appropriate selection of planning strategies
TRANSCRIPT
![Page 1: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/1.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 1/16
Generated by Jive on 2013-09-09+02:00
1
Appropriate selection of Planning Strategies
Purpose:
The purpose of this document is to guide the most appropriate SAP Planning Strategy(s) for each Material. Itis intended to supplement (by providing more detail and rational) the documentation for Determine Strategy for
Independent Requirements and Determine Strategy for Dependent Requirements.
For each Planning Strategy, consideration will be given to:
The Business Environment best suited
The role of the forecast versus the Customer Order
Demand calculations within the system
Available to promise methodologies that apply
Through the selection of the best Planning Strategy(s), the user will achieve the right balance between
customer responsiveness and manufacturing stability while maintaining up to date visibility of customer needs.Forecasting, if performed for individual materials, will be supported at the desired level(s) in the BOM.
Note: Most of the Planning Strategies described below have been used as part of Business Scenario
execution while a few have not. Regarding the latter, the descriptions below are based on SAP documentation
only.
Summary:
There are many Planning Strategies to choose from in SAP. It is anticipated that most of the strategies will be
used at one time or another for at least one material. The strategies range from pure make-to-stock to pure
make-to-order including many hybrid strategies. In most cases, the strategy will be associated with the finished
item, however the strategy can also be associated with a Planning Material or an Assembly.
![Page 2: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/2.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 2/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
2
The strategy is assigned on the Material Master - MRP 2 screen which is a plant specific view. Some
business locations will have finishing / packaging / final assembly in a different SAP plant .
In this case, careful consideration must be given to the strategy of both materials (i.e. at the Manufacturing
Plant and the Distribution Plant).
Planning Strategies define how Planned Independent Requirements (i.e. forecasts) and Customer Independent
Requirements (i.e. sales orders) interact and become visible to manufacturing planning and the Planning Run
(e.g. MPS and MRP). Additionally, they define whether Availability Checking is permitted and where costs are
ultimately settled. There are many Planning Strategies representing many (but not all) combinations of the
above.
SAP offers many Planning Strategies to choose from. Selecting the right Planning Strategy is critical for the
successful balance between customer service, cycle time / inventory investment, and costs.
Outline:
1. Key Definitions
2. Planning Strategies
a Description of the Planning Strategies
b. Environment(s) where the strategy would fit
c. Characteristics that differentiate this strategy from others
3. Combining Planning Strategies within a BOM.
Planning Strategy and Requirements Types
![Page 3: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/3.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 3/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
3
The above screen (SAP Transaction OPPS) shows the linkage between a Planning Strategy and
Requirements Types / Class. In this example, Planning Strategy 10 will recognize Planned Independent
Requirements with a type LSF and Customer Requirements with a type KSL. Additionally, notice that
CONSUMPTION (of forecasts by orders) will not occur. Strategy 10 is the make-to-stock strategy where
forecasts only are used in the planning run / planning process.
Once Master Data is established, SAP will propose the valid requirement type for transaction data entry.
1. KEY DEFINITIONS
![Page 4: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/4.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 4/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
4
Availability Check - In SAP, there are two different kinds of Availability Checks. First there is the
Available to Promise (ATP) check. Here Customer Orders are compared to Available Stock and planned
receipts into stock. Specifics regarding which stock, receipts, and issues that are to be considered are defined
by the Checking Rule . Second there is the Planned Independent Requirements (AKA forecast) check. Here
Customer Orders are compared to the previously received forecasts. The premise behind this latter check is
that previously received forecasts should have been previously evaluated (material and capacity) and covered.
As long as orders do not exceed forecasts, material and capacity should be available to satisfy the Sales
Order. During the Availability Check, regardless of the kind of check, if SAP determines there is an issue, a
pop up window will display for the person posting the Sales Order alerting them of the situation. Neither kind of
check can directly determine the capacity situation.
