Demand-Driven Replenishment: Warning

5/29/2020
Demand-Driven Replenishment
Generated on: 2020-05-29
SAP S/4HANA | 1709 (Sep 2017)
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Original content: https://help.sap.com/viewer/e93a1ed5d8d9422faa3acd132b27e7ba/1709 000/en-US
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Demand-Driven Replenishment
Here, you will see information about apps that help you work with Demand-Driven Replenishment.
Demand-Driven Replenishment helps you plan and manage supply chains efficiently based on customer demand, rather than
through traditional MRP procedures. You do this by strategically decoupling material ows, becoming less vulnerable to
disruptions in the supply chain, and by protecting the ow through dynamically-managed buffer (stock) levels for relevant
products.
Apps for Demand-Driven Replenishment
Optimally, your target is to ensure high customer service levels at the lowest possible inventory. With sufficient data to model
customer demand, products or components relevant to Demand-Driven Replenishment can be sufficiently well-stocked to meet
customer demand, but still stocked in low enough quantities to prevent excessive annual storage costs or losses due to expiry.
Decoupling material ows at strategic locations can help avoid the Bullwhip Effect, which refers to increasing swings in inventory
along the supply chain in response to changes in customer demand. These swings in inventory can expand exponentially up a
supply chain, and can cause excessive storage costs or losses due to expiry along all the levels of a supply chain.
Demand-Driven Replenishment-Relevant Products

To identify products which can act as decoupling points, products are systematically evaluated and classi ed based on goods
issue value, decoupled lead time, usage across BOMs and variation in actual demand.
Using the results of these classi cations, you identify products that are relevant to Demand-Driven Replenishment (DD-relevant
products).
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For more information regarding product classi cation, see Schedule Product Classi cation (DD) and Schedule Lead Time
Classi cation of Products (DD).
For more information regarding the selection of DD-relevant products, see Mass Maintenance of Products (DD).
Buffer
The buffer is typically divided into three layers, green, yellow and red, based on increasing order of severity of the stock situation.
These layers are known as buffer zones.
A Buffer in Demand-Driven Replenishment
Buffer zones are dynamically calculated using parameters such as Average Daily Usage and Decoupled Lead Time, and help
determine the Maximum Stock, Reorder Point and Safety Stock for the stock buffer.
The red zone denotes the highest severity in the buffer, indicating low stock levels and an immediate need for
replenishment. The buffer value at the top of the red zone gives the safety stock, which is the minimum recommended
buffer level that should be maintained.
The yellow zone denotes medium severity in the buffer, indicating lower than ideal stock levels and a need for
replenishment. The cumulative sum of the quantities of the red and yellow zones gives the reorder point.
The green zone denotes the lowest severity in the stock buffer, where if the available stock lies within this zone, there
should be sufficient stock available to comfortable meet the current demand. The cumulative sum of the quantities of the
red, yellow and green zones gives the maximum stock, which is the maximum recommended buffer level, beyond which the
stored inventory quantity can be considered as excessive.
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The net ow position shows where the available stock lies within the buffer and accordingly indicates the stock situation based on
the buffer zones.
 Note
Quali ed order spikes are taken into consideration for times when there is a sudden increase in demand for a product.
For more information regarding the net ow position, see Demand-Driven Replenishment Planning Procedure.
Constant feedback based on factors such as average daily usage and decoupled lead time of DD-relevant products allows dynamic
management of buffer levels using the Manage Buffer Levels app. Using the app, you can use up-to-date information to better
meet your customer demand through the proposed buffer values.
For more information regarding how buffer proposals are calculated, see Schedule Buffer Proposal Calculation.
For more information regarding buffer level management, see Manage Buffer Levels.
For more information regarding replenishment planning and execution, see Replenishment Planning by Planning Priority and
Replenishment Execution by On-Hand Status.
Manage Buffer Levels

