Make or Buy decision using SNP heuristic

[Former Member]

For example, If the Material A has procurement type X (both in-house and external procurement) Can SNP heuristic make an automatic source determination with different procurement type based on the requirement date.

From what I know is that SNP heuristic makes a source determination within one procurement type i.e. either external procurement ( quota arrangement, procurement priority, costs) OR in-house production (based on PPM/PDS priority). But when the system is to choose from in-house(make) or external procurement (Buy) based on requirement date, Can SNP heuristic which considers infinite capacity accomplish this task?

Thnaks in advance.

[Former Member]

If the priorities and the costs are the same, in-house production takes precedence over external procurement

In the case of products that can be produced in-house and procured externally, the planning application can also define that either only sources for in-house production or only sources for external procurement are permitted

the selection of the SOS within this would also be dependant on your application you are running

if you run PPDS it would pick up the PDS or PPM and if you run SNP it would pick up Tlanes

also the criterion for choosing the SOS will be application specific. PPDs looks at on time delivery while SNP optimizers would look at costs

if you want to change this ... check if you can use BAdI /SAPAPO/PWB_SOS

[Former Member]

Thanks for your response. I tried it in the system and PPDS choses between external and in-house based in the procurement priority in PPM/PDS and Tlane, however SNP heuristic does not do this.

[srinivas_krishnamoorthy]

To my knowledge Heuristics will definitely not short a demand if it has an option to meet a demand from alternate means. Usually the preference to use internal resources (inhouse production) rather than external resources. I dont think heuristics can do any cost/priority based make vs buy decision though. However please give this a shot in your system by using procurement priorities in PPM and T Lanes after setting proc priority as X.

I would also suggest you to do a search on "make vs buy" or "make or buy" in this forum.

[Former Member]

Thanks for your response. I have tried this in my system and the system only picks the high priority automatically. It does not chose from in-house production and external procurement. With in in-house it chooses SOS with high priority or within external procurement it chooses SOS with high priority.