MRP GROUP -
The MRP group contains all the materials from the point of view of MRP for assigning special control parameters forthe total planning run. These control parameters include, for example, the strategy group, the consumption mode,
and the planning horizon.
Use : For each MRP group, control parameters can be created for total planning in Customizing for MRP which
deviate from the plant parameters.
Note
If this field has not been maintained, the system uses the material type instead of the MRP group. In this case, the
material type has to be maintained as the MRP group in Customizing.
Strategy Group - In SAP, Strategy Groups are assigned to Materials. A Strategy Group contains one or
more Planning Strategies.
Planning Strategy - In SAP, a Planning Strategy defines how independent demand will be used by the
Planning Run (i.e. MPS, MRP, etc.) and other applications in SAP. Fundamentally, there are two different
kinds of independent demand. They are forecasts and customer orders. Forecasts may be created forProduct Groups or individual Materials. The Materials may be end items / finished product or semi-finished
product. Examples of the latter include a key assembly, the core of a finished product not specific with respect
to variants or options, etc.
![Page 5: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/5.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 5/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
5
Requirements Type and Class - In SAP, the two fundamental kinds of independent demand (forecasts
and customer orders) are further sub-divided into specific Requirements Type and Classes. Requirements
Types and Classes are linked to specific Planning Strategies. In other words, a given Planning Strategy will
recognize at most one type of forecast and one type of order from Demand management.
2. PLANNING STRATEGIES
SAP offers a wide range of Planning Strategies. The application of a Planning Strategy(s) to a particular
Material at a plant will determine it's Demand Program. In other words, the Planning Strategy will determine
which Demand Requirement Types will be considered by the Planning Run for a Material and to what extent
they are considered. It is highly recommended that one of the SAP delivered strategies be chosen for each
Material. If a fit cannot be found, a new Planning Strategy should be created in configuration by copying an
existing strategy (then making changes to the copy) rather than changing one of the as-delivered strategies.
Planning Strategies can be assigned either by Plant Parameters, MRP Group, or on the Material Master
(MRP 2 screen) itself. If it is defined at more than one level, the most detailed level will take precedence. The
Material Master is the most detailed level.
Make-to-Stock Production (10/11)
As the name implies, Make-to-Stock Production is a strategy that utilizes forecasts as the basis to drive
production of end items and components. It is particularly useful for mass production environments where
product variants / options are at a minimum. One of the most important features of this planning strategy is
the smoothing of the demand program. As customer orders are booked, they do not impact the demand as
seen by manufacturing planning. Therefore, the manufacturing plans, themselves, will remain stable. Individual
customer requirements play no role in a make-to-stock production environment from the Manufacturing
Planners perspective. In other words, in this planning strategy, planned independent requirements are not
consumed by Sales Orders as Sales Orders are booked. Planned Independent Requirements remain stable.
This strategy is very simple to use and is applicable for finished goods where the finished good is forecastable
and the forecast horizon is far enough into the future to drive material planning via BOM explosion. Planned
Independent Requirements (i.e. forecasts) only are used by SAP to determine the requirements for a Material.
![Page 6: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/6.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 6/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
6
This is how stability is achieved. Unpredictable Customer Orders, as received, do not change the view as seen
by the Manufacturing Planner.
Make-to-Stock Production is defined in SAP as two different Planning Strategies, 10 and 11. They differ in theway they treat Available Stock. Planning Strategy 10 will consider Stock (net requirements planning) while
Planning Strategy 11 will not (gross requirements planning). In Planning Strategy 10, Stock will count towards
the coverage of requirements, in this case Planned Independent Requirements.
These strategies are best used when stability is important in Finishing / Packaging as long as finished goods
are forecastable with reasonable accuracy and strategic safety stock of finished goods is in place to cover
forecast error and supply variability across the manufacturing lead time. For businesses that cannot, or would
prefer not, to forecast at the finished goods level, this strategy is not appropriate.
