SD2007: SD Product Allocation v 1.

India SAP CoE, Slide 1

Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 2
Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 3
Purpose

Supply and demand are key components of any customer order

management system. In an effort to establish and maintain
competitive customer service levels, suppliers must focus on
filling a customer’s order on time for the desired quantity.

Certain circumstances can arise however, where on hand and

expected inventory will not cover the demand for a particular
product or group of products. Production problems, unexpected
demand, short product life cycles, or scarce raw materials can all
cause this situation.

When this occurs, allocation tools are required to distribute the

inventory across competing demands. An allocation plan must
allow for fair share distribution as well as the ability to focus on
key markets and key accounts.

India SAP CoE, Slide 4

Use

 Product allocation functionality allows you to manage the

supply of scarce products to customers so that each customer
receives an allocated amount.

India SAP CoE, Slide 5

Challenges

 Once an allocation plan has been completed, it must function as

an integral part of available to promise (ATP) processing. Whether
for incoming sales orders or the rescheduling of existing orders,
checks against allocations must be performed.

During the allocation period, it is also necessary to track actual

demand against planned allocations and to have tools to red flag
critical situations.

India SAP CoE, Slide 6

Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 7
Product Allocation Functional Overview
Product allocation functionality combines the planning and
tracking tools of the Logistics Information System (LIS) with
the real time available to promise functionality in sales order
processing.

 In the LIS system, users are able to define a custom planning hierarchy
for allocations. Hierarchy levels such as sales organization, customer
group, market, and customer can be selected. Once the hierarchy is
established, the allocation quantities can be planned at any level.

For example, allocations could be planned down to the market level and
then down to the customer level for two key accounts in that market.
Consistent planning tools in LIS allow for bottom up as well as top down
planning.

India SAP CoE, Slide 8

Product Allocation Functional Overview
 An active check against planned allocations is carried out in sales
order processing in addition to the available to promise check.
Based on the delivery date of the item, the system ensures that the
ordered quantity does not exceed the period allocation. If this occurs,
the system is able to propose future delivery dates when the quantity
can be supplied. Actual quantities are then updated in the Logistics
Information System for the allocation period.

 The allocation check is also carried out during the rescheduling

function. Reporting tools in LIS can provide useful information
regarding status during an allocation period.

India SAP CoE, Slide 9

Analysis of the Allocation Process
Prior to being able to establish any rules, data, or configuration
for the strategic allocation of products, one must first evaluate
the underlying business process that is driving it.
Most importantly, a decision must be made as to how allocation is to be done. This process can
be facilitated by addressing the following issues:

1. At what level of the sales structure is allocation to be established?

List the levels in order of importance for the hierarchy. (Up to 8
levels) Material
Sales Organization
Customer

India SAP CoE, Slide 10

Analysis of the Allocation Process
2. How are allocation preferences to be established? What groups receive
what percentage of the overall allocation quantity?
E.g. Sales Organization 1000 = 70% and all other sales organizations
split the remainder.

Fig: Allocation Planning Hierarchy

3. For what time period is allocation to be active?
E.g. 01/01/2007 - 10/30/2007

India SAP CoE, Slide 11

Analysis of the Allocation Process
4. Are unused quantities from prior periods to be included in the available
quantity calculation for the current period? If so, what is the size of
the allocation interval?
I.e. How many past and future periods are to be included in the
allocation scenario?

5. Is the allocation check to be a single level check or are multiple levels of

checks to be evaluated?
E.g. STEP 1: Evaluate the allocation quantities for the requested plant
STEP 2: Evaluate the allocation quantities for the requested
customer

India SAP CoE, Slide 12

Product Allocation in Sales Order Entry
Product allocation is incorporated into the sales order process as follows:

Step 1: An order line item is entered for a material currently on allocation. This is
determined by reading the material master and identifying that an allocation procedure is
assigned.

Step 2: An ATP check is then carried out to see if and when the requested quantity can be
confirmed. An ATP check is not, however, a prerequisite for product allocation.

Step 3: If the order quantity unit is different than the planning unit of measure, the order
quantity will be automatically converted prior to the allocation validity. Secondly, if a
conversion factor has been established to represent a constrained component, this factor
will be used to calculate the proper allocation requested quantity prior to the allocation
check against the planning data.

Step 4: First, based upon the date in the allocation information structure activation rule,
one of three dates (delivery date, material availability date, or planned goods issue date)
from the sales order is used to validate the allocation quantity for the requested period.
Secondly, depending upon the method selected and the allocation interval, quantities are
cumulated and the future proposal dates are determined.

