Cross-Period Lot Size Planning 

Use

In some industry sectors (such as the process industry), setup activities have a great influence on lot size planning. If the setup costs are relatively high in comparison to the storage costs, orders are grouped into large lots to save on set up costs. For this reason, it is possible to run a cross-period lot size planning as part of optimization-based planning within Supply Network Planning. Here, the optimizer takes into account the setup statuses from the previous bucket if the same production process model (PPM) is being used to produce a product in that bucket. This means that the optimizer only schedules one setup operation per lot size. For this setup operation, the system then calculates the setup costs and setup consumptions (fixed resource consumption and material consumption) that were defined in the PPM for the resource set with the Cross-Period Lot Size indicator.

The SNP optimizer does not support multi-level cross-period lot size planning, meaning that lot size planning can only be done at production level.

Integration

·         Within the campaign planning business process, cross-period lot size planning represents the preliminary stage of the actual campaign creation that is done in Production Planning and Detailed Scheduling (PP/DS). During planning, the SNP optimizer creates SNP planned orders that correspond to a production campaign that is created at a later point in PP/DS. You can convert these SNP planned orders into PP/DS orders. For more information, see Converting SNP and CTM Orders into PP/DS Orders.

·         The optimizer is also able to consider setup statuses resulting from already planned PP/DS orders. When doing this, it is possible to run an SNP PPM in a bucket (period) without taking into account setup expenses, if there is a PP/DS order with the associated PP/DS PPM, or if the corresponding setup expenses can be adopted from the previous bucket.

Prerequisites

The steps listed below are general prerequisites for running the SNP optimizer:

·         Planning Area Administration

·         Master Data Setup for the Optimizer

·         Model/Version Creation

·         Supply Chain Model Setup

·         Release of the Demand Plan to SNP

The following are special prerequisites for cross-period lot size planning:

·         Resource master data

-         The optimizer only takes into account the setup statuses from previous buckets for the resource for which the cross-period lot size indicator has been set.

·         Production process model (PPM)

-         The PPM is permitted to use a maximum of one resource only for which the cross-period lot sizeindicator has been set.

-         The PPM is not permitted to use any other resources that have been specified with a fixed resource consumption.

-         The PPM duration must be less than or equal to the smallest bucket from the planning buckets profile used.

-         The minimum PPM lot sizes and the discrete (integer value) lot sizes refer to the cross-period lot quantity.

-         The optimizer plans a maximum of one setup operation per bucket.

Profiles

In Supply Network Planning, you have also maintained the relevant profiles for SNP optimization, in particular the SNP optimizer profile (from the Implementation Guide (IMG), choose SAP Advanced Planner and optimizer (SAP APO) → Supply Chain Planning → Supply Network Planning → Profiles → Define SNP Optimizer Profiles). For more information, see Optimization Profiles and the corresponding Implementation Guide (IMG) documentation.

In particular, you have made the following settings for cross-period lot size planning in the SNP optimizer profile:

·         You have chosen Discrete Optimization as your optimization method.

·         You have entered the horizon over which you want the optimizer to take into account the setup statuses from this previous bucket in the Cross-Period Lot Size field from the Discrete Constraints tab page. The optimizer can only do this if the PPM from the previous bucket is used to produce a product.

·         If you want the optimizer to take account of setup statuses resulting from already planned PP/DS orders, you must have activated the indicator Cross-Period Lot Size Planning on the Integration tab page. A prerequisite for this is that the corresponding PP/DS PPM must be assigned to the SNP PPM.

Activities

·         You run the optimizer from the interactive planning desktop or in the background. For more information, see Running the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background. For general information on the SNP optimizer, see Optimization-Based Planning.

·         The optimizer determines the most cost-effective solution to fulfil the demands. For example, to decide about lot sizes, the optimizer uses storage costs and setup costs. Having larger lot sizes and only one setup operation per lot size saves on setup costs but results in higher storage costs. With smaller lot sizes, multiple setups mean that more capacity is required and this results in higher setup costs.

·         You display the individual stages and final results of the optimization run in interactive planning on the Optimization tab page within the optimizer window. You also receive a list of the costs determined by the optimizer.