Use
With this app, you can ensure products are available when needed by managing the safety stock, reorder point and maximum
stock through buffer proposals for optimized Demand-Driven Replenishment. Buffer level proposals are necessary to adjust the
buffer levels to the everchanging reality and thereby ensure that a product is sufficiently stocked to meet average demand, but in
low enough quantities to prevent excessive storage costs or losses due to expiry. Buffer level proposals are calculated using the
Schedule Buffer Proposal Calculation app.
Key Features
View buffer (stock) levels of products based on lter criteria such as proposal status, value indicator, lead time indicator,
variability indicator, and so on
Adopt or ignore proposed buffer proposals for products
Navigate to view the following buffer-related details of a product:
Buffer Zones
Buffer Levels
Average Daily Usage
Decoupled Lead Time
Classi cations
Adjust the buffer levels for a product by changing the Adjustment Factor
Switch between planning view and performance view of buffer levels
View maximum stock, safety stock, and reorder point in the planning view
Review the replenishment operations in the performance view
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For Buffer Levels and Average Daily Usage, switch between chart view and table view
Select data points on the charts to view details
For more information on calculation of buffer level proposals, see Schedule Buffer Proposal Calculation
Supported Device Types

Desktop
Replenishment Planning by Planning Priority

With this app you have an overview of the buffer information sorted by the planning priority. Using this information, you can trigger
replenishment on time to avoid stock shortages and possible delays in the completion of production or sales orders as a result of
insufficient stock.
Key Features
De ne lters to limit the products displayed as necessary.
Save your prede ned lter settings as a variant.
Review buffers which are below the reorder point and therefore have a planning priority of yellow or red.
View the proposed quantity to be ordered to re ll the buffer to maximum stock and therefore avoid shortages.

Desktop
Tablet
Replenishment Execution by On-Hand

Status
With this app you can view today's stock situation for each product and check that sufficient on-hand stock is available for
production. Using this information, the planner can try to speed up replenishment by contacting the supplier of a purchase orders
or the production supervisor of the component production order, for example.
Key Features
Use lters to limit the products displayed as necessary. For example, you may want to see all products with value indicator
A.
Save your prede ned lter settings as a variant.
View today's on-hand stock situation.
View the open supply quantity.
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Desktop
Tablet
Mass Maintenance of Products (DD)

With this app, you can display and change product details (master data records) relevant to Demand-Driven Replenishment. After
you have classi ed or re-classi ed your products, you can view the results of the classi cations in this app, and based on the
results, select products that are relevant to Demand-Driven Replenishment. You can use the mass change feature to change the
master data records for several products simultaneously. This is the second app that you’ll use when you start with Demand-
Driven Replenishment.
Key Features
Select products that are relevant to Demand-Driven Replenishment.
Mark your selected products as DD-relevant by setting an appropriate MRP type.
Display and change the results of product classi cations.
Select an averaging interval, based on which the Average Daily Usage (ADU) and the Decoupled Lead Time (DLT) will be
calculated.
Select which lot sizing procedure the system uses within materials planning to calculate the quantity to be procured or
produced.
Set a minimum lot size to de ne a minimum procurement quantity.
Export your ltered results into a spreadsheet and save it to your computer.
In addition, the app supports the following technical features and options:
SAP Jam Integration
Email Integration
Save as Tile
 Note
When you run this app for the rst time, you may see that your products don’t have a lead time (EFG) classi cation. Only DD-
relevant products are classi ed based on their Decoupled Lead Time. After you have identi ed and marked products that are
relevant for Demand-Driven Replenishment, you can use the Schedule Lead Time Classi cation of Products (DD) app to
classify your products.
For more information regarding Decoupled Lead Time (EFG) Classi cation, see Schedule Lead Time Classi cation of Products
(DD).
For more information regarding product classi cations, see Schedule Product Classi cation (DD).
Prerequisites
You’ll need the following roles assigned to your user:
Production Planner
Master Data Specialist - Product Data
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Your products are classi ed based on goods issue value (ABC Classi cation), usage across BOMs (PQR Classi cation) and
variation in actual demand (XYZ Classi cation) using the Schedule Product Classi cation (DD) app.

