Product Allocation is the functionality in SAP which enables you to judiciously allocate

available quantity to customers based on rules in case of shortages. Thus avoiding the
situations where first order takes away large chunk of inventory and depriving later
orders for any quantity.

Brief description
Following are the steps required to set-up the Product Allocation functionality:
1- A planning Info Structure (SIS) with its updating rules must be created. SAP
provides “S140” for this purpose, but you may need to create your own info
structure.
2- A product allocation Procedure must be created, containing the planning info
structure as a step of it. Many steps can be assigned to a procedure when
many allocation checks have to be done simultaneously in different info
structures, as an example we can mention an allocation check by customer
and another by product. In the procedure, it can also be defined a Masking ID
for the remaining allocations that are not planned in detail. An example of this
is when you allocate certain quantity for a specific customer and the
remaining quantity for this Masking ID, it means that the specific customer
can only buy what it has been allocated to him, but any other customer can
consume from the quantity assigned for the Masking ID although there is no
allocation quantity planned for himself.
3- A planning Hierarchy must be created with all the corresponding nodes that
will be planned for the allocation process, is like creating the baseline for
planning (this is a functional step, not configuration).
4- The product allocation check must be set in the schedule line item to be used
during the Sales order entry. This allocation check is performed at the
moment of the availability check, although it’s an independent check itself.
It’s important to mention that if the Lead-time is set to be considered during
the ATP, then the replenishment date will be compared with the required
delivery date and the higher of them will be taken as the baseline date to
check the allocation quantity available.
5- Although is not part of the configuration settings, the last step to finish this
set-up is to create the inactive planning version ‘000’(Real Data) to assign the
allocation quantities among the planning hierarchy branches, which are the
ones to be controlled at the Sales Order entry while processing the
availability check. Also, this version ‘000’ is the one that will be updated with
the transactional data.
6- Now, the set-up is ready to perform the product allocation check during the
sales order process. System will now check for the allocated quantity during
sales order creation. In case order quantity is more then allocated quantity
then system will create additional schedule lines as per the allocated quantity.
7- Statistical updates must be activated and self defined info structures also
needs to be activated

Configuration Tasks:
1. Create a Info Structure. We will be using standard info structure S140 in this
case. However, in real life you may need to create a new Info Structure.
 Use transaction MC21, click on create button, give a number between S500 to
S999 as name for info structure, application is 01, Type of info structure is
standard, flag check box for Plng Possible and copy from Info structure S140.
Choose required characteristics and key figures. Generate the info structure and
save it. Ensure that Source Table and source field are available for new fields
added by you.
A screen shot of a info structure created by me is given below:

2. Transaction OMOG: Maintain Update Groups

- Logistics - General Logistics Information System (LIS)  Logistics Data Warehouse
Updating  Updating Definition  General Definition Using Update Groups  Maintain Update
Groups

Standard update groups are sufficient for most situations.

3. Maintain Update Rules

Update Rules needs to be maintained for each info structure. Use transaction MC24, give
 your info structure name and update group 01. Set up the update rules. Ensure that source
field data is available. This step may not be required for S140. Generate and save. Repeat
the process for update group 02.

4. Activate Update : Transaction OMO1

Select your info structure and click on magnifying glass. Give update rules as
shown below:
5. Check Statistical Set up
Ensure that statistical groups are assigned to Document types and Item
categories. Also ensure that statistical groups are assigned to customer master
and material master records.

6. Assign Update Group to your sales area and statistical groups (Transaction
OVRP)
7. Set Up Planning Parameters for info structure
Transaction MC7F. (LIS-> Planning-> Master Date-> Set Parameters for info
structure)
Select your info structure and click on magnifying glass. Maintain both
characteristic and key figure level as shown below. Ensure that important key
figures are included in this.
 8. Create Planning Type
Transaction MC8A (LIS-> Planning-> Tools-> Planning Type)
Standard system has planning type COMMIT for info structure. In case you have created
a new info structure then create a new planning type (do not copy from COMMIT
because it will copy info structure assignment also). Also create macro to automatically
fill up calculated lines in the plan. A Macro is just a calculation rule. Remember to assign
the macro at the header level.
9. Create Allocation Procedure
Transaction OV1Z (SD-> Basic Functions-> Availability-> Availability against prod. Allo.->
Maintain procedure)
Create a procedure.

