Back to Back Promising – Fusion

GOP & Supply Planning

An Oracle White Paper
Dec 2016

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Back to Back Promising – Fusion GOP & Supply Planning

Table of Contents

1. Back to Back Promising .......................................................................................................................... 3

1.1. Functional Flow ................................................................................................................................. 3
1.2. Setups .................................................................................................................................................... 4
1.3. Change Management ....................................................................................................................... 6
1.4. Example ................................................................................................................................................ 8

2. Planning for Back to Back ...................................................................................................................... 9

2.1. Setup steps to plan back to back ................................................................................................. 9
2.2. Forecasting for back to back items ............................................................................................ 9
2.3. Planning for back to back items ............................................................................................... 10

Back to Back – Fusion Supply Planning Page 2

Back to Back Promising

This whitepaper covers the functional flow, setup and change management scenarios for the Back
to Back promising and planning in Fusion Supply Chain Planning modules GOP and Planning
Central.

Back to Back promising is a supply to order scenario where fulfillment lines are promised by
purchasing from suppliers - the supplier ships to the ship from warehouse rather than shipping to
the customer directly.

• A purchase order equivalent to the fulfillment line is created against the supplier and
supply is reserved against the fulfillment line
• Another variant of Back to Back called Internal Material Transfer Back to Back (IMT Back
to Back) involves transferring supply from an internal org to the ship from warehouse; in
this case a transfer order is created and is reserved against the fulfillment line.

Functional Flow for Back to Back

• A fulfillment line is sent for promising from Distributed Order Orchestration (DOO)
• GOP recognizes the item as back to back based on the PIM attribute ‘BacktoBack’
• GOP identifies the eligible ship from warehouses and the upstream sources based on the
sourcing rules. GOP performs availability calculations and provides response.
Note: The sourcing rule definitions override the item attribute. For example, for an item that is
indicated as back-to-back, if a “Make At” sourcing rule is defined as rank1 source, GOP will
promise using Make CTP if required and provide the relevant supply recommendation.
• Upon scheduling, GOP will provide supply recommendations. SCO then orchestrates the
creation of supplies. SCO also maintains association of supplies with demands and the
association information can be communicated to GOP in real-time using the net change
capabilities.
• GOP honors the associated supply that is reserved, during rescheduling.

Back to Back – Fusion Supply Planning Page 3

Setups for Back to Back

• Create an Item with PIM attribute BacktoBack enabled

• Collect the Item and Assign an ATP rule
• Define two sourcing rules:
Rule 1: For a customer or customer region, ship from internal organization X
Rule 2: For internal organization X, buy from supplier Y or transfer from internal organization
Z

GOP provides the suggested supply to SCO, which creates the inventory reservation if the source is
ship from X or SCO creates the purchase order or transfer order with the reservations if X does not
have on hand supply.
Note: Use Document Reference DropshipAndBackToBackProcessManual when creating
SalesOrder in DOO.

Back to Back – Fusion Supply Planning Page 4

Changes to Demand

Requested Quantity is decreased

• GOP will return the same scheduled date back to DOO. GOP will export the supply pegging
which will be identical to the original pegging that was associated with this demand. SCO
compares the Requested Quantity on the fulfillment line and the pegged PO quantity and
determine whether the PO quantity must be reduced.

Requested Quantity is increased

• GOP will look for additional supply from suppliers that deliver to this ship-from warehouse
since the Ship-From warehouse is already present on the line.
• GOP can determine a date from the supplier currently on the PO, or choose a new supplier, or
even split the fulfillment for the incremental quantity across suppliers. This will depend on
supplier capacity, lead times and transportation lead times. GOP could split the fulfillment line
due to the shipment dates from the Ship-From warehouse being different.

Demand Date is pulled in

• GOP will send the existing scheduled date back since the PO date is still the same – thus, this
could result in a delay, since the Requested Date has moved in, but the Scheduled Date is the
same as earlier.
Note: If the PO date has been pulled in and is already reflected within GOP before the
scheduling call with the earlier requested date, GOP will schedule the pulled-in requested date
on time.

Demand Date is moved out

• GOP will schedule the line on the same date as the requested date, or schedule the line earlier
depending on the Earliest Acceptable date on the line.

Demand Cancelled

• SCO will cancel this supply out which can be received by collections and GOP in real-time
based on the net change rules.

Back to Back – Fusion Supply Planning Page 5

Changes to Supply

PO Quantity is less than the fulfillment line quantity

• When DOO calls GOP to reschedule the line, GOP will first schedule a part of the line by using
the pegged PO supply. For the remainder, GOP will look for sources of supply.
• Results will be restricted to the Ship-From warehouse on the line. Using sourcing rules, GOP
will look at suppliers for the remaining demand, and choose the best supplier source. GOP
updates DOO with the new Scheduled dates, and publishes updated supply recommendations.
These recommendations will consist of the existing PO, and the new purchase
recommendation created by GOP.

PO date is before the fulfillment line scheduled date

• DOO will initiate a reschedule call to GOP of the fulfillment line to update the scheduled dates
on the fulfillment line.
• When GOP is called for rescheduling the line, GOP will recognize the updated PO dates, and
change the scheduled dates on the fulfillment line.

PO due date after the fulfillment line scheduled date

• DOO will call GOP to reschedule the line – GOP will determine the updated scheduled dates
after looking at the updated PO date, and update DOO.

PO gets Cancelled

• Supplier capacity of the drop supplier-site will be increased.

• GOP will reschedule the reservation in a way similar to that of a new fulfillment line.