Desktop
Tablet
Smartphone
Demand-Driven Replenishment Planning

Procedure
New MRP Procedure for Demand-Driven Replenishment (DD)
In demand-driven replenishment, the planning run is the process step that is used to generate new supply elements. In
consumption-based planning procedures, a supply element is created when the stock level falls below a prede ned, static reorder
point. In demand-driven replenishment, however, the planning run creates a new supply element (such as a purchase requisition, a
planned order, or a stock transfer requisition) when the net ow position falls below the reorder point that is maintained in stock
level management or, if not here, then in the material master.
Prerequisites
The following prerequisites are ful lled:
You have decided which materials are to be buffered and have assigned an MRP type with the MRP procedure C, Demand-
Driven Replenishment, to these materials.
For more information, see Mass Maintenance of Products (DD).
You have calculated the decoupled lead times for buffered materials.
For more information, see Schedule Lead Time Classi cation of Products (DD).
You have de ned the necessary buffer levels in the Manage Buffer Levels app.
For more information, see Manage Buffer Levels.
Planning Run with MRP Procedure "C"
The aim of the planning run is to create supply elements to ful ll demand by using a better quality of demand signal. This means
that it is possible to create supply elements which meet real customer demand more accurately. This, in turn, achieves improved
service levels on the one hand while lowering inventory levels and bound capital on the other.
The equation for generating supply elements is the net ow equation:
On-Hand Stock + Open Supply – Open Past (Including Today’s) Demand – Quali ed Spike Demand
That is, the quantity of stock on hand is added to the quantity of open supply. Then the total quantity of open demand (including
today’s demands) plus the quali ed spike demand is subtracted. This results in the net ow position. If the day’s net ow position
is below the reorder point, a supply element is created for the amount that will bring the stock level back up to the maximum stock
quantity. See diagram:
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In the example, you can see the different zones. The net ow position was calculated at 6872 pc (available stock). Therefore, the
system creates a supply element for 3128 pc to bring the stock level up to maximum stock which is 10000 pc.
The quantities used in the net ow equation are:
On-Hand Stock: This is the quantity that is considered available by the planning run. For example, customer consignment
stock is not available for planning. This quantity is not speci c to demand-driven replenishment, it is the same for all MRP
procedures.
Open Supply: All receipts that have been ordered, but not yet in stock.
Open Past Demand: All today’s and past demands of the following categories that have not yet been ful lled. That is:
Open reservations for production orders (dependent demand)
SD released schedule lines
Outbound deliveries
Open sales order quantities
Demand from stock transfer orders
Stock transfer reservations (movement type 541)
Stock transfer schedule lines
Excluded from open past demand are the following categories:
Reservations for planned orders (dependent demand)
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Planned independent requirements
Stock transfer requisition demand
 Note
These categories also apply to the calculation of the quali ed spike demand.
Quali ed Spike Demand: When calculating quali ed spike demand, the system considers the open, future quantities of
aggregated daily demands. A quali ed spike is a future daily demand that lies above the spike threshold and within the
spike horizon.
Spike threshold: Factor * Safety Stock
That is, the spike threshold is de ned as a percentage value of the saety stock quantity, for example, 50%.
 Note
The factor used is de ned at plant level. The safety stock quantity is the material-speci c safety stock quantity
that is valid for today and takes account of the average daily usage (ADU). If no valid safety stock quantity is
maintained in the Manage Buffer Levels app, the system uses the safety stock quantity that is maintained in the
MRP 1 view of the material master as a fallback.
Spike horizon: Today + Factor * Decoupled Lead Time (DLT) + Constant Offset
That is, the spike horizon is a time interval that starts after today and ends after the number of calendar days of the
decoupled lead time into the future at the earliest.
 Note
The factor and offset used are de ned at plant level. The decoupled lead time is the material-speci c DLT that is
de ned in the Schedule Lead Time Classi cation of Products (DD) app. If no DLT is maintained, the system uses
the total replenishment lead time that is maintained in the MRP 3 view of the material master record as a
fallback.
See the following diagram:
This diagram shows open demands along a time axis. You can see that several of the demands are in the past. You
can see the spike threshold that has been de ned as 50% of the safety stock quantity is exceeded at two dates
within the spike horizon by demand aggregated daily. These two quali ed spikes make up the quali ed spike
demand in the net ow equation.
Scheduling
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Scheduling in demand-driven replenishment is performed using the decoupled lead time irrespective of whether the material is
replenished internally or externally.
The availability date is calculated on the basis of forward scheduling meaning that the availability date of the new supply element
is “today + decoupled lead time (in calendar days)”. The goods receipt processing times and safety times are also taken into
account in this calculation as is the case when planning materials with other planning procedures. To avoid a situation where these
times are duplicated in the calculation of the availability date, you are recommended to set these times to zero in the material
master.
The planning time fence (if your MRP type has xing type = 1) uses the decoupled lead time. Assume, for example, that today's
planning run creates a supply element with an availability date as above. To avoid that that tomorrow's MRP pushes the
requirement out to the next day according to the same formula, the planning time fence date is set to today + DLT, so that an MRP
executed tomorrow will regard the newly created supply element as xed. This stabilizes the MRP result.
Stock/Requirements List
In the stock requirements list, you can view all the values that are used by the system for the MRP calculation in the Demand-
Driven Replenishment tab.
Application Jobs for Demand-Driven

