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Object documentationComparison of the Planning Methods

 

This topic compares the two most important planning methods of Supply Network Planning (SNP),optimization-based planning and heuristic-based planning, as well as the Capable-to-Match (CTM) planning method.

We recommend that you use optimization-based planning or CTM planning if one of the following conditions applies to you:

  • Your business environment is subject to strict constraints (for example, you must take into account production capacities, transportation capacities, storage capacities, and/or handling capacities)

  • You have alternative production locations and sources of supply (locations, production process models, and external procurement relationships)

  • You can decide between early production and late production

  • You share resources, meaning that multiple products are produced simultaneously on one resource

We recommend that you use heuristic-based planning or CTM planning if any of the following conditions apply:

  • You wish to plan on an infinite basis (meaning that you do not wish to consider capacities) for the medium to long-term horizon (heuristic).

  • You wish to plan or fulfill demands on the basis of priorities (CTM).

The following table describes the main features of each planning method:

Business Environment

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer

Business Objective

To create a feasible plan with few bottleneck resources

To create a feasible plan by fulfilling the highest priority demand first

  • To create a feasible plan with minimum costs

  • To maximize profits

Demand Type

Not relevant

Prioritized demand and demand-specific supply strategies

Demand can be aggregated for three demand classes or by customer locations

Capacity

  • Heuristic run: Based on the assumption that capacity is infinite (infinite capacity planning)

  • Capacity leveling: This is a step following on from the heuristic run to level capacities

Finite capacity planning (taking capacity constraints into account) or a simulation of infinite planning

Finite or infinite capacity planning

Planning Approach

Bucketed (period-based) planning

Bucketed or continuous planning

Bucketed planning

Constraints and Business Scenarios

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer

Resources

  • Production

  • Transportation

  • Handling (heuristic only)

  • Production

  • Transportation

  • Handling

  • Production

  • Transportation

  • Storage

  • Handling

Target Stock Levels

Flexible definitions for the heuristic but capacity leveling does not consider the target stock level method specified

Can use absolute target stock levels or target days' supply for planning

Can use absolute target stock levels or target days' supply for planning. The optimizer calculates the target days' supply before the actual optimization run

Lot Sizes

Considers lot sizes for production, transportation, and procurement

Considers lot sizes for production, transportation, and procurement

  • Considers lot sizes for production and transportation

  • Considers cross-period lot sizes for production

  • Transportation lot sizes have to be used to map lot sizes for procurement

Source Determination (sourcing)

Based on quota arrangements and priorities

Based on costs (PPM/PDS and transportation), priority, or quota arrangements (quota arrangement does not split orders unless necessary to fulfill demands on time)

  • Cost-based sourcing decisions

  • Can be used to modify quota arrangements

Time-Based Production Parameters

Considered

Considered

Considered

Material Constraints

Material staging is not a constraint. A backlog is created for externally planned products

Considers material constraints; external products are not planned and do not represent a material constraint

Can consider material constraints for externally planned products or by setting a high procurement cost for procured products

Supply Categorization

Not supported

You can define supply categories

Not supported

Supersession and Discontinuation of Products

1:1 - Supports supersession (supersession chains and form-fit-function classes)

1:1 - Supports supersession (forward interchangeable supersession chains and form-fit-function classes)

1:1 - Supports supersession (supersession chains and form-fit-function classes)

Aggregated Planning

Supports aggregation planning and disaggregation

Supports aggregation planning on two levels of the supply chain. You can also choose to aggregate demands and supply on a time basis or by order types for product

Supports aggregation planning and disaggregation

Maximum Stock Levels by Product

Not considered

Not considered

Considered as a constraint

Push Distribution Stock to Downstream Locations

Not supported (but is supported bydeployment)

Supported by supply distribution

Can be controlled using storage costs

Minimum Resource Utilization

Not supported

Can consider minimum receipt quantities

You can define a minimum available capacity for a resource and assign costs for falling below this minimum level (this only applies to production resources)

Resource Capacity

Does not make a distinction between standard and extended capacity

Does not make a distinction between standard and extended capacity

Can make a distinction between standard and extended capacity

Demand Prioritization

Capacity leveling does not recognize demand priorities

Demand can be sorted by different sort criteria

Demand can be aggregated for three demand classes or by customer locations

Shelf Life

Not considered

Can consider shelf life constraints in a restricted way (for example, CTM does not consider shelf life propagation).

  • Can consider shelf life constraints in a restricted way (see SAP note 579556)

  • Batches are not recognized

Subcontracting

Supported (the subcontractor has to be modeled as a location)

Supported (the subcontractor has to be modeled as a location)

Supported (the subcontractor has to be modeled as a location)

Scheduling Agreement Processing

Supported

Not supported

Not supported

Configuration

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer

Relevant Master Data

  • Locations

  • Products

  • Resources (single-mixed, multimixed, and bucket resources)

  • PPMs and PDSs (SNP)

  • Transportation lanes

  • Locations

  • Products

  • Resources (single-mixed or multimixed, and bucket resources)

  • PPMs and PDS (SNP and PP/DS, but some restrictions)

  • Transportation lanes

  • CTM profile (supply profiles, demand profiles, and so on)

  • Locations

  • Products

  • Resources (single-mixed or multimixed, and bucket resources)

  • PPMs and PDSs (SNP)

  • Transportation lanes

  • SNP optimizer profile

  • Optimizer costs

Flexibility of Algorithm

Macros can be used to modify heuristic values that are entered

You can modify aspects of the calculation by changing profile settings and maintaining parameters

  • Has a user function for modifying the optimizer input log

  • Macros can be used to modify optimizer values that are entered

Average Effort

Minimal

Medium to large, depending on the complexity of the supply chain

  • Medium to large, depending on the complexity of the supply chain

  • Cost fine-tuning is the major effort

Daily Operation

After you have configured the parameters, the heuristic can run automatically

After you have configured the parameters, CTM can run automatically

After you have fine-tuned the costs, the optimizer can run automatically

Comprehensibility

  • Transparent results

  • Explanation of planning results by the system

  • Transparent results based on priorities. The analysis complexity is governed by the supply chain complexity

  • Order tracking by pegging

  • Graphical representation of results

  • Explanation of planning results by the system

  • Requires some understanding of cost trade offs

  • Cost summaries are available after the optimization run

Integration with PP/DS

Bucketed plans need to be converted into continuous plans

  • Bucketed plans need to be converted into continuous plans

  • Continuous plans can be created

  • Bucketed plans need to be converted into continuous plans

  • Recognizes material flow, capacity consumption, and setup statuses from PP/DS

Net Change Planning

Supported

Supported - with options for dynamic and fixed pegging

  • Have to replan all demands

  • Can use the SNP optimization bound profile to restrict replanning