SAP F & R: Order Creation Process. Part 2
Hi, Habr! In the last article, we stopped at the “Calculation of Needs” block. Brief reminder: SAP F & R - demand forecasting and inventory management system at the level of target location-location provider. The system is part of the SAP SCM (Supply Chain Management) solution and is implemented in two variations:
All the functionality of SAP F & R is divided into 4 main blocks:
At the entrance to SAP F & R, sales data is presented in terms of product-location, history of balances, product and supplier master data, predefined delivery schedules and some tuning parameters that allow the system to function efficiently in accordance with the retailer's business.
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As a result of the work of the forecast calculation module, an average forecast is formed - such a value of goods on location that with a probability of 50% will satisfy the demand of customers in the store, or, in other words, will ensure the level of customer service = 50%.
In order to avoid lost sales, the target level of customer service, as a rule, is planned to be not lower than 95%. This means that in 95 cases out of 100 the customer will buy what he planned in the store. Ensuring a high level of service in SAP F & R is made by means of an insurance premium to the average forecast, which depends not only on the target level of service, but also on the variability of past values of sales of goods. Thus, a maximum sales forecast is formed in the system, the volume of which will be sufficient to minimize stock in a warehouse or in a store (and, therefore, withdraw frozen capital in stocks) and meet the target level of customer service.
The system "thinks" periods of demand and stock. The stock period is the time from the order date to the availability date of this order. The demand period is the time from the availability date of the first order to the availability date of the second order. The system only calculates the demand for the first demand period in order to minimize inventory at the location. In case optimization is used, the system “climbs” in the next periods of demand on a given optimization horizon. In this case, in the next demand period, the order will be reduced by the quantity that the system borrows from this order to optimize the previous one.
The need for a system is calculated by the formula:
Need = Predicted quantity of goods + presentation (minimum) stock (or stock on the shelf) + dynamic safety stock.
SAP F & R automatically calculates the varying safety stock. In the terminology of the system, such an insurance stock is called dynamic. The amount of safety stock depends on two values:
• Variability of the time series of sales history.
The greater the variability, the greater will be the volume of safety stock.
As a result of calculating the safety stock, we see the following schedule:
Blue line - the average forecast. The green line is the maximum sales forecast for the product. The maximum forecast is made up of the average forecast and the dynamically calculated safety stock. The figure shows the amount of safety stock at various levels of service: from 75 to 99. The maximum forecast is such a volume of goods that will satisfy demand with a given probability (= level of service). To analyze the accuracy of the forecast “prediction-fact”, the values of the maximum forecast are used.
The order quantity in F & R is calculated by the formula:
Order = demand volume - (current stock + goods in transit) + logistic rounding volume.
Thus, the order quantity of the goods is calculated. Also, the function of preliminary distribution of goods is included in the order calculation block.
Pre-distribution is a function that provides a transfer of the forecast to previous weeks. This can be useful for reducing the load on the department of acceptance and logistics, for example, by the new year, when order volumes will certainly grow, and you need to make great efforts to ensure the availability of goods without a shortage. For this, some of the forecast for 52 or 51 weeks is postponed to previous weeks.
The following article is about order optimization in the SAP F & R system.
Read me:
» SAP F & R: Order Creation Process. Part 1
» Overview: SAP F & R today and tomorrow is the future of sales forecasting
»The Art of Forecasting in the SAP F & R System for Inventory Management
- SAP F & R SCM - implementation with seamless integration with SAP systems;
- SAP F & R OI - implementation with integration with non-SAP systems.
All the functionality of SAP F & R is divided into 4 main blocks:
- Input processing
- Forecast calculation
- Requirement calculation
- Needs optimization
At the entrance to SAP F & R, sales data is presented in terms of product-location, history of balances, product and supplier master data, predefined delivery schedules and some tuning parameters that allow the system to function efficiently in accordance with the retailer's business.
')
As a result of the work of the forecast calculation module, an average forecast is formed - such a value of goods on location that with a probability of 50% will satisfy the demand of customers in the store, or, in other words, will ensure the level of customer service = 50%.
In order to avoid lost sales, the target level of customer service, as a rule, is planned to be not lower than 95%. This means that in 95 cases out of 100 the customer will buy what he planned in the store. Ensuring a high level of service in SAP F & R is made by means of an insurance premium to the average forecast, which depends not only on the target level of service, but also on the variability of past values of sales of goods. Thus, a maximum sales forecast is formed in the system, the volume of which will be sufficient to minimize stock in a warehouse or in a store (and, therefore, withdraw frozen capital in stocks) and meet the target level of customer service.
Requirement calculation
The system "thinks" periods of demand and stock. The stock period is the time from the order date to the availability date of this order. The demand period is the time from the availability date of the first order to the availability date of the second order. The system only calculates the demand for the first demand period in order to minimize inventory at the location. In case optimization is used, the system “climbs” in the next periods of demand on a given optimization horizon. In this case, in the next demand period, the order will be reduced by the quantity that the system borrows from this order to optimize the previous one.
The need for a system is calculated by the formula:
Need = Predicted quantity of goods + presentation (minimum) stock (or stock on the shelf) + dynamic safety stock.
Dynamic safety stock
SAP F & R automatically calculates the varying safety stock. In the terminology of the system, such an insurance stock is called dynamic. The amount of safety stock depends on two values:
- Target level customer service.
The customer service level is set into the system manually by product groups (by any) or by sales class by turnover rate .
• Variability of the time series of sales history.
The greater the variability, the greater will be the volume of safety stock.
Maximum forecast
As a result of calculating the safety stock, we see the following schedule:
Blue line - the average forecast. The green line is the maximum sales forecast for the product. The maximum forecast is made up of the average forecast and the dynamically calculated safety stock. The figure shows the amount of safety stock at various levels of service: from 75 to 99. The maximum forecast is such a volume of goods that will satisfy demand with a given probability (= level of service). To analyze the accuracy of the forecast “prediction-fact”, the values of the maximum forecast are used.
Order quantity calculation
The order quantity in F & R is calculated by the formula:
Order = demand volume - (current stock + goods in transit) + logistic rounding volume.
Thus, the order quantity of the goods is calculated. Also, the function of preliminary distribution of goods is included in the order calculation block.
Preliminary distribution
Pre-distribution is a function that provides a transfer of the forecast to previous weeks. This can be useful for reducing the load on the department of acceptance and logistics, for example, by the new year, when order volumes will certainly grow, and you need to make great efforts to ensure the availability of goods without a shortage. For this, some of the forecast for 52 or 51 weeks is postponed to previous weeks.
The following article is about order optimization in the SAP F & R system.
Read me:
» SAP F & R: Order Creation Process. Part 1
» Overview: SAP F & R today and tomorrow is the future of sales forecasting
»The Art of Forecasting in the SAP F & R System for Inventory Management
Source: https://habr.com/ru/post/311342/
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