Time-Series-Based Supply Planning

SAP Integrated Business Planning (IBP) allows you to create

a demand and supply plan for your supply chain network
using the following time-series-based supply planning
algorithms:
1. Supply planning heuristic to create an infinite supply
plan without shortages in which all demands are
fulfilled regardless of available supply.
2. Supply planning finite heuristic to create a priority-
based finite supply plan in which demands are fulfilled
depending on available supply.
3. Supply propagation heuristic to create an infinite
supply plan in which only the available supply is
propagated downstream through the supply chain.
4. Shelf life planning heuristic that takes the shelf life of
products into account when creating a supply plan
(infinite without shortages).
5. Supply planning optimizer to create a finite cost-
optimized supply plan.
The algorithms are typically used within a sales and
operations (S&OP) business process.

You can run the planning algorithms from the IBP Excel add-
in in simulation or batch mode. You can also start the
planning runs from the Application Jobs app.
 The resulting plan provides information on how much of
each product should be purchased, produced, or shipped at
each location in your supply chain and in which period of the
planning horizon.

The supply plan also allows you to identify issues in your

supply chain, such as insufficient production capacity or
stock. You can configure alerts to warn you about such
issues. You can then use the functions in Excel to try out
different solutions and share scenarios with other team
members before coming to a decision about what changes
need to be made.

You can model and plan any depth of network of supply-

chain-relevant locations and production steps.

The supply plan answers any questions you may have, such
as the following:

 How much do I need to produce and where should I

produce it?
 How much do I need to transport and from where to
where?
 How much do I need to source from external sources of
supply that are not modeled in my supply chain?
 Where do I have issues in my supply plan?

Planning Method
 The time-series-based supply planning algorithms calculate
the flow of products through your supply chain to satisfy
demand.

Using customer demand as the starting point and taking

different constraints and planning data into account, the
algorithms calculate which locations in your supply chain
can supply the product to the customer and how much each
location can supply in each period of your planning horizon.

The algorithms propagate customer demand through the

supply chain in an upstream direction (for example, from
customer to distribution center, from distribution center to
plant). The product receipts are then transferred back
through the network in a downstream direction and the
product is supplied to the customer (for example, from plant
to distribution center, from distribution center to customer).

The resulting plan includes all material flows to customers

from plants and suppliers via distribution centers or other
intermediate locations, and includes all production
processes.

Planning Algorithms

The following planning algorithms are available:

 Time-series-based supply planning heuristic

You use this algorithm for infinite demand and supply
planning. The algorithm calculates supply based on the
 assumption that all resource capacities are infinite. It fulfills
all demands, balancing insufficient supply with negative
project stock for the location products in question. This does
not necessarily produce a feasible plan, but it allows you to
identify issues with supply and also capacity bottlenecks.
For more information, see Time-Series-Based Supply
Planning Heuristic.
 Time-series-based supply planning finite heuristic
You use this algorithm for finite demand and supply
planning. The algorithm takes constraints into account, such
as resource capacities. Demands are processed in priority
order, with the algorithm planning supply for each demand
top-down though the supply chain. If the available supply is
insufficient, demand can remain unfulfilled or only partially
fulfilled.
For more information, see Time-Series-Based Supply
Planning Finite Heuristic.
 Time-series-based supply propagation heuristic
As a variant of the supply planning heuristic, this algorithm
also calculates an infinite demand and supply plan. In
contrast, however, it propagates only the available supply
downstream through the supply chain and does not fulfill all
demands. It therefore allows you to see the impact of the
supply problem, that is, which customer demands and net
demands of which customer products and location products
will not be met.
 For more information, see Time-Series-Based Supply
Propagation Heuristic.
 Time-series-based shelf life planning heuristic
You use this algorithm for infinite demand and supply
planning that needs to take the shelf life of products into
account. Customer demands are defined with a required
minimum shelf life, meaning that corresponding customer
receipts need to have a remaining shelf life that's the same
as, or longer than, the minimum shelf life defined for the
customer demand. As with the supply planning heuristic, the
algorithm calculates supply based on the assumption that all
resource capacities are infinite. It fulfills all demands,
balancing insufficient supply with negative project stock for
the location products in question.
For more information, see Time-Series-Based Shelf Life
Planning Heuristic.
 Time-series-based supply planning optimizer
You use this algorithm to generate a cost-optimized
production, distribution, and procurement plan for the
entire supply chain network, taking into account certain
constraints. The algorithm can be configured to generate a
plan that maximizes either profits or delivery.
Note
In many situations, an optimized supply planning solution is
required, for which the time-series-based supply planning
optimizer is provided. Note, however, that this algorithm is
 available only with the license SAP Integrated Business
Planning for response and supply.
For more information, see Time-Series-Based Supply
Planning Optimizer.
Note the following:
 The system administrator determines which algorithms
are available for the planner in Excel and in the application
jobs app.
 The time-series-based supply planning heuristic and
time-series-based supply planning optimizer were called
S&OP heuristic and S&OP optimizer respectively in previous
releases (up to 1705). They were renamed in 1708.

