Extended Safety Stock Planning 

Use

Extended safety stock planning in Supply Network Planning (SNP) automatically calculates the safety stock using data that you specified as mandatory in the system. This includes, for example, a service level that you want to attain through observance of the calculated safety stock. You also specify the current demand forecast and the historical data using the demand forecast and the replenishment lead time (RLT) as key figures. The system uses the historical data to calculate the forecast error for the demand forecast and the RLT.

Prerequisites

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·        You have assessed your supply chain and determined at which stages you want to plan safety stock.

·        You have determined the special master data for safety stock planning next to the basic SNP planning master data (including quota arrangements). This includes, for example, the service level and the safety stock methods in the location product master data. For more information see Master Data Setup for Safety Stock Planning.

·        You have created a safety stock planning profile (SFT planning profile). In this profile you can, for example, determine how the system calculates the forecast error (from historical or master data), and specify the demand type (regular or sporadic). For more information, see Safety Stock Planning Profile.

Features

The system considers the following factors when calculating the safety stock:

·        Demand forecast and demand forecast error

·        Replenishment lead time (RLT) and RLT forecast error

·        Service level

·        Safety stock method

·        Demand type

The reorder point method that you determined in the location product master data does not influence safety stock planning.

The system determines these factors as follows:

·        Demand Forecast Determination

¡        The forecasted demand for a product at a location is the sum of the independent and dependent demands at the location and all downstream locations. You specify the independent demands in the system as a key figure for the demand forecast. The system determines the dependent demands using transportation lanes and production process models (PPM) or production data structures (PDS). The system also takes into account inbound quota arrangements.

¡        The system determines the demands forecast error from the historical data or location product master data that you specified as mandatory (settings in SFT planning profile).

·        Replenishment Lead Time Determination

¡        The RLT for a product at a location is the total time for the in-house production or the external procurement of a product (including its components). The system determines the RLT using the supply chain model or from location product master data (settings in SFT planning profile).

¡        If the system determines the RLT using the supply chain model, it adds up the respective production times, good issue processing times, transportation times, goods receipt processing times, and planned delivery times. If there are alternative procurement options, the system always considers the option that takes the longest time. The system does not consider restrictions on capacity size, lot size, or warehouse stock. Procurement from upstream safety stock is not restricted.

¡        The system determines the RLT forecast error from the historical data or location product master data that you specified as mandatory (settings in SFT planning profile).

·        Service Level Determination and Safety Stock Method Determination

¡        The system determines the service level and the safety stock method from the location product master data (Lot Size tab page). With the safety stock method you determine the combination of service level and order policy that the system is to consider.

¡        During the reorder cycle methods AT and BT the system interprets the target days’ supply from the location product master data as an order cycle.

¡        During the reorder point method BS the system uses the target days’ supply from the location product master data to calculate the purchase order quantity.

¡        During the reorder point methods AS and BS the system accepts a monitoring interval (period of time between successive reviews of the warehouse stock) from one period.

·        Demand Type Determination

¡        You can use safety stock planning both for products with regular demand and also for products with sporadic demand. For the former, the formulas used assume normal distribution, for the latter they use gamma distribution.

¡        The system determines the demand type from the settings you made in the SFT planning profile. You can determine whether it is regular or sporadic demand, or whether the system is to automatically determine the demand type using historical data.

Activities

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On the SAP Easy Access screen, choose Advanced Planning and Optimization →Supply Network Planning → Planning → Safety Stock Planning. On the Safety Stock Planning screen, you then enter the data described below:

 

Section	Input data
Planning Data	In this section you then specify the planning area where the planning objects and key figures are. You can use, for example, the SNP standard planning area 9ASNP05 (or a planning area based on it) that contains the key figures 9ADFCST, forecasting, and 9ASAFETY, safety stock (planned). You can also specify the key figure for the demand forecast, based on which the system calculates the safety stock (for example, 9ADFCST). You can also specify the key figure in which the system saves the safety stock (for example, 9ASAFETY) and the SFT planning profile the system uses.
Object Selection	In this section you specify the location products for extended safety stock planning. The system plans the safety stock for those location products for which you have determined an extended safety stock method in the master data.
Historical Data	In this section you specify the key figures for the demand forecast historical data which the system uses to calculate the forecast error. You can, however, determine the forecast error in the location product master data yourself.
Application Log	In this section you specify how the system creates the application log (level of detail, immediate display, length of storage).

 

You can display the calculated safety stock as a key figure in interactive Supply Network Planning and, if required, manually change it or copy it into another planning version. You can also use the calculated safety stock in Production Planning & Detailed Scheduling (PP/DS) and Capable-to-Match (CTM).