Sourcing of Forecast 

Purpose

Customers usually create characteristic combinations on the customer/product level and execute a demand planning (DP) run to arrive at a forecast. This forecast is generated at the customer/product level for a long horizon of typically 12 to 18 months. Until the introduction of the sourcing process, this forecast was released to supply network planning (SNP) to carry out mid-term planning. The release process was not influenced by material or resource constraints that exist in the supply chain model. The decision about the release quantity at each production location was predetermined before the release process.

Sourcing of forecast offers a higher level of intelligence to the sourcing process. This new function extends the classic SNP supply chain to include the customer, because this is where the initial demand originates. The sourcing of customer forecast to the production locations is carried out by an SNP planning run that is encapsulated in the sourcing process. In the current implementation, the SNP optimizer serves as a sourcing tool.

Another aspect that impacts the sourcing process is the sourcing of sales orders. Sourcing of forecast results in the creation of forecast orders at the production locations to satisfy the customer demands. Based on the result of the sourced forecast, the allocation situation (in global available-to promise (GATP) product allocations) is updated to reflect the decision of the sourcing process. The impact of this on subsequent incoming sales orders is that the GATP performs a check against the “updated” allocation situation and assigns the sales order to the appropriate production location based on the most recent allocation situation. Therefore, you achieve the sourcing of sales orders based on material and resource constraints in addition to an availability check at the production plants.

Integration

Sourcing of forecast is integrated with SAP APO and the SAP R/3 system. In SAP APO SNP, a product can have more than one production location that delivers to the customers, and forecasting is traditionally carried out for these customer locations in the DP planning area. The sourcing process introduces a new link between the DP and the SNP planning area. The sourcing process can be invoked only through an SNP planning area. This is an inherent restriction because the sourcing process uses the SNP optimizer as the sourcing tool. This link specifies from which DP planning area (and from which key figure in the DP planning area) the DP forecast data is read.

In addition, there is already a standard link between a GATP product allocation group and a DP planning area. This link is used to map characteristics and key figures between a GATP allocation group and a DP planning area. The sourcing process uses this link with standard features and without any modification.

Therefore, what the sourcing process effectively creates is a three-way link between an SNP planning area, a DP planning area, and a GATP product allocation group.

Features

Sourcing of forecast is a more accurate way of deciding from where the customer forecasts are sourced. This function allows you to source incoming sales orders while considering the material and resource constraints. Through the sourcing process, you achieve what could be termed as “location-independent consumption”. This is because sales orders at production locations can now consume forecasts originally generated at customer locations.

This new function also offers the following features:

·        A one-level location-independent consumption of forecasts and sales orders

·        Consideration of only the sourcing-relevant transportation lanes and the corresponding location products

·        No need to explicitly release the DP forecast at the customer location to the various production locations