Replenishment
Here, you will see information about the application jobs you will use for Demand-Driven Replenishment.
Schedule Product Classi cation (DD)
Schedule Lead Time Classi cation of Products (DD)
Schedule Buffer Proposal Calculation
Schedule Product Classi cation (DD)

With this app, you can classify your products by systematically evaluating them based on their goods issue value (ABC
classi cation), usage across BOMs (PQR classi cation) and variation in actual demand (XYZ classi cation) across a speci ed
evaluation interval. Classifying your products will help identify whether they are relevant for Demand-Driven Replenishment, and
will help de ne inputs for their buffer settings. Additionally, you can schedule runs to re-classify your products periodically to keep
their classi cations up-to-date, so that you get accurate results as you proceed with Demand-Driven Replenishment. This is the
rst app that you’ll use when you start with Demand-Driven Replenishment.
Key Features
Select only the products you need, by means of lters such as Product, Product Group, Plant and MRP Area.
Set custom thresholds for product classi cations.
Evaluate your products based on their goods issue value through ABC classi cation.
Evaluate your products based on their BOM usage through PQR classi cation.
Evaluate your products based on the variation in their actual demand through XYZ classi cation.
 Recommendation
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5/29/2020
Product classi cations can change seasonally or based on increase or decrease in demand over time. SAP recommends that
you periodically re-classify your products to ensure that the right products are considered relevant for Demand-Driven
Replenishment.
For general information about application jobs and to learn how to schedule a job to run periodically, see the SAP S/4HANA Cloud
documentation at http://help.sap.com/S4HANA. In the Product Assistance, search for General Functions for the Key User.
For more information regarding how to use these product classi cations for demand-driven replenishment, see Mass Maintenance
of Products (DD).
Prerequisites
Production Planner

Desktop
Tablet
Goods Issue Value (ABC) Classi cation

Here you’ll see how products are classi ed based on their goods issue value.
A product is typically classi ed into type A, B or C based on its goods issue value, with products classi ed as type A having the
largest goods issue value and products classi ed as type C having the smallest goods issue value.
The price of a product and the number of its goods issues are the main factors that decide its goods issue value. For example, a
high-priced product with a low number of goods issues may have the same classi cation as a low-priced product with a high
number of goods issues.
Using ABC analysis, products are evaluated to compute their goods issue value over a selected evaluation interval, sorted in
descending order based on the calculated goods issue value and then classi ed based on the thresholds set for value
classi cation.
For example, you can set thresholds for value in percentage such as 70, 20 and 10, or 80, 15 and 5 for A, B and C respectively for
value classi cation.
These classi cations are stored as a Value Indicator for the product, and can be displayed and manually changed in the Mass
Maintenance of Products (DD) app.
 Recommendation
Replenishment.
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For more information regarding how to use these product classi cations for Demand-Driven Replenishment, see Mass
Maintenance of Products (DD).
BOM Usage (PQR) Classi cation

