Planning at client level for raw materials

[former_member222161]

HI all,

I've several plants under one company code, sometimes same raw materials are used to produce finished products in various plants. Here, we are using central purchasing department to procure the raw materials.

For instance, in plant 1000, the user from purchase department raises a purchase requisition for ' X ' component to produce the finished product, and same ' X ' component exist in the BOM of finished Product in plant 2000, for which stock exists in plant 2000 and is a high value component.

The issue here is the purchase planner in the central purchasing department is not aware of the stock which exists in plant 2000, and raises a purchase order for the requisition generated from plant 1000.i.e If the purchase planner could check the stock in plant 2000, this enables him to generate STO for plant 1000 from plant 2000, which save the inventory costs.

I would like to know, whether this issue can be mapped in APO.

Any help, much appreciated.

Thanks & Regards,

[Former Member]

Hi Rajesh,

Of course. Your requirement is possible in SNP. For that, you can use SNP Optimisation techniques wherein if you maintain cost levels at both plants, system while planning does cross plant planning and calculates cost at both procurement cost, production cost, and if stock already exists since that can be served at the minimum cost, it puts up purchase requisition.

Hope this answers your query.

Please confirm.

Regards

R. Senthil Mareeswaran.

[Former Member]

Hi Rajesh,

In APO, there is functionality called Quotas wherein you can define the items which are sourced from one or more locations. If it is drawn from one single location you can define quota as 100%. If the same is from two locations, then for that item you can define 50% to each location. Like that you can customize your quotas.

During planning run, depending on the stock positions, based on the requirements, the system created purchase requisitions as per your requirement.

This functionality is available in Supply Network Planning in APO.

Hope this answers your query.

Please confirm.

Regards

R. Senthil Mareeswaran.

[former_member222161]

Hi Senthil,

Thanks for your instant reply, this solves my problem partially. However, if i use quota arrangements for sourcing locations, system always proposes the requisitions according to the quota arrangement %.

As per my requirement, when i plan at client level, for instance, for plant 1000, if the stock exits for raw materials in plant 1000, the system should propose the stock from plant 1000, and whenever, if stock doesn't exist in 1000, and if it exists in some other plant, say 2000. The sytem should automatically propose the plant 2000 as issuing plant for plant 1000.

Is this possible in APO - SNP

Thanks & Regards,

Rajesh

[nitin_thatte]

Hi,

The solution given by Senthil is the exact solution. However you cannot use it if the stock transfer is to happen both ways. This is because it gives rise to circular planning.

If both plants are going to look at other plant for same material, system does not know what to do.

You have transportation lane from 1000 to 2000 for material X and also from 2000 to 1000 for same material. System will not be able to determine low level code.

However if the stock is to be transferred only one way, Senthil's solution with SNP optimiser will work. I have myself done it at one site.

Bye.

Nitin

[former_member222161]

Hi

when I'm planning at clent level, raw material shortage exists for one plant, and raw material stock is available in several plants ( for instance, more than two). Could you please clarify me that the proposed solution through SNP would work. I mean the sytem should propose/select automatically issusing plant from the list of available plants (in which the stock exists) based on minimum cost (transportation or some other procurement lead time factors)

Thanks & Regards

Rajesh

[Former Member]

Hi Rajesh,

You can actually just do the whole thing in SNP Heuristics. While Optimizer is capable of giving you better solution, I suggest trying Heuristics first as it is simple and inexpensive compared to Optimizer.

Here is the suggested solution:

You have plants 1000, 2000 and 3000 and you have a DC "DCA" ( your procuring department)

When there is a requirement at DCA, you want to check the stock in 1000 first than in 2000 and then fianlly in 3000.

Set your material with procurement type E in plant and F at the DC

Create transportation lanes between

DCA-1000 with transportation time say 2 Hrs ( in means of transport)

DCA-2000 with transportation time say 3 Hrs ( in means of transport)

DCA-3000 with transportation time say 5 Hrs ( in means of transport)

When you run SNP location heuristics, the system checks the plant with shortest transportation time and takes 1000, if not found it tries 2000 and finally 3000 to create a stock transfer.

Please remember that transportation lanes are always one way and APO does not support the flow in opposite direction line 1000 to DC is supported but not DC to 1000. This stock transfer has to be manually created in ECC system.

Please let me know if I got your scenario right.