Scm235 en Col81 Fv Part a4

SCM235Planning with Capable-to-Match

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Participant HandbookCourse Version: 81Course Duration: 5 Day(s)Material Number: 50090917

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About This HandbookThis handbook is intended to complement the instructor-led presentation of thiscourse, and serve as a source of reference. It is not suitable for self-study.

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About This Handbook SCM235

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iv © 2009 SAP AG. All rights reserved. 2008

ContentsCourse Overview ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Course Goals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii

Unit 1: Overview of Planning in SCM/APO...... . . . . . . . . . . . . . . . . . . . . . 1Overview of Planning in SCM/APO... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Overview of Technical SCM Landscape ... . . . . . . . . . . . . . . . . . . . . . . . . 24Introduction to Capable-to-Match (CTM)... . . . . . . . . . . . . . . . . . . . . . . . . 36

Unit 2: Master Data in CTM ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Models and Versions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65The Location and Product Master in CTM.... . . . . . . . . . . . . . . . . . . . . . 78Transportation Lanes and Quota Arrangements in CTM ... . . . .103Procurement Relationships in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . .123Resources in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127PDS/PPM in CTM.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148

Unit 3: The CTM Planning Scope..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173Master Data Selection .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174Order Selection.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194CTM Planning Horizon .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210

Unit 4: CTM Planning Results Analysis ..... . . . . . . . . . . . . . . . . . . . . . . 231CTM Evaluation Tools .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232

Unit 5: CTM Planning Strategies ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259Pegging in SCM.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .260CTM Planning Strategies Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .282CTM Planning Strategies Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310CTM Special Planning Strategies... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .348

Unit 6: CTM Demand Aggregation ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373Time Based CTM Aggregation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .374

Unit 7: CTM Demand Prioritization ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397Demand Prioritization... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398

2008 © 2009 SAP AG. All rights reserved. v

Contents SCM235

Unit 8: CTM Supply Categorization/Search Strategy ..... . . . . . . 433Supply Categorization .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .434

Unit 9: CTM Planning Engine Algorithm...... . . . . . . . . . . . . . . . . . . . . . 469Introduction To The CTM Algorithm ... . . . . . . . . . . . . . . . . . . . . . . . . . . . .471PPM Selection.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .483Using Quota Arrangements in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . .504Scheduling in CTM... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526Managing Lateness in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .561

Unit 10: CTM Inventory Control Methods ... .. . . . . . . . . . . . . . . . . . . . . 603Safety Days Supply.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .605Safety Stock Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .627Restricting Early Demand Fulfillment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .656Push Deployment with Supply Distribution .. . . . . . . . . . . . . . . . . . . . . .679

Unit 11: CTM Advanced Planning Methods ..... . . . . . . . . . . . . . . . . . . 689Rules Based Substitution in CTM... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .690Product Interchangeability in CTM.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .710

Unit 12: Appendix (Self Study).... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735Subcontracting in CTM... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .736Planning Strategies in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .744Descriptive Characteristics .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .757

Index ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771

vi © 2009 SAP AG. All rights reserved. 2008

Course OverviewThis course is designed to instruct individuals on how to set up, use, and evaluatethe Capable-to-Match (CTM) functionality within the SCM/APO solution.

Target AudienceThis course is intended for the following audiences:

� This course is intended for project team members and key users (personsfrom special departments) who are responsible for implementingCapable-to-Match for short-term or long-term solutions

Course PrerequisitesRequired Knowledge

� General understanding of how APO fits into Supply Chain Planning� Detailed understanding of Core Interface (CIF)� Detailed understanding of Master Data in APO� Thorough understanding of Production Planning Detail

Recommended Knowledge

� Thorough understanding of SCM Master Data� General understanding of planning concepts in SCM/APO

2008 © 2009 SAP AG. All rights reserved. vii

Course Overview SCM235

Course GoalsThis course will prepare you to:

� Explain how Capable-to-Match can be applied to your short or long termbusiness scenarios

� Present how Flexible Capable-to-Match can be in defining the scope of aspecific business problem(s)

� Demonstrate planning parameters and different affects on various businessscenarios

� Exhibit how Capable-to-Match can be used to prioritize different demandsfor a very robust solution

� Prove how controlling supply constraints can improve customer servicelevels

� Explain how robust the Capable-to-Match solver is by applying differentplanning parameters to various supply chain challenges

� Demonstrate how product interchangeability can improve a constrainedsupply chains service levels

� Certify how integration with Global Available to Promise can improve aconstrained supply chains service levels

� Prove how Capable-to-Match can be applied to aggregated prioritizedplanning for the long term

� Present how descriptive characteristics can be used to prioritize forecasts insupply planning

� Exhibit how Supply Distribution can complement the top down planningaspects of CTM with a bottom up application

Course ObjectivesAfter completing this course, you will be able to:

� Setup and Define a CTM Scenario� Identify and use different planning strategies to support planning with supply

constraints� Setup and execute demand prioritization and supply categorization� Apply Advanced planning techniques via the CTM profile settings� Execute a CTM scenario using Product Interchangeability� Execute a CTM scenario using GATP� Demonstrate Aggregate Planning with CTM� Apply CTM and Descriptive Characteristics to a supply constrained scenario� Show how Supply distribution can be applied a prioritized scenario. planning

from the bottom up

viii © 2009 SAP AG. All rights reserved. 2008

Unit 1Overview of Planning in SCM/APO

Unit OverviewThis unit is designed to introduce how CTM fits into the Supply Chain Planningwithin APO. To get a better understanding of how CTM fits into the APO solution,you will explore how the entire solution is designed to work as one seamlesstool to support planning a supply chain.

Unit ObjectivesAfter completing this unit, you will be able to:

� Understand how CTM fits into APO solution� Describe differences between CTM, SNP, and PPDS� Describe the general SCM landscape� Describe SCM integration components� Describe APO technical scenarios� Describe the general purpose of CTM� Identify differences and similarities between CTM and SNP-PPDS

Unit ContentsLesson: Overview of Planning in SCM/APO ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Lesson: Overview of Technical SCM Landscape ... . . . . . . . . . . . . . . . . . . . . . . . . . 24

Procedure: The SCM Integration process.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Procedure: The integrated Environment ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Procedure: Order Types ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Lesson: Introduction to Capable-to-Match (CTM) ... . . . . . . . . . . . . . . . . . . . . . . . . 36

2008 © 2009 SAP AG. All rights reserved. 1

Unit 1: Overview of Planning in SCM/APO SCM235

Lesson: Overview of Planning in SCM/APO

Lesson OverviewThis lesson will give you a high-level overview of where Capable to Match (CTM)can fit in the Supply Chain Planning process. Due to the unique nature of CTM,you will be introduced to all the planning elements of APO. CTM is essentiallyintegrated into all aspects of APO, and as a potential user, you must be aware howto position CTM as a potential solution.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Understand how CTM fits into APO solution� Describe differences between CTM, SNP, and PPDS

Business ExampleAs a supply planner living in a dynamically changing world, you must understandwhat planning tools are available to you and your company. In this lesson, youwill gain an understanding of how CTM fits into the APO fold, and be able tocompare CTM against SNP and PPDS.

Introduction�Supply Chain Management encompasses the planning and management of allactivities involved in sourcing and procurement, conversion, and all LogisticsManagement activities. Importantly, it also includes coordination and collaborationwith channel partners, which can be suppliers, intermediaries, third-party serviceproviders, and customers. In essence, Supply Chain Management integratessupply and demand management within across companies.� (Council of LogisticsManagement)


SCM235 Lesson: Overview of Planning in SCM/APO

Figure 1: Concept of Supply Chain Management

Objectives of Supply Chain Management

� Reduce the inventory levels along the supply chain� Reduce production / transportation time and costs� Increase service level and in-time demand fulfillment� Increase manufacturing throughput and resource utilization� Better return on assets

Using the SAP tools, ECC and SCM, your organization can begin to manageyour supply chain issues in detail, while benefiting from real time planning andexecution



Figure 2: Elements of Supply Chain Planning

The fundamental problem of Supply Chain Planning is that the delivery time ofproducts to customers is supposed to be substantially shorter than production timeor lead time. To be able to realize a short delivery time, a pre-planning procedureis carried out that predicts future customer requirements as planned independentrequirements. By using pre-planning, procurement is planned well in advanceand stocks or safety stocks are produced on component or finished-product levelin plants or distribution centers (DC) that, with good planning, enable a shortdelivery time to be realized.

You use what are called postponement strategies to define the extent to which thesales order penetrates the supply chain - in other words, the point at which thereis a departure from anonymous make-to-stock production (push strategies) andmake-to-order production (pull strategies).

Generally speaking, supply chain planning is divided into several steps, some ofwhich are executed by components in SAP ECC and others by components inSAP SCM. It is possible and advisable to integrate these two systems and use bothtogether when planning. System integration takes place using the CIF interface(CIF: Core Interface).



Figure 3: Process Steps in APO

APO can be broken down into different components. Each component has aspecific function to accomplish. While each component can be used separately, thefull benefit of APO will not be recognized until all components function together.

The Demand Planning (DP) tool was designed specifically to allow a business tomanage and predict future sales in dynamic environments. The goal is to create ademand plan, which the supply organization must respond to.

Supply Network Planning (SNP) was designed to perform two tasks, consolidateand generate a distribution and sourcing plan, and perform long term, rough-cutplanning. Using constraint-based planning tools, SNP will determine the optimalsourcing location and timing of replenishment against the demand plan.

Production Planning Detailed Scheduling (PPDS) is used to determine an detailedprocurement plan and an optimal execution schedule. This is done by performingconstraint based �planning� at the product/location level, then by performingoptimization on the production resources.

The Deployment (DEPL) process is designed to change the original SNP requestsbased on execution data and improvements to the production execution schedule.Thus confirming the planned stock transfer to the distribution centers. Deploymentwas designed to plan/change internal transfers.

Transport Load Builder (TLB) is designed to review the requests for a singlelocation/mode and compile all the stock transfer quests into a single stock transfergoing to a single point on a single shipment. This requires transportation lanesfor processing

Transportation Planning Vehicle Scheduling (TPVS) was designed to plan allshipments, inbound and outbound from any location.



Figure 4: APO Across the Horizon

The figure above is designed to give you some insight as to how the differentcomponents of APO can be applied across the supply chain and across time.Demand Planning is designed to create an internal requirement or forecast. This isto allow the supply chain to anticipate customer requirements and replenishmentPlanning pro-actively . The result of the DP process will be a Planned IndependentRequirement (PIR) or Forecast Requirement (FC-Rqmt)

Once the demand plan is released to the operations team, it will depend on masterdata to decide which tool will plan which location, and what part of the horizon.SNP was designed to plan the entire horizon for the distribution centers. It willconsolidate not only the forecasts, but also sales orders, to provide a singledemand to the plant to simplify and speed up planning. Some typically referto this process as Distribution Replenishment Planning (DRP). In addition toperforming the DRP task, SNP can be used at the manufacturing locations toperform rough-cut production and capacity planning. The output of SNP will beStock Transfer Requests (STR) or SNP: Plnd Ord.

PPDS is also controlled by master data and horizons. The tool actually has twoaspects of planning. The first step, Production Planning (PP) is to generatea product/location-specific production and purchasing plan, which is timedependent. This process will generate Plnd Ords and Purch. Reqs. The secondstep, Detailed Scheduling (DS), is to change the production plan into an executionschedule based on resource capacity and requirements dates. The results ofDetailed Scheduling can vary, but some examples are: Firmed Plnd Ords, CreatedProd./Proc. Ords. Purch. Ords.



The next step in the process is Production Execution. In other words, the actualprocessing of manufacturing orders (production orders or process orders) andpurchase orders which takes place in the ECC tool. This information will bepassed back to APO in real time, which can account for changes in the plan orthe schedule.

Once manufacturing has commenced and goods receipts are being recorded, theoriginal replenishment plan generated by SNP needs to be revisited. This step willbe performed by Deployment (DEPL). This is essentially a bottom up planningapproach. Deployment is going to acknowledge the SNP plan by either confirmingthe stock transfer request or changing it to a point in time where it can be coveredby the manufacturing schedule. The result of this step can be a Firmed STR,or a Stock Transfer Order (STO) depending upon whether or not transportationplanning will be performed in APO.

Upon completing the deployment process, Transport Load Building will begin.This is the process of consolidating the firmed STRs, into a single, multi-productstock transfer Order.

Demand Planning in APODemand Planning is a complex, powerful, and flexible tool that supports yourcompany's demand planning process. The result of the forecast usually takes theform of demand forecasts (planned independent requirements) at distributioncenter level or directly in production plants.

User-specific planning layouts of planning books enable you to include differentdepartments or even other enterprises in the forecasting process. With SAPSCM Demand Planning, you can use univariate forecasting methods andadvanced macro techniques to do the following: Create forecasts from thedemand history, based on a number of different causal factors; test predefined,and user-defined forecast models, and forecast results; use a consensus-basedapproach to consolidate the demand plans of different departments. You can useforecast corrections and promotions to take account of marketing intelligenceand management adjustments.



Figure 5: The Demand Planning Concept

The broad spectrum of functions in SAP SCM Demand Planning for statisticalforecasting and advanced macro techniques allows you to create forecasts basedon sales history as well as any number of causal factors, and use a consensus-basedapproach to consolidate the results.

Marketing intelligence and management corrections can be incorporated usingforecast overrides and sales promotions.

Aggregated actual data can be extracted from the SAP ECC system. Likewise,data can be imported from SAP BW, Excel or legacy systems.

Supply Network Planning in APO

Figure 6: Cross-Plant Planning



Cross-Plant Production ensures that medium to long-term planned independentrequirements and sales orders are covered by means of receipt elements such asstock transfers, planned orders and purchase requisitions. It is based, for example,on the requirements you have determined in Demand Planning for distributioncenters and determines how these requirements are met by distribution centers,production plants, and suppliers in your network. Cross-Plant Planning is carriedout using the component SAP SCM SNP (Supply Network Planning).

This type of planning can be executed finitely, which means that productionresources, storage resources, or transportation resources in your network can betaken into account even at this rough planning stage. Planning in SNP is basedon time buckets, that is, on the basis of freely defined time bucket profiles (thesmallest unit in SNP is one day). In terms of performance, this bucket-orientedplanning is much better than Detailed Scheduling in SAP SCM PP/DS and meansthat it is possible to plan even complex networks.

Network planning as part of Supply Network Planning comprises two steps: Inthe first step (the actual planning), stock transport requisitions are created tooptimize distribution and coverage of requirements in the network. For example,the requirements of one distribution center may best be covered by stock transfersfrom two production plants. The second step occurs after production in theproduction plants has been completed: Planning is executed as part of deployment.During deployment, stock transport requisitions are converted into deploymentstock transfers, based on the quantities actually produced. The deployment stocktransfer is then triggered.

Various planning and optimization methods can be used in SAP SCM SNP.

Production Planning Detailed Scheduling in APO

Figure 7: Goals of Production Planning and Detailed Scheduling

Production Planning is above all used for short-term planning with exact times inthe production plant (both for in-house production and external procurement).



Production planning covers requirements by generating planned orders (to planin-house production) as well as purchase requisitions or schedule lines (to planexternal procurement).

In contrast to medium-term planning in SAP SCM SNP, production planning inthe plant is detailed and, in particular, uses exact times. Exact production times forthe production of materials are therefore determined.

By using requirements strategies in SAP SCM, you determine which requirementsare to be included in the planning process and how requirement reduction isto be achieved. With make-to-stock production, only planned independentrequirements are taken into account during planning. In pure make-to-orderproduction, only sales orders are covered by the planning process and productionis customer-specific. There are also a range of mixed strategies whereby you canset offsetting for sales orders and planned independent requirements.

The production of a product can be planned in make-to-stock production wherethere are no customer-specific production requirements. Various requirementsstrategies are available for this situation. The production program is determinedin make-to-stock production using planned independent requirements, and, ifnecessary, using sales orders that already exist.

Sales orders can also be planned during make-to-stock production as part of aCapable-to-Promise check (CTP check). When a sales order is created, an ATPcheck is performed to determine whether the necessary procurement elementsexist. If necessary, a new procurement element is created and scheduled accordingto capacity. Possible delays (because of capacity overloads, for example) aredirectly reported to the sales order. In make-to-stock production, a CTP check isonly possible within the PP/DS horizon.

In make-to-order production, each sales order is planned in a separate segment.Since the PP/DS horizon plays no role in make-to-order production, the CTPcheck can be carried out without any time restrictions.

Make-to-order production strategies are only possible in PP/DS and not in SNP.

In addition to in-house production, external procurement can also be planned inSAP SCM. Automatic source determination (based on costs, for example) canalso take place. Scheduling agreement processing and subcontracting can alsobe depicted.

Materials requirements planning is the first step in detailed production planningwhich you perform within the PP/DS production horizon infinitely for each plant.

In material requirements planning within SAP SCM PP/DS, procurement datesfor the required assemblies and components are determined on the basis ofrequirements dates for the finished product (a sales order, for example).

Scheduling of procurement for in-house products is carried out on the basis ofrouting. A routing specifies which production operations need to be executed andhow long the individual operations last. To begin the production of the finished



product, the assemblies (from the bills of material) required for production mustbe available. Procurement of these assemblies must therefore be initiated earlier.In this way, assuming the dependent requirements date is the availability date, thesystem determines the basic order dates of the components by means of backwardscheduling using the in-house production time or planned delivery time.

In the subsequent detailed planning, production operations are dispatched for thenext shift or finitely for the next few days in the work center.

CTM in APO

Figure 8: Overview of the CTM Process

With Capable To Match (CTM) planning, you can execute multi-level, finiteplanning for the requirements of your supply chain. Unlike the optimizer ofSupply Network Planning (SNP), which determines the most cost-efficientsolution for satisfying all of the requirements selected, CTM planning uses aheuristic procedure. This means that CTM does not optimize according to costs.Instead, you can influence the sequence of the requirements and the choice ofprocurement alternatives using priorities. CTM planning does not consider theindividual production and distribution levels one after the other, as in the classicalMRP run. It handles them simultaneously. This ensures that CTM planninggenerates a timely, feasible plan.

Since CTM planning is order-oriented, you can determine and track the associatedreceipts and stocks on hand of every requirement across the entire supply chainusing pegging relationships after your CTM planning run. This also applies if youexecute bucket-oriented planning with CTM. Unlike Production and DetailedPlanning (PP / DS), which cover short term planning, CTM planning is targeted



towards mid- to long-term planning. Because of this, CTM planning does notsupport detailed scheduling strategies such as sequence-dependent setup activitiesor synchronizing multi-activity resources.

The CTM planning run compares prioritized requirements to available stocks andfeasible receipts. First, the CTM application model is generated on the basis of theuser-defined master data selection (location products, PPMs, and transportationlanes). The demands are then fulfilled across all plants with reference toproduction capacities, component availability, and transportation resources.

As in the SNP environment, the CTM planning run produces a medium-termproduction, distribution, and procurement plan. CTM complements thecross-location supply chain planning strategies of SNP. You use CTM to perform aquick check of production capacities and subcontracting component availabilitybased on a set of categorized supplies and prioritized demands.

Figure 9: The CTM Scenario



The above figure illustrates the determination of feasible receipts, in order tofulfill requirements in line with your priority. CTM checks for feasible receiptssuccessively. You can use rules to define the sequence of the checks. CTMaccepts the first feasible solution.

� Individual prioritized demands� Pegging of demands to receipts� Availability of production, handling, or transportation capacity� Storage capacity is not taken into consideration� Planning of alternative resources� Planning of supplier capacities� Component availability� Product interchangeability and FFF classes� Aggregated planning

CTM is an order-based planning method for individual demands that uses peggingto track orders back to the individual demand. By contrast, Supply NetworkPlanning is quantity-based and does not support order-based planning: After theoptimization or heuristic run, the system does not connect (or �peg�) demandand supply elements.

Figure 10: Determining the First Feasible Solution



CTM searches for the first feasible solution. In the above example, CTM searchesfor receipts of a sales order.

� Taking capacity into account, final assembly at the plant can be completedon time.

� Manufacturing components is not possible within the time specified. As aresult, you cannot manufacture the components.

� The components are available at another location and a stock transfer can bemade during the specified time. Orders are created according to this solution.

This search process considers valid sources for raw materials, components, andavailable capacities.

If the system encounters an infeasible situation during the search process, thesystem backtracks to the previous node and searches for alternative options. Thisprocess is repeated until a feasible solution is found or the system determinesthat no solution exists.

Deployment in APOThe deployment stage determines the best possible way of distributing theproduced or procured quantities of the plants to the distribution centers. Theresult of this is confirmed stock transfers.

Figure 11: Overview of the Planning Process



If the quantities actually produced and procured match the requirements of thedistribution centers, deployment confirms the stock transfers. If the availablequantities do not cover distribution demand, the system reduces the stock transfersand decides how much each distribution center gets.

The quantities of different products confirmed by deployment can be combinedinto stock transport orders by the Transport Load Builder (TLB).

Deployment and TLB confirm OLTP stock transport requisitions and can convertthese requisitions into SAP ECC stock transport orders or VMI sales orders.

Deployment and TLB are only used to confirm stock transfers. Other functionssuch as route planning, the selection of transportation service providers, andthe generation of deliveries and shipments in the OLTP system, are plannedin Transportation Planning and Vehicle Scheduling (TP/VS). You cannot usedeployment for stock transfers involving storage location MRP areas.

The deployment Heuristic calculates a replenishment plan for each productat a delivery location. If the available quantities are not sufficient to meet thedistribution requirements, the system determines the distribution plan based onfair share rules. If, by contrast, supply exceeds demand, push rules can be definedso that surpluses are assigned directly to the distribution centers. Fair share rulesand push rules are defined in the deployment profile.

