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Consumption-based Planning: Forecast-based

SAP Username
Name

GBI-230
Rizki Amalia Putri

When consumption-based planning is configured using reorder-point planning, the SAP system
creates a planned order or purchase requisition whenever the inventory level for the material falls
below the reorder point, and the reorder point must be determined by the user. In addition to
requiring the user to determine the reorder point manually, the reorder point method will not
perform particularly well when there is a change in the demand for the materialfor example if
there is seasonal variation in the material demand, or demand for the material is increasing or
decreasing over time. To address this problem, consumption-based planning can be configured to
use forecasts of material demand to estimate consumption, and this estimated demand can be used
to create planned orders.

2.1 Create Forecasting View for Raw Material


To use forecast-based planning, it is first necessary to create the forecasting view for the material.
To do this, follow the menu path:
Menu Path
Trans Code

Logistics Production Master Data Material Master Material Create (Special)


Raw Material
MMR1

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Enter RAW-230 for material and select Retail for Industry Sector then click on Select view(s). The
material RAW-230 already exists, and we want to add the Forecasting view for this material. In the
SAP system, we do this by creating the view rather than changing the material. When we enter
RAW-230 for material, the system will find this (existing) material, then create the new views we
select.

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Select the Forecasting view, then click on enter icon (

) and another pop-up window will appear.

Enter DL00 for Plant, then click on enter icon (


for your material:

) and the SAP system will create a Forecasting view

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Click on Consumption vals icon (


screen:

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), which will produce the following

Note that usage of 330 raw materials


from the first consumption-based
planning exercise have been recorded.
Note that monthly data is being
recorded.

Note that the use (consumption) of 330 raw materials from the first consumption-based planning
exercise have been recorded. An advantage of an integrated information system like SAP is that
material usage is automatically recorded for forecasting purposes. Note that the figure under Total
consumption is presented with a grey background. This figure is updated by the SAP system as
material is issued. As a result, SAP does not want the user to adjust this figure. However, in
forecasting it is common to want to make an adjustment to historical sales figures to produce a
better forecast. It may be that sales were low in a particular period because of a random occurrence
like bad weather. In this case, a better forecast could probably be obtained by correcting the sales
value that was low due to an event that was unlikely to occur in the future. To accommodate this,
SAP provides a Corrected value column where the user can enter a value other than the actual usage
(consumption) for forecasting purposes.
Click on the Main data icon (

) icon to return to the Forecasting view.

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Enter J for Forecast model (automatic model


selection) and change the Period Indicator to
W (weekly), then click on the Enter icon

Enter J for the Forecast model. This choice will let the SAP system select the forecasting model after
it analyzes the historical data to determine whether trend or seasonal patterns exist. Our
consumption data is currently being collected on a monthly basis. This choice was made because of
a default setting on the MRP 2 view of the material master when we created the material in the first
consumption-based planning exercise. Monthly data is probably not a sufficiently small time
increment for our purposes. Change the entry from M (monthly) to W (weekly) so that data is
collected on a weekly basis. Click on the enter icon ( ), which will send these new values to the
SAP server and produce the following message:

Click on the exclamation mark icon


Click on the exclamation mark icon to get more information:

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Messages with an exclamation mark ( ) are warnings, which means we can ignore them if we
choose. That doesnt mean that we arent making a mistake, but the SAP system will let us proceed.
In this case, the warning message lets us know that we are changing the time period for
consumption data AND consumption data already exists. It also lets us know that we can correct
consumption valuesthat is, we can enter manually correct the consumption values. Close the
Performance Assistant, then click on the Consumption vals icon (
)
again. This will produce another error message about existing consumption values:

Click on the enter icon (


we can enter values:

), which will take us back to the consumption values screen, only this time

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The period gives the week


and year. The current
period is the first listed.

Enter the Total consumption values shown.

Enter 10 weeks of Total consumption values as shown above, then click on the save icon (

).

2.2 Change Planning Method


To change from reorder-point planning to forecast-based planning, we need to change planning
parameters that were set on the MRP 1 view of the material. To do this, follow the menu path:
Menu Path
Trans Code

Logistics Production Master Data Material Master Material Change


Immediately
MM02

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Enter RAW-230 for Material, then click on the Select view(s) icon (
the following pop-up window:

Select the MRP 1 view, then click on enter icon (

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). This will produce

) and another pop-up window will appear.