Back to Back – Fusion Supply Planning Page 6

Example 1

Promising a Simple back to back order

Vision Corporation needs to promise a back to back fulfillment line for 1000 units of AS66315
from Hilman associates. Vision Corporation sources this item from Allied Manufacturing and does
not hold inventory at any of the internal locations.

Supplier
(Allied Manufacturing)

Receive Shipment
Customer
from Supplier (Hilman Associates)
Transit Lead
Time 4 days

OEM (Vision) Regular Shipment

Transit Lead Time 3
days

1. When the fulfillment line is sent for availability, GOP looks at the sourcing rules to determine
the eligible ship-from warehouses to ship to the customer/region based on sourcing rules.
GOP looks at inventory at these locations and performs availability check at upstream sources
as indicated by sourcing rules (if required).

2. In this case, GOP sees that sufficient capacity exists at the upstream supplier location. The
fulfillment line is promised on day 7 by considering supplier to OEM transit lead time of 4 days
and OEM to customer transit lead time of 3 days

3. GOP pegging details indicate that the PO from the supplier is shipped to the internal
warehouse and is shipped from the internal shipping warehouse to the customer location

4. Upon scheduling, the “Ship-from Warehouse” field of the fulfillment line is populated internal
shipping warehouse OEM (Vision). The scheduled ship date is set as day 4 and scheduled
arrive date is set on day 7.

5. Since supplier capacity is based on dock date, the supplier capacity on day 4 is consumed.

6. Since the PIM attribute indicates that the line is back to back, GOP provides supply
recommendations for the purchase order to be created to SCO.

7. A purchase order is created by SCO in the source systems. A purchase order is created against
Allied Manufacturing with ship to location as the internal shipping warehouse for 1000 units
with the due date as day 4.

Back to Back – Fusion Supply Planning Page 7

8. An association is created and maintained between this purchase order and the fulfillment line.

9. This reservation information can be communicated in real-time or collected as part of next

GOP data store.

10. Once the purchase order is received, it is converted in on-hand inventory, a reservation needs
to be explicitly created to reserve on-hand inventory against this fulfillment line

Back to Back – Fusion Supply Planning Page 8

Planning for Back-to-Back

Back-to-back ordering matches each supply order with each sales order on a one-for-one basis.
The organization using “Back-to-Back order” or “Supply to Order” flow whereby that organization
purchases the product from a supplier, have the supplier ship it to the organization and then
combine that product with other goods that organization may have purchased or stocked to create
one shipment to the customer. This is a common scenario especially for the wholesale distributors
who typically use this business flow.

This process enables companies to optimize order fulfillment to customers, reduce overall
fulfillment cost, and maintain a competitive advantage with greater reliance on contract
manufacturers and suppliers to supply some or all of their products to their customers.

Standard planning setup steps to plan back-to-back items:

For supply planning to consider back-to-back flow, the item-organization attribute “Back-to-Back
Enabled” should be set to Yes in Oracle Fusion PIM. Following are the main setups for planning:

 Set item-organization attribute: Planning Method to either ‘MRP Planned’ or ‘MPS

Planned’ to include the item in plans.
 Define sourcing for the item:
o Specify the ship from organization for sales orders
o Specify the supply source for the ship from organization
 Create an assignment set for supply planning using above sourcing rule. Also add this
sourcing rule to GOP assignment set.
 Add demand schedule in the plan options to plan forecast for back-to-back items

Forecasting for back-to-back items

Planners can forecast shipments for back-to-back enabled items by using booking or shipment
history for the back-to-back items. To generate forecast, planners need to run collections for
bookings or shipments history for the back-to-back items, create demand plans, review and
finalize forecasts for the back-to-back items. External forecasts can also be loaded into planning
instance through legacy flat files.

Back to Back – Fusion Supply Planning Page 9

Planning for back-to-back items:
 As discussed in the previous section, in a back-to-back order cycle

o A fulfillment line is sent for promising from DOO

o GOP schedules the order line and passes its recommendation to Supply Chain
Orchestration (SCO)
o SCO uses existing on-hand or create new supplies as a purchase order, transfer order
or work order depending on the recommendations.
o SCO creates the reservation between the newly created supply and the sales order

 Planning Central collections process collects back-to-back sales orders, supplies and
reservations as created in above cycle.

 Supply Planning respects reservation between sales orders and supplies as created above and
pegs these reserved supplies to sales orders for back-to-back items.

 Planners analyze supply shortages and capacity overloads using any of the standard planning
tools.

 Planning Central creates back-to-back supplies using associated sourcing rules when a back-
to-back sales order does not have a reserved supply and the item is marked as “Back-to-back
Enabled”.

 The planned orders for back-to-back enabled items cannot be released from Planning Central.
SCO cannot accept releases from planning for back-to-back items. Planners can notify order
management to check the order line, use GOP to promise the line, and send the supply
recommendation to Supply Chain Orchestration.

 By definition, the planned order quantity equals the demand quantity. Order modifiers can be
violated. Planned order quantities can be less than the demand quantity when existing
supplies are suggested for the sales order.

 If the back to back supply is late for the sales order, then a late replenishment exception
message is generated. A back to back supply can be late because it is firm. Planning Central
does not cancel reserved back-to-back supplies.

 When an item is marked as “Back-to-back Enabled” for the item-organization, then planning
central does not calculate or consider safety stock levels.

Back to Back – Fusion Supply Planning Page 10

Back to Back – Fusion GOP
Dec 2016

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