Here you’ll see how products are classi ed based on their BOM usage.
A product is typically classi ed into type P, Q or R based on its usage in BOMs, with products classi ed as type P being used in the
highest number of BOMs and products classi ed as type R being used in the lowest number of BOMs.
Using PQR analysis, products are evaluated to understand their presence and impact across BOMs.
For example, you can set thresholds for the number of BOMs such as 3, 2 and <2, or 2, 1 and <1 for P, Q and R respectively for BOM
usage classi cation.
These classi cations are stored as a BOM Usage Indicator for the product, and can be displayed and manually changed in the
Mass Maintenance of Products (DD) app.
 Recommendation
Replenishment.
Variability (XYZ) Classi cation

Here you’ll see how products are classi ed based on the variation in their actual demand.
A product is typically classi ed into type X, Y or Z based on the variation in its actual demand, with products classi ed as type X
having the lowest variation and products classi ed as type Z having the highest variation.
The actual demand is calculated as the sum of sales orders due on the current date, sales orders that are overdue and quali ed
order spikes, if any.
Using XYZ analysis, products are systematically evaluated to compute the mean and standard deviation of their actual demand
over a selected evaluation interval, through which the coefficient of variation for the actual demand is derived. The products are
then classi ed based on the coefficient of variation using the thresholds set for variability classi cation.
For example, you can set thresholds such as 0.25, 0.5 and >0.5 for X, Y and Z respectively for the coefficient of variation used with
the variability classi cation.
These classi cations are stored as a Variability Indicator for the product, and can be displayed and manually changed in the Mass
 Recommendation
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Replenishment.
Schedule Lead Time Classi cation of

Products (DD)
With this app, you can classify your Demand-Driven Replenishment-relevant products by evaluating them based on their
Decoupled Lead Time (EFG classi cation) across a speci ed evaluation interval. Classifying your products based on their
Decoupled Lead Time (DLT) will help de ne inputs for their buffer settings. Additionally, you can schedule runs to re-classify your
products periodically to keep their classi cations up-to-date, so that you get accurate results as you proceed with Demand-Driven
Replenishment. This is the third app that you’ll use when you start with Demand-Driven Replenishment.
Key Features
Select only the products you need from your DD-relevant products, by means of lters such as Product, Product Group,
Plant and MRP Area.
Select an evaluation interval (in days) based on which your selected products will be classi ed.
Set custom thresholds for Decoupled Lead Time (EFG) Classi cation based on procurement types such as Make, Buy and
Transfer.
Evaluate your products based on their Decoupled Lead Time through EFG classi cation.
 Recommendation
Product classi cations can change seasonally, based on logistics or even based on an increase or a decrease in demand over
time. SAP recommends that you periodically re-classify your products to ensure that the right buffer settings are considered
for Demand-Driven Replenishment.
Lead time classi cation, along with the other product classi cations will be used as inputs to the Schedule Buffer Proposal
Calculation app. For information regarding how to generate buffer proposals for your Demand-Driven Replenishment-relevant
products based on their product classi cations, see Schedule Buffer Proposal Calculation.
Prerequisites
Production Planner
5/29/2020
You have identi ed and marked your DD-relevant products as relevant by assigning them an MRP type with the MRP
procedure C, Demand-Driven Replenishment, using the Mass Maintenance of Products (DD) app.