Deployment optimization contains an overview of the receipts of the supplyinglocations and the requirements of the receiving locations. Deploymentoptimization can therefore calculate a replenishment plan for a product in thelocations of a network. If the available quantities are not sufficient to meetthe requirements, or supply exceeds demand, the system uses control costs todetermine an optimum distribution plan for the entire network.

The deployment heuristic uses different rules: fair share deployment and pushdeployment.

A fair share rule is used when an ATD quantity is lower than total demand. Thefair share rule determines how the shortage is processed in the network. If theATD quantity is higher than total demand, a push strategy can be used to preventstock on hand in the plant.

Transport Load Builder in APOWith the transport load builder (TLB), you can build shipments for determinedtransport means and ensure that the capacity of transport means is utilized to thepossible maximum. TLB planning prioritizes the following aims:

� Grouping of products for the same transportation planner� Time-based grouping: The TLB brings forward stock transfers within the

pull horizon and checks whether the quantity is already available.� Grouping of locations using transport zones



You can create transportation zones for the Transport Load Builder or transfer thetransportation zones from SAP ECC. With these transport zones, you can forexample, group your locations using the TZONE hierarchy (chooseMaster Data→ Hierarchy). Assign this hierarchy to your model. In Customizing in TP/VS,you can choose to maintain a transport-based hierarchy and assign the TLBapplication to your hierarchy. The TLB can now build deployment stock transfersfor several locations within one transportation zone.

Grouping ensures that:

� The minimum capacity of transport means is respected in terms of volume,weight, and pallet quantity

� The maximum capacity of transport means is not exceeded in terms ofvolume, weight, and pallet quantity

Load plans for stock transport orders that could not be satisfied during the TLBrun due to specified constraints must be built manually.

Hint: You can employ the TLB in SAP Inventory Collaboration Hub(SAP ICH) or in Supply Network Planning (SNP). In SAP ICH, additionalfunction features are available which are not included in SNP-TLB.

Figure 12: The Transport Load Builder

The system groups deployment stock transfers for individual products togetheruntil the TLB profile defined minimum values for volume, weight, and palletquantity for creating a load have been reached. If transportation recommendationscannot be converted, the system generates an alert and the planner can convert thetransfers manually. The Alert Monitor informs the planner about the exceptionalsituation that has arisen.



TLB groups planned stock transfers into practical freight units. If the TLB transferis for a Vendor-Managed Inventory (VMI) customer, the results are processed inthe SAP ECC system as sales orders. Otherwise, the result is a stock transport orderin the SAP ECC system. You can specify additional conditions for VMI customers.

In APO 3.1 and below, the Transport Load Builder could only create full palletswith the same product. In SCM 4.0, pallets can be loaded with several differentproducts (Global SNP Settings in Customizing).

Prioritization of Deployment Stock Transfers

You can distribute the deployment stock transfers by requirement type and assignpriorities. The transport priority that was assigned to the deployment stock transferis displayed in the TLB view in interactive SNP planning. The priority enablesyou to assess the relative importance of a stock transfer and use this informationwhen manually building the TLB shipments. The TLB run ignores the transportpriority. You can only implement prioritization for deployment stock transfersthat are not transferred at all or that are transferred as purchase requisitions toa connected OLTP system. Deployment stock transfers that are transferred aspurchase orders to the OLTP system cannot be processed using this function.Starting from SCM 4.0, you can prioritize deployment stock transfers according tothe following categories:

� Category 1: Stock transfers to cover current demands and shortfall quantities� Category 2: Stock transfers to cover demands based on a specified target

stock level� Category 3: Stock transfers that represent a delivery in excess of the target

stock level (overdelivery), for example, on the basis of the push rule

You carry out prioritization after deployment and before the TLB run with thetransaction /SAPAPO/DPLSPLIT, prioritize deployment stock transfer.

GATP in APOCompanies operating on a world-wide scale are driving the globalization ofavailable information. Information must cross system boundaries as quickly aspossible for optimal decision making. Global ATP can be used in heterogeneoussystem landscapes to provide necessary information as quickly as possible.

Global ATP contains the functions for the ATP check in the SAP SCM system.This includes transportation and shipment scheduling, which is carried out in theSAP SCM system. The ATP check � also known as the availability check � is anonline search which ensures that your company can provide a product in the timeand quantity requested by the customer.

The scenario in this unit is as follows: Deployment has confirmed stock transfers.Using these confirmed stock transfers, we will now carry out a global availabilitycheck for the SAP ECC customer orders in the distribution centers.



Figure 13: Global Available-to-Promise (Global ATP)

Global ATP in SAP SCM (APO) gathers information about product availabilityfrom the entire supply network. The likelihood of making a successfulcommitment and of having short delivery processing times varies depending on thecheck method used. Global ATP is highly integrated in all SAP APO applicationcomponents, thus ensuring that the ATP check requirements are fulfilled. Thisintegration can include the following: Demand Planning forecasts can be used asa basis for checks against sales orders when no supply plan exists, such as in amake-to-order environment. Supply network plans can be examined at alternativedistribution centers and plants, with the option of checking alternative products.Production Planning and Detailed Scheduling (PP/DS) plans can be examinedfor detailed production plans, and automatic planning can check if an additionalproduction plan can be scheduled for the requirement.



The basic methods of availability check include:

� Product availability check or availability check based on ATP quantities:The ATP (Available-to-Promise) quantity is calculated from warehousestock, planned receipts (production orders, purchase orders, planned orders,and so on), and planned issues (sales orders, deliveries, reservations, andso on). During this type of availability check, the system dynamicallychecks the stocks and planned goods movements for each operation � eitherwith or without using the replenishment lead time. Planned independentrequirements are not taken into account.

� Product allocation availability check: You can allocate materials using anycriteria. The availability check is successful if there is a product allocationfor the relevant period of an operation and this product allocation has not yetbeen consumed by other requirements. The check against product allocationsis used when supply is lower than demand to prevent one or more customersfrom buying the complete quotation quantity and other requirements notbeing satisfied.

� Forecast availability check: During the forecast check, the system checks aplanned independent requirement that was created for an anonymous market,and which is usually not customer-specific (for example, in the strategy'planning without final assembly', if production is only carried out to thestocking level). The planned independent requirement results from demandprogram management and is used for the non-order-specific planning ofexpected future sales quantities.

Business events are defined in the OLTP system and used in SAP SCM (APO).A business event identifies the type of operation that initiates the ATP check.Current business events available in the SAP ECC System include:

� Sales order� Production order (creation and release)� Delivery

The business event is transferred to the ATP check in SAP SCM (APO). In SAPAPO, the business event is used together with the other ATP settings to determinethe entire check rule control. The business event corresponds to the checking rulein SAP ECC and is transferred to SAP SCM (APO) using CIF.



The advanced availability check methods include:

� Combination of basic methods:

You can execute a check against product allocations, for example. You thencheck the resulting confirmed quantities against the relevant ATP quantitywithin the product availability check.

� Production (Capable-to-Promise):

CTP means calling Production Planning and Detailed Scheduling (PP/DS)during an ATP check. You can specify that PP/DS is called when therequested product is not completely available. This ensures that theremaining quantity is produced or procured externally. Unlike in themultilevel ATP check, PP/DS planned orders or purchase requisitions,which are visible and are taken into account during planning, alwaysresult immediately during the CTP process. A feasible planned order isdetermined in PP/DS from the result of scheduling these planned orders(taking capacities and the product availability into account). A confirmationcan then be made against this planned order.

� Production (multilevel ATP check):

The multilevel ATP check is used in production processes where a large partof the value-added activity occurs during final assembly. The assemblies onthe lower production levels are already produced or procured before the salesorder arrives. Final assembly is only started when a sales order arrives.The critical factor in production is component availability. In contrast toCapable-to-Promise (CTP), receipt elements are not created in the SAPSCM system order network during the multilevel ATP check. Instead, thecheck results are stored in the ATP tree structure. Receipt elements are onlygenerated later when the ATP tree structure is converted in PP/DS. Thisimproves performance during the check. However, statements about capacityavailability and scheduling cannot be as detailed as in CTP.

� Rules-based ATP check:

You use the rules-based ATP check with predefined rules to automaticallyor manually optimize the decision-making process between alternatives.If a product is not available, for example, you can check substitutes foravailability or you can check the availability of the original product in otherlocations. Another option within the framework of production would be toselect alternative PDSs/PPMs. These alternatives are stored in the masterdata (integrated rules or the master data for product interchangeability andlocation interchangeability) and are determined separately for each operation(condition technique).



Rules-based availability checking is an iterative process. The rules stored in thesystem and the corresponding check results determine the next steps for eachcase. Possible steps include:

� Product substitution� Location substitution� PPM substitution, if production is started

All subsequent checking steps span the three-dimensional area shown in theillustration above. You can move in any direction and combine any dimensions.For example, you may procure or substitute from an alternative location andproduce in another plant. The system stops the search once a check step has founda suitable check result (calculation profile). If no other setting is active, the systemsummarizes the results of each step until the requested quantity is reached. If SDis used in SAP ECC, subitems are generated in the corresponding sales order.

Hint: The rules-based ATP function in SAP SCM (APO) is currentlyonly supported by sales order processing in SD and within the multilevelATP check.

Transportation Planning / Vehicle SchedulingTPVS was designed to perform the following tasks: Dynamic Route Determination(Routing Guide). This is an interactive and powerful decision support tool thatis Integrated in Sales Order Promising for Sales Orders and Rush orders. TPVSnow supports Inter-Modal shipment planning with various strategies to simulaterealistic transportation plan. DRD can optimize routing and sequencing ofdeliveries, as well as resource utilization and minimize workload. Supports CrossDocking and Hub Selection Online Carrier Determination, considering freightcosts, priorities and business shares

In comparison to Transport Load Builder, which was designed to plan the internalsupply chain elements, TPVS was designed to specifically manage all aspects oftransportation planning. TPVS will not only consider outbound deliveries butcan also consider inbound deliveries as well. Unlike TLB, TPVS is designed towork at the order level. TPVS can be used to generate deliveries and shipments,as we well as convert stock transport requests to stock transport orders. This caneffectively remove the need for Transport Load Builder in some instances.

Transportation planning creates an optimized, executable transportation plan.Customers or suppliers can be grouped into transportation zones to reduce thecomplexity of TP/VS problems. The unbroken line is modeled and the brokenlines are generated by the optimizer. If a transportation zone is loaded withcustomers from ECC, an associated hierarchy is generated automatically. Duringthe TPVS planning process, deliveries can consolidated, orders can be split basedon resources, and route and vehicle scheduling performed.



Additional functions like carrier selection and optimization can be performed.This can be based on finding the carrier with the lowest costs based on ShippingPoint & Lanes Priorities, Business Shares and Allocations. The optimizer can usereal freight costs Means of Transport Hierarchy Collaborative Carrier Assignmentand Profile Maintenance

Once shipments are created TPVS can begin to tender those shipments to theappropriate carriers via a collaborative process. This process enables you to shareyour expectations based on your forecast to reduce needless tendering steps. UseCollaborative planning books to give your carrier access to a weekly and dailyoverview about your planned number of shipments you will assign to them.



Lesson Summary

You should now be able to:� Understand how CTM fits into APO solution� Describe differences between CTM, SNP, and PPDS



Lesson: Overview of Technical SCM Landscape

Lesson OverviewDue to the resource requirements of a sophisticated planning system, APO usesseveral different technical environments to support planning. In this lesson youwill be exposed at a high level to database scenarios designed within SCM/APO.


� Describe the general SCM landscape� Describe SCM integration components� Describe APO technical scenarios

Business ExampleAs a planner you will be required to plan for many different scenarios, both shortand long term. To understand how to utilize the tools in APO better, you need tounderstand how the underlying technical environment functions.

SCM ArchitectureSCM 5.1 is the version of the software component and SCM 2007 is the nameof the solution. .

A typical system landscape consists of one or more core ERP systems and oneSCM system. The core ERP systems send data to the SCM system and viceversa. For using collaboration, there may be an ITS Server related to the SCMsystem. The SCM system itself consists of the SCM DB, one or more applicationservers and additionally, in contrast to the well known core ERP systems, of thefollowing components: liveCache server and optimizers. LiveCache is a datamanagement system developed by SAP that combines the features of relationaland object-oriented databases, and resides in a very large main memory of aserver. Optimizers are used for optimizing transport routes or minimizing costs,for example.

LiveCache is designed to provide the highest levels of data managementperformance for data intensive applications. This is achieved by extending astandard relational DBMS (SAP DB) by main memory-based object-oriented datamanagement technology, which is accessible by several application servers. Theresult is a hybrid DBMS where the advantages of both data modeling styles can beutilized in their broad range; and relational as well as object data can be managedunder the control of the same transaction.


SCM235 Lesson: Overview of Technical SCM Landscape

SCM IntegrationIn the ECC System, you define the integration model that controls the transferof master and transaction data. You can find the menu option �Core InterfaceAdvanced Planner and Optimizer� (the �CIF menu�) under Logistics→ CentralFunctions→ Supply Chain Planning Interface.

The integration model distinguishes between master data and transaction data. Werecommend that you select the two types of data in separate integration modelsand then transfer them separately. In the integration model, you select the dataset(master or transaction data) that you want to transfer. You specify the following inthe integration model:

� The APO target system for the data transfer� The data objects you want to transfer

You can delete integration models that you no longer need. Note that you mustfirst deactivate these integration models.

Figure 14: SCM Integration Components

The master data that the system will transfer for the first time (initial transfer) fromthe ECC system into the APO system is defined in an integration model. The ECCsystem generates this integration model (transaction CFM1).

An integration model is uniquely defined by its name and application. It isuseful to create several integration models with the same name but as differentapplications. Ensure that the data pools of your integration models are generallynot too big. This enables you to handle errors more easily.



The target system that you specify in the integration model determines the SCMSystem that the master data is transferred into. The target system is a logical(APO) system that must have an RFC connection.

Finally, you use a particular integration model to specify which master data youwant the system to transfer. To do so, you first specify the master data types thatflow into the integration model. In the second step, you specify the selectioncriteria to be used for the selection of the individual master data documents inthe ECC System.

You complete the generation of the integration model by �executing� the model(this means that the data objects of the model are compiled) and then you save it.

To transfer data into APO, you must activate an integration model that haspreviously been generated. Activate an integration model with the �ActivateIntegration Model� transaction (transaction code CFM2) in the CIF.

It is useful to have several integration models active at a time.

Choose the Start function to trigger the data transfer into APO: The masterdata, or the equivalent of the ECC master data in APO, exists in the APOSystem. Basically, only the master data that was not available in any other activeintegration model is transferred again (delta comparison).

To be able to carry out the delta matching that was executed during activationof an integration model quickly, the system refers to the runtime version of theintegration models. The runtime version is formed in the background from allactive integration models, each with one object type and target system, formattedoptimally, and saved to the database. It is automatically updated during theactivation of new models. You can access the runtime version manually fromreport RCIFIMAX.

The initial data transfer usually runs in a particular order: the objects are selectedsuccessively, transferred to APO, and processed there in this sequence. Forimproved system performance, it is also possible to execute a parallel initial datatransfer: several integration models can be activated at the same time. Duringparallel processing, you can set whether to run the selection in ECC, the processingin APO, or both at the same time. Parallel processing takes place within an objecttype, whereas the different object types are still transferred in sequence.



Figure 15: ECC/APO Integration

Planning in SAP APO uses its own master data that is usually transferredautomatically from an ECC system, but which can also be created manually inSAP APO.

When master data is transferred from ECC, it is mapped onto correspondingmaster data in APO. Rather than transferring all the data from ERP, only masterdata relevant for planning in APO is transferred (firstly in the form of an initialtransfer, then later as change transfers).

SAP ECC is always the dominant system for master data. Only the settings thatcannot be transferred from the ECC System are maintained directly in APO.

The transaction data relevant for planning, such as warehouse stock and salesor production orders is also transferred from the ECC System into APO via theCIF interface. And vice versa, the results of the planning in APO are returned toECC via CIF and executed there. This integration of transaction data takes placein real time.



The SCM Integration process

1. In ECC, use Tcode CMF1.

2. Model name : SCM235, Logical system:APOCLNT800, APO Application:T-F1##.

3. Select the following indicators: Materials, PPM, Storage Location Stock,Sales Orders, Plnd Indp Rqmts, Plnd Ords, POs and Reqs, Prod. Ords.

4. In the section labeledGeneral Selection Options for Materials, Entermaterial T-F1## and Plant 1000.

5. Select Execute.

6. Select Generate Integration model, and enter through any messages.

7. In ECC, use Tcode /NCMF2.

8. Enter Model name : SCM235, Logical system:APOCLNT800, APOApplication: T-F1##, and select Execute.

9. Select T-F1##; then select the line that appears on the right side of screen.

10. Select Set to Active/Inactive, then select Start Activation.

11. APO menu path: APO→ Master Data→ Product→ Product.

12. Product T-F1## and Location 1000.

The APO Technical EnvironmentThe technical environment inside of SCM is one of a complex nature. Essentially,APO will be made up of three types of databases:

1. Multi-dimensional (BI)2. Relational (Master Data)3. Main Memory (liveCache)



Figure 16: The APO Technical Environment

The BI databases are integrated with both liveCache and ECC. In both instances,�Extractors� are delivered to pull data from the necessary tables for reportingpurposes. In the case of ECC, standard extractors are delivered as part of thePLUG-In technology in ECC. In SCM, extractors are delivered to access data inboth the relational tables (master data) and liveCache (transactional data).

The master data tables are populated by the CIF and normal user transactions.

The memory resident data base, liveCache, is broken up into at least four differentdatabase segments: Demand Planning, Global-Available-to-Promise, SNP, andPPDS.

The Demand Planning liveCache is very customized, due to the type and numberof characteristics and key figures an organization requires to model their demandplanning process. This process will periodically be backed up to BI and transferredonce a DP cycle is complete. Here, you generate your own customer extractorsfor BI integration.

When a DP cycle is complete, the data will be transferred to order-based liveCacheas an ATP Category FA � Forecast Rqmt. If Demand planning requires currentdata like sales orders or inventory, we can use SNP planning areas to aggregate thedata into key figures and then transfer it to demand planning. In reality, it transfersdirectly from order-based liveCache. Demand planning can also be used to planallocation quantities for GATP. This will typically require a different planning



area due to different characteristics. The data will then be transferred to a specialGATP time series for product allocation. The GATP data can then be passed upto DP to evaluate the progress of the allocation plan.

The CIF interfaces with only two of the four liveCache databases: Order based,and GATP. The transactional data that is passed through the CIF, funnels only tothe Order based liveCache. The ECC MRP elements will be mapped to ATPCategories in Order based liveCache. From there, it is instantly aggregated to theGATP time series where it is made available for the GATP integration models.The GATP time series is defined by Material/Location/ATP Category/SLOC.

SNP liveCache consists of two types of planning areas. The first is a DP-likestructure that will hold time dependent data like safety stock and optimizer costs.The other planning area is virtual. It will use ATP categories assigned to keyfigures to aggregate the order-based data. The data is aggregated only when aplanning book is used during interactive planning or mass processing. PlanningBooks are always used in SNP/DEPL/TLB. When SNP creates an order, it willactually be created in the order-based liveCache, but with an �SNP� order ATPCategory.

When master data is transferred via the CIF, it is entered into relation master datatables. The data is also assigned to a model/version and copied into liveCache.This allows the data to be readily available for the APO optimizers. BW willmake use of extractors that are delivered with the ECC plug-in. The extractorswill be used to transfer master data in ERP to BW characteristics. The �historical�transactional data will be passed to BI �data targets�, also known as InfoCubes.



The integrated Environment

1. ECC Tcode MD11. Create a planned order using Order type LA, for materialT-F100, plant 1000.

2. Enter a quantity of 10 pcs, and an order finish date of 30 days from currentdate.

3. Select Enter, and select Save.

4. APO menu path: APO→ Production Planning→ Interactive ProductionPlanning→ Product view

5. Enter Planning Version 000 , Product T-F100, and Location 1000. Thenselect Enter.

Hint: The result should be a planned order for 10 pieces delivering30 days from today.

7. APO menu path: APO→ Supply Network Planning→ Planning→Interactive Supply Network Planning

8. Select Selection Window.

9. ShowAPO Location Product, Choose APO Product and then selectT-F1##, and select Execute.

10. Double-click on T-F100/1000.

Hint: The result will be a quantity of 10 pieces in the weekly bucketapproximately 30 days from now.

12. Select the Cell, using the context menu, display details.

Hint: The result will be the same planned order previously viewedthrough the Product View (PPDS).



Order Categories

Figure 17: Order Categories in SCM

When using the term order types we must be very careful to first identify whatsoftware component we are talking about. When discussing order types in respectto the ECC system, we refer to how your company has chosen to control aparticular process. In ECC, there are sales order types:

� OR - Standard Order� RE - Return� RO - Rush Order

These particular order types are used to control the order fulfillment process.This would include the integration with accounts receivable, and inventorymanagement.

Within ECC, there are production order types:

� PP01 - Standard Stock order for Production Orders� PI01- Standard Stock order for Process Orders� PP04 - Make-to-Order (MTO) order for Production orders

These order types control how the internal manufacturing, costing and inventorymanagement functions occur in ECC.

Additionally, there are purchase order types:

� NB - Standard Purchase Order� UB - Stock Transfer



These order types control inventory management and accounts payable in ECC.

Note: The ECC order types have little effect in SCM/APO. Only in CTMand Back Order Processing (BOP) do order types have any affect on APO.In addition, the information will not be visible in APO.