The Availability Check performed as a Sales Order is posted is based on ATP logic. Customer Requirements,
while not used in the calculation of demand, are displayed.
Choose this strategy if
the finished item will be forecasted across a horizon that supports finishing manufacturing and component
planning
customer service objectives can be achieved given the demonstrated forecast accuracy and the finished goods
inventory investment permissible
manufacturing stability in the finishing / packaging operation is important during periods of both soft and strong
sales
Make-to-Order Production (20/ 21/ 25/ 26)
![Page 7: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/7.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 7/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
7
As the name implies, Make-to-Order Production are strategies that utilizes Sales Orders as the basis to
drive production of end items and components. These strategies are applicable to finished goods as well as
materials in the BOM of the finished good, thus enabling cost settlement to Sales Orders. These strategies are
useful when production orders need to be directly linked to sales orders. These strategies would be applied to
a finished good first, then to whatever direct children can / should be Make-to-Order as well, then their children,
etc. Once a material in the BOM is not identified as Make-to-Order, it's children in the BOM can not either.
Materials identified as MTO will have manufacturing orders created in a lot for lot mode that pegs directly
to the Sales Order. Since production orders are linked to sales orders, finished goods are not inventoried.
The differences between the several MTO strategies are combinations of how costs are settled (in all cases
to Sales Orders versus stock) and the degree with which configuration of the Sales Order (for a configurable
material) is required. Strategies 20 and 21 do not allow configuration, 25 requires it, and 26 makes it optional.
The Individual / Collective requirements field on the MRP2 screen of the Material Master should be set to
Individual for this strategy.
Choose this strategy if
Finished item forecasting is impractical or too inaccurate
Another planning process exists that will provide enough demand visibility into the future for components not
identified as Make-to-Order
Customers are willing to wait for the total lead time of all materials (finished item and optionally components)
tagged as Make-to-Order
Finished goods inventory is not desired
Finishing manufacturing stability is not important
Linking of production orders to sales orders is desired / required
Settling product costs to sales orders is desired / required
At least one component of the finished item will be identified as Make-to-Order (otherwise one of the
Assembly-to-Order planning strategies should be used (81 / 82)
![Page 8: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/8.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 8/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
8
Production by Lot Size for Sales and Stock Orders (30)
This strategy is particularly useful for companies that mainly produce for major customers but who also require
the option of selling smaller requirements from stock. Several sales orders, depending on the dates, can begrouped together to be produced in one single lot. Therefore, this strategy is not make or assemble to order
since production quantities are not directly tied to sales quantities.
In addition to recognition of Sales Orders, this strategy will also plan to cover Planned Independent
Requirements like the Make-to-Stock Strategy. Instead of Sales Orders consuming Planned Independent
Requirements, they are additive in nature. Therefore, the forecast represents just the smaller customers
whose orders are sold from stock. As with Planning Strategies 10 and 11, this strategy is applicable for
finished goods and require forecasts at the finished good level for the portion of the business that will be soldfrom Stock.
The Availability Check performed as a Sales Order is posted is based on ATP logic.
Per SAP documentation, the Individual / Collective requirements field on the MRP2 screen of the Material
Master should be set to Collective for this strategy.
