SCM_4_Lab_Forecast-based.doc

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Consumption-based Planning: Forecast-

based

SAP Username GBI-229 ________________________Name Ririn Hutagalung _________________

When consumption-based planning is configured using reorder-point planning,the SAP system creates a planned order or purchase requisition whenever theinventory level for the material falls below the reorder point, and the reorderpoint must be determined by the user. In addition to requiring the user todetermine the reorder point manually, the reorder point method will not performparticularly well when there is a change in the demand for the materialforexample if there is seasonal variation in the material demand, or demand for thematerial is increasing or decreasing over time. To address this problem,consumption-based planning can be configured to use forecasts of materialdemand to estimate consumption, and this estimated demand can be used tocreate planned orders.

2.1 Create Forecasting View for Raw Material

To use forecast-based planning, it is first necessary to create the forecastingview for the material. To do this, follow the menu path:

MenuPath

Logistics Production Master Data Material Master Material

Create (Special) Raw Material

Trans

Code

MMR1

Enter RAW-### for material and select Retail for Industry Sector then clickon Select view(s).The material RAW-### already exists, and we want to addthe Forecasting view for this material. In the SAP system, we do this bycreating the view rather than changing the material. When we enter RAW-### for material, the system will find this (existing) material, then create thenew views we select.

SCM Gasal 2012/2013Faculty of Computer Science University of Indonesia

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Select the Forecasting view, then click on enter icon ( ) and another pop-upwindow will appear. Enter DL00 for Plant, then click on enter icon ( ) and theSAP system will create a Forecasting view for your material:


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Click on Consumption vals


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Click on Consumption vals icon ( ), which will produce

the following screen:


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Note that usage of 330 raw materials

from the first consumption-based

planning exercise have been recorded.

Note that monthly data is being

recorded.


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Note that the use (consumption) of 330 raw materials from the firstconsumption-based planning exercise have been recorded. An advantage of anintegrated information system like SAP is that material usage is automaticallyrecorded for forecasting purposes.Note that the figure under Total consumption is presented with a grey

background. This figure is updated by the SAP system as material is issued. Asa result, SAP does not want the user to adjust this figure. However, inforecasting it is common to want to make an adjustment to historical salesfigures to produce a better forecast. It may be that sales were low in a particularperiod because of a random occurrence like bad weather. In this case, a betterforecast could probably be obtained by correcting the sales value that was lowdue to an event that was unlikely to occur in the future. To accommodate this,SAP provides a Corrected value column where the user can enter a value otherthan the actual usage (consumption) for forecasting purposes.

Click on the Main data icon ( ) icon to return to the Forecasting view.


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EnterJ forForecast model (automatic model

selection) and change the Period Indicator to

W (weekly), then click on the Enter icon


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Enter J for the Forecast model. This choice will let the SAP system select theforecasting model after it analyzes the historical data to determine whethertrend or seasonal patterns exist. Our consumption data is currently beingcollected on a monthly basis. This choice was made because of a default setting

on the MRP 2 view of the material master when we created the material in thefirst consumption-based planning exercise. Monthly data is probably not asufficiently small time increment for our purposes. Change the entry from M(monthly) to W (weekly) so that data is collected on a weekly basis. Click on theenter icon ( ), which will send these new values to the SAP server and producethe following message:

Click on the exclamation mark icon to get more information:

Messages with an exclamation mark ( ) are warnings, which means we can

ignore them if we choose. That doesnt mean that we arent making a mistake,but the SAP system will let us proceed. In this case, the warning message lets usknow that we are changing the time period for consumption data ANDconsumption data already exists. It also lets us know that we can correctconsumption valuesthat is, we can enter manually correct the consumptionvalues. Close the Performance Assistant, then click on the Consumption vals

icon ( ) again. This will produce another error message

about existing consumption values:


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Click on the exclamation mark icon

Read the error message, then

close the Performance Assistant


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Click on the enter icon ( ), which will take us back to the consumption valuesscreen, only this time we can enter values:


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The period gives the week

and year. The current

eriod is the first listed.

Enter the Total consumption values shown.


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Enter 10 weeks of Total consumption values as shown above, then click on thesave icon ( ).

2.2 Change Planning Method

To change from reorder-point planning to forecast-based planning, we need tochange planning parameters that were set on the MRP 1 view of the material.

To do this, follow the menu path:

MenuPath

Logistics Production Master Data Material Master Material

Change Immediately

TransCode

MM02


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Enter RAW-### for Material, then click on the Select view(s) icon (). This will produce the following pop-up window:

Select the MRP 1 view, then click on enter icon ( ) and another pop-up windowwill appear.