Once these various MRP Elements are transferred to APO, they will be writtento the order-based liveCache tables in APO. Each MRP element has one or morecorresponding SAP/ATP Category in the order-based liveCache.

Note: You can access the translation of MRP types to SAP/ATPCategories by using the following menu path in SCM configuration:Advanced Planning and Optimization→ Global Available-to-Promise(Global ATP)→ General Settings→ Maintain Category

In addition to SAP/ATP Categories, there will be liveCache order types. Thesewill only be visible to the project team, since they are more of a technical objectand are not configurable. These will be used to determine how and when certainorders will be sent to ECC

Note: You can access a list of the liveCache order types by using thefollowing menu path Advanced Planning and Optimization→ APOAdministration→ Integration→ Publication→ Publish Orders . Reviewthe options for APO Publishing types

� 021 External Procurement� 026 Confirmation for Scheduling Agreement� 031 In-House Production� 033 Maintenance Work Package� 036 Project Order� 037 Maintenance Order� 051 Planned Independent Requirements� 053 Sales Order� 300 Production Campaign� 310 Planning File Entry (IS Automotive)� 330 Shipment� 340 Delivery� 350 Confirmation (IS Automotive)� 351 Confirmation of Deletions (IS Automotive)� 352 Reporting Points (IS Automotive)� 360 Reservations



Order Types

1. ECC Tcode MD04, Material T-F100, Plant 1000. Select Enter.

2. Review the details of the lone planned order.

Hint: Note the Order type in the lower right hand corner LA.

3. APO menu path:APO→ Production Planning→ Interactive ProductionPlanning→ Product view

4. Plng Version 0000, Product T-F100, Location 1000, select Enter.

5. Drill into the planned order.

Note: Notice no order type.

6. APO menu path:APO→ APO Administration→ Integration→ Publication→ Publish orders

7. Select the dropdown for APO Order Type.

8. APO Tcode SPRO, select Reference IMG.

9. APO Configuration menu path: APO→ GATP→ General Settings→Maintain Category

10. Drill into Category AI Plnd. Ord.



Lesson Summary

You should now be able to:� Describe the general SCM landscape� Describe SCM integration components� Describe APO technical scenarios



Lesson: Introduction to Capable-to-Match (CTM)

Lesson OverviewIn this lesson, we will introduce the general concept and positioning ofCapable-to-Match in the supply chain planning environment.


� Describe the general purpose of CTM� Identify differences and similarities between CTM and SNP-PPDS

Business ExampleYour company has identified the need for a constraint-based planning tool. Theyhave considered using Supply Network Planning and Production Planning/DetailedScheduling, however there are still some gaps that need to be filled. Due to itsunique nature, CTM might fill some of those gaps. In this lesson, you will beintroduced to the CTM algorithm at a very high level. In addition, you will seecomparisons between CTM and the other tools PPDS and SNP.

Concept of Capable-to-MatchCapable-to-Match (CTM) is a supply planning tool that has similar goals to thoseof Supply Network Planning (SNP) and Production Planning Detailed Scheduling(PPDS). The goal of CTM is to generate a replenishment plan considering yoursupply chain constraints. These constraints are typically related to operationsresource limitations (production handling and transportation), in addition tomaterial shortages or availability.


SCM235 Lesson: Introduction to Capable-to-Match (CTM)

Figure 18: CTM General Concept

Capable-to-Match (CTM) was initially designed a as planning solution for theSemi-Conductor/High Tech industry. In particular, this industry is constantlyfaced with supply shortages or demand constantly exceeding supply. Therefore,CTM is a production and inventory allocation planning tool.

CTM uses a Multilevel, Finite Heuristic. This �Top-Down� planning approachchecks the cross-location production and handling capacities, transport availabilityas well as available receipts. CTM does this on the basis of predefined supplycategories and demand priorities. The goal of CTM is to calculate a feasiblesolution for fulfilling all demands and �match� the demands to the availableprocurement alternatives. All alternatives are checked first for On Time Demandfulfilment before switching to Late Demand Fulfilment.



Figure 19: CTM Planning Process

The figure above depicts the process flow for planning with CTM. The first stepis to set up a series of configuration tables to set some standard parameters. Theparameters will be applied as global settings and will affect planning. Theseparameters can be found under in the menu pathTcode: SPRO→ SAP Ref.IMG→ Advanced Planning and Optimization→ Supply Chain Planning→Multi-Level Supply and Demand Matching→ Capable-to-Match→ GlobalValues and Default Values.

The second step will be a constant process of maintaining master data. Some of themaintenance will be managed by updates coming from ECC via the Core Interface(CIF), while other changes will be made by planners in the APO master data.

The third step will be to maintain a supply chain model. This again will besupported by the CIF and the user environment as constraints need to be increasedor relaxed as required. Depending upon the scenario, users may be planning inthe active model for short to midterm problems, or using a simulation modelfor long term considerations.

The next step is the CTM profile. This is where users will define the scope of theproblem or scenario, as well as the solution steps to be considered. A companycan have more than one profile depending upon the problems or scenarios theyare trying to solve. The profiles can be used repeatedly or in a single instancedepending upon the issues that need to be resolved. The profile can be adjusted asoften as the problem or solution requires alterations.



The next series of steps can be executed as often as required. These will beplanning steps that can happen as periodic as once a month, or as frequently as adaily process.

Figure 20: Introduction of CTM Logic

CTM will allow the user to alter the parameters with each run. As part of the CTMprocess, the users will define a sequence which will filter and sort the variousdemands/orders. CTM will approach the planning process on an order-by-orderbasis, solving only one order at time. The scenario above depicts several thingsthat play into the CTM Solve:

1. Demand has been sorted from highest to lowest priority (right side of graphic)2. Supply has been segregated and categorized (left side of graphic)3. Supply chain constraints and priorities have been identified (middle section

of graphic)

The approach the solver took with the first demand (solid line) was different thanthe approach with the second demand (dotted line). The solution for each demandused a different part of the supply chain and different levels of inventory.

As mentioned earlier the output of CTM will be controlled by the profile and thedefinition of the supply chain (Model). CTM will use the master data that willbe provided by ECC via the CIF and additional master data updated or created inAPO. In SCM master data is shared with other tools than just APO. Within APO,a new concept called a model is introduced. A model represents the master dataconstraints, and sourcing rules that the majority of the planning algorithms in APO



use. During the transfer of data from ECC, the CIF creates master data in modelindependent tables, then creates a reference to model 000. Model 000 is to beconsidered the active model in relation to SCM integration.

The model will consist of materials that will be planned in APO. Each materialwill exist in one or more locations, such as plants, distribution centers, customers,and suppliers/vendors. For items that are purchased, you can use the purchasinginfo records or scheduling agreements by transferring them from ECC. In the caseof manufacturing, you can transfer work centers, resources, production lines, billsof material, and task lists to define the necessary production processes. If itemsexist in more than one location, transportation lanes can be created in APO inorder to determine sourcing of replenishment shipments when necessary.

Figure 21: CTM Focus Area

When Planning with CTM, the scope of the planning process will not entail theentire supply chain. Since CTM is order-based, we will start the planning processat the top of the internal supply chain which will typically be the distributioncenter or the plant. Within the CTM profile, you will decide which master data isrelevant and which requirements CTM will be expected to plan against.

Note: CTM has some restrictions regarding sub-contracting scenarios,but this will be discussed in detail in a later unit.



CTM as Part of APOCTM is a supply planning tool with similar goals to SNP and PPDS. SNP has twosolvers, a heuristic and an Optimizer; Production Planning (PP) has 60+ heuristics,and Detailed Scheduling (DS) has 10+ heuristics and an optimizer - CTM only hasone planning engine. This engine however is very flexible in allowing users toalter the parameters to change the solution.

Figure 22: APO Across the Horizon

In the figure above, you see how the different components of APO �can � beapplied to a time horizon. Demand Planning is a highly customized solution tohelp an organization create a sales/demand plan. Demand Planning will work withall the supply planning tools in APO.

SNP by design was to be used at the distribution center (DC), the productionplants, and suppliers. SNP by nature is considered a rough cut planning tool.Within each Product/Location is a field called SNP Stock Transfer Horizon.This horizon controls the time period in which SNP can generate stock transferrequests. Oftentimes at the DC this will be set to ZERO. Now, at the DC, SNP willconsolidate all requirements into a time bucket (time aggregation) , and into keyfigures (quantity aggregation) to speed up planning. Therefore, SNP is an orderlessplanning tool, and thus the reason it was not designed to work with Make-to-Orderprocesses. At the Plant, the field SNP Production Horizon, instructs the systemwhen to start using SNP to plan the production and procurement process. This



section was designed to be a more traditional �rough-cut� planning tool. Here, youwill not only aggregate the demands but your business will simplify the bill ofmaterial and the task list to speed up the rough planning process.

By designating an SNP Production Horizon that is greater than zero, you aretypically relinquishing control to this period to PPDS. Like SNP, a field in theproduct master, called PPDS Horizon, will control how far from the currentdate and time PPDS can control the replenishment plan. PPDS, like CTM, isan order-based tool, but it typically does not look at order-related information(customer) to influence the planning result.

CTM is a unique tool, since it can be used anywhere on the planning horizon. Itcan be used across multiple horizons, since each CTM profile will define whichmaterials and what time horizons are to be considered.

Once the replenishment plan has been created, then tools like Deployment andTransport Load Builder can use the results of CTM to continue planning. Toolslike Transportation Planning/Vehicle Scheduling and Global-Available-to-Promisecan be influenced by the results of CTM, but not changed directly.

Figure 23: Planning Horizons in Replenishment Planning

Demand Planning (DP) enables you to predict customer demand by forecastinghistorical consumption data, for example. Demand Planning data is usuallybucket-oriented and unconstrained. Forecast data is then released as plannedindependent requirements.

Supply Network Planning is a bucket-oriented, medium-term, cross-plantplanning process that plans production outside of the SNP production horizon,and procurement outside of the stock transfer horizon.



Production Planning and Detailed Scheduling is used for short-term, order-basedplanning according to sequences and setup times within the PP/DS horizon. Theplanning run does not create any new orders within the planning time fence. Inthis way, production is not disrupted. The planning horizons of SNP and PP/DScan overlap if the SNP production horizon is smaller than the PP/DS horizon. Inthis horizon, SNP determines the receipts that have favorable sources of supplyand lot sizes. PP/DS plans the receipts created by SNP in more detail.

Note: CTM will use the horizons specified in the production master, but ina different way. CTM will use a Time Stream Profile to determine its startand stop period. The use of horizons will be discussed in another lesson.

Deployment and Transport Load Builder (TLB) are part of the SNP module andare used for short-term replenishment planning to adjust stock transfers accordingto short-term changes on both the demand and the receipt side.

Figure 24: Transition from Medium to Short-Term Planning

Network planning within SAP APO SNP takes place outside of the SNPproduction horizon. The start of the SNP production horizon is calculated byadding number of days in the product master to the current date. The calculation isin calendar days. In the PP/DS horizon, however, Production Planning/Detailed



Scheduling takes place, that is, detailed planning of procurement in a plant. ThePPDS horizon is calculated by using the current date and adding the PPDS horizonto it. It is calculated in calendar days.

Note: SNP starts AFTER the SNP horizon. PPDS Ends AT the PPDShorizon. It is possible, and also makes sense, that the two horizonsoverlap, and that the PP/DS horizon is behind the SNP production horizon.

SNP Planning is based on SNP bills of material and routings, most of whichare usually simplified production plans. SNP bills of material, for example,usually contain only the strategically important components for which foresightedplanning is necessary, whereas procurement of the remaining components is onlyplanned in plant-specific Detailed Scheduling. SNP planned orders that are basedon this simplified master data can be converted into planned orders in DetailedScheduling.

Pegging is the link between receipts and issues along the supply chain. Whenan order is shifted, all dependent orders can be adjusted automatically. Thisfunction is only available in Production Planning and Detailed Scheduling. SupplyNetwork Planning is based purely on quantities and buckets.

CTM is different in that the user will define what type of master data will beused (PPDS or SNP). Additionally the user can control what the results will be,PPDS or SNP, what type of planning order based or aggregate, will the results bedynamically pegged or fixed.

Caution: CTM does not perform sequencing when constructing a plan.This is due to the fact that the CTM algorithm solves one order at atime, and once a solution is found it is fixed and cannot be changed bya subsequent solve.

Comparison CTM to SNPSupply Network Planning, which you can carry out using the component APOSNP, usually takes place in the mid- to long-term horizon, that is, outside of theproduction horizon. This is based on the requirements that you have determinedfor the distribution centers in Demand Planning. These requirements shouldbe covered by the distribution centers, production plants and suppliers in yournetwork.

Planning can be executed finitely. In this way, the production, warehouse, ortransport resources of your network can already be taken into account in rough-cutplanning. In principle, planning in SNP takes place based on time buckets, thatis, on the basis of freely defined time bucket profiles (the smallest unit in SNPis one day). In terms of performance, this kind of bucket-oriented planning ismuch better than Detailed Scheduling in SAP APO PP/DS, so that planning ofmore complex networks is also possible.



Network planning within SNP takes place in two steps: During the first step, inthe actual planning, stock transfers are created to optimally distribute and meetthe requirements in the network. This means, for example, that the demands of adistribution center are partially met through stock transfer from two productionplants. After production has taken place in the production plants, a second stepis carried out: Execution of planning within deployment. In deployment, SNPplanned orders are converted into deployment orders, based on the quantitiesactually produced, and stock transfers are then triggered. In SAP APO SNP,different planning and optimization methods are available.

Figure 25: SNP Planning Process

During the supply planning process, a company has many options with APO. Onecommon thread is the use of demand planning to initiate a forecast process. Usinghistorical data typically extracted from ECC, APO DP will use statistical modelsto generate a forecast. Once the forecast is released to operations planning, yourcompany can use several different tools to support the long term rough cut or theshort term detailed planning. In all instances, the results can be transferred back toECC to be planned in more detail or executed.



Figure 26: Supply Planning - Basics

The SNP Heuristic performs requirements planning through the entire supplychain network to determine how to satisfy the customer and/or consumer demand.The supply chain is planned to meet customer service levels, while minimizinginventory levels and synchronizing the flow of material. The heuristic, based on arepair-based planning approach, efficiently plans complex distribution networksin multi-site production environments.

The SNP Optimizer considers material and resource availability simultaneously. Ituses linear programming to consider all relevant factors simultaneously as oneproblem. In other words, there is no sequential processing in the determination of asolution. The optimizer considers transportation, production, storage, and handlingcosts to propose a minimum cost solution that meets the respective constraints.

Capable to Match (CTM) matches a set of prioritized customer demands andforecasts to a set of categorized supplies considering the current productioncapacities and transportation capabilities in a multi-stage production environment,as in the semiconductor industry. CTM is based on constraint-based propagationtechniques and goal-oriented programming.



Figure 27: Comparison of SNP Planning Techniques

The SNP heuristic works one bucket at time combining all requirements intoone demand, one level at a time, from the top of the supply chain or BOMdownwards. This is what causes the assumption of materials to be created. Duringplanning, the finish good planned order is created first. During this process, theBOM is copied to the planned order, and causes dependent demand to be created.The dependent demand is not checked until all requirements at the top level areplanned throughout the entire horizon.

The SNP optimizer also plans one bucket at a time, however it will plan each typeof requirement separately (Sales order versus forecast requirement). Unlike theheuristics, it will consider all requirements simultaneously giving you a chance ata true network optimization plan.

CTM plans one requirement at time. If a planned order is created, the newdependent requirement created will be immediately checked. If a shortage occursat the dependent demand, CTM can begin planning that requirement. Ultimatelythis can cause a bottom up adjustment.



Figure 28: CTM versus SNP Optimizer

In this figure, we focus on finite/constraint planning and finding a feasible solutionfor the planning problem. Because of this, we do not include a comparison withthe SNP heuristic. Both CTM and the SNP optimizer simultaneously considerplanning constraints and calculate a feasible plan, whereas the SNP heuristicusually is a two-step approach of calculating a (possibly infeasible) plan and thenbalancing the violations of planning constraints (capacity constraints) by capacityleveling.

The SNP Optimizer looks for a solution of the entire problem within the definedsolution space. The optimizer will try to improve the solution by altering thestarting point during different iterations of the plan. In this case we allow amaximum time for the planning run to limit the number of improvements.

The CTM processes demand by demand and evaluates a solution tree. Eachdemand will be planned individually. If a branch of the tree is invalid, it will backup one level only. It only analyzes one level at a time. It will deliver a feasibleplan but not an optimal plan.



Figure 29: Linear Programing Example

A company manufactures hockey sticks and chess sets. Each hockey stick yieldsan incremental profit of $2 and each chess set $4 A hockey stick requires 4h ofprocessing at resource A and 2h at resource B A chess set requires 6h at resourceA, 6h at resource B. Resource A / B has a maximum of 120h / 72h of availablecapacity per day If the company�s target is to maximize profit, how many hockeysticks and chess sets should be produced?

Linear programming example - formulation:

A company manufactures hockey sticks and chess sets. Each hockey stick yieldsan incremental profit of $2 and each chess set $4 A hockey stick requires 4h ofprocessing at resource A and 2h at resource B A chess set requires 6h at resourceA, 6h at resource B. Resource A / B has a maximum of 120h / 72h of availablecapacity per day. If the company�s target is to maximize profit, how many hockeysticks and chess sets should be produced?

1. Identify decision variables:

� H � positive number of hockey sticks per day� C � positive number of chess boards per day

2. Identify constraints:

� Available capacity� Capacity consumption (See above)

3. Define objective function:

� Maximize daily profit: max { Z | Z = 2$ × H + 4$ × C }



Sin-gle/Multi-Level

Alt.Ext.Pro-cure-ment

Alt.In-HousePro-duction

AltModes

Plan-ning Pe-riods

Stabilityof Plan

Plan-ningScope

CapacityLeveling-Heuristic

Single1

No Yes3 No <= DataView6

Impor-tant8

Re-source-Local11

CapacityLeveling -Optimizer

Single1

No 2 Yes3 No <= DataView6

LessImpor-tant9

Re-source-Local11

Capable-to-Match

Multi Yes Yes4 Yes5 0 - 2years7

Impor-tant10

SupplyChain

SNPOptimizer

Multi Yes Yes No <= DataView

LessImpor-tant

SupplyChain

1 Only �multi-level� if the resource is used in several production/transportationsteps; otherwise it is single-level2 Alternative transports based on procurement priority or quotations. If externalprocurement is not possible, in-house production can be tried3 Procurement alternatives are considered only when the original source of supplybecomes invalid. PPM/PDS alternatives will be considered in SCM5.0 byprocurement priority in case there is an overload situation on the resource4 Alternative PPM/PDS selection based on procurement priority/quotation. Ifin-house production is not possible, external procurement can be tried5 Based on mode priority6 <= end of planning horizon of data view7 Usually planning horizon is between several months and 4 years, defined bythe time stream8 Works on existing plan, changes existing plan. The plan is stable if the resourceis not in a bottleneck situation. The overall supply quantity before and after thelevelling has to be the same9 Deletes existing plan, creates new plan10 Several options: Deletes existing plan, creates new plan. Deletes part of plan,creates part of plan, based on master data/order/pegging selection. Plans only forpart where individual order changes occurred



11 The approach is resource-centred, i.e. the considered objects (locations,products, PPM/PDS, lanes) are determined via the resource to be levelled. Incase of production resource the planning scope is local, that is, only considersone location

Bottle Necks Re-source

Trans-port

MaterialAvail-ability

Max.StockLevel

OrderPrior-ity

Sourc-ing Pri-ority

CapacityLeveling-Heuristic

Yes 12 No No 17 No Yes 20 Yes

CapacityLeveling -Optimizer

Yes 13 No No 17 No No 21 Yes 23

Capable-to-Match

Yes 14 Yes 16 Yes 18 No Yes 21 Yes 24

SNP Optimizer Yes 15 Yes Yes Yes 19 No 22 Yes 25

12 Once a levelling decision was done (decide to move which order to whichbucket) it cannot not be reviewed/changed, thus an earlier decision may preventthe complete elimination of overloads. Considers the levelling resource withoutrespecting all the other resources (even in the same PPM/PDS). Thus, byeliminating overloads on one resource other resources may get overloaded.Considers production and transport resources13 Considers the levelling resource without respecting all the other resources (evenin the same PPM/PDS), other resources are set infinite. Thus, by eliminatingoverloads on one resource other resources may get overloaded. Considers anytype of resource14 Considers resources on all BOM-levels as constraints. Considers secondaryresources as constraint. Backward scheduling: schedules the first resourcealternative backwards in time starting from the requirement date, only then triesthe next resource alternative. Forward scheduling: schedules the first resourcealternative forward in time starting from the planning start, only then tries thenext resource alternative. Considers only production resources. In SCM5.0 alsotransport resources will be considered. Once resource allocation was created for ademand it cannot be changed (shifted, reduced, and so on.) during the solutionfinding process of a next demand15 Additional capacity can be acquired causing penalty costs16 Transport calendar is considered. In SCM5.0 transport resources are considered17 The availability of components is not considered. Unnecessary stock build-upcan occur



18 Component availability is a constraint. Unnecessary stock build-up can occur,various stock policies like maximum pegging length, early production can beused to reduce stock build-up19 Soft constraint, i.e. can be violated causing penalty costs20 By product priority ascending/descending, by order size ascending/descending.Demands can be fulfilled late21 Demands can be fulfilled late, a maximum delay can be maintained22 Based on costs. Demands can be fulfilled late (causing penalty costs). Amaximum delay can be maintained. Sales order, corrected forecast, forecast,safety stock (it can be set whether the safety stock priority is interpreted as a salesorder/corrected forecast/forecast priority)23 Costs are generated that reflect the procurement priorities24 By procurement priorities25 Sourcing decisions are based on costs that are not related to the procurementpriorities, yet by setting the appropriate costs the system can be made to selectpreferred sources of supply

Figure 30: CTM Algorithm Concepts

� Domain assigned to each variable:� Variables are linked

Domain reduction: Reduce domain of the variable

Constraint Propagation Domains of linked variables are reduced

Contrary to the cost-based prioritization, in the SNP optimizer profile (tabsolution methods) a strict prioritization can be selected. Here the optimizer firstsatisfies customer demand, then the corrected demand forecast, and then thedemand forecast; safety stock as a fourth demand type gets its priority assigned



by attaching it to one of the first three. Generally, from processing one demandtype to another, the degree of fulfillment is fixed for the first processing step, thuswhen planning the next demand type the overall solution might be different, yet,the degree of fulfillment for the first demand type is the same.