Desktop
Tablet
Decoupled Lead Time (EFG) Classi cation

Here you’ll see how products are classi ed based on their Decoupled Lead Time.
A product is typically classi ed into type E, F or G based on its decoupled lead time, with products classi ed as type E having the
shortest decoupled lead time and products classi ed as type G having the longest decoupled lead time. An EFG classi cation is
typically used together with the procurement type for a product or component.
The sum of the longest lead times of non-buffered products in a sequence headed by a buffered or DD-relevant product in a BOM,
adds up to a cumulative lead time for the DD-relevant product that is known as the Decoupled Lead Time.
Using EFG analysis, your products are systematically evaluated to compute the Decoupled Lead Time for DD-relevant products,
and the DD-relevant products are then classi ed based on the thresholds set for lead time classi cation.
For example, you can set thresholds for value (in days) such as 2, 5 and >5 for E, F and G respectively for value classi cation.
These classi cations are stored as a Lead Time Indicator for the product, and can be displayed and manually changed in the Mass
Procurement Types
You can set separate, custom thresholds for Decoupled Lead Time (EFG) Classi cation based on procurement types such as
Make, Buy and Transfer.
For example, you might want to set different DLT thresholds for products produced in-house, products procured from external
sources or products transferred in through STOs based on logistical, contractual or cost considerations.
 Recommendation
Product classi cations can change seasonally, based on logistics or even based on an increase or a decrease in demand over
time. SAP recommends that you periodically re-classify your products to ensure that the right buffer settings are considered
for Demand-Driven Replenishment.
Lead time classi cation, along with the other product classi cations will be used as inputs to the Schedule Buffer Proposal
Calculation app. For information regarding how to generate buffer proposals for your Demand-Driven Replenishment-relevant
products based on their product classi cations, see Schedule Buffer Proposal Calculation.
Schedule Buffer Proposal Calculation

5/29/2020
With this app, you can generate buffer (stock) level proposals for your Demand-Driven Replenishment-relevant products based on
their average daily usage, decoupled lead time, buffer pro les and several other factors. Additionally, you can schedule runs to re-
calculate the buffer proposals periodically to keep them up-to-date, so that you maintain appropriate levels of inventory while
using Demand-Driven Replenishment. This is the fourth app that you’ll use when you start with Demand-Driven Replenishment.
Key Features
Select only the products you need from your DD-relevant products, by means of lters such as Product, Product Group,
Plant and MRP Area.
Calculate the average daily usage (ADU) of your products over a selected averaging interval, an interval that you set in the
Mass Maintenance of Products (DD) app.
Calculate the decoupled lead time over the same interval in conjunction with the average daily usage.
Generate buffer level proposals which will act as inputs to the Manage Buffer Levels app for your selected products.
Adopt the generated buffer proposals automatically. You can use this feature together with the scheduling facility of this
app to automatically adopt the generated buffer proposals after every scheduled run.
Overwrite product details relevant to Demand-Driven Replenishment such as individual lead time and decoupled lead time
in master data records based on the updated values calculated by the app.
 Recommendation
Buffer Proposals can change daily, based several factors, including an increase or a decrease in demand over time. SAP
recommends that you re-calculate the buffer proposals for your products periodically to ensure that the right buffer levels are
considered for Demand-Driven Replenishment.
For information regarding how to use the generated buffer proposals for your Demand-Driven Replenishment-relevant products,
see Manage Buffer Levels.
Prerequisites
Production Planner
You have identi ed and marked your DD-relevant products as relevant by assigning them an MRP type with the MRP
procedure C, Demand-Driven Replenishment, using the Mass Maintenance of Products (DD) app.
Your DD-relevant products are classi ed based on their decoupled lead time (EFG Classi cation) using the Schedule Lead
Time Classi cation of Products (DD) app.

Desktop
Tablet
5/29/2020
Buffer Proposal Calculation

Here you’ll see how buffer proposals are calculated for Demand-Driven Replenishment-relevant products.
Buffer (stock) level proposals help you manage the safety stock, reorder point and maximum stock for your products through the
Manage Buffer Levels app. Several factors are taken under consideration when calculating buffer proposals for your Demand-
Driven Replenishment-relevant products.
Average Daily Usage
Averaging Interval
Decoupled Lead Time
Minimum Order Quantity
Buffer Pro les
A Buffer in Demand-Driven Replenishment
Average Daily Usage

The average usage of a product or component on a daily basis, calculated based on the demand over a selected averaging interval.
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Averaging Interval
The Mass Maintenance of Products (DD) app is used to set an averaging interval, a rolling interval de ned in the form [-x days],
referring to the current date. This interval is used to calculate the Average Daily Usage (ADU) for that date based on the daily
usage, and to calculate the Decoupled Lead Time (DLT).
Decoupled Lead Time