10. Define Allocation Object:

(SD-> Basic Functions-> Availability-> Availability against prod. Allo.-> Define Object)
11. Specify Hierarchy
(SD-> Basic Functions-> Availability-> Availability against prod. All.-> Specify Hierarchy)

12. Define consumption Periods

13. Create Control for Product Allocation:
(SD-> Basic Functions-> Availability-> Availability against prod. Allo.-> Control Product
Allocation)

14 Ensure that Product allocation is up for Requirement Categories and Schedule Line
Category used by you.

Further Steps:
This completes the IMG configuration. However, following further steps are also
required.

A. Set up Planning Hierarchy:

Transaction MC61. Create planning hierarchy for your info structure. Here you define
basic allocation pattern (%) for the available product. Define percentage for all the levels
of your info structure. Start with the highest level and keep going to the next level till the
last level:
B. Create the Availability Plan

Transaction MC93. Use your planning type (ZCOMMIT) and enter quantity available for
each period. Remember you create plan only at the highest level of the info structure.
System will distribute these quantities automatically to levels below it. Also remember
that only version “000” is used by the system during sales order processing. As such you
can have as many versions as you want (which can then subsequently be copied to
version “000”) (Version “000” is placed under inactive versions). You only enter product
allocation Qty.
C. Assign Allocation Procedure to the Material Master (Basic View-1)

This completes the set up.

Now if you create a sales order for this material system, will confirm only allocated
quantities and will create further schedule lines for excess quantity.

Edit Product Allocation Planning

Use
The product allocation quantities are determined in a plan. Plans are made for all sales
organizations and distribution channels in the planning hierarchy.

Procedure

 Call the transaction as follows:

Menu Path Logistics
 Logistics controlling  Flexible Planning  Planning  Change
Transaction Code MC94
 Enter the following data:
Field Data

Planning type Z_S700

 Choose .

The data of the plan which you make is saved in the info structure S700. The planning type is a
template of the underlying info structure. The planning type e. g. defines the layout of the lines in
the plan.

 Enter the following data:

Field Data

Prod. allocation object R-1001

 Delete any default Sales Organization and Distribution Channel field values.
 Choose Inactive version.
 Select version 000 Actual Data In the Choose Inactive Version dialog-box and confirm with .
 Confirm any warning messages with .

You go to the Change Consistent Planning screen.

The product allocation data is saved in an information structure. Info structures are also used in
the Logistics Information System and the Sales & Operations Planning (SOP). Several versions
of an information structure can exist (e.g. several planning versions and one version with the
actual data). The actual data are administered under the version number 000. The version A01
always contains the active planning version. You save the planned product allocation quantities
and updated sales order quantities (= Actual data) together in version 000. You must therefore
plan under version number 000. As the version number 000 is not the active planning version,
you have to select Inactive Version.

The planning tableau contains four key figures. The Product Allocation Quantity key figure can be
planned. The other key figures are not ready for input. The Incoming Order Quantity key figure is
updated from the sales orders. The Open Product Allocation and Unconfirmed Quantity key
figures are calculated. The planning tableau starts with the current period.

 Choose .

The planning horizon is twelve months.

 Choose , to return to the beginning of the planning horizon.

In the following steps you determine a product allocation quantity for a period of twelve month
and distribute it evenly to the individuals periods. You are currently on the aggregation level of the
product allocation processing object R-1001 which represents the material R-1001. Product
allocation quantities assigned to this level are distributed to the members of this planning
hierarchy according to the proportions (Disaggregation).

 Select the line Product Allocation Quantity

 Choose Edit  Select  Select all periods.
 Choose .
 In the dialog box, enter the following data:
Field Data

ProdAllocQty 4000

OP (in the Product Allocation Quantity row) ==

 Choose .

The specified quantity is distributed among the periods. As the R/3 System has no sales orders at
hand to settle them against, it displays an open product allocation quantity of the same amount.

 Position your cursor on the ProdAllocQty line and choose .

 Mark the Sum Members row.
 Position the cursor on a member field in the Sum Members row.
 Choose Disaggregate row.
The R/3 System displays the product allocation quantity distribution per period on the sales
organization levels 1000 and 2200. The standard value on the level of the product allocation
processing object R-1001 is distributed according to the proportion.

 Select the line R-1001 1000.

 Choose .

The distribution channels of sales organization 1000 are displayed.

 Mark the Sum Members row.

 Position the cursor on a member field in the Sum Members row.
 Choose Disaggregate Row.

The R/3 System distributes the product allocation quantity per period on the sales organization
levels 10 and 12.

You get an overview of the product allocation quantity distribution in the distribution channels in
sales organization 1000.

 Note the open product allocation quantity in the first two periods for the distribution channel 10
in the sales organization 1000.
 Choose .

The plan under version number 000 is saved.

 Choose until the overview tree appears.