Choose this strategy if
All finished items sold from stock will be forecasted across a horizon that supports finishing manufacturing and
Component planning, the forecast represents just customers who buy from stock
Customer service objectives for customers who buy from stock can be achieved given the demonstrated
forecast accuracy and the finished goods inventory investment permissible
Customer service objectives for customers whose sales orders drive manufacturing can be achieved given the
demonstrated lead times of manufacturing
![Page 9: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/9.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 9/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
9
Planning with Final Assembly (40)
Planning Strategy 40 is useful when finished goods are somewhat forecastable, some level of stability is
important in Finishing / Packaging, and customer service objectives cannot be achieved by the demonstratedforecast accuracy and an acceptable level of strategic safety stock of finished goods. 'Somewhat forecastable'
means that as dependent demand is created for components of finished goods, they are accurate but the
forecasted mix of the finished goods requires less accuracy. As opposed to make-to-stock production
(Planning Strategy 10/11), planned independent requirements are consumed by incoming sales orders. This
strategy, like others that allow consumption of forecasts, requires maintenance of the Consumption Mode and
Consumption Periods fields on the Material Master to define the scope of consumption. If sales orders exceed
Planned Independent Requirements, this higher level of demand will be recognized by the Planning run. Thus,
the important feature of this planning strategy is that you can quickly react to customers' requirements in
excess of the forecast while sacrificing some stability. Manufacturing stability is less important than customer
service (or the additional inventory required to achieve customer service goals) when sales are strong.
If sales orders fall short of the forecast, production will cover the entire forecast and temporarily increase
finished goods inventory. Stability of production schedules in Finishing / Packaging will be preserved and is
decided to be more important when Sales are soft than a temporary increase in inventories.
As with Planning Strategies 10 and 11, this strategy is applicable for finished goods and require forecasts at
the finished good level.
The Availability Check performed as a Sales Order is posted is either based on ATP logic or as a Planned
Independent Requirement check. The later is a check to determine if Planned Independent requirements have
been exceeded by Sales Orders.
Choose this strategy if
The finished item will be forecasted across a horizon that supports finishing manufacturing and component
planning
Manufacturing stability in the finishing / packaging operation is important during periods of soft sales
Customer service is more important than finishing manufacturing stability during periods of strong sales
![Page 10: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/10.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 10/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
10
Planning Without Final Assembly (50/ 51/ 52/ 54/ 55/ 56)
It makes sense to use these planning strategy when the main value added process is final assembly or
when forecasting is not accurate for finished products. In the case of the later, these strategies assume that
after a BOM explosion, the dependent demand on components becomes fairly accurate. In other words,
while the finished good item mix might not be accurately forecastable, the forecast error will diminish to an
acceptable level for the fewer, major components that go into the finished good. Manufacturing stability in the
final operation must be of lesser importance. These strategies do still require finished goods forecasts if the
Planning Run is to create Dependent Demand on lower level assemblies in the Bill of Material. Alternately,
the components could be forecasted separately which would eliminate the need to forecast the finished item.Planned Orders for finished goods resulting from forecasts are not used to determine Finishing / Packaging
manufacturing schedules.
The assemblies are produced or procured before the creation of the sales order. Production is not carried out
for finished product level. Instead, the material is produced up to one level below the finished product level and
the assemblies and components required for producing the finished product are placed in stock to await the
incoming sales order. Final assembly is then triggered by the incoming sales order.
Typically, Planned Independent Requirements are entered at finished product level. The system creates
special planned orders at the finished product level for these planned independent requirements that are
only relevant for production in finishing once a sales order for the finished product is booked. These Planned
Independent Requirements can trigger the production and procurement of all the lower levels of the finished
product. Lower level materials must have the Individual / Collective Requirements field (MRP2 screen of
Material Master) set to Collective for dependent demand to be generated on them. In either case, when Sales
Orders are booked for finished product, dependent demand will be created for lower level materials after a
Planning Run. After dependent demand is created for lower level materials, the Planning Run will then create
manufacturing orders for these materials.
These strategies provide even less manufacturing stability in finishing / packaging than Planning Strategy 40.
Manufacturing of the finished product occurs only when a Customer Order exists. Unlike other strategies that
delay making assemblies until receipt of a sales order, this strategy will trigger the stocking of assemblies prior
![Page 11: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/11.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 11/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
11
to sales order receipt since forecasts for the finished good are allowable. It is therefore very useful when the
lead time for assembly manufacturing is longer than customer wait time and finished good stock is not desired.
Final Assembly lead time must be shorter than customer wait time otherwise a make-to-stock strategy is the
only strategy that will protect customer service.
