Source Determination in Supply Network Planning (SAP Library

Source Determination in Supply Network Planning

Use

The individual planning procedures in Supply Network Planning (SNP) have very different source determination methods. While the SNP heuristic uses quota arrangements and procurement priorities as a basis for choosing the source of supply, the SNP optimizer bases its source determination decisions on costs. Deployment, on the other hand, uses source determination not to determine sources of supply but instead to determine the destination locations to which product stock is to be distributed.

Features

SNP Heuristic

The heuristic determines the sources of supply as follows:

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1. The system first takes into account the defined quota arrangements.

2. If there are no quota arrangements available, the procurement priority specified in the Production Process Model (PPM), in the Production Data Structure (PDS), or in the transportation lane is used.

3. If both quota arrangements and procurement priorities have been defined, the system uses the quota arrangements.

4. If neither quota arrangements nor procurement priorities exist, the system chooses the most cost-efficient source of supply.

5. If all sources of supply have the same costs, the general guidelines for source determination apply (see Determination of Source of Supply Ranking List).

If there is neither a valid transportation lane (for procurement type F; external procurement) nor valid PPM/PDS (for procurement type E; in-house production), the system creates an SNP stock transfer or SNP planned order with no reference to a source of supply. The same applies if there is no product in the source location of the transportation lane.

For more information, see Source Determination (Heuristic).

SNP Optimizer

Since the SNP optimizer basically determines the most cost-efficient solution, its sourcing decisions are also cost-based.

This also means that you can only influence source determination or, to a certain extent, prioritize sources by specifying costs. For example, you can use production costs to prioritize production resources and transportation costs to prioritize the procurement location. Note however, that the optimizer always takes all influencing factors into account (such as storage costs).

The SNP optimizer also takes into account incoming quota arrangements by including the penalty costs defined for violating the quota arrangement values in the cost calculation.

If there is no valid transportation lane for procurement type F (external procurement), the system creates an SNP stock transfer with no reference to a source of supply. If there is no valid PPM/PDS for procurement type E (in-house production), the system’s behavior is governed by whether or not the SNP: No Planned Order indicator has been set in the planning version. If this indicator is set, the SNP optimizer does not create any planned orders; if it is not set, the SNP optimizer creates planned orders with no reference to a PPM/PDS.

For more information, see Source Determination (Optimizer).

Deployment

Deployment determines the destination locations to which the product stock is to be distributed. Therefore, deployment only considers transportation lanes as "sources."

Deployment Heuristic

In the deployment heuristic, it is crucial that the corresponding transportation lanes and one of the means of transport assigned to it are valid in the planning time period. The system first determines all valid means of transport for every individual period and every target location, and then decides which means of transport to use to create the deployment stock transfers. Generally, the system tries to orientate itself on the results of the SNP run and adopt the SNP-stock transfers created there. If there a multiple means of transport, or if there are no SNP stock transfers in a period, the system chooses the means of transport with the shortest mover time. If no valid transportation lanes or means of transport are available, the system cannot create any deployment stock transfers.

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Deployment uses distribution rules to decide which product stock proportions are to be distributed to the different destination locations; for example, it uses fair share rules in the event of a supply surplus or push rules if there is insufficient supply to fulfill demand. These rules are based partly on quota arrangements or priorities (distribution priority in the transportation lane).

Deployment Optimizer

The deployment optimizer generally decides which source locations to distribute available product stock to and which means of transport to use, based on the lowest total costs and by considering all restrictions (such as transport capacity) In doing so, the system may also take detours into consideration.

The deployment optimizer also decides which proportion of product stock is distributed to which source location based on the distribution rules.

For more information, see Deployment.

Capacity Leveling

Capacity leveling performs a source determination if the system decides to switch the source of supply. If the chosen leveling procedure is heuristic-based, sources are determined in the same way as for the SNP heuristic, if optimizer-based, source determination corresponds to that of the SNP optimizer. However, with optimizer-based capacity leveling, you cannot define the costs yourself, which means you cannot influence the source determination.

For more information, see Capacity Leveling.

Manual Source Selection in Interactive Planning

In interactive planning, you can modify planned distribution receipts (SNP stock transfers), confirmed distribution receipts (deployment stock transfers), and planned production (planned orders) manually.For SNP stock transfers and planned orders, you receive a ranked list of all possible sources from which you can choose your source of supply. For more information, see Source Determination in Interactive Planning.

A list of possible destination locations is displayed for deployment stock transfers. These destination locations are prioritized according to transportation costs and transport duration. The source of supply (destination location) with the lowest transportation costs and shortest transport duration is displayed as the "best" source of supply (and is shown at the top of the selection list, highlighted in green).