In SCM 5.0 the optimizer offers an automatic cost generation function in the SNPoptimizer profile, allowing the user, without explicitly modeling the costs, tospecify in which order the different demand types (based both on demand type �including safety stock � and location product priority) should be considered

Using product decomposition and an SNP Priority Profile it is also possibleto group a set of products with the same priority and to optimize this setindependently. The priorities of the sets of products determine in which order thesets are optimized. If the sets are not independent (maybe two products sharethe same components) the sets will be optimized together, yet, the priorities willoverride possible penalty costs, that is, a demand for a product with higher prioritywill be satisfied first (even if that means a higher penalty)

Generally, CTM provides more flexibility for the prioritization of demandsbased on a variety of criteria, for a complete list of the criteria and under whichcircumstances they can be used consult the SCM-SDM-CTM documentation:help.sap.com

The CTM prioritization logic is to take the first criterion and sort the demands bythat. Each set of demands where the value for the first criterion is the same (thatis, demands have the same priority based on the first criterion) is subsequentlysorted by the second criterion and so on. A profile-dependent Sort Variant (appliedfor special sorting of a criterion) is only available from release SCM 5.0. Usingdescriptive characteristics for prioritization is only available from release APO 3.1.

Note: With user-exit APOBO020, non-standard prioritization is possiblein CTM.



Figure 31: CTM versus SNP (Optimizer & Heuristic)

Oftentimes during planning processes, companies need to perform finitescheduling. Only CTM and the SNP Optimizer allow finite planning during theinitial planning stages. In both cases, users can direct the planning run to be eitherfinite or infinite with control parameters in the proper profiles.

All three tools will allow safety stock calculation. During SNP Optimization runs,planners can decide the priority of safety stock with costs or assigning it a hardpriority during stick prioritization planning. CTM will allow more opportunities toconsider safety stock in planning. This will be discussed in a later lesson.

The SNP Heuristic is required to abide by quota arrangements even if theymake the solution invalid. The SNP optimizer is able to calculate cost-optimalin- and outbound quota arrangement distributions for external procurement.Other planning tools can use the calculated quota arrangements as input for theplanning. In SCM 5.1, SNP Optimization respects time-dependent inbound quotaarrangements on procurements from source locations, external suppliers andin-house production. Deviation from quotas are penalized and visualized in theObjective function. In addition, it is now possible to define inbound quotas forproducts or product groups. Unlike the other two Algorithms, CTM can choose touse quota arrangements or to dismiss them during each planning run.

The SNP Heuristic and Optimizer are only applicable to Make-to-Stock situations(this can be changed with the use of several BADIs). This is due in part to the factthat both tools use planning areas and thus Key Figures to store the necessarytransactional data. With Make-to-Order, planning is always linked to data relatedto the sales order, this is not possible with planning areas since all the orderdata is lost when the data is aggregated to the key figure. CTM can handle theMake-to-Order part of the business since it has the option to plan at the order level;



thus keeping the customer related data in the requirements during planning. This iswhat allows CTM to prioritize one sales order over another for the same product.SNP optimizer can not prioritize one sales order over another for the same product.

Details of the CTM Planning ProcessCapable-to-Match is somewhat unique in that it has its own planning engine.The CTM planning process will always follow the same series of steps as listedin the next figure.

Figure 32: CTM Technical Oriented View

CTM will use three different technologies during the planning process.

� ABAP� CTM Engine� liveCache

ABAP programing will be utilized to facilitate the selection and deletion of orders,control strategic parameters or instructions to the CTM engine, and outline variousstrategies that will instruct the engine how to perform the necessary calculations.

The CTM engine itself will have internal parameters/rules which will influencethe run. In addition, the algorithm is stored in the engine as well.

LiveCache will be accessed prior to the run to read the requirements, receipts, andinventory, as well as receive the results from the CTM engine at the conclusionof planning.



Figure 33: CTM Planning Process Steps

Step 1: the CTM planning run selects the orders for deletion from liveCache.This is in regards to which receipts will be deleted and not used during the netrequirements calculation. Prior to executing each planning run, users have theopportunity to control whether orders will be deleted or not, and to what extentdeletion can take place.

Note: It has been suggested by SAP Develop for large scenarios to have aseparate planning run just to delete the unwanted receipts. This could alsobe accomplished by using program /SAPAPO/RLCDELETE

Step 2 is the process of demand (order selection). In the CTM profile, the userwill define what types of requirements they wish to plan. This is controlled byselecting the appropriate ATP category/categories or all demands for the specifiedmaster data scope.

Step 3 has several parts: A) Demand Aggregation (Optional) - users can aggregatethe demand by time or by ATP category. Aggregating by ATP category would besimilar to planning with Key Figures like the SNP Heuristic or Optimizer. B)Demand Prioritization - is the critical stage (required), in which all the selectedorders will be sorted by the designated priority scheme established in the CTMprofile. C) Supply Categorization is another optional stage, in which any relevantstocks will be sorted and grouped into categories. This can be done based on aquantity scenario or specific ATP categories. These instructions also lie within theCTM profile. The results are written to the APO Database (not liveCache).



During steps 1-3 numerous BAdIs can be called to influence any of these steps.However, once the engine is started, no further customization can be done until theresults are written back to liveCache.

Step 4: planning begins and will be contained in the CTM Engine.

During step 5, that master data is built and copied to the CTM engine based on theCTM profile selection.

Step 6: demands and supplies are read from the APO database based on previousinstructions.

Step 7: net requirements calculation is performed, and receipts are created ifnecessary.

Upon completion of planning, step 8, planning results/logs are written.

At this time, orders are taken from the CTM Engine, and are written to liveCacheand pegging relationships will be created in step 9.

In the final step, step 10, if instructed to do so by the CTM profile, the resultswill be sent back to ECC via the CIF.



Lesson Summary

You should now be able to:� Describe the general purpose of CTM� Identify differences and similarities between CTM and SNP-PPDS


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Understand how CTM fits into APO solution� Describe differences between CTM, SNP, and PPDS� Describe the general SCM landscape� Describe SCM integration components� Describe APO technical scenarios� Describe the general purpose of CTM� Identify differences and similarities between CTM and SNP-PPDS


Unit Summary SCM235


SCM235 Test Your Knowledge

Test Your Knowledge


Test Your Knowledge SCM235

Answers


Unit 2Master Data in CTM

Unit OverviewIn this unit, you will explore the nuances of master data and how it interacts withCTM. CTM is unique in its approach to solving shortages in the supply chain.Therefore, the master data will not always be used in the traditional sense.


� Explain what a model means in SAP SCM� Create a Version of your Active Model for Simulation� Demonstrate the master data selection options for CTM Scenarios� Explain the origin and purpose of transportation lanes� Explain the origin and purpose of quota arrangements� Explain the effects of the purchasing information record in CTM� Explain how resources impact SCM as whole� Identify how the use of resources differs in CTM from other APO planning

tools� Explain how the PDS/PPM impact SCM as whole� Identify how the use of the PDS/PPM differs in CTM from other APO

planning tools

Unit ContentsLesson: Models and Versions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Procedure: Creating Models in SAP SCM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Procedure: Creating Planning Versions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Exercise 1: Create a planning version.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Lesson: The Location and Product Master in CTM .... . . . . . . . . . . . . . . . . . . . . . 78Exercise 2: Location/Product Masters .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Lesson: Transportation Lanes and Quota Arrangements in CTM.... . . . .103Exercise 3: Transportation Lanes and Quota Arrangements .. . . . . . . .117

Lesson: Procurement Relationships in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123Lesson: Resources in CTM.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127


Unit 2: Master Data in CTM SCM235

Procedure: Resource Categories and Types ... . . . . . . . . . . . . . . . . . . . . . . . .130Exercise 4: Scheduling Inconsistencies with Mixed Resources.. . . . .141

Lesson: PDS/PPM in CTM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148Exercise 5: The PPM in CTM... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .165


SCM235 Lesson: Models and Versions

Lesson: Models and Versions

Lesson OverviewIn this lesson, we will discuss the options of simulation planning. Models are thefirst step in strategic supply chain planning and simulation.


� Explain what a model means in SAP SCM� Create a Version of your Active Model for Simulation

Business ExampleAssume your business has decided to implement SAP SCM for supply chainplanning. You need to explain the master data environment to users. Forcontinuous planning, users use model 000. For simulation situations, planners willneed to perform what-if scenarios. You will explore how Models and Versions canhelp accomplish this.

Supply Chain Models in SCMThe Supply Chain Model (abbreviation: Model) represents the entire supply chainnetwork, ranging from suppliers to production and distribution sites, through tothe customer. It contains locations, transportation lanes, products, resources, andproduction process models. The model is therefore the basis for all planningfunctions in SAP SCM. A model is a set of master data. Master data from SAPECC is automatically assigned to the active model (model 000) during the transferto SAP SCM. Model 000 is the only active model and all others are simulationmodels.



Figure 34: Supply Chain Models in SAP SCM

All master data that is transferred from SAP ECC using the CIF is automaticallyassigned to model 000, the active model. The active model represents the supplychain actually used in the company. In this way, all the transferred master data isautomatically available for operational planning in model 000. Master data that iscreated directly in the SAP SCM System is model independent master data andmust be assigned to a model. You can use version management to copy models orcreate them manually.

You maintain the supply chain network in the Supply Chain Engineer (SCE), byplacing locations on the map and create a network by adding transportation lanes.The lane direction shows the direction of the product transportation flow. The SCEallows you to view data pertaining to different elements in your supply chain. Italso allows you to maintain the model objects simultaneously. You can submitrequests for information on individual or combined elements in your supply chain.For example, you can request a list of all the products assigned to a specificlocation in your model. At the same time, you can add products to this location ormake changes in the location master.

As well as locations and transportation lanes, the supply chain model also allowsyou to keep track of other supply chain elements. These include products, PPMs(production process models), and resources. During supply chain modeling, youmay have to assign or delete large numbers of objects in your model. Manyof these objects can have dependent objects assigned to them. To guaranteeconsistency within the model, you can automatically assign or delete thedependent objects, together with the primary object. Automatic assignment not



only guarantees consistency but also enables easier model maintenance. If youhave a lot of master data, viewing it in the network map in the Supply ChainEngineer can become very confusing. To limit your view to only the masterdata you want to concentrate on, you can define work areas. The work areais used exclusively as a filter for displaying objects in the Engineer. You canmaintain different work areas. In the work area of the Supply Chain Engineer, youcan select: Locations (plant, distribution center, vendor, customer), Products,Resources, or PPMs (production process models).



Creating Models in SAP SCM

1. SAP SCM menu path: Advanced Planning and Optimization→Master Data→ Planning and Version Management→ Model and Version Management

2. Select Create Model/Planning Version→ Model

3. Create model A## with description Instructor Demo.

4. Select Create and Save.

The Supply Chain Version

Figure 35: Versions in APO

The Supply Chain Model (abbreviation: Model) represents the entire supply chainnetwork ranging from suppliers to production and distribution sites, through tothe customer. It contains locations, transportation lanes, products, resources, andproduction process models. The model is therefore the basis for all planningfunctions in SAP SCM. It only contains master data. Master data from SAP R/3is automatically assigned to the active model (model 000) during the transfer toSAP SCM. The active model represents the supply chain actually used in thecompany. In this way, all the transferred master data is automatically availablefor operational planning in model 000. You must assign master data that youcreate manually in SAP SCM to a model. For simulation purposes, it is possible tocreate several planning versions for each supply chain model. However, only themodel 000 and the planning version 000 are active. The planning version containsversion-specific master data and transaction data. In an inactive planning version,



you can, for example, simulate increased planned independent requirements andplan production based on an increased demand. As of SCM 4.0, it is possible tocopy an inactive version back to the active version 000 but both must belong tomodel 000. It is not possible to copy versions across models. You can use versionmanagement to copy models and planning versions, or create them manually.They must be uniquely identifiable, however, which means that two planningversions in different models must have different names. The active planningversion 000 only exists in model 000.

The majority of the settings in the Version affect specific areas, only a fewspecifically affect CTM. The only the settings below will affect CTM. The CTMprofile may have similar settings to control similar parameters based on the scopeof your problem

Stock Transfer Horizon of Source LocationIf you set this indicator, Supply Network Planning and Capable-to-Match(CTM) take into account the SNP stock transfer horizon of the sourcelocation. By default, this indicator is not set and the system takes into accountthe SNP stock transfer horizon of the destination location. In a multi-sourcingenvironment, where demand is fulfilled from multiple source locations, youcan set this indicator to take better consideration of the SNP stock transferhorizon of different source locations and reduce delivery time, if necessary.

Note: If the SNP stock transfer horizon of the destination location islonger than that of the source location, the system takes into accountthe stock transfer horizon of the destination location.

Example: Two source locations deliver to one distribution center (DC).Source location A has an SNP stock transfer horizon of 3 days and sourcelocation B one of 5 days. If you set this indicator, the demand at the DC canbe fulfilled after 3 days, if you do not set it, the demand will be fulfilledafter 5 days.

Standard Planning Horizon in Calendar Days -If you have not specified an SNP production horizon in the location productmaster, CTM uses the PP/DS horizon from the planning version.

A version can be created either online or in the background by choosing theappropriate setting.



Creating Planning Versions

1. SAP SCM Menu Path: Advanced Planning and Optimization→ MasterData→ Planning Version Management→ Model and Version Management

2. Select version 000, and then select Copy Model/Planning Version→Model/Version.

3. Enter Version B## (GR## Demo Version).

4. Set the options to determine the scope of the copy.

5. Select Copy and Save

Caution: DO NOT EXECUTE! Training system may not haveenough resources allocated to perform this task.

Training Master DataMaster Data Scenarios

� Pumps� Pump (simplified)

Locations

� DC - 2400

� Priority: 1� Calendars: LOC2500� Handling Resource - None

� DC - 2500

� Priority: 2� Calendars: LOC2400� Handling Resource - None

� Plant - 2300

� Priority: � �� Calendars: LOC2300� Handling Resource - None

� Plant - 1000

� Priority: � �� Calendars: LOC1000� Handling Resource - FORK-LIFT TRUCK_1000



Materials/BOMsPump Scenario

� T-F2##

� T-B1## - Casing

� T-T1## - Slug for Spiral Casing� T-T2## - Flat Gasket� T-T3## - Hexagon Screw

� T-B22## - Fly Wheel

� 100-210 - Slug for Fly Wheel� T-B3## - Hollow Shaft

� T-T4## - Slug for Shaft� T-B400 - Electronic Turbo Drive

� T-T5## - Casing for Electronic Drive

� T-F3##

� T-B1## - Casing




� T-T4## - Slug for Shaft� T-B400 - Electronic Turbo Drive


� T-F4##

� T-B1## - Casing




� T-T4## - Slug for Shaft



� T-B400 - Electronic Turbo Drive


Simplified Pump

� T-F## - Pump

� T-SF1## - Casing

� T-T## - Slug for Casing

Work Centers/RoutingsT-F2##/T-F3##/T-F4## Routing

Operation WorkCenter

Descript Setup Processing

0010 T-M## Matl. Staging 2 min/pc0020 T-V## Assembly 10 min 10 min/pc0030 T-L## Paint 30 min 20 min/pc0040 T-E## Assembly 3 min 10 min/pc0050 T-F## Final Assembly 18 min/pc0060 T-P## Goods Receipt 5 min/pc

T-B1# Routing



0010 T-## Lathe Casing 10 min 30 min/pc0020 T-B## Drill Holes 3 min 10 min/pc0030 T-C## Assembly 5 min/pc0040 T-C## Inspect and Recv. 10 min/pc

T-B22##, T-B23##, T-B24## Routing



0010 T-H## Matl Staging 20 min0020 T-H## Load 3 min





0030 T-H## Lathe 10 min/pc0040 T-I## Balance 3 min 3 min/pc0050 T-K## Inspect and recv. 5 min 5 min/pc

T-B3## Routing



0010 T-G## Cut 20 min 10 min/pc0020 T-H## Pre-Lathe 15 min 20 min/pc0030 T-J## Heat 20 min 30 min/pc0040 T-A## Lathe 10 min 30 min/pc0050 T-A## Mll 15 min 10 min/pc0060 T-K## Inspect and recv. 30 min/pc

T-B4## Routing


Description Setup Processing

0010 T-C## Matl Staging 20 min 10 min/pc0020 T-C## Assembly 15 min 20 min/pc0030 T-C## Assembly 20 min 30 min/pc0040 T-C## Mount 10 min 30 min/pc0050 T-C## Display 15 min 10 min/pc0060 T-C## Inspect and recv. 30 min/pc

T-F## Stnd Routing



0010 T-CTM## /T-CTMA##

Mfg 60 min/pc

T-SF1## Stnd Routing





0010 T-CTM1## Mfg 60 min/pc

Transportation Lanes

Lane Means Duration(time)

Cost

1000→ 2400 0001- Truck 19:41 130 / pc1000→ 2500 0001- Truck 04:58 70 / pc2300→ 2400 0001- Truck 14:31 150 / pc2300→ 2500 0001- Truck 20:31 140 / pc

Quota Arrangements

Destination Source Percentage2400 1000 202400 2300 80

Destination Source Percentage2500 1000 802500 2300 20



Exercise 1: Create a planning version

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how to create simulation versions in SAP SCM

Business ExampleYour business has decided to implement SAP SCM for supply chain planning. Forcontinuous integrated planning, users use version 000. However, to assist usersto gain a better understanding of SAP SCM's simulation environment, create asimulation version, version B##, for model A##.

Task: Create a version for simulation purposes.Simulations are part of an everyday process in supply chain planning. As a supplyplanner you need to understand how to create and use versions as part of SAPSCM.

1. Create a simulation planning version in the background called CTM_##(Group ## CTM simulation), for model 000.



Solution 1: Create a planning versionTask: Create a version for simulation purposes.Simulations are part of an everyday process in supply chain planning. As a supplyplanner you need to understand how to create and use versions as part of SAPSCM.

1. Create a simulation planning version in the background called CTM_##(Group ## CTM simulation), for model 000.

a) SCM menu path: Advance Planning and Optimization→ Master Data→ Planning Version Management→ Model and Version Management

b) Select model 000 from the list on the left by clicking on it.

c) Select and choose the option Planning Version from the menu.

d) Enter the name CTM_## and the description (Group ## CTMsimulation)

e) Select the In Background radio button and click the Create andSave button.

f) You should be able to see your planning version under Model 000in the navigation tree on the left.



Lesson Summary

You should now be able to:� Explain what a model means in SAP SCM� Create a Version of your Active Model for Simulation



Lesson: The Location and Product Master in CTM

Lesson OverviewIn this lesson, we will discuss the unique attributes of the different master dataelements as they relate to CTM.


� Demonstrate the master data selection options for CTM Scenarios

Business ExampleTo plan properly in any environment, master data is an essential element. Themajority of master data is created in SCM/APO by ECC via the Core Interface(CIF). In this lesson, we will discuss how the different master data objects in APOaffect the Capable-to-Match (CTM) run.

Master Data in CTMAs with any planning tool, Capable-to-Match (CTM) will require master datato plan the appropriate replenishment elements when demand drives on-handbalances below zero.

Figure 36: Master Data Elements in CTM


SCM235 Lesson: The Location and Product Master in CTM

Similar to Supply Network Planning (SNP) and Production Planning DetailedScheduling (PPDS), the master data required by CTM will be built mainly fromthe Core Interface (CIF) and ECC. However, due to CTM's unique nature, therewill be some differences in the way that CTM uses that master data. CTM willrequire these basic objects:

� Locations (ECC)� Product Masters ECC)� Purchasing Info Records (ECC)� Transportation lanes (APO)� Resources (ECC/APO)� Production Versions (ECC)

In the following sections, we will discuss the details of how each object canimpact the results of a CTM run.

The Location MasterOne of the requirements in any planning system is to understand where inventoryresides, where sales orders will be shipped from, and where replenishment willcome from. To do this in APO, we will require the use of Locations.

LocationPlace or organizational unit at which quantities of products or resourcesare managed.

In APO we have several different types of locations:

� 1001 - Production plant� 1002 - Distribution center� 1003 - Shipping Point� 1005 - Transportation zone� 1006 - Stock transfer point� 1007 - Storage Location MRP area� 1010 - Customer� 1011 - Vendor (external supplier)� 1020 - Transportation service provider� 1050 - Subcontractor� 1030 - Terminal� 1031 - Geographical area� 1040 - Store



Figure 37: The Location Master in CTM

For each location, companies can define and assign production, warehousing,shipping, and storage calendars.

Note: CTM does not use shipping, or receiving calendars in the locationmaster. Instead, for shipping and receiving, CTM will use the data locatedin the resource master in the inbound/outbound resource. This is locatedon the Resource tab of the location master.