Enter DL00 for plant, then click on the enter icon and the MRP 1 view will appear:

Change MRP type to VV,


then click on the enter icon

We want to change the MRP Type from VB (Manual reorder point planning) to VV (Forecast-based
planning). Enter VV in the MRP Type and click on the enter icon ( ) and the following message will
be displayed:

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The warning message reminds us that the reorder-point is not used with forecast-based planning.
While we could leave the value for the reorder-point in the material master, it is a better practice to
delete this value (Why? Do you agree?). Click on the save icon ( ) to save the change to the
planning method.

2.3 Stock/Requirements List


We can review the status of our material by following the menu path:
Logistics Materials Management Inventory Management Environment Stock
Menu Path
Stock/Requirements List
Trans Code
MD04

The material we just created should be entered by default. If not, enter material RAW-230 and
plant DL00, then click on the enter icon ( ) and the following screen will appear:

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Click on the detail icon for the Purchase Requisition

Note the following information message at the bottom of the screen:

Because we want to use forecast-based planning, we need to have a forecast. We will do that after
we delete the existing purchase requisition so that we can clearly see how forecast-based planning
works. Click on the detail icon ( ) for the Purchase Requisition, which will produce the following
pop-up window:

Click on the change icon


Click on the change icon (

) to get the following screen:

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Click on the Item overview icon


to open the Item overview panel

If the item overview panel is not open, click on the Item overview icon (

) to open it:

Click on the row selection icon, then click on the


delete icon to delete this purchase requisition

Select the row with the raw material, then click on the delete icon (
following warning:

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). You will get the

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Click on Yes, then click on the save icon ( ) and you will return to the Stock/requirements list. Click
on the refresh icon ( ) and the purchase requisition will be removed.

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2.4 Run Forecast


Leave the Stock/Requirements list open and create a new session by clicking on the new session icon
( ). We will use the new session to generate a forecast for our material. To do this, follow the
menu path:
Logistics Production Production Planning Materials Forecast Forecast
Menu Path
Individual Forecast Execute
Trans Code
MP30

Enter RAW-230 for Material and DL00 for Plant, then click on the enter icon (
the following screen:

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). This will produce

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Click on the Execute icon


to execute the forecast

This screen shows us the forecast values that


were entered in the material master, and also
informs us that we dont have any forecast yet

Click on the Execute icon (

) to execute the forecast. This will produce the following pop-up:

Dont worry about the Last forecast date. Click on the enter icon (
be displayed:

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) and the forecast results will

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Click on the save icon (

) to save these results

then switch to the Stock/Requirements list and click on the refresh icon (
for the material will now be displayed:

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). The forecast demand

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Note that forecast


requirement for first week is
adjusted based on time left
in the week

2.4 Run MRP Planning


Now that the forecast has created demand for the material, we can generate planned orders using
the MRP process. To run the MRP planning process, switch to the other session and follow the
menu path:
Logistics Production MRP Planning Single-Level, Single-Item
Menu Path
Trans Code
MD03
This will call up the following screen:

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Use the default planning values, select


Display results before they are saved,
then click on the enter icon

Select Display results before they are saved so we can see the planning results immediately, then
click on the enter icon ( ) and the following message will appear at the bottom of the screen:

Depending on the situation, production planning can take a lot of computer resources, so SAP is just
reminding you to make sure that you have everything set correctly. Click on the enter icon ( ) a
second time, and a screen very similar to the Stock/Requirements screen will be displayed:

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Note that planned orders


have been created to keep
the available quantity
positive

Click on the save icon (

) to save these results

Then switch to the Stock/Requirements list and click on the refresh icon (

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).

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With forecast-based planning, material requirements and production/purchase orders are handled
in essentially the same manner as finished products planned using MRP. Demand is forecast, then
planned orders are generated to meet this demand.
Forecast-based planning can be made to run automatically by grouping all materials together that
are planned using this method, then generating forecasts and then running MRP for all materials in
this group on a regular basis (e.g. weekly).
Question:

Is there any situation in which this approach can not be used? Explain!
Answer:
Apabila demand level tidak menentu

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