Enter DL00 for plant, then click on the enter icon and the MRP 1 view willappear:


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Select the MRP 1 view


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Change MRP type to VV,

then click on the enter icon


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We want to change the MRP Type from VB (Manual reorder point planning) to VV(Forecast-based planning). Enter VV in the MRP Type and click on the enter icon( ) and the following message will be displayed:

The warning message reminds us that the reorder-point is not used withforecast-based planning. While we could leave the value for the reorder-point inthe material master, it is a better practice to delete this value (Why? Do youagree?). Click on the save icon ( ) to save the change to the planning method.

2.3 Stock/Requirements List

We can review the status of our material by following the menu path:

MenuPath

Logistics Materials Management Inventory ManagementEnvironmentStock Stock/Requirements List

TransCode

MD04

The material we just created should be entered by default. If not, entermaterial RAW-### and plant DL00, then click on the enter icon ( ) and thefollowing screen will appear:


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Note the following information message at the bottom of the screen:

Because we want to use forecast-based planning, we need to have a forecast.

We will do that after we delete the existing purchase requisition so that we can


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Click on the detail icon for the Purchase Requisition


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clearly see how forecast-based planning works. Click on the detail icon ( ) forthe Purchase Requisition, which will produce the following pop-up window:

Click on the change icon ( ) to get the following screen:


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Click on the change icon

Click on the Item overview iconto open the Item overview panel


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If the item overview panel is not open, click on the Item overview icon ( ) to

open it:


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Select the row with the raw material, then click on the delete icon ( ). You

will get the following warning:

Click onYes, then click on the save icon ( ) and you will return to theStock/requirements list. Click on the refresh icon ( ) and the purchaserequisition will be removed.


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Click on the row selection icon, then click on the

delete icon to delete this purchase requisition

Select Yes


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2.4 Run Forecast

Leave the Stock/Requirements list open and create a new session by clicking onthe new session icon ( ). We will use the new session to generate a forecast forour material. To do this, follow the menu path:

MenuPath

Logistics Production Production Planning Materials ForecastForecast Individual Forecast Execute

TransCode

MP30

Enter RAW-### for Material and DL00 for Plant, then click on the enter icon (). This will produce the following screen:


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Click on the Execute icon ( ) to execute the forecast. This will produce the

following pop-up:


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Click on the Execute iconto execute the forecast

This screen shows us the forecast values that

were entered in the material master, and also

informs us that we dont have any forecast yet


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Dont worry about the Last forecast date. Click on the enter icon ( ) and theforecast results will be displayed:


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Dont worry about the date selection.

Click on the enter icon


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Click on the save icon ( ) to save these results.

Then switch to the Stock/Requirements list and click on the refresh icon ( ).The forecast demand for the material will now be displayed:


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Note that forecast

requirement for first week isadjusted based on time left

in the week


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2.4 Run MRP Planning

Now that the forecast has created demand for the material, we can generateplanned orders using the MRP process. To run the MRP planning process, switchto the other session and follow the menu path:

MenuPath

Logistics Production MRP Planning Single-Level,Single-Item

TransCode

MD03

This will call up the following screen:


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Select Display results before they are saved so we can see the planningresults immediately, then click on the enter icon ( ) and the following messagewill appear at the bottom of the screen:

Depending on the situation, production planning can take a lot of computer

resources, so SAP is just reminding you to make sure that you have everythingset correctly. Click on the enter icon ( ) a second time, and a screen verysimilar to the Stock/Requirements screen will be displayed:


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Use the default planning values, select

Display results before they are saved,

then click on the enter icon


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Click on the save icon ( ) to save these results, then switch to the

Stock/Requirements list and click on the refresh icon ( ).

With forecast-based planning, material requirements and production/purchaseorders are handled in essentially the same manner as finished products plannedusing MRP. Demand is forecast, then planned orders are generated to meet thisdemand.

Forecast-based planning can be made to run automatically by grouping allmaterials together that are planned using this method, then generating forecasts

and then running MRP for all materials in this group on a regular basis (e.g.weekly).


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Note that planned orders

have been created to keep

the available quantity

positive


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Print a copy of this Stock/Requirements List.Put you name on it, and hand it in.

Is there any situation in which this approach can not be used? Explain!

SCM Gasal 2012/2013 27

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SCM_4_Lab_Forecast-based.doc