Note: CTM will not use the production calendar either. The data relatedto work days and available capacity will be retrieved from the resourcemaster as identified by the PDS or PPM.

The geographical data (longitude/latitude) is used to position the location onthe geographical map of the Supply Chain Engineer. This can also be used todetermine durations and distances within a transportation lane. Predefining it as apart of the location data forces the location to be positioned at a specific point onthe map. If you leave these fields blank, they are filled automatically when youplace the location on the map.

The time zone for the location is located in the General tab. This data can beautomatically generated by using the special Geo-coding logic supplied with APOor by using a third-party tool. The time zone describes the position of an object inrelation to its local time.

Note: CTM supports all time zones for planning.



Also located on the General tab, is a field labeled Priority. This field is a controlparameter used to assign a processing sequence to locations. The location priorityis also used to define the processing sequence for location-dependent objects.Enter the value 1 for the highest priority. The higher the number entered, thelower the priority.

Caution: If you do not enter a value, the system automatically assignsthe value 0, giving the location the lowest priority.

The VMI customer tab page only applies to the location type '1010' (customer).The Crr. tab page is only activated when you select the location type '1020'(Carrier).

Input fields that are not available to other location types are activated for locationtype '1007' (MRP area).

The Product master in CTM

Figure 38: The Product Master in CTM

The product master in SCM is linked directly to the material master in ECCvia the Core Interface (CIF). While a good majority of the fields in the productmaster can be populated by ECC, several fields relevant to CTM will need to bemaintained within SCM.

Similarly to ECC, the product master in SCM has two levels of data maintenance:Global and Location level. The global fields will be populated from the BasicData or client level views (MARA for example) in ECC. The location level tablesare linked to the plant (MARC) level fields in ECC.



Figure 39: Requirements Strategies

* ECC Strategy 70 can be used in APO, however the CIF will not transfer anyproposed Strategy. Due to different consumption logic, you should have a differentstrategy for forecasting sub assemblies.

** CTM can only plan make-to-order if you are doing Time Continuous (orderbased) planning.

The CIF will transfer the planning strategies from ECC to the product master inSCM. As mentioned in a previous lesson, SNP is a Make-to-Stock tool, so onlyAPO strategies 10 (ECC 10) and 20 (ECC 40) will work there. Any make to ordersales order requirements will be planned by PPDS, regardless of horizons. Theinteractive SNP planning book cannot display data for the scenarios �planningwithout final assembly� and �make-to-order�, since they are order level detailsand SNP plans at the key figure level.

PPDS, being a detailed tool, can plan all the strategies in the product master.

The requirement strategies �make-to-stock production (10/10)�, �planning withfinal assembly (20/40)�, �planning without final assembly (50/30)� are supportedby CTM. In case of �make-to-order (blank), CTM can plan these requirements, butonly if the CTM profile is set to time continuous planning. If one of the strategiesthat are not supported is used, the corresponding demands will not be selected byCTM and will not be planned.



Forecast consumption works independently of CTM. CTM uses unconsumedforecast elements as input. Whenever CTM accesses (changing/deleting) orders(transport orders, planned orders), which take part in a forecast consumptionprocess (based on Assembly Planning), consumption is triggered again. Forecaston component level is consumed by dependent demands (of planned production ortransport orders), for example, a sales order or any other requirement. To use thisfunction, maintain the �Proposed Strategy� and all values in the section �ForecastConsumption Mode� under the Demand tab in the product location master. Also,set the �Assembly Planning� check box. The consumption is executed in theOrder LiveCache automatically.

Lot Sizing in CTM

Figure 40: Lot Sizing in CTM

CTM supports exact, fixed, min./max. and rounding value lot size settings.Periodic, reorder point, or other lot size settings are not supported by CTM.You must consider that CTM plans a lot only for each single (independentor dependent) demand signal. Therefore, the result for all demands may benon-optimal. Only when the CTM profile is set for aggregate planning will CTMaggregate independent demands. A potential work-around for surplus inventory isto improve the result by using a second CTM run which plans the product withthe lot size setting and its dependent supply chain.



The lot size maintained in the product master is used to create orders with thespecified quantity. The lot size interval maintained in the PDS/PPM is only usedfor PDS/PPM selection based on the quantity to be produced. If the demandquantity was less than the minimum lot size of the PPM, the PPM was not selectedfor planning this demand. This will be covered in more detail in a later lesson

Note: The rounding functionality in CTM profile : Settings→ TechnicalSettings→ Round: is a post process which acts globally on all order inputand output quantities planned by CTM.

When using fixed or min. lot size or rounding value, excess supply cannot be usedto fulfill the parts of a split order when planning the same independent CTMdemand. Only following CTM demands can consume the excess supply.

For example, a CTM demand of 100 is split into two orders of 50 due to aproduction restriction. Both quantities of 50 also require a component supply of 50each. If a min. or fixed lot size for the supply of 1000 pieces is maintained, CTMwill create two planned orders of 1000 each. This means that each componentdemand of 50 is fulfilled with a supply of 1000. The system is not able to fulfillboth orders with just one supply of 1000. This is true for production and transportlot sizes/rounding as well as co-product production. Since the following CTMdemands will consume the excess supply, there will be no excess supply at theend of the CTM planning run.

Note: CTM uses lot sizes for stock transfer orders as specified in CTMprofile: Settings→ Master Data Settings→ Lot Sizes for Stock Transfers



Figure 41: CTM Profile - Lot Size Controls

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab,the parameter Lot Sizes can be used. This parameter determines whether CTMplanning is to use the minimum lot size, maximum lot size, fixed lot size androunding value from the location product master and the transportation lane.



In addition, planners can control rounding of replenishment since the CTM enginewill try to plan �parts� of a single unit or piece. In the Settings→ TechnicalSettings tab of the CTM profile, users can control the rounding process.

� Do not round order quantities: The system does not round the quantities upor down after the CTM planning run.

� Round order quantities: The system rounds up all order quantities towhole-numbered values after the actual CTM planning run. As the systemexecutes rounding after the planning run, surplus quantities that occur as aresult of the rounding are not consumed. In the same way, missing quantitiesthat are not fulfilled can occur as a result of the rounding.

After a decimal place of 0.5, the system rounds the quantity up to the nextwhole number value. Otherwise, the system rounds the quantity down to thenext whole number value.

� Round down demands, round up receipts: The system always roundsdemands down to the next whole number value and always rounds receiptsup to the next whole number value. This therefore causes small surplusquantities but no missing quantities.

Safety Stock MethodThe Safety Stock method determines whether safety stock (by quantity) or safetydays of supply is planned by CTM and where the values will be retrieved from.To actually use the corresponding SS method, additionally set the flag �Build UpSafety Stock� or �Consider Safety Days Supply� on the tab �Supplies� in theCTM profile. It is also important that the correct Customizing settings (planningbook/area, key figure mapping) have been set when using time-dependent safetystock or safety days of supply. As of SCM 4.0, auxiliary key figures for safetystock planning can not be used any more. Instead, time series key figures shouldbe used. For details, see note 646738.

SNP 2 TabA major reason that many companies have chosen to use CTM for theirsupply planning issues is that they have multiple sources of supply to covervarious requirements. As discussed in an earlier lesson CTM will prioritizeeach requirement and plan accordingly. A problem however is with plannedindependent requirements, since often they are void of things like customer anddelivery priority. This can cause a concern for planners when trying to sourceforecast requirements in the constrained supply chain.



Figure 42: Location Priority

You can maintain the priority for a location product in the product master, onthe SNP 2 tab.

Note: To activate this for demand prioritization, set the parameterMATPRIO as a criterion on the Demand tab in the CTM profile.

This field in the product master is of type INT1 and hence only values between1 and 255 can be maintained. If a value of more than 255 has to be maintainedfor the Product Priority, one of the freely definable attributes for the ProductLocation master (AT101, ,AT102, ,AT103, ,AT104, ,AT105) might be used tomaintain this value. Zero or ' Blank ' will have a default value of 255. Theycan be found under the tab extra. These customer fields can only be recognizedwith the CTM demand prioritization customer exit in place. It is not possible touse it directly in the CTM Profile. The new field must also be activated in thecustomizing before it can be used. This can be done with transaction SPRO→SAP Advanced Planner and Optimizer (SAP APO)→ Master Data→ MaintainFreely-Definable Attributes.

If priority is not maintained for products, the normal priority values are calculatedand assigned to the corresponding demands. When using MDAT in the CTMProfile the demands are prioritized according to their dates. Thus, in the demandsimulation of the CTM, the priority column is filled with values like: 255 (max.value of integer field) divided by amount of Demands plus 1. For example, 255: 3 demands + 1 = Value first demand 64, value second demand 128 and valuethird demand 191. In case there are more than 255 demands, several demands will



get the same values. For example, if there are 510 demands (double of 255), thenthe first two demands would both have the value 1 and the next two demandswould have both the value 2 and so on.

The Priority field on the SNP 2 view is static or constant over the time horizon.However, if there is a need to change the product priority over time, you can usethe Time-Based Priority field on the SNP 2 view. This field will allow you to timephase the production priorities to meet the needs of your CTM profile. This fieldwill override the product priority field.

Caution: The product Priority field can be used by PPDS to determineorder priority in PP and DS heuristics. SNP capacity leveling and thedeployment optimizer can also use this field. If several teams are usingthe production priority field, it can lead to conflicting results.

Production HorizonsThere are two important CTM profiles concerning horizons:

CTM selects all orders (demands and supplies) which lie inside the PlanningHorizon, based on the Time Stream used in the CTM Profile. If the planning startsin the past, CTM creates orders in the past (which are not realistic as they lie in thepast). To plan the demands in the past (backlogs) and to create a feasible solutionfor those demands, the setting CTM profile→ Strategies→ Special Strategies→Order Creation Start and Deletion Start can be used.

Horizons such as the production horizon will always refer to the current date.However, in CTM, it is possible to refer them to the planning start in CTM profile→ Settings→ Master Data Settings→ Relate Horizons to Planning Start.



Figure 43: SNP Horizon in APO

For the order creation within CTM, the SNP Production Horizon of the mainoutput product (of the corresponding PDS/PPM) is taken into account. TheProduction Horizons of the Co-Products are ignored.

The SNP Production Horizon is only taken into account in case of in-houseproduction. During a planning run, CTM will create all orders outside theproduction horizon regardless of whether you are creating PP/DS or SNP plannedorders. In this sense, the use of the SNP Production Horizon is similar to the PPDSPlanning time fence. If neede,d the production horizon can be ignored - setting aflag on the Fixed Control Parameter screen of in the CTM profile. Then, CTMplanning will ignore the production Horizon for all products, and orders are thencreated in the entire planning horizon.

During an SNP Heuristic or Optimization run, requirements can only be createdinside the SNP horizon. In this situation, the start of the SNP horizon is calculatedbased on the current date plus the SNP production horizon value in the productmaster. Technically, there is no end to the SNP horizon, as this is the responsibilityof a rough cut planning tool.

Using CTM, it is not possible to create orders within the production horizonwithout ignoring the production horizon. The start of the SNP production horizonrefers to the current day at midnight, 00:00. It is possible to maintain the value �0�for the SNP production horizon; then it is ignored. Value �1� refers to the currentday at midnight 00:00. The production horizon only prevents the creation of new



orders. Pegging will be recreated within the production horizon if excess supply isavailable. Any other horizon, like fixed horizon in PP/DS (PP/DS Tab ProductMaster), will not be regarded during CTM planning.

Note: If no production horizon is maintained in the product master, thenthe PP/DS horizon in the planning version is used.

Figure 44: CTM Profile - Ignore Production Horizons

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab,in the section Ignore Master Data, the parameter Production Horizons can beused. If you do not set the indicator, CTM planning considers the value for theSNP Production Horizon entered in the location product master. If there is novalue entered here, CTM planning considers the PP/DS Horizon in the model andversion maintenance. If you do set the indicator, CTM executes planning withoutconsidering the SNP production horizon or the version-dependent PP/DS horizon.

Stock Transfer HorizonFor stock transfer orders (reservations and requisitions), the stock transfer horizonis considered and not the planned delivery time. By default, the stock transferhorizon of the destination is used during order creation.



Figure 45: Use of Stock Transfer Horizon in APO

When the stock transfer horizon is referred to the destination location, the demandnode of an order (PRqRel) can be inside the horizon of the source location but thesupply node must be outside the horizon of the destination location.

To use the stock transfer horizon of the source location, set the corresponding flagin the planning version. When the stock transfer horizon is referred to the sourcelocation, both demand and supply nodes of an order are outside the stock transferhorizons of both locations.

Figure 46: CTM Profile - Ignore Stock Transfer Horizon

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab, in thesection Ignore Master Data, the parameter Stock Transfer Horizons can be used.If you do not set the indicator, CTM planning considers the SNP stock transferhorizon in the location product master. If you set the indicator, CTM executes theplanning without considering the SNP stock transfer horizon.



Planned Delivery Time

Figure 47: Use of Planned Delivery Time

The planned delivery time influences the creation of purchase requisition. Theplanned delivery time is used as a horizon for external procurement. Within theplanned delivery time CTM cannot create any purchase requisitions. Purchaserequisitions are created by CTM for externally procured products if transportationlanes do not exist. Also note that the safety days� supply is ignored within theplanned delivery time.

Figure 48: CTM Profile - Ignore Planned Delivery Time

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab,in the section Ignore Master Data, the parameter Planned Delivery Time canbe used. If you do not set the indicator, CTM planning considers the planneddelivery time that you specified in the location product master when creatingpurchase requisitions. If you do set the indicator, CTM executes planning withoutconsidering the planned delivery time.

GR and GI Processing TimesCTM planning only takes account of GR and GI processing times for purchaserequisitions and stock transport requisitions. GR processing times are notsupported for PPMs. The shipping calendar of the corresponding location is usedfor scheduling GR and GI activities. Scheduling using transport or handlingresources does not take place.



With GR/GI a stock transfer order can now have three activities which are goodsissue, transportation, and goods receipt. For each of these activities, separatedurations can be maintained. A purchase requisition can have only a goods receiptactivity.

Figure 49: Goods Issue/Receipt Processing Times

GR and GI processing times are displayed in seconds in the CTM master recordcheck. The scheduling of GR and GI activities is carried out to the second. Forbackward scheduling, the individual activities are created as late as possible, forforward scheduling, the activities are created as early as possible. Breaks betweenactivities are only allowed if the corresponding calendar contains a break. GR andGI activities cannot start or end in breaks of the corresponding shipping calendar.If an activity is scheduled over the break of the shipping calendar, the total time ofthe activity is extended by the break duration.

If no GR processing time is maintained for a location product, no GR activityis created. The same applies for GI processing times. In this case, a shippingcalendar specified at the corresponding location does not play any role. In thisrespect, GR and GI activities differ from transport activities. Even if no transportduration is specified (that is, transport duration = 0), the transport calendar istaken into account during scheduling.

For purchase requisitions without source location, the GR activity is alwayscreated after the planned delivery time.



* For stock transport requisitions, the GR and GI activities for the stock transferhorizon are dealt with in the same way as the transport activity. If the stock transferhorizon of the source location is used, all activities must start after the stocktransfer horizon. If the stock transfer horizon of the target location is used, thereceipt of the stock transport requisition must be outside the stock transfer horizon.

The receipt of a purchase requisition is always available at the end of the lastactivity. The date of a dependent requirement of a stock transport requisition isdefined by the start of the first activity.

GR and GI processing times are hard constraints for CTM planning, that is, arequirement can be covered late due to the GR and GI processing times or may notbe covered if there is no valid solution. If you are using the planning parameter"OrderCreationFrame" or the constraint "early requirements coverage", GR andGI processing times are also taken into account.

Caution: GR and GI processing times are not taken into account by CTMsupply distribution.

As of APO 4.1 GR processing time is also applicable to inhouseproduction.

** If a product master exists at the vendor location then GI times are applicable.This is because APO will consider a stock transfer rather than purchase requisition.

Figure 50: CTM Profile - Controlling GR/GI Times

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab, inthe section Ignore Master Data, the parameter GR and GI Processing times can



be used. This parameter determines whether CTM planning considers the goodsreceipt processing time (GR processing time) and goods issue processing time (GIprocessing time). Choose one of the following settings:

� Always Consider - The system considers the GR processing time forin-house production and both the GR and GI processing times for externalprocurement.

� Only Consider for External Procurement - The system considers the GR andGI processing times for external procurement.

� Do not Consider - The system does not consider GR or GI processing times.





Exercise 2: Location/Product Masters

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate the fields in the Location Master that are relevant to CTM� Demonstrate the fields in the Product Master that are relevant to CTM

Business ExampleUnderstanding master data is an integral step in interpreting planning results.CTM is somewhat of a unique planning tool if compared with SNP and PPDS.To understand the CTM results better, you will review and set several parametersthat will influence CTM.

Task 1: Location MasterThe location master is the foundation of all master data in APO. In this section,you will review the necessary fields that will impact CTM.

1. Review the Location Master for your distribution center 2400.

2. What is the location priority for D.C. 2400?

3. What resources are used for handling?Hint: select Resources tab


Continued on next page



5. In location 2500, what resources are used for handling?Hint: select Resources tab

6. What is the location priority for Plant 1000 ?

7. In location 1000 what resources are used for handling?Hint: select Resources tab


9. What resources are used for handling?




Task 2: Product MasterThe product master will be one of the primary pieces of master data in CTM. Inthis section, you will review the necessary fields that will impact CTM.

1. Review the Product Master for your product T-F2## at distribution center2400.

2. What are the following Horizons set to?

Product/Location

SupplyProfile

SNPProd.Hor.

SNPStkTran.Hor.

Priority PlndDelv.Time

GRProc.Time

GIProc.Time

T-F2##/2400



Product/Location

SupplyProfile

SNPProd.Hor.

SNPStkTran.Hor.


GRProc.Time

GIProc.Time

T-F2##/1000



Solution 2: Location/Product MastersTask 1: Location MasterThe location master is the foundation of all master data in APO. In this section,you will review the necessary fields that will impact CTM.

1. Review the Location Master for your distribution center 2400.

a) APO menu path: APO→ Master Data→ Location→ Location

b) Enter Location 2400

c) Select DISPLAY


Answer: 1 - highest priority


Hint: select Resources tab

Answer: None


Answer: 2 - 2nd highest priority

5. In location 2500, what resources are used for handling?


Answer: None


Answer: None

7. In location 1000 what resources are used for handling?


Answer: FORK-LIFT TRUCK_1000 for both inbound and outboundloading.


Answer: None


Answer: None.




Task 2: Product MasterThe product master will be one of the primary pieces of master data in CTM. Inthis section, you will review the necessary fields that will impact CTM.


a) APO menu path: APO→ Master Data→ Product→ Product

b) Enter Product T-F2## and Location 2400

c) Select DISPLAY


Product/Location

SupplyProfile

SNPProd.Hor.

SNPStkTran.Hor.


GRProc.Time

GIProc.Time

T-F2##/2400

SNPSUPDC 0 0 0 10 0 0


a) APO menu path: APO→ Master Data→ Product→ Product

b) Select DISPLAY


Product/Location

SupplyProfile

SNPProd.Hor.

SNPStkTran.Hor.


GRProc.Time

GIProc.Time

T-F2##/1000

SNPSUP01 4weeks

0 0 10 0 0



Lesson Summary

You should now be able to:� Demonstrate the master data selection options for CTM Scenarios

Related InformationConsulting Notes:

� None


SCM235 Lesson: Transportation Lanes and Quota Arrangements in CTM

Lesson: Transportation Lanes and Quota Arrangementsin CTM

Lesson OverviewDuring the CTM planning process, users are often expecting the solver todetermine which might be the best source of supply if constraints exist, anddemand is greater than supply. In APO, you use transportation lanes and quotaarrangements to manage scheduling and source determination. In this lesson, wewill explore how these master data elements can influence the planning resultswith CTM.


� Explain the origin and purpose of transportation lanes� Explain the origin and purpose of quota arrangements

Business ExampleIn your current environment, your distribution centers are supported by more thanone plant for several products. To plan the proper flow of supply, you need to maphow you plan to support demands at the distribution center. This can be done inAPO using transportation lanes and quota arrangements.

Transportation LanesA transportation lane in SAP APO represents a business relationship betweenlocations, which you can use to transport goods. Transportation lanes do not existin ECC and therefore cannot be transferred to APO. While ECC can use routes todetermine shipping, this a Logistics Execution (LE) function and no integration isavailable at this time.



Figure 51: Transportation Lanes in CTM

Transportation lanes can be created by the CIF when transferring procurementmaster data: info records, scheduling agreements, and contracts. This will bediscussed in more detail in another lesson. Transportation lanes can also be createdby using the special procurement key in the material master to automatically haveMRP generate stock transfer requests between locations.

The lanes and the locations represent the supply chain network. Material flowis defined by the direction of the transportation lane from start-location todestination-location. These transportation lanes enable you to:

� Define the product procurement parameters such as lot sizes, cost functions,unit costs, and lane priorities

� Define the means of transport (truck, ship, airplane, and so on) for each laneand the related parameters such as transportation costs, distances, and times

� Assign product-specific means of transport� Assign carriers to the lanes.

You can view the lane-relevant data from the Supply Chain Engineer menu or onthe map. You can, for example, display a list of all products that are assigned toa certain transportation lane.



Figure 52: Transportation Lane Details

Transportation lanes are model-dependent. This is done to allow your organizationthe opportunity to simulate changes in your supply routes. Lanes are singledirection only.

Caution: It is possible to create two lanes between two locations, andshow both locations as target and a source. However, by define locationsat as both target and source for the other location, can cause recursiveissues. In this type of situation, you must properly identify costs andpriorities so the CTM solver can determine the correct sourcing pattern.