Planning Input and Output

Different constraints and planning data are used as input for

demand and supply planning, including the following:

 Master data such as customers, locations, sources of

supply, and resources, and master data attributes such as
quota arrangements, lead times, and lot sizes
 Input key figures such as customer demand, stock on
hand, projected stock, inventory target, and capacity supply

The planning output includes demand-related key figures

such as dependent demand and capacity demand, and
supply-related key figures such as transport receipts and
 production receipts, external receipts, and customer
receipts.

For more information, see Master Data and Key Figures.

Planning Versions

A planning version is a set of key figures that represents a

particular plan. Planning versions are defined by your
system administrator.

The base planning version is the default planning version

and is provided in the standard system.

Each planning version has a baseline, that is, the "true" key
figure values before you edit them and simulate scenarios. If
supply planning reveals issues in the supply plan, you may
need to change the baseline of the relevant version.

Performing Supply Planning in Excel

You can run the planning algorithms for time-series-based
supply planning directly in Excel in the planning view
(see Planning Views) that you use for supply planning. In the
IBP Excel add-in menu, you can call the planning algorithms
in the Advanced data group under SOP Operator.
Note
 The SOP Operator menu item includes all functions
that are typically needed for time-series-based supply
planning in an S&OP business process, including some
auxiliary functions.
 You can also run the planning algorithms as application
jobs, for example, to schedule them as recurring jobs.

You can run the algorithms in the following modes:

 Simulation
This mode allows you to simulate your supply plan in real
time (for example, to see the effect of changes that you have
made to input key figures such as customer demand and
capacity supply). The results are shown immediately in your
planning view.
 Batch job
This mode allows you to schedule your plan to run in the
background (for example, if you know that the algorithm has
to process a large amount of data). You can view the
progress of the batch job in the log. When the batch job is
finished, you open the planning view to display the
generated supply plan.

Your system administrator determines whether simulation

and batch modes are available to you in Excel.

Permissions

Only authorized users can perform supply planning. For

information about users and authorizations, see Identity and
Access Management.
As for permission filters (for more information,
see Permission Filters), note the following behaviour in
time-series-based supply planning:

Note
The visibility part of the permission filter settings for a user
is applied while reading the values of supply planning key
figures and passing them to the S&OP operator. No
permission filter is used while writing the values back to the
supply planning key figures. However, SAP recommends to
provide the supply planner with full visibility of the entire
network. The S&OP operator runs can be limited to one or
more subnetworks, but this does not influence the data
reading or writing permissions.

More Information

If you are a system administrator who wants to know how to

configure supply planning, see Configuration (Configuration
Expert).

If you are a planner who wants to know how to use Excel to

generate a supply plan, see Creating a Supply Plan (Planner).

For more information on advanced topics such as

subnetworks, see SAP Note 2238074  .