India SAP CoE, Slide 13

Product Allocation in Sales Order Entry

Step 5: If, after performing the allocation checks, the ATP schedule lines determined above
need to be modified to concur with the allocation data, a dialog message is issued to the user
to inform them of the change due to allocation. Then the user will be taken to the availability
control screen to verify these altered schedule lines. From this screen, the user can branch
to the product allocation detail screen (Go to -> Product Allocation) to investigate the changes
further.

Step 6: Upon acceptance of the delivery proposal, the corresponding allocation quantities are
reduced to reflect the consumption of the allocated inventory. Subsequent orders will then
recognize these updated figures. This is accomplished by using the real-time updating
capabilities of LIS, which insures that product is not over-allocated.

The allocation check in sales order entry is capable of reading allocation quantities at multiple
levels in the LIS planning hierarchy. Allocation would first check to see if planning was done
at the most detailed level of the hierarchy. If so, the planned quantity at this level is used for
the validation. If not, the system continues to read subsequent levels of the hierarchy until a
record is found.

India SAP CoE, Slide 14

Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 15
Product Allocation - Configuration

 Allocation Specific
 LIS Specific

India SAP CoE, Slide 16

Product Allocation - Configuration

 Allocation Specific
 LIS Specific

India SAP CoE, Slide 17

Allocation Specific - Configuration
1. Allocation Procedure

Maintain Allocation
procedure

 IMG – Sales and Distribution – Basic Functions - Availability Check and Transfer of
Requirements - Availability Check Against Product Allocation - Maintain Procedure
(Transaction code:ov1z)

Usage: The product allocation procedure is the parent of the entire allocation
process. All materials that are to be included in the allocation scheme are required to
have an allocation procedure assigned to it in the material master.

India SAP CoE, Slide 18

2. Allocation Object

Define Object

 IMG – Sales and Distribution – Basic Functions - Availability Check and Transfer of Requirements -
Availability Check Against Product Allocation - Define Object (Transaction code:ov2z)

Usage:The allocation object is the root level of the allocation process where actual data is
entered and planned in LIS. The object allows the user to further break down a procedure
into smaller parts for future validation of components comprising a specific material.

India SAP CoE, Slide 19

 3. Allocation Hierarchy Mapping

Specify hierarchy

S140 is the standard delivered info structure

for allocation.

 IMG – Sales and Distribution – Basic Functions - Availability Check and Transfer of Requirements
- Availability Check Against Product Allocation – Specify Hierarchy (Transaction code:ov3z)

Usage: This transaction permits the assignment of an allocation procedure to an LIS info-
structure. This link serves as the pointer to the allocation plan data that will be verified in sales
Order processing. Additionally, in this transaction, the user must assign a ‘mask’ character to
Permit collective planning.

India SAP CoE, Slide 20

4. Control Product Allocation

Control Product allocation

 IMG – Sales and Distribution – Basic Functions - Availability Check and Transfer of requirements -
Availability Check Against Product Allocation – control product Allocation (Transaction code:ov4z)

Usage: In order for the allocation process to function properly, allocation control records are
created primarily to map allocation procedure steps to their corresponding objects so that the
allocation data records can be located for validation.

Secondly, validity periods must be established to indicate when the allocation control records
are active. Finally, the user has the option of establishing a conversion factor per allocation
control record to accommodate BOM listings of constrained materials. Specifically, this
factor represents the relationship between the allocation sales quantity being entered and
the component BOM quantity needed for a restricted component.

India SAP CoE, Slide 21

5. Define consumption periods

Define consumption
periods

 IMG – Sales and Distribution – Basic Functions - Availability Check and Transfer of Requirements - Availability Check Against Product Allocation - Define consumption periods (Transaction code:ov5z)

Usage: The consumption window indicates the number of past and future periods to be
used in the allocation check.

India SAP CoE, Slide 22

5. Define consumption periods

The consumption window indicates the number of past and future periods to be used
in the allocation check. These two parts work together as follows:

 The number of past periods identifies the number of periods before the allocation
order date that are valid for inclusion into the current allocation quantity calculation.
The unused allocation quantities present in these past periods are then cumulated
together before the allocation check of the current period.

 The number of future periods identifies the number of periods after the allocation
order date that are valid for inclusion into the current allocation window. If the
requested quantity cannot be confirmed within the future period window, any
remaining quantities will remain unconfirmed.