Lanes can be defined as generic by creating an entry for �All Products�. Ifnecessary, exceptions can be defined as single entries for materials or a groupingof materials. If a location has more than one source of supply available tothe destination location, then lot sizes, costs, priorities, and validity dates areapplicable for CTM selection.

Selection of Transportation lanesUntil SCM 4.1, transportation lanes are considered by CTM, if the locationproducts are in the model for both the source and the destination location. In caseof a master data selection, both location products have to be included.



As of SCM 5.0, additional sources of supply are external procurements usingtransportation lanes where the product at the source location is not in the model.In case of a master data selection, the location product at the destination locationhas to be included.

As of SCM 5.0, a transportation lane can refer to a purchase info record.

Note: CTM considers priorities, quotas, durations and calendarsmaintained for the transportation lanes. As of SCM 5.0, a resource fortransportation is used by CTM. If a resource is maintained, a calendar isbeing ignored. The transportation duration must then be greater than zero.

The following criteria are taken into account for the selection of the lanes:

� Procurement type �F� or �X� has to be set. If procurement type �E� ismaintained, no transportation lanes will be selected.

� The quota or the priorities are considered.� The validity period which means start and end date is used for the selection.� If there is more than one �Means of transport� for a transportation lane,

transportation costs are used to determine the priority of these �Means oftransport�.

� If a transportation lane exists, anonymous purchase requisitions are notpossible.

Figure 53: Internal Data illustration of Transportation Lanes



The maintained transportation master data is transferred to the CTM Engineas shown in the Figure above. In the headline �Maintained Data�, a singletransportation lane is displayed valid for all products (P1/P2/P3) to be transported.For P1, two different quotas (Q1/Q2) with their validity periods are maintainedand the quota Q3 is set for all products.

Internally, the system creates a separate lane for each single product/quotacombination. This is shown in the above figure in the headline �Data transferredto the CTM Engine�. Seven single lanes have been created. P1 has 3 lanes - onefor Q1, one for Q2 and one set at 0. For P2 and P3, two lanes exist - one for Q3,and the other set at 0 because no data has been maintained.

The CTM Master Data Checker displays the maintained data as it will betransferred to the engine. Therefore, it would show seven transport lanes for thegiven example. The setup described in the example might also have an impacton the performance if a large number of products and quota arrangements areinvolved.

Recursive ReplenishmentWhen using complex supply chains, with many locations and various directionalsupply routes, it can be easy to confuse a level-by-level planning tool. In certainsituations, recursive planning can occur. Recursiveness, is when the planningalgorithm is thrown into a loop (circular replenishment). Location 1000 can shipto location 2400, and location 2400 can ship to location 1000. Situations such asthis can cause the CTM engine to terminate since it cannot find a starting point.

Figure 54: Controlling Recursive Replenishment



Within the CTM Profile, Settings→Master Data Settings tab, planners can controlthe sources of supply for External Procurement. With the parameter MaximumNumber of Consecutive Stock Transfers, you determine how many consecutivestock transfers CTM planning can create. This value does not restrict the totalnumber of stock transfers for a demand. If you enter a value here, you can preventthe system from transporting the receipts for a demand over several locations dueto the procurement priority. Also, you must have modeled the master data in sucha way that a direct stock transfer is possible if the system ignores the procurementpriority. If a direct stock transfer is not possible, CTM cannot fulfill the demand.

Calendar Maintenance and Transportation Lanes

Figure 55: Transportation Calendars



If the calendar days are maintained from 0:00 to 23:59, a break of one secondappears for the transport duration. It is recommended to maintain the days from0:00 to 24:00. The break of one second could have various effects because atransport activity can never start or end within a break. These effects could be:

� Impact on performance.� Production might be shifted� Transportation durations of �0�, if maintained, cannot be scheduled in a

break.

Note: In the master data checker, transport lane durations are shownin seconds.

Note: If a product is not maintained at the source location, a purchaserequisition would be created in spite of an existing transportation lane.

Note: Lot CTM uses lot sizes for stock transfer orders as specified inCTM profile→ Settings→ Master Data Settings→ Lot Sizes for StockTransfers.

Note: If the �Block� field in the transportation master data at the section�Product Procurement� is set, the transportation lane is not taken intoaccount by CTM. The lane is not shown if a master data check is carriedout.

Note: The fields �Aggr. plng� (aggregate planning) and �Det.Plnng� (detailed planning) in the section �Means of Transport� in thetransportation master are not used by CTM at all.

Figure 56: CTM Profile - Calendar Controls

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab, inthe section Ignore Master Data, the parameters Transportation Calendar andShipping and Receiving Calendar can be used.

The parameter Ignore Transportation Calendar: If you do not set the indicatorwhen creating stock transport requisitions, CTM planning takes the transportationcalendar maintained for the transportation lane into consideration. If you do set



the indicator, CTM executes planning without taking the transportation calendarinto consideration. Stock transport requisitions can be created at any time withinthe validity period of the transportation lane.

The parameter Ignore Shipping and Receiving Calendar: If you do not set theindicator, CTM planning considers the receiving calendar and shipping calendarmaintained in the location master when creating a goods receipt and goodsissue activity. If you do set the indicator, CTM executes planning withoutconsidering the receiving calendar and shipping calendar. The system can thencreate goods receipt and goods issue activities at any time within the validity ofthe transportation lane.

Quota ArrangementsQuota Arrangements are used in planning to identify that you have the optionof sourcing supply from more than one location. While ECC supports quotaarrangements, the CIF does not. Therefore, quota arrangements must be createdand maintained in SCM. Two types of quota arrangements exist in APO, Inboundand Outbound.

Figure 57: Determining the Source of Supply

CTM supports only Inbound quotas, but �Supply Distribution� using CTM takesoutbound quotas also into account. Quotas are applied to the complete demandand not to a single demand. The single supplies are distributed among A and B sothat the solution which has the smallest delta is always chosen.



Figure 58: Quota Arrangement Details

Quota arrangements can be manually created or can be generated as timedependent output from an SNP Optimization run. Within the quota arrangement,you can mix sourcing opportunities from inhouse manufacturing, externalpurchasing, or stock transfers. Similar to transportation lanes, quotas are modelspecific, but also can be created specific to a planning version. They can bematerial specific or applied to groups of materials. They are time dependent andare geared towards percentage split.

Incoming Quota Arrangements: A/B �> 80% / 20 %DemandQty

CurrentSituation:Absolute(A/B)Percentage(A/B)

After Selecting A:Absolute (A/B)Percentage (A/B)

DeltaAfter Selecting B:Absolute (A/B)Percentage (A/B)

Delta

100 0 / 0

0% / 0%

100/ 0

0% / 0%

20 0 / 100

0% / 100%

80

100 100 / 0

100% / 0%

200 / 0

100% / 0%

20 100 / 100

50% / 50%

30



100 200 / 0

100% / 0%

300 / 0

100% / 0%

20 200 / 100

67% / 33%

13

100 200 / 100

67% / 33%

300 / 100

75% / 25%

5 200 / 200

50% / 50%

30

100 300 / 100

75% / 25 %

400 / 100

80% / 20%

0 300 / 200

60% / 40 %

20

The example in the table above refers to a location which is supplied by two otherlocations A and B. Location A provides 80% and location B provides 20% of thesupply. When CTM has to fulfill a specific demand, then it will always transfer thewhole quantity either from one (A) or the other (B) location. It will never split thequantity according to the quota arrangement. However, CTM also has to considerthe quota. Therefore, for each supply, it decides whether it will come from A or B.Thus, it distributes all incoming supplies according to the quota. To decide wherethe supply will come from, CTM calculates and compares a delta for each locationand chooses the smallest deviation described as follows:

� In the first row, if using supply from location A, the delta would be:100%-80%=20%. This means that if the supply is coming from A, then thequota would be 100% for A and 0% for B. The deviation from the quotawhich will be achieved (80% for A and 20% for B) is then 100%-80%=20%.When using supply from location B instead of A, the delta is calculatedas: 100%-20%=80%. In other words, if the supply is coming from B, thenthe quota would be 0% for A and 100% for B. The delta from the quotawhich will be achieved (80% for A and 20% for B) is then 100%-20%=80%.The deltas (20% and 80%) are compared, and the one which shows up thesmallest deviation is chosen. In this case, the smaller inaccuracy is 20%,therefore CTM would decide on alternative A.

� In the second row, the delta is calculated in case A as 100%-80%=20% andin case B 50%-20%=30%. The deltas are determined in the same way asdescribed for the first row. Thus, the decision would be made on A againdue to the smaller deviation.

� In the third row, the inaccuracy in case A is 100%-80%=20% and in caseB 33%-20%=13%. As a result, the delta in case B is smaller and B wouldbe chosen.

� In the forth row the situation in case A is 75%-80%=-5% and in case B50%-20%=30%. Thus, the choice would be A again.

If quota arrangements should not be taken into account by CTM, then they canbe switched off with setting CTM profile→ Settings→ Master Data Settings ->Ignore Quota Arrangements. If they are switched off, CTM uses the maintainedpriorities instead. Assume that we have the same situation mentioned in theexample one paragraph before:



From 01.xx to 07.xx quota arrangement 30% / 70%

From 07.xx to 10.xx priority 2 / 1

Both pieces of data are maintained at the same location.

If the quotas are turned off, the priorities would be used in spite of the mixture ofquotas and priorities. This could be a useful feature when the quotas are necessaryfor a different application but CTM still has to run on priorities.

Quotas are not maintained in %. They are maintained in ratio values. For example,when setting 5 times 20, the ratio and the percentage value is the same. However,when deleting one of the quotas so that we have only 4 times 20 left, the ratio valueis then 20 and the percentage value is 25%. Therefore, the following situation canappear as well. Assuming we have three supply sources, two locations and onePPM, for example; if a specific quota is maintained for only one of these sources,no matter which value it is, then everything is taken from this source. Nothingfrom the other sources will be delivered to fulfill a demand. This quota situationcan be displayed in the master data checker.

It is also possible that a different supply distribution than what was maintainedin the quota arrangement comes out of a planning run. The reason for this isother constraints like capacity constraints, for example. Assuming you have aquota arrangement of 60% and 40% maintained. As a result of the planning runand the supply is distributed 10% and 90% instead. This difference in the supplyallocation could then be attributed to capacity constraints at one or both locations.

Figure 59: CTM Profile - Ignore Quota Arrangements

During individual planning scenarios, planners can override certain aspects ofmaster data. In the CTM Profile in the Settings→ Master Data Settings tab, inthe section Ignore Master Data, the parameter Quota Arrangements can be used.This parameter causes CTM planning to ignore the quota arrangements for PPMsand transportation lanes. CTM planning takes the priorities of the PPMs andtransportation lanes into account instead.



Quota IntervalsWhen quota arrangements are time phased, then for each quota period a separatetransportation lane is transferred to the CTM engine. The defined interval for aquota always ends at 23:59:59. This means the next second already belongs to thenext interval. Additionally, orders can only be created within an interval. Example:

01.07 - 31.08 30% (Location A) 70% (Location B)

01.09 - 01.12 40% (Location A) 60% (Location B)

In this case, an order from 25.08 until 03.09 cannot be scheduled because of theinterval change. Note that if intervals of 7 days are modeled then orders of 7days cannot be scheduled because of the interval which ends at 23:59:59 and thepreviously mentioned fact that the orders cannot be scheduled beyond an intervalborder. Thus, if an interval of 7 days is maintained, then it is in fact 6 days and23:59:59 hours.

Note: Intervals which follow each other and contain about the same quotafigures are united into one interval.

Quota SplitAs of SCM 5.0, CTM also plans quotas with requirement splitting. Buildingthe solution tree at any location product level, CTM considers available sourcesthat may supply the demand quantity. In case of a demand split for a quotaarrangement, two steps are performed:

� The entire quantity is split accordingly across the sources. These demandsare explored consecutively - sorted by first, increasing quota and second, bysource priority. Any demand fails if the minimum lot size of the sourceexceeds the demand quantity.

� If there is a remaining quantity, the sources are explored again with thedefault procedure.

Hint: For a location product, four possible sources of supply are selectedto supplying a demand quantity of 100. The quota arrangement is: SourceS1 has quota 5, S2 has quota 3, S3 and S4 have quota 1.

This leads to the following demand list: Try 1st S3/S4 with 10 (dependingon priority), 2nd S4/S3 with 10, 3rd S2 with 30, and 4th S1 with 50. Ifthere is an open quantity left, try the highest priority source again, andso on.



PrioritiesThe procurement priority is used for selecting from alternative transportationlanes (and PPMs). Procurement type �X� must be used if both the procurementalternatives PPMs and Transportation Lanes should be selected in CTM planning.

The priorities of a means of transport (for example, ships or trucks) are maintainedby the transport costs. It is also important to maintain a unit such as pieces, litresand so on, to which the costs refer. This unit has to be compatible with all otherunits of products, which can be transported by this lane. A calculation methodmust therefore be maintained in the product master, to convert the different units.In case of incompatibility, an error message appears after a CTM run. Theplanning result is probably not valid. This error cannot be displayed in the masterdata checker.

Priorities and QuotasIt is not possible to mix priorities and quotas. If one quota exists, all otherpriorities are ignored, even if they are maintained for a different time period. Thisrestriction is only valid per location. In other words, it is possible to have quotas atone location and priorities at another location.

Assume the following situation is modeled:


From 07.xx to 10.xx priority 2 / 1

Both pieces of data are maintained at the same location.

In this situation, quotas and priorities are mixed. Therefore, only the quotas wouldbe used and the priority would be ignored completely. When using the followingworkaround, the quotas would be treated by the system like priorities:


From 07.xx to 10.xx quota arrangement 0.001% / 99.999%

The quota arrangement 0.001% / 99.999% �simulates� in this case the priority.

Note: If neither quotas nor priorities are maintained, CTM looks for othercriteria to distinguish. For example, validity periods. If all the selectioncriteria (Validity, Lot size, and so on) are identical, then CTM randomlyselects the procurement alternatives (PPMs and Transports). As thisselection procedure is arbitrary, it cannot be reproduced.





Exercise 3: Transportation Lanes andQuota Arrangements

Exercise ObjectivesAfter completing this exercise, you will be able to:� Review the details of your existing supply chain

Business ExampleAs a supply chain planner, you must be aware of all of your supply sources, supplyoptions, and constraints. Therefore, in this exercise, we will review the details ofyour already established supply chain

Task 1: Review Transportation NetworkTo understand the results being generated by CTM better, you will review thevarious levels of your supply chain.

1. Using the supply chain engineer, display the details of the Model 000, andWork Area Pump_00

Hint: Filter the display by removing customers.

Note: You will be reviewing the details for group 00. However,your materials will end with ##.




2. Where is location 2400 supplied from?


4. What lot size is the Lane from 2300 to 2400 valid from?

5. What means of transportation are available and what are the distances anddurations?

Start/Dest. Loc Means ofTransp.

Duration(HH:MM)

Distance(in KM)

Trsp. Cost/ Pc

2300/24002300/25001000/24001000/2500

Task 2: Quota ArrangementsTo understand the results being generated by CTM better, you will review thevarious sourcing decisions that were made prior to your arrival with the company.

1. Remaining in the supply chain engineer, review the details of any existingquota arrangements between your locations.

Hint: Select a location and, using the context menus, review anyinbound quota arrangements.




2. How will location 2400 be resupplied?

3. How will location 2500 be resupplied?Select Location 2500; using the context menus, select Quota Arrangements→ Display incoming Quota Arrangements



Solution 3: Transportation Lanes andQuota ArrangementsTask 1: Review Transportation NetworkTo understand the results being generated by CTM better, you will review thevarious levels of your supply chain.

1. Using the supply chain engineer, display the details of the Model 000, andWork Area Pump_00

Hint: Filter the display by removing customers.

Note: You will be reviewing the details for group 00. However,your materials will end with ##.

a) APO menu path: APO→ Master Data→ Supply Chain Engineer→ Maintain Model

b) Enter Model 000, and Work Area Pump_00.

c) Select Display Model

d) Using your Mouse, zoom in by drawing a box around Europe

e) To reduce the noise, select and select the customer icon to displaythe internal network.


Answer: Plants 2300 and 1000


Answer: Plants 2300 and 1000

4. What lot size is the Lane from 2300 to 2400 valid from?

Answer: 0 to 9999999 pcs

5. What means of transportation are available and what are the distances anddurations?




Start/Dest. Loc Means ofTransp.

Duration(HH:MM)

Distance(in KM)

Trsp. Cost/ Pc

2300/2400 0001 14:31 1162 1202300/2500 0001 20:31 1641 1401000/2400 0001 19:41 1574 1301000/2500 0001 4:58 398 70

Task 2: Quota ArrangementsTo understand the results being generated by CTM better, you will review thevarious sourcing decisions that were made prior to your arrival with the company.

1. Remaining in the supply chain engineer, review the details of any existingquota arrangements between your locations.

Hint: Select a location and, using the context menus, review anyinbound quota arrangements.

a) Select a location and, using the context menus, select QuotaArrangements→ Display incoming Quota Arrangements.

b) Drill into the details of all products.


Answer: 2400 will be resupplied by stock transfers (LOK) from plant 1000(20%) and 2300 (80%)


Select Location 2500; using the context menus, select Quota Arrangements→ Display incoming Quota Arrangements

Answer: 2500 will be resupplied by stock transfers (LOK) from plant 1000(80%) and 2300 (20%)



Lesson Summary

You should now be able to:� Explain the origin and purpose of transportation lanes� Explain the origin and purpose of quota arrangements


SCM235 Lesson: Procurement Relationships in CTM

Lesson: Procurement Relationships in CTM

Lesson OverviewTo be able to deliver finished goods in a timely fashion, assemblies must bemanufactured and raw materials procured. Some raw materials may be difficultto come by, or have long lead times. In this lesson, you will learn how externalprocurement relationships affect the CTM planning process


� Explain the effects of the purchasing information record in CTM

Business ExampleSeveral of the raw materials needed to manufacture assemblies and finishedgoods have long lead times or have limited supply. Since CTM is capable ofhandling these types of constraints, you will investigate how CTM manages theserelationships.

External Procurement RelationshipsPurchasing Info Records, Contracts, and Scheduling Agreements, are transferredvia CIF and generate External Procurement Relations in APO. The purpose ofthese relationships is to include the supplier as a constraint or consideration duringthe planning run.

Figure 60: External Purchasing Relationships in CTM

For APO to support purchasing, it needs the Product/Location master, thesource Vendor/Supplier, and the purchasing master data. During the transfer, theSource Vendor can be transferred to APO and will be assigned to the Purchase



Requisitions that use info record lanes. During the transfer process, these ExternalProcurement Relations will automatically generate Transportation Lanes in APO.These Transportation Lanes are used for CTM Planning.

As of SCM 5.0, Transportation Lanes without valid products at the source locationcan be considered for the CTM Run.

Procurement in CTM

Figure 61: Consideration of Contract Information in CTM

A Transportation Lane with a Purchase Info Record will be selected for theCTM-Run, when:

� In the definition of the CTM Profile, the parameter Select all Master Data inModel is set. This ensures the product at the destination location is in themodel and the CTM profile.

� In the definition of the CTM profile, the parameter Master Data Selectionis set. When this parameter is used, it is up to the users to add the productsmanually at the destination location in the list of location/products for theCTM run. In addition, the source and destination location combination mustbe in the list of external procurement relations.


SCM235 Lesson: Procurement Relationships in CTM

The lanes created by info records are automatically selected by CTM.To avoid the selection of such lanes, use the planning parameterLANE_NOSOURCE_IGNORE. (See Note 993071)

Note: Lane reading performance for CTM planning can be improved byusing parameter LANE_READ_BY_PRODUCT (See Note 979901)

Figure 62: Transportation Lane Information

Purchase Requisitions inside the planned delivery horizon of the info recordcannot be deleted, and new requisitions will not be created in the planneddelivery horizon. If the transport lane (info record) is selected for the CTM Run,then the planned delivery horizon from the transport lane is used. If the transportlane (info record) was not selected for the CTM Run, then the planned deliveryhorizon from the product master in the destination location is used.

Transport lanes (info record) without valid products at the source location aresubject to the same sourcing criteria:

� Procurement priority� Transportation costs� Validity range� Lot size setting� Quota setting

Note: If a product is externally procured and no transportation laneexits, a purchase requisition with no source of supply will be created.The planned delivery time from the product master will be used forscheduling purposes.



Lesson Summary

You should now be able to:� Explain the effects of the purchasing information record in CTM


SCM235 Lesson: Resources in CTM

Lesson: Resources in CTM

Lesson OverviewCTM will be used primarily to allocate limited production resources and materialreserves. While resources can be integrated via the Core Interface (CIF) andsome created in APO, you must be aware of some of the restrictions that CTMwill have on your resources. In this lesson, you will investigate the nuances ofthe resource in conjunction with CTM.


� Explain how resources impact SCM as whole� Identify how the use of resources differs in CTM from other APO planning

tools

Business ExampleTo receive the best results possible from the CTM solver, it is imperative thatusers understand how modeling master data can affect their results. CTM can beused to solve both detailed problems and rough cut problems. However, since thisis a tool that can accomplish both tasks, you must investigate the master datanuances that make CTM unique

Resources in SCMAs part of your supply chain model, resources will play a critical role in generatingfeasible procurement and production plans. In APO, resources are used toidentify the capacities of locations, machines, personnel, means of transport, andwarehouses. Resource data is relevant to the planning of order dates, takingworking times and the available capacities of the resources into account.