A sum of the longest lead times of non-buffered products in a sequence headed by a buffered (DD-relevant) product in a BOM,
adding up to a cumulative lead time for the buffered product.
 Note
In case you have never generated a buffer proposal for the products you have selected, an up-to-date decoupled lead time
(DLT) is mandatory for generating a new buffer proposal. The DLT is automatically calculated, unless you have speci cally
chosen not calculate it, in which case the buffer proposals for those products will not be generated.
Minimum Order Quantity

The lowest product quantity for which an order can be placed to replenish the stock buffer, decided by logistical, contractual or
cost considerations.
Buffer Pro les

Buffer Pro les are set of buffer control parameters. They are assigned to DD-relevant products based on their classi cation with
respect to lead time and variability, and their procurement type. Every DD-relevant product has a Lead Time Factor and a
Variability Factor assigned to it based on its assigned buffer pro le that helps calculate the buffer level proposals for that product.
For information about buffer pro les and how they are relevant to Demand-Driven Replenishment, see Buffer Pro les.
For information regarding how to use the generated buffer proposals for your Demand-Driven Replenishment-relevant products,
see Manage Buffer Levels.
Buffer Pro les

Here you’ll see information about buffer pro les, as well as a sample set of buffer pro les.
A buffer pro le is one of the several factors taken under consideration when calculating buffer proposals for Demand-Driven
Replenishment-relevant products.
Buffer Pro les are set of buffer control parameters. They are assigned to DD-relevant products based on their classi cation with
respect to lead time and variability, their procurement type, and whether a minimum order quantity is considered or not. Every
DD-relevant product has a Lead Time Factor and a Variability Factor assigned to it based on its assigned buffer pro le that helps
calculate the buffer level proposals for that product.
For example, you can have a set of buffer pro les as shown below:

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SAP S/4HANA | 1709 (Sep 2017)

Original content: https://help.sap.com/viewer/e93a1ed5d8d9422faa3acd132b27e7ba/1709 000/en-US

For more information, please visit the https://help.sap.com/viewer/disclaimer.

Apps for Demand-Driven Replenishment

Demand-Driven Replenishment-Relevant Products

A Buffer in Demand-Driven Replenishment

Manage Buﬀer Levels

Adopt or ignore proposed buﬀer proposals for products

Navigate to view the following buﬀer-related details of a product:

Average Daily Usage

Decoupled Lead Time

Switch between planning view and performance view of buﬀer levels

Review the replenishment operations in the performance view

Select data points on the charts to view details

Supported Device Types

Replenishment Planning by Planning Priority

Save your prede ned lter settings as a variant.

Supported Device Types

Replenishment Execution by On-Hand

Save your prede ned lter settings as a variant.

View today's on-hand stock situation.

View the open supply quantity.

Supported Device Types

Mass Maintenance of Products (DD)

Mark your selected products as DD-relevant by setting an appropriate MRP type.

Display and change the results of product classi cations.

Set a minimum lot size to de ne a minimum procurement quantity.

SAP Jam Integration

Master Data Specialist - Product Data

Supported Device Types

Demand-Driven Replenishment Planning

The following prerequisites are ful lled:

For more information, see Mass Maintenance of Products (DD).

For more information, see Manage Buﬀer Levels.

Planning Run with MRP Procedure "C"

The equation for generating supply elements is the net ow equation:

The quantities used in the net ow equation are:

Open reservations for production orders (dependent demand)

SD released schedule lines

Open sales order quantities

Demand from stock transfer orders

Stock transfer reservations (movement type 541)

Stock transfer schedule lines

Excluded from open past demand are the following categories:

Reservations for planned orders (dependent demand)

Stock transfer requisition demand

Spike threshold: Factor * Safety Stock

See the following diagram:

Application Jobs for Demand-Driven

Schedule Product Classi cation (DD)

Schedule Lead Time Classi cation of Products (DD)

Schedule Buﬀer Proposal Calculation

Schedule Product Classi cation (DD)

Set custom thresholds for product classi cations.

Master Data Specialist - Product Data

Supported Device Types

Goods Issue Value (ABC) Classi cation

BOM Usage (PQR) Classi cation

Variability (XYZ) Classi cation

Schedule Lead Time Classi cation of

Master Data Specialist - Product Data

Supported Device Types