Note: In both cases, the period definition is defined by the corresponding information
structure activation rule (I.e. Period = Daily, weekly, monthly etc). Additionally, the
selection of which date from the order should be used for period determination is also
defined there.
Only three order dates are permitted to be used for allocation validation: Delivery
date, material availability date and the Planned Goods Issue date.

India SAP CoE, Slide 23

6. Create Planning Hierarchy

Create planning
hierarchy

 SAP Easy Access – Logistics-Sales and Distribution –

Sales Information System- Planning – Flexible
Planning – Master data – Planning hierarchy - create
(Transaction code:MC61)

Usage: In order to adequately establish allocation quantities, the user must initially
determine the level at which the allocation is to take place and the aggregation factor of
the allocation quantities. In this step, the levels for the collective allocation search
procedure are also identified.

India SAP CoE, Slide 24

7. Activate Allocation for Schedule Line Category

Activate
Allocation for
Schedule Line
category

IMG – Sales and Distribution – Basic Functions -

Availability Check and Transfer of Requirements -
Availability Check Against Product Allocation –
Process flow for each Schedule line category
(Transaction code:OVZ8)

Usage: In order to ‘turn on’ allocation in the standard order processing functionality, the
schedule line must have a flag indicating that allocation is relevant.

Data: Place an ‘x’ in the allocation field for those schedule line categories relevant for
allocation.

India SAP CoE, Slide 25

8. Activate Allocation for Requirements Class

IMG – Sales and Distribution – Basic Functions -

Availability Check and Transfer of Requirements -
Availability Check Against Product Allocation –
Process flow for each Schedule line category
(Transaction code:OVZ0)

Usage: In order to ‘turn on’ allocation in the standard order processing functionality, the
requirements class must have a flag indicating that allocation is relevant.

Data: Select the allocation radio button for those requirements classes relevant for
allocation.

India SAP CoE, Slide 26

Product Allocation - Configuration

• Allocation Specific
• LIS Specific

India SAP CoE, Slide 27

LIS Specific - Configuration
1. Maintain Statistics Groups for Customers

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups -
Maintain Statistics Groups for Customers (Transaction code: OVRA)

India SAP CoE, Slide 28

2. Maintain Statistics Groups for Material

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups -
Maintain Statistics Groups for Material (Transaction code: OVRF)

India SAP CoE, Slide 29

3. Maintain Statistics Groups for Sales Documents

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups -
Maintain Statistics Groups for Sales Documents (Transaction code: OVRN)

India SAP CoE, Slide 30

4. Assign Statistics Groups for Sales Documents & item category

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups - Assign
Statistics Groups for Each Sales Document Type (Transaction code: OVRH)

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups -
Assign Statistics Groups for each Sales Document Item Type (Transaction code:
OVRI)

India SAP CoE, Slide 31

5. Assign Update Groups at Header & item Level

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Statistics Groups - Update
Group -Assign Update Group at Header Level (Transaction code: OVRO)

IMG – Logistics - General – Logistics Information System (LIS) - Logistics Data

Warehouse - Updating – Up dating Control - Settings: Sales - Update Group -Assign
Update Group at Item Level (Transaction code: OVRP)

India SAP CoE, Slide 32

6. Assign statistics groups to Master Data – Customer Master

Assign Customer
Statistics Group

7. Assign statistics groups to Master Data – Material Master

Assign Product
Allocation Procedure

India SAP CoE, Slide 33

Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 34
LetMe
How do I do CONFIGURATION Settings ?!!
OV1Z Maintain Allocation Procedure

OV2Z Define Allocation Objects

OV3Z Specify Allocation Hierarchy Mapping

OV4Z Control Product Allocation

OV5Z Define Consumption Periods

MC61 Create Planning Hierarchy

OVZ8 Activate Allocation for Schedule line category

OVZ0 Activate Allocation for requirement Class

India SAP CoE, Slide 35

Product Allocation
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 36
Tips and Tricks
 Check settings for product allocation using report RMQUOT00

 Check the update using report RMCSUTIC

 Check the update for each document using MCVR

– Display which info structures are updated using which update
groups
– The best point for debugging the update is here using a
breakpoint in the program generated by MC25, e.g.
RMCX0007
– In the detail view, you can check the updated value

India SAP CoE, Slide 37

Additional Info
Customizing Tables

T190 Product allocation control

T190H Product allocation steps
T190S Product allocation procedure
T190O Product allocation object
T190V Consumption period

India SAP CoE, Slide 38