Note: Up to SCM 4.1, CTM takes only production resources into account.As of SCM 5.0, handling, transport and calendar resources are also used.Other resources are NOT supported by CTM.



Figure 63: Resource Categories in CTM

Unlike ECC, APO supports the planning of different categories of resources.These can be time-based like ECC, but also volume and mass based constraints.While tools like SNP use all types of resource categories, more detailed tools likeCTM and PPDS, which are primarily production oriented, do not use storageresources as a constraint.

Note: The CIF only supports the transfer of production resources.

In addition to different categories of resources, you can further subdivide resourcesinto types.

Resource Type SNP PPDS CTMSingle-Activity X XMulti-activity X XSingle-Mixed X X XMulti-mixed X X XBucket X X



You use bucket resources for the bucket-oriented, medium and long-term planningof Supply Network Planning. The smallest time unit that can be used in bucketresources is one day. Bucket resources can be defined as:

� Quantity (without time base) - by defining the transportation capacity of atruck or the storage capacity of a warehouse, for example.

� Rate (quantity with time base) - this defines the consumption or productioncapacity of a resource, for example; in other words, the quantity that isconsumed or produced on a working day at the resource.

Transportation resources are, by nature, bucket resources used to model thecapacity of transport fleets to avoid overloading them. Storage resources are bucketresources used to model the capacity of storage locations to avoid overloadingthem and are typically volume based. Handling resources are used to model thecapacity of forklifts, conveyor belts, or pipelines to avoid overloading them.

The calendar maintained in the resource master is used by CTM to calculate theavailable capacity of the resources, but only if updated into the LC. Any changesto the calendar like new working days need to be updated. CTM takes the capacityright from the LC. Maintained down times for mixed resources have an impact ontime-continuous planning and on bucket-oriented planning.

CTM Scheduling Supports

� Production Resources for Production Activities� Handling Resources for GR/GI Activities� Transport Resources for Transport Activities

CTM Restrictions

� Unscheduled Resource breaks in PPDS planning mode� Resource Utilization in PPDS planning mode� Multiple capacity variants (Only Active Variant is used for planning)

Only the active variant of a resource is used for planning. If a variant is notdefined, the header definition will be taken into account. CTM can only use onecapacity variant which is the active one. It can�t use alternative variants like SNP.For modeling alternative capacities, you have to maintain alternative resources.



Resource Categories and Types

1. APO Menu path:APO→ Master Data→ Resource→ Resource

2. Enter Location 1000 and planner 000

3. Select Change

Finite PlanningFinite or infinite planning mode can be controlled by setting CTM profile→Strategies→ Special Strategies→ Finite or Infinite Capacity Planning. As ofSCM 4.1, CTM supports real infinite planning. In earlier releases, CTM alwaysused finite planning. The system simulates an infinite planning by taking thehighest possible value for resource capacities into account for finite planning. Thisvalue is 109. Note that a higher value than 109 cannot be used for finite planning.This value can easily be exceeded by using dimensional units.

For example, if a resource capacity is 1000 tons, the system calculates the capacityin the smallest unit, that is, in grams, which leads to a value of 109 grams. Toavoid these high values, you should avoid using dimensional units or use theplanning parameter, �Precision�. The reason for using this planning parameteris the CTM internal multiplication of the capacity values. CTM multiplies thecapacity consumption internally by 1000 because the variable for the capacityconsumption is an integer and therefore only values without decimals can be used.In case of very high capacity offers, very big values might appear, which are toobig to fit the 109 restriction. These large values can be reduced using the controlparameter �Precision�. If this parameter is set, the default multiplier of 1000 canbe reduced to 100, 10, or 1. This means that internally, the capacity is multipliedby 100, 10, or 1 depending on the value set in the parameter. However, this meansthat the capacity values become inaccurate.

For example, the number 10.41 instead of 1041, will then be used by the CTMengine as 10. To calculate the final result the values from the CTM engine aredivided by 1000 again or by the value set in the parameter.

Note: The high capacity values are mainly a problem when using bucketor multi-activity resources. For single activity resources, an infiniteplanning is not possible before SCM 4.1.

When using �infinite planning�, the maximum resource capacity valuedoesn�t affect breaks. This means that only the time periods of availablecapacity are enlarged up to 109; breaks will still not provide any capacity.

The Master Data Checker always shows the values maintained in theresource master data. It does not show the values used for infiniteplanning. The capacity values are shown converted into the base unit.



Time Continuous PlanningWith Time Continuous Planning, you want to plan to the second with PP/DSin-house production sources of supply. CTM planning uses single-activityresources, multi-activity resources, and mixed resources. When using mixedresources, CTM planning loads both the time-continuous capacity and theavailable bucket capacity of the resource.

Figure 64: Unscheduled Break Times

Unscheduled breaks are not supported by CTM. An unscheduled break is aresource downtime which can appear in a certain time frame. For example, withina time period from 8:00 � 18:00, a break of 30 minutes can take place. Theseunscheduled breaks can cause resource overload or overlapping activities becauseof the order durations which could be scheduled differently in CTM than in theliveCache. Therefore, the 100% capacity usage is mandatory.

On the other hand, breaks between two shifts (non-working time) are supported byCTM. According to the settings in the corresponding PPM, an activity can also becreated over a break. But in this case, however, the breaks are always scheduled.



Figure 65: CTM/LiveCache Scheduling

When setting the flag �Check LiveCache Scheduling and if errors exist createlog� in the global customizing settings (Transaction: SAPAPO/CTMCUST), thesystem will give an error message when unscheduled breaks are set.

Note: For further details, refer to note 406825.



Figure 66: Resource Utilization in CTM

For time continuous resources, the capacity utilization must always be 100%.(For bucket resources, any variable utilization is possible). When using capacityutilization other than 100%, the scheduling in the liveCache is different thanin CTM. Note that the following scheduling differences are also the same forunscheduled breaks, because in both cases, the activity durations are enlargedby the liveCache.

Example: Assume we have an available capacity of 10 hours and a utilization rateof 90%. As a result, the capacity offer would be 9h. If an activity of 1h durationnow has to be scheduled, the duration needs to be enlarged to 1 hour and 6 minutes.The enlargement of the duration is then 10% (10% of 1h = 6 min.) because of thelower capacity usage of 90%. Since CTM does not support this functionality, theactivities are scheduled without these 6 minutes but the liveCache will considerthe 6 minutes, which causes the scheduling differences.

In case of a utilization rate of 110%, the reverse would happen. The duration of 1hour would be shortened by 6 minutes to 54 minutes. Therefore, the liveCachewould schedule a gap between the activity and the due date instead of an overlap.See Figure 17.

Caution: If resource utilization is not equal to 100% for CTM planning,then the CTM engine created order start date is recalculated by liveCacheduring order creation. The new order dates will be different compared to



the CTM proposed dates. This can cause resource overload/underloads. Incase of multilevel planning with CTM, the component availability dateswill also be either too early or too late.

The difference in planning between CTM and LC due to resourceutilization/unscheduled breaks can be identified using 'CTM: Compare CTMresults with liveCache scheduling' in CTM global customizing.

The CTM planning parameter UTILIZATION can be used with restrictionsto handle resource utilization factor. This parameter can be set in the CTMProfile Control→ Planning Parameters. This parameter temporarily extends thePPM/PDS variable duration of the mode according to utilization factor maintainedwith Value 2 of the parameter. In the CTM profile, maintain the variable planningparameter UTILIZATION as follows:

Parameter Name: Utilization

Value 1: X

Value2: (enter Utilization factor - 90% )

Before using the CTM parameter UTILIZATION, the following restrictions of theparameter must be considered:

1. Constant utilization for all resources (maintained with value 2 of theparameter) is used, that is, resources with different resource utilizationcannot be considered.

2. Cannot consider fixed duration of the mode given in the PPM/PDS3. Cannot handle time-phased resource utilization factor maintained in the shift

factor of the capacity variant of resource4. Unscheduled breaks are not handled at all5. Primary and secondary resource with different utilization cannot be handled

Bucket Oriented PlanningBucket planning is the process of planning based on buckets of data with SNPin-house production sources of supply. CTM planning loads bucket resources orthe available bucket capacity for mixed resources. When using CTM for SNPplanning, all activities must start at the beginning of a bucket. In case of dailybuckets, the orders will also end at the end of a bucket. For weekly or longerbuckets, the orders can also end within the bucket.



When performing bucket planning in CTM, there are some restrictions that willoccur.

Note: If a min. lot size is bigger than the max. daily capacity and theduration is limited to 1 day, CTM cannot find a solution. An examplewould be a capacity of 10 pieces per day and a min. lot size of 50 piecescorresponding with a duration one day.

Note: For bucket resources, any variable utilization is possible. This willnot provide any scheduling problems between CTM and the liveCache.

In case of bucket-oriented planning, only fixed activity durations are possible. Thedurations of the activities are independent from the amount produced. It is notpossible to have variable activity durations like in continuous planning.

Figure 67: Scheduling Fixed Activities

Assume you have a capacity of 10 pieces per day and a fixed duration of 1 day.A demand of 5 pieces will then lead to an activity with a duration of one day.A demand of 10 pieces will also lead to an activity with a duration of one day.However, a demand of 20 pieces will then cause two activities (orders), each witha duration of one day. It will not create an order with a duration of two days.

If the duration of an activity is longer than one day, the resource consumption isdistributed evenly. For example, an order of 9 pieces with a fixed duration of 3days leads to a consumption of 3 pieces each day. Unusable capacities may arise.In case one day has just a capacity of 3 pieces left, then an additional activity canbe scheduled in a time span where three days in sequence can provide enoughcapacity. In the case displayed in the figure below, a capacity gap occurs whichcannot be used by activities longer than one day.



Mixed ResourcesMixed resources can be created via the CIF or manually in APO. These types ofresources can be used by both PPDS and SNP as well as CTM. Each resource canhave start and stop times that are required by PPDS, as well as summary data indaily buckets as required by CTM. Mixed resources can be single, which meansyou can only perform one task in a given time period, or Multi, which allows morethan one task to be performed on the same piece of equipment

Mixed resources are used according to the setting �bucket oriented� or time�continuous� in the CTM profile on the �Settings� tab page. If �bucket-oriented�is set, only the bucket part of mixed resources is used. If �time continuous�planning is set, the time continuous and the bucket part of mixed resources aretaken into account. During CTM planning, the time continuous part is consideredand after planning, an additional calculation for the bucket part takes place. Thismakes it possible to show the planning result both time continuously and alsoaggregated in buckets. The PP/DS results may also be considered in the SNPplanning which is usually bucket-oriented.

For bucket resources any variable utilization is possible, but for time continuousresources, the capacity utilization must always be 100%. The capacity utilizationfor mixed resources must also be 100% because in both bucket and timecontinuous planning the time continuous part of the resource is used.

LiveCache/CTM Scheduling DifferencesIf buckets only provide a part of the resource available capacity because of timerestrictions of the time series, a capacity overload can appear. This only happensin bucket planning mode. When using time continuous planning, the problemdoesn�t appear. If performing a bucket planning for mixed resources, activitieslonger than one day might be scheduled differently in CTM than in liveCache.The reason for this is a reduced capacity offer due to the time stream.



Figure 68: Mixed Resource Scheduling

1) Assume we have just half of the available capacity (5 pieces) on Monday thanwe have on other weekdays. This constraint could result from the fact that onMonday only 50% of the normal 8 hours working time is valid. The capacity offerwould then look like in the upper part of the figure above.

2) If CTM schedules an activity (order) with a duration of two days and a capacityutilization of 5 pieces per day, CTM could place it on Monday and Tuesday. Thecapacity utilization scheduled by CTM for these days is then 5 pieces per day.In the case of bucket planning, the liveCache distributes the utilization of theresources pro rata and uses 3.3 pieces of resource utilization on Monday and6.6 pieces in total on Tuesday.

The scheduling differences lead to inconsistencies which can cause overloadsituations or unusable capacity. An additional activity (order) scheduled by CTMon Tuesday that would need 5 pieces of resource capacity will lead to an overloadsituation for the liveCache. Also the remaining capacity of 1.7 at the liveCache onMonday would be unusable for CTM. Refer to the lower part of the figure above.

Note: A work-around for this problem would be: Set activity duration to1 day. As a result, the liveCache would schedule two activities separatelywith a capacity of 5 pieces each on Monday and Tuesday. Using bucketplanning, the liveCache would also consume 5 pieces of the capacityper activity. For time continuous planning, the liveCache distributes theresource utilization in the same way as CTM. without any disharmonies.



SCM Resources in CTMSCM resources are those resources that exist on in SCM to constrain the SCMsolvers. These would be the resource categories Handling and Transportation.These resources are not synchronized to any objects in the ECC System. Theyare typically dependent on other SCM objects, like Locations or TransportationLanes, to be of any use to the SCM solvers.

Handling Resources can be assigned in the location master, under the Resourcestab. You have the opportunity to assign two different resources on for inbound(unloading) and one for outbound (loading). You can choose to use different onesto potentially model that you have different areas in the facility that handle theseseparately or you can assign both tasks to the same resource. The consumptionof these resources is defined in the product master at the location level in theGR/GI tab.

Transportation Resources and the consumption of them are assigned in theTransportation Lane. These resources are designed to represent a fleet constraintnot an individual shipment constraint.

Figure 69: Scheduling Resources in CTM

As indicated in the figure above, CTM will schedule Production, Handling, andTransportation Resources.



During the creation of a planned order, CTM will use the production resources toschedule production activities. In addition, if a GR processing time is entered inthe product master, CTM will use the Inbound Handling resource in the LocationMaster.

Note: In the Location master, if both calendars and resources are assigned,then the calendar is ignored and CTM scheduling only considers resourcecapacities.

During the creation of a stock transport order or purchase requisition, CTM willuse the outbound handling resource from the shipping location, to schedule theGI processing time. The transportation duration or planned delivery time will usethe transportation resource or the calendar in the transportation lane, and the GRprocessing time will use the inbound resource from the receiving location.





Exercise 4: Scheduling Inconsistencieswith Mixed Resources

Exercise ObjectivesAfter completing this exercise, you will be able to:� Identify and correct master data issues related to CTM and time continuous

planning

Business ExampleThe resources that you will be using to plan your CTM scenario were createdby the CIF during a nightly batch process. Due to certain nuances in CTM andliveCache, you must correct any inconsistencies that could cause issues with timecontinuous planning.

Task 1: Demonstrating Scheduling Inconsistencieswith Time Continuous PlanningYour data that was created in ECC several months ago has recently been created inSCM due to the recently activated Core Interface. With an existing supply chainmodel in place, you would like to test for any ill effects based on the currentstate of your master data.

1. If you have not done this step yet in a previous exercise, create a simulationversion called CTM_## (Group ## CTM simulation), for model 000.

2. Create a new CTM Profile called GR## (Group 01 CTM Profile) using theprofile CTM_00 as a template. In your new CTM profile, change out theversion from 000 to CTM_## and save the profile.

3. From the CTM profile, enter the product view for version CTM_##, productT-F200 at Location 1000. Create an order (forecast requirement) for -25pieces one month from today and Save.

Use the view SAP001 (Orders Settings) and set/save the Propagationrange SAPALL.

Note: For this exercise, all participants will be using the samematerial number but different resources.

4. Return to the CTM profile GR## and execute a planning run. Review theevaluations.




5. Review the details of the evaluation. Where does the error occur?

6. What is the cause of this error?Hint: Select the long text

Task 2: Correcting Resources for Time ContinuousPlanningNow that you have experienced the scheduling inconsistency problems first handfrom the previous task, you must now correct the situation. Review your resourcesand find out what is causing the error in liveCache scheduling. Then, using massprocessing, correct the problem in your resources

1. Review the time continuous capacity data for one of your resourcesWT-L##_1000_001

2. What caused the problem with writing the data back to liveCache?

3. Using Mass processing, remove the breaks for your resources and set theutilization rate to 100 %, using planner code 0## in locations 1000, 1200and 2300.

Hint: Variant SCM235_2 (Rest Break Duration and Utilization)is available to use as a template, but change planner code to 0##.

Caution: Make sure planner code 000 is removed or this willcause problems to others!



Solution 4: Scheduling Inconsistencieswith Mixed ResourcesTask 1: Demonstrating Scheduling Inconsistencieswith Time Continuous PlanningYour data that was created in ECC several months ago has recently been created inSCM due to the recently activated Core Interface. With an existing supply chainmodel in place, you would like to test for any ill effects based on the currentstate of your master data.

1. If you have not done this step yet in a previous exercise, create a simulationversion called CTM_## (Group ## CTM simulation), for model 000.

a) SCM menu path Advance Planning and Optimization→ Master Data→ Planning Version Management→ Model and Version Management

b) Select model 000 from the list on the left by clicking on it.

c) Select and choose the option Planning Version from the menu.

d) Enter the name CTM_## and the description (Group ## CTMsimulation)

e) Select the Create and Save button. If you click the expand triangleon your model in the list on the left, you should be able to see yourplanning version.

2. Create a new CTM Profile called GR## (Group 01 CTM Profile) using theprofile CTM_00 as a template. In your new CTM profile, change out theversion from 000 to CTM_## and save the profile.

a) APO menu path: APO→ MultiLevel Supply and Demand Matching→Planning→ CTM

b) Enter Profile CTM_00 and select enter.

c) Select Copy Profile, and enter GR## and select Copy Profile.

d) Navigate to the Planning scope tab and replace version 000 withCTM_## and select Save.

3. From the CTM profile, enter the product view for version CTM_##, productT-F200 at Location 1000. Create an order (forecast requirement) for -25pieces one month from today and Save.




Use the view SAP001 (Orders Settings) and set/save the Propagationrange SAPALL.

Note: For this exercise, all participants will be using the samematerial number but different resources.

a) From within the CTM profile, select Product view.

b) Select View SAP001 (Order Setttings) and select .

c) Select Create Order.

d) Enter Planning Version CTM_##, Product T-F200 at Location 1000

e) In the Rec/Reqmts Qty field enter -25 pc

f) Remove the Start date and time.

g) Enter an Avail/Reqmt Date One month from today.

h) Select Create Order.

i) Select Save.

4. Return to the CTM profile GR## and execute a planning run. Review theevaluations.

a) Return to the CTM profile GR## (use Back if necessary).

b) From the Planning Run tab, select F8 or Start Planning engine.

c) The results should have a Status.

5. Review the details of the evaluation. Where does the error occur?

Answer: The Error Occurs when the CTM engine tries to create the ordersin liveCache. The error should read something like Order 000000160630:Activity in liveCache was scheduled differently from CTM

6. What is the cause of this error?

Hint: Select the long text

Answer: In the following cases, the scheduling of activities in the liveCachecan vary from the result in CTM planning:

� You use time-continuous resources with a rate of resource utilizationthat does not equal 100 %.

� You have specified a break duration for the resources.




Task 2: Correcting Resources for Time ContinuousPlanningNow that you have experienced the scheduling inconsistency problems first handfrom the previous task, you must now correct the situation. Review your resourcesand find out what is causing the error in liveCache scheduling. Then, using massprocessing, correct the problem in your resources

1. Review the time continuous capacity data for one of your resourcesWT-L##_1000_001

a) APO Menu Path: APO→ Master Data→ Resource→ Resource

b) Enter Location 1000, Planner 0##

c) Select Resource.

d) If necessary, select the Single Mixed tab.

2. What caused the problem with writing the data back to liveCache?

Answer: Resource WT-L##_1000_001 has a break time of 1:00:00 hour.

3. Using Mass processing, remove the breaks for your resources and set theutilization rate to 100 %, using planner code 0## in locations 1000, 1200and 2300.

Hint: Variant SCM235_2 (Rest Break Duration and Utilization)is available to use as a template, but change planner code to 0##.




Caution: Make sure planner code 000 is removed or this willcause problems to others!

a) APO menu path: APO→ Master Data→ General Master DataFunctions→ Mass Maintenance or use transaction code MASSD.

b) Select the object type Resource.

c) Select Load Variant.

d) Enter Variant SCM235_2 (Rest Break Duration and Utilization) andselect Load Variant.

e) Change the Planner to 0##, (do not leave 000 in field) and chooseSelect .

Note: If any popup windows appear, select Continue.

f) Select Change with Display.

g) Set the Break field to Set Fixed value and enter 00:00:00.

h) Set the Utiliz. Rate % field to Set Fixed value and enter 100.00.

i) Select Make Changes.

j) Select Save.




Lesson Summary

You should now be able to:� Explain how resources impact SCM as whole� Identify how the use of resources differs in CTM from other APO planning

tools



Lesson: PDS/PPM in CTM

Lesson OverviewCTM will be used primarily to allocate limited production resources and materialreserves. To determine the timing and quantity of the resources and material, youwill need the use of Bills of Material (BOM) and Task Lists. While both of theseitems can be integrated via the Core Interface (CIF), you must be aware of someof the restrictions that CTM will have on them. In this lesson, you will investigatethe nuances of the BOM and Task List in conjunction with CTM.


� Explain how the PDS/PPM impact SCM as whole� Identify how the use of the PDS/PPM differs in CTM from other APO

planning tools

Business ExampleIn order to receive the best results possible from the CTM solver, it is imperativethat users understand how modeling master data can affect their results. CTMcan be used to solve both detailed problems and rough-cut problems. However,since this is a tool that can accomplish both tasks, you must investigate the masterdata nuances that make CTM unique

BOMs and Task ListsOne of the cornerstones of a manufacturing process is the master data that ensuresthe timely delivery of components and finished products to support requirementsdates. Depending on the complexity of your process, you may only have a fewcomponents to be concerned about, or have several layers of manufacturing.

