Question on SSP in context of Multiechelon IO

[srinivas_krishnamoorthy]

Folks

I need to do some comparative study on what SAP has to offer as part of extended Safety stock planning (that uses leadtime variabilities & errors from a demand and supply perspective) using service levels. Does the functionality equal that of multi-echelon Inventory optimization tools such as Optiant and to some extent i2 ? My understanding based on how SAP SSP works was that it takes only one location product parameters to arrive at SS levels for that location product. It does not seem to account for variabilities in network for that product. Is this a correct understanding?

Also there are two places to enter forecast errors - one in the Location Product master and the other at the variant level of SSP. It looks that though both paramters seems equivalent it takes both the values while doing the calculation. Can someone help in demystifying this calculation?

thanks

srinivas

[Former Member · Accepted solution]

As of 7.0 I don't think SPP can be said to have multi-echelon capability. The test of multi-echelon capability is whether the inventory at different locations is managed as a "pool." The vast majority of advanced planning systems do not do this, but treat each location almost as if it is an internal customer to the rest. This, combined with the practice of setting different service levels at product locations, means that each service level is maintained separately, which has a lot of implications for attempting to set service level at the overall supply network level, or by customer.

For an extensive practical rundown on mulitechelon, see this post.

http://spplan.org/2009/11/02/multiechelon-inventory-optimization-defined/