The Availability Check performed as a Sales Order is posted can only be a Planned Independent Requirement
check of the finished good. The differences between the several strategies are combinations of how costs are
settled, the degree with which configuration of the Sales Order (for a configurable material) is required, and
Availability Checking.
Strategy Cost Settlement Sales Order Configuration Availability Check
50 to Sales Order not allowed no
51 to Sales Order not allowed yes
52 to Stock not allowed no
54 to Sales Order mandatory no
55 to Stock allowed no
56 to Sales Order allowed no
Choose this strategy if
The finished item can be forecasted across a horizon that supports finishing manufacturing and component
planning (if not forecasted, provisions must be made to provide demand visibility for lower level components
and finishing capacity planning)
Customer service objectives cannot be achieved given the demonstrated forecast accuracy and the finished
goods inventory investment permissible, therefore if customer orders exceed forecasts, they are used
Finishing manufacturing is flexible enough (material, labor, and capacity) to react quickly to surges in customer
orders that exceed forecasts
Finishing manufacturing is flexible enough (material, labor, and capacity) to react quickly to softness in
customer orders that fall short of forecasts
![Page 12: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/12.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 12/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
12
Manufacturing stability in the finishing / packaging operation is less important than an unplanned build of
finished goods inventory or ignoring surges n customer orders during under and over under selling periods
Planning with Planning Material (60/61/63/65)
These planning strategies are particularly useful for planning BOMs that contain variant as well as common
parts. Here, the common parts are planned using the BOM of a so called "planning material". In this instance,
the planning material is used purely for planning purposes. It is not actually produced itself but is used to hold
a forecast and pass on the dependent requirements to the common parts. The variant parts can be planned
using the strategy "Planning at assembly level" or another planning technique. The advantage of planning with
a planning material is that you can plan all the common parts included in several finished products together.
You must create a separate Material Master record for the planning material. You must enter the planning
material in the Material Master record (MRP 3 screen) of all finished products that are to be planned using one
of these planning strategies. The finished products and the planning material are also assigned the strategy
"Planning with planning material" in the Material Master record.
Planned Independent Requirements are entered for the planning material and not for the finished product. In
the planning run, the Planned Independent Requirements of the planning material trigger the production and
procurement of the components of the planning material. As the planning material is not actually produced
itself, the system automatically creates a separate planning segment, "Planning without assembly" in the
planning run. The planned orders created for the planning material in the planning run are given the order
type "VP" and cannot be converted. However, these planned orders pass on dependent requirements to the
components and assemblies which are then produced and procured. Sales orders for the finished product
consume the planned independent requirements of the planning material. The availability check is based on
this consumption.
Assemblies and components that are maintained in the BOM of the finished product and that are not contained
in the BOM of the planning material are only planned once a sales order exists. The differences between the
several strategies are combinations of how costs are settled and the degree with which configuration of the
Sales Order (for a configurable material) is required.
![Page 13: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/13.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 13/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
13
Strategy Cost Settlement Sales Order Configuration
60 to Sales Order not allowed
61 to Sales Order (different account
assignment category)
not allowed
63 to Stock not allowed
65 to Sales Order allowed
Choose this strategy if
Forecasting will not be performed for finished materials, but rather for a planning material
An availability check is required relative to the planning material forecast
Another strategy should still be chosen for the variant parts.
Planning at Assembly Level (70) / Planning at Phantom Assembly Level (59)
This Planning Strategy combines features of previously defined strategies and is specific to non- finished items.
This strategy fit's best where it is desired to delay manufacture of the finished good until Customer Order
receipt but components need to manufacture in advance of this time, like Strategy 50. Unlike Strategy 50, thisstrategy moves the point of forecasting from finished good to key assembly. This strategy therefore, does not
apply to a finished good. When using this strategy on an assembly, several strategies could be used for the
finished good.
