Automatic Safety Stock calculation based on Forecasted demand

[Former Member]

Hi everyone,

I am a relatively new SC professional with limited experience with SAP.

I work in a company and we want to start setting Safety stocks automatically for some of the raw materials (components).

The problem is that there are no historical forecasts stored in the system. Thus, it is not possible to have the SS calculated based on Forecast error.

Now we are using a "textbook" formula and feed the results once a month to the system:

SS= SafetyFactor * StDev(Forecasted Demand) *Sqrt(Leadtime).

We use an Horizon of 6 months in the future to calculate the StDev(forecasted Demand)

Is there any way in APO that we can do this automatically?

"additional safety stock" seems to offer a solution which seems similar to what we are seeking but I am not sure.

Thank you in advance.

[Former Member]

Hello George,

Very much well placed requirement. You can directly write this formula (macro) to a new key figure. You can further influence that in what ever way you want with another macro if the result is not very appealing...e.g. some smoothing factor.

Alternatively you can advance the requirements in a manner such that supplies (component procurement orders) are planned for sooner than when you need it (this may not always be accurate and behave as desired) or else have days supply based factor to add to the demand forecast based on consumption. You can have a macro that can dynamically can estimate the safety stock everytime you have a bit of history available. Hope this helps. nothing but the sort of arithmetic that speadsheets provide. There could be host of work arounds in APO e..g receipts pre-ponement.. releasing them earlier than the proposed dates to achive some or all of the objectives.

Regards,

Loknath

[Former Member]

Hi George,

There are two ways to do Safety Stock planning in APO, one is the Simple Safety Stock calculation and the other is Advanced Safety Stock Calculation.Sice you are saying that there is not much History available doing Advanced Safety Stock Planning is not advicable.

Hence the best way to go about doing Safety Stock Plannng is define the Safety days of Supply in the SNP.

This would trigger the system to plan for the future requirments based on what you have specified. FOr example if you define Safety days of Supply as 10 days then system would ensure that the stocks at the DC or Plant carry stocks to meet the next 10 days requirement for which it will generate Plannede Orders in case of deficit.

Trust this gives you a bit of insight into Safety Stock Planning in APO.

I would suggest that you go through Safety Stock Planning in details in http://help.sap.com/

Thanks,

Harsh