
This function is supported in SNP and Global ATP. If requirements are received for a product and there are not sufficient receipts/stocks to satisfy these requirements, the system checks the other products in the FFF subset. Receipts/stocks for any of these products can be used. Only if there are not sufficient receipts for any product in the subset, does the system trigger the purchasing process for the leading product in the subset.