![Page 14: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/14.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 14/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
14
This strategy should be used on assemblies when finished goods cannot or should not be forecasted. Finished
item forecast accuracy or forecasting cost could drive a decision to use this strategy. Consideration needs
to be given to finished good planning strategies and other materials that are not part of the manufacturing
BOM of the assembly being forecasted. Additionally, a method for the planning of finishing capacity needs to
be developed. The optional materials need to be quickly available since they might have the same demand
horizon as the finished good (i.e. short). That being receipt of Sales order. Several strategies would be
available for the options when using strategy 70 on a major assembly. Instead of a planning strategy, Forecast
Based Planning or Order Point functionality (MRP Types) within SAP could be used for these optional
materials.
As Sales Orders are booked, and after the next Planning Run, dependent demands result on the major
assembly. These dependent demands consume the forecasts. If the dependent demands exceed the
forecasts, they will be used otherwise the forecasts will be used. This strategy will provide some stability for
the major assembly. If sales are soft, we will still build assemblies based on the forecast (i.e. stability) howeverif sales are strong we will build more than the forecast (i.e. customer service more important than stability).
The Mixed MRP field on the MRP2 screen of the Material Master must be set to Assembly Planning for this
strategy.
Planning Strategy 59 behaves very similarly to strategy 70. The difference being that instead of forecasting
a major assembly, a phantom material could instead be forecasted. This material would sit directly below
the finished good in the BOM and would have buildable components below it. These components would be
produced like a kit. All components would receive dependent demand. An application of this planning strategy
would be to plan both the major assembly and the variant / optional parts (using planning factors) from a single
forecast. Restructuring the BOM would be necessary for this application. As stated above, there are other
ways to plan the variant / optional parts (i.e. forecast- based planning or re-order point planning) if planning
factors cannot be derived for the variants / options.
Choose this strategy for components if
Forecasting will not be performed for finished materials, but rather at the assembly level
An availability check is not required relative to the component forecast
![Page 15: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/15.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 15/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
15
Another strategy should still be chosen for the finished materials from the recommendations above.
3. COMBINING PLANNING STRATEGIES
Many combinations of Strategies within a BOM are possible. Typically at least one level of the BOM requires
a forecast so selection of a strategy should make sense from the perspective of the entire BOM. Below I will
outline some of the more widely applicable combinations.
Finished Good Strategy Components Strategy
10 or 11 None for all components
10 or 11 (short range) 70 for major assembly
80 (assemble to order) None for all components
20's 20's for the MTO components
30 None
40 None
50 None
50 70 for major assembly
50 59 for phantom assembly
60's 60's for Planning Material
70 for materials not in BOM of planning material
60's 60's for Planning Material
none for materials not in BOM of planning material
(i.e. re-order point)
![Page 16: Appropriate Selection of Planning Strategies](https://reader031.vdocument.in/reader031/viewer/2022022418/577cd8ac1a28ab9e78a1b7d0/html5/thumbnails/16.jpg)
7/29/2019 Appropriate Selection of Planning Strategies
http://slidepdf.com/reader/full/appropriate-selection-of-planning-strategies 16/16
Appropriate selection of Planning Strategies
Generated by Jive on 2013-09-09+02:00
As a final note, several other methods exist within SAP that will determine a materials' demand and or trigger
production that are independent of Planning Strategies. These methods do not rely on forecasts nor customer
orders. They are Consumption Planning, ReOrder Point Planning, and KanBan.
Assumptions/Comments:
People will be impacted by the Planning Strategies chosen.
The Planning Strategy will determine how the forecasting process will take place (if at all) and how many
materials require a forecast.
The Planning Strategy will determine how responsive manufacturing planning and scheduling must be.
The Planning Strategy will influence manufacturing order quantity and the degree with which strategic safety
stocks must exist throughout the Supply Chain.
The Planning Strategy will influence manufacturing schedule stability.
The Planning Strategy will affect customer response time and therefore the people dealing with our customers.