In SAP SCM your company will have two choices to model a manufacturingprocess, the Production Process Model (PPM) or the Production Data Structure(PDS). Each will contain the following Items:

� Components (Raw or Semi-finished)� Scheduling Rates� Manufacturing Resources.


SCM235 Lesson: PDS/PPM in CTM

Figure 70: Production Versions in ECC

The PPM or the PDS are objects that can be generated by the CIF based on ECCmaster data. Both pieces of APO master data are based on the ECC productionversion. The production version is a combination of the bill of material and tasklist (routings/recipe).

A bill of material is a master data object that is used mainly by engineering andmanufacturing to model the input components for a semi-finished or finishedproduct. The BOM will list the product numbers, quantities and units of measure.In SAP ECC there will be other relevant control parameters that will be used tocontrol the planning results.

A task list is a generic term to describe the manufacturing process in detail. InSAP ECC, there are several different types of task lists that are used to controlspecific processes. Several examples are :

� Standard Routing (production orders)� Rate Routings (repetitive mfg.)� Recipes (process orders)



The PDS in CTMIf you use PP/DS production process models (PP/DS PPM) or PP/DS productiondata structures (PP/DS PDS) in CTM planning, CTM considers the setting forthe plan explosion. The plan explosion determines which source of supply typeCTM planning is to use.

Hint: For the plan explosion, CTM supports all settings except MatrixExplosion of iPPE and Long Products Plan Explosion.

You can set the plan explosion in SAP Advanced Planning and Optimization(SAP APO) in the following places:

� In the location product master� In Customizing for Production Planning and Detailed Scheduling (PP/DS)

under Global Settings→ Maintain Global Parameters and Defaults� In CTM Customizing under Define Global Values and Default Values

If you want to use the PP/DS PDS in CTM, there are two options available:

1. In Customizing (PPDS Global Parameters and Settings) , set the PlanExplosion indicator to PDS Generated from R/3

2. If migrating from PPM, users must update the Product Master (PPDS tab)and set the plan explosion indicator to: PDS Generated from R/3

Note: SNP can use both PPMs and PDSs. Therefore users must properlymaintain cost and priorities to distinguish the highest priority for thesources of supply.

This means that you use the Individual Explosion for iPPE setting in PP/DSCustomizing and either Individual Explosion for iPPE or No Restrictions in CTMCustomizing.



Figure 71: PDS in CTM

You can use a PP/DS PDS in CTM that was generated directly from an SAP R/3production version or BOM. After the transfer from ECC, the master data existsin SAP APO directly in the form of a PP/DS PDS.

So you can use the PP/DS PDS in CTM, you must note the following whengenerating the PP/DS PDS:

� When you create the integration model in ECC, select the PP/DS PDS.� If you want to use the PP/DS PDS generated from ECC data in CTM, use

the method CREATE_CTM_PDS of this BAdI.

PPM in CTMThere are two types of master data for in-house production: PPM and PDS. ThePPM has been available to customers since release 1.1 of APO, while the PDShas only been available since release 4.0 of SCM. The PDS data is convertedto PPM data for CTM and thus used in the same way. SNP-PDS is used likeSNP-PPM. However, PP/DS PDS is not used by CTM. A specific CTM PDS hasto be generated from a PP/DS PDS which is used like a PP/DS PPM.



Figure 72: APO Manufacturing Master Data

CTM planning uses both SNP and PP/DS PPMs. The following restrictions shouldbe considered for CTM planning:

During the planning process, procurement priority will be considered by CTM.CTM also supports all time-phased parameters and version-dependent parametersof the PPM. The PDS will have time phased parameters based on the use ofEngineering Change Management in ECC. The PDS has limited version-dependentparameters (costs/priorities) since this data is maintained in a separate table fromthe production version (but references the production version - PDS_MAINT).

CTM Planning LevelsCTM can plan at both the rough cut level (SNP), and the detail level (PPDS). BothPP/DS and SNP PPMs can be selected during a planning run.



Figure 73: CTM Planning Level Settings

In the CTM profile, you can select which type of PPM/PDS you will use, PPDSor SNP. When you initially create the CTM profile, you will be prompted by thesystem to identify what type of planning you intend to perform: Time Continuousor Bucket. These parameters can be changed at a later time if required. Once yourplanning levels are set, you must then set the Master Data Selection in the CTMprofile (This will be covered in a later session).

Note: The field: bucket or time continuous planning in the CTMprofile has no influence on the PPM selection.

To perform Bucket Planning with PP/DS PPMs, it is necessary to use mixedresources in the PPM. A fixed duration and a variable bucket consumption shouldbe maintained in the PP/DS PPM master data. The advantage is, PPMs generatedin SAP ECC do not have to be converted from PP/DS to SNP. Using PP/DS PPMsfor bucket planning is also recommended if a certain PP/DS PPM functionality isrequired that is not available for SNP PPMs. For example, you can maintain thevalidity of the alternative components.

SNP orders created with PP/DS PPMs have certain restrictions. For example,these orders cannot be transferred via CIF, or the orders cannot be changed in theinteractive planning. This is because the system tries to find the correspondingSNP PPM for the SNP order but can�t because the PP/DS PPM was used to createthe SNP order. It is therefore recommended that you create PP/DS orders usingPP/DS PPMs, and SNP orders using SNP PPMs.



Plan/OperationsDuring the transfer of the production version from ECC, a new hybrid object, thePDS or PPM is created. These objects combine data from the Production Version,Bill of Material, Task List, and Work Center / Resource in ECC. In doing this, thetransfer has achieved a more optimized structure for planning purposes.

Figure 74: Structure of the PPM

As a result of the transfer of the production version data, the PPM will contain twounique pieces of data in APO, the Plan Number, and the PPM Name. The plannumber consists of the master data that created the PPM. The PPM name containsthe data the was defined in the production version, such as Output Product, LotSize validity and Date Effectivity.

In CTM, the main output product of the PPM determines for which demands(based on the product) a plan can be used.

Assume we have two output components (product A and B) assigned to plan X. Ifwe only have a PPM for product A, then the plan cannot be used for demands ofproduct B. Product B could be a co-product output, whenever a demand for productA is fulfilled with this PPM, B will also be produced if A will be produced. Theyield of B is put to stock. The stock of B will be consumed with every order for B.Note that the main output product is defined in the PPM maintenance. Therefore,it is possible to create two PPMs within a plan with different output products.

Note: Only the main output product (not the co-products) is takeninto account for the PPM determination.



Within the PDS/PPM there are two levels to define the manufacturing process,operations and activities. Only activities will be scheduled as this is where thedurations actually exist. Operations will be used simply to group manufacturingactivities that should be scheduled on the same resource.

Note: PI-Operations (Process Industry Operations) are automaticallyignored when using CTM.

Each Operation can consist of a maximum of 3 operations, Setup, Processing(production), and Tear down.

Note: Tear down activities are not supported in CTM and thereforewill be deleted during planning.

ModesThe duration of an activity is maintained within the mode parameters. Modesdefine what resources are needed for an activity. For PP/DS PPMs, a primaryresource must always be defined. For SNP PPMs, it is possible that no primaryresources are maintained. CTM will then use the duration of the activity without aresource. This can be used to model lead times, for example.

With PP/DS PPMs, the mode number maintains the priority.

Note: SNP PDS/PPMs do not support alternative modes.

Resources modeled in one mode are all taken into account for production. Forexample, if one primary resource and two secondary resources are maintained inone mode, then all resources are necessary for production. If the resources aremodeled in different modes, then these modes will be looked upon as alternativesto each other and planned production would use the resources of either one ofthe modes.

For PP/DS PPMs, the priority has to be maintained in the Priority field in thePPM master data.

Setup Matrix in CTMSetup is one of the types of activities that are modeled as part of the PDS/PPM.In ECC, setup activities are usually considered fixed durations, but this can becontrolled by the formulas in the work center/resource. Within each operation ofthe task list, the owner can define a setup group and setup key to help determinesequence dependent setup times. The sequence is determined during schedulingfunctions of the planner, and during that time, the planner can make use of asetup matrix.



Figure 75: Setup Activities

SNP currently (5.1) cannot make use of the setup matrix, as it is used in detailedscheduling and SNP is scheduling at the bucket level. However, during bothProduction Planning and Detailed Scheduling activities, planners can have thesystem access a setup matrix that will adjust the setup durations dynamically, asthe production sequence is being built.

Note: When performing bucket planning, CTM cannot access/use thesetup matrix. During time-continuous planning, CTM will use the setupduration in the PDS/PPM, butWILL NOT use the setup matrix.

Breaks Allowed in CTMWithin the activity of an operation, users can control how each mode reacts tobreaks in capacity. In each mode, users can set a parameter, Break not Allowed.This parameter specifies that a mode may not be interrupted by a break.



Figure 76: Breaks Allowed

In CTM, the setting �Break not allowed� in the mode of an activity is notinterpreted correctly. If the option is not activated and no duration is specifiedfor the maximum length of work break, there is no restriction for the maximumbreak duration. Activities can therefore be created over breaks that can be as longas desired. If the option is activated, activities must not be interrupted by workbreaks, regardless of whether a maximum work break length was specified ornot. Note that in the CTM master data check, a maximum break duration of 0 isdisplayed if the activity is not to be interrupted.

This is also supported by CTM. It can be used to model interruptions of theactivities. In case a primary resource and a secondary resource are modeled, thesystem uses a resulting capacity profile. This means that if one of the resourceshas a break, all resources cannot be used during this break. See Figure 12.



Figure 77: Work Breaks in Activities

During the analysis of the resource, whether the primary or the secondary resourceis the calendar resource has no impact on the resulting capacity profile. CTM cansplit the orders and schedule the order over a break, no matter whether the primaryor the secondary resource has a break. As a result, one part of an order is donebefore and one part is done after the break of the resulting capacity profile. Forfurther details about modeling breaks in activities, see note 402964.

Resource ConsumptionIn ECC, scheduling and capacity consumption are controlled through two differentsets of formulas. Therefore, since these can have two different durations, this mustbe supported in APO as well.

In the section labeled primary resource, users will define the scheduling duration.In addition to this, you must also define the use of the resource related tocapacity. Beneath the mode, you can maintain the amount of primary resourceconsumption. It is also possible to define secondary resources. When setting theconsumption (variable/fixed), you must be aware of the dependencies betweenconsumption/duration and type of PPM.



Figure 78: Resource Consumption

For SNP PPMs (bucket oriented planning), a variable and a fixed consumptioncan be used but only in combination with a fixed duration. This means that youmay be scheduling in daily buckets, but capacity will be managed in smallerbuckets (minutes/hours). A variable duration for bucket planning is not possiblein SNP. However, when scheduling in a finite environment, the capacity willultimately affect scheduling or at least order sizes, given an order per day basedon capacity availability.

For PP/DS PPMs (time continuous planning), only a fixed capacity consumptioncan be utilized, but this can be combined with a fixed or a variable duration forscheduling purposes.

Note: Exception: For PP/DS PPMs, it is also possible to define a variableconsumption but only in combination with a fixed duration. This is onlyfeasible if a multi mixed resource is applied.

Caution: It is not possible to maintain a standard capacity consumptionof zero. However, a zero value can be set when maintaining the timephase capacity consumption.



Activity RelationshipsActivities are what will allow CTM to determine where, how long, and in whatsequence manufacturing will take place. When using Rate or Standard Routings inECC, the PDS/PPM will support Setup and Processing (Production) activities.

Only activities are allowed in a sequential chain for CTM. However, CTMsupports the feature minimum/maximum duration between the end and the start ofan activity. This allows to model min. or max. breaks between activities. Pleasenote that this is possible only for PP/DS PPMs. SNP PPMs cannot have any breaksbetween their activities (maintained breaks are internally set to �0�).

Caution: Using min/max it is possible to maintain negative values whichwill result in overlapping of activities.

Figure 79: Scheduling Activity Relationships

CTM only supports relation type �end-start relationship�. Therefore, the min/maxfeature relates to the end and the start of sequencing activities. These relationshiptypes can be maintained under reference type. The reference subtype is not usedby CTM at all.



Mode LinkageWithin the activity relationship, users can determine which resources or modeswill be used to support a particular activity. When dealing with more than oneactivity in an operation, it is imperative that planners use the same mode for asetup activity as they do for a production activity.

Figure 80: Mode Linkages

In the PPM, planners can set theMode Linkage Type. This parameter indicateswhether a mode linkage exists between two related activities. You use modelinkage if two related activities must be linked for optimization or explosion. Thefollowing options for mode linkage exist:

� Linkage of modes with identical names: The modes of the activities musthave identical names for linkage. The activities must also have the samenumber of modes.

� Linkage of modes according to primary resource: The modes of twoactivities that are assigned to the same primary resource are linked. In thiscase, the names of the modes are unimportant.

Scheduling SNP ActivitiesFor SNP PPMs, no break is allowed between activities by default. The MasterData setting Maximum Interval Between Activities in the CTM profile allows youto set a global value for breaks between activities when using SNP PPMs. ForPPDS PPMs, when no maximum break duration is specified, the a default value of100 days (8640000 sec) is used.



Figure 81: Scheduling Breaks in Bucket Planning

Example: Assume that you are facing a normal working week, which has 5working days and a 2 day weekend.

Case 1: In your order, the SNP PDS/PPM you are using has than one activity for agiven mode. This order as one activity that has a 1 day fixed duration and a secondactivity of 6 days. The order could be scheduled over the break if the flag �Breaknot allowed� in the PDS/PPM is NOT set. The activity is scheduled like in case 1.

Case 2: A different order has an SNP PDS/PPM that does not allow breaksbetween activities. The order has two activities, each with a 5 day fixed duration.The default break duration between activities is �0�. This can result in a situationwhere the order cannot be created.

Case 3: Using the same situation as Case 2. However, these two activities canbe scheduled if the activities are shifted by one day. In this example, the breakinterrupts the activity itself and therefore it can be planned.

Scheduling Components in CTMFor manufacturing processes that require several steps and span more than oneday, it is prudent to identify where components will used or consumed. InECC, this function is called component allocation and is controlled via task listmaintenance. In APO, the PDS/PPM will identify which materials are consumedin the production process (Input), and those that are received from the productionprocess (Output).



Figure 82: Component Assignment

Specifically in CTM, all output components must be assigned to the last activityof the PDS/PPM. As of release 4.0, the input components can be assigned toany activity. Prior to 4.0 the input components needed to be consumed at thebeginning of the first activity of an operation and the output needs to be consumedat the end of the end activity.

Output components not assigned to the last activity are ignored during the PPMexplosion in the CTM. If an output component is not assigned to the last activity,the CTM planning cannot use the PDS/PPM.





Exercise 5: The PPM in CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Understand how the PPM can impact CTM

Business ExampleYour business needs to use Bills of Material and Task Lists to support in-houseproduction planning. Update your master data accordingly.

Task: Update Production Process ModelsAfter your research, you should realize that many of your products that you willbe using might be using PPDS PPMs during planning. Since you are unfamiliarwith CTM and the master data, we will reset the product master so PPMs will bethe Plan of choice during time continuous planning in CTM.

1. Using mass processing, set the Plan Explosion Indicator to 2 - Explodethe Production Process Model for all the materials (production version)assigned to production planner 0##, in plants 1000, and 2300.

Hint: You may use the existing variant SCM235_3 - Set PlanExplosion to PPM for the business object Product.

Be sure to use your Planner Code 0##.



Solution 5: The PPM in CTMTask: Update Production Process ModelsAfter your research, you should realize that many of your products that you willbe using might be using PPDS PPMs during planning. Since you are unfamiliarwith CTM and the master data, we will reset the product master so PPMs will bethe Plan of choice during time continuous planning in CTM.

1. Using mass processing, set the Plan Explosion Indicator to 2 - Explodethe Production Process Model for all the materials (production version)assigned to production planner 0##, in plants 1000, and 2300.

Hint: You may use the existing variant SCM235_3 - Set PlanExplosion to PPM for the business object Product.

Be sure to use your Planner Code 0##.

a) APO menu path: APO→ Master Data→ General Master DataFunctions→ Mass Maintenance

b) Select Object type Product.

c) Select Load Variant.

d) Using the dropdown function, select SCM235_3 - Set Plan Explosionto PPM.

e) Select Load Variant.

f) Change the production planner to 0##.

g) On the bottom of the screen, select Select (Execute Selection) .

h) If necessary, select Change with display.

i) Select Hide Selector.

Hint: You may have to re-size the product description fieldto bring in the other fields.

j) Set the Plan Explosion field to Set Fixed value. Set the value to 2 -Explode the Production Process Model

k) Select Make Changes Twice.

Hint:




l) Select Save.




Lesson Summary

You should now be able to:� Explain how the PDS/PPM impact SCM as whole� Identify how the use of the PDS/PPM differs in CTM from other APO

planning tools


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Explain what a model means in SAP SCM� Create a Version of your Active Model for Simulation� Demonstrate the master data selection options for CTM Scenarios� Explain the origin and purpose of transportation lanes� Explain the origin and purpose of quota arrangements� Explain the effects of the purchasing information record in CTM� Explain how resources impact SCM as whole� Identify how the use of resources differs in CTM from other APO planning

tools� Explain how the PDS/PPM impact SCM as whole� Identify how the use of the PDS/PPM differs in CTM from other APO

planning tools


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 3The CTM Planning Scope

Unit OverviewCTM is a very flexible planning tool. One of the biggest benefits of CTM is theability to change the scope of the problem that needs to be solved quickly. Inthis unit, you will explore how CTM selects the master data that will be usedfor planning, as well as how requirements will be selected for resolution by theCTM planning engine.


� Demonstrate the Selection Window Function� Demonstrate Static versus Dynamic Selection� Demonstrate Manual versus Automatic Dependent Data Selection� Explain the Master Data Checker and its relevance.� Demonstrate Transactional Data Selection� Demonstrate the ability to create CTM Time Streams� Demonstrate how the CTM horizon can affect existing plans.

Unit ContentsLesson: Master Data Selection .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174

Exercise 6: Master Data Selection .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .187Lesson: Order Selection .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194

Exercise 7: Order Selection .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201Lesson: CTM Planning Horizon.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210

Exercise 8: The CTM Planning Horizon .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215


Unit 3: The CTM Planning Scope SCM235

Lesson: Master Data Selection

Lesson OverviewCapable-To-Match is a very flexible planning tool. Unlike the SNP optimizer thatrequires constant cost maintenance, CTM can be used once or on a reoccurringbasis. Within the CTM Profile, users will define the problem and the solution. Thescope of the CTM Profile is controlled through data selection. That is, definingwhat will be planned and what can be used to solve the inherent problem. Inthis lesson, you will explore how data selection will work in defining the scopeof the CTM run.


� Demonstrate the Selection Window Function� Demonstrate Static versus Dynamic Selection� Demonstrate Manual versus Automatic Dependent Data Selection� Explain the Master Data Checker and its relevance.

Business ExampleYour business intends to use CTM for a variety of situations. Some situationsare static, others will change based on consumer needs. Investigate how MasterData selection can be managed in CTM to adapt a CTM profile as the real-lifeproblems change.

Selection IDsWhen planning in any APO application, the first and most important step isdefining your scope of planning; those materials you wish to plan.


SCM235 Lesson: Master Data Selection

Figure 83: Data Selection

In Demand Planning, Supply Network Planning, and now Capable-To-Match,users predefine their work area or their areas of change and responsibility.

Selection management for the SDP selector is probably the better known of thetwo kinds of selection management. In interactive sales planning or in interactiveSupply Network Planning, you can create selections in the SDP selector andalso store them under a certain name. These stored selections can be used in allplanning books based on the same planning area, however, CTM is not required touse planning areas. CTM can use SNP planning areas to report off the planningrun's results. While the selection process is very similar between CTM andDP/SNP, the values are application-specific, so the naming conventions canoverlap between the applications. Within an application like CTM however,selection IDs must be unique.

The selector is your primary tool for locating, sorting, and organizinginformation. You select the characteristics that meet certain conditions fromthe dropdown boxes in the Object Selection dialog box (show... that meet thefollowing conditions...). Examples might be specific products, locations, PPMs,or Transportation lanes.

You can use the standard multiple object selection function to select several valuesof a characteristic. The lowest line is the most detailed level. This means thatonly those characteristic values can be selected for which the previous selectioncriteria are valid. In the shuffler, you can save selections that you intend to usefrequently and load existing selections.



Flexible Master Data SelectionIn CTM, it is possible to use just a certain part of the model for planning. Theselection can be defined in the CTM profile Edit→ Master Data Selection orindependently, APO→ Multilevel Supply and Demand Matching→ Environment→ Master Data Selection /SAPAPO/CTMMSEL. A CTM master data selectioncan be used in several CTM profiles.

You can include or exclude the following master data of the specified supply chainmodel from the master data selection, according to certain criteria.

� Location products: CTM planning can only create or delete orders forlocation products contained in the master data selection. If a plannedorder has a component for a location product that is not contained in themaster data selection, the entire order is fixed for CTM. The system cannotdelete this order unless you have set the Do not Check Order Detailsindicator on the Settings→ Basic Settings tab page. In this case, CTMdeletes the order, even if some of its components are not contained in themaster data selection.

� Sources of supply for external procurement (transportation lanes): Ifyou exclude a transportation lane from planning, CTM can no longer createstock transfers between the corresponding locations. However, the systemcan delete existing stock transfers if the orders are not fixed. If you use themaster data selection to exclude all transportation lanes for a location productwith procurement type External Procurement (F), CTM creates a purchaserequisition without a source location.

� Sources of supply for in-house production: If you exclude a source ofsupply for in-house production from the planning, CTM cannot createany orders for this particular source of supply. However, the systemcan delete existing orders for this in-house production source of supply ifthe orders are not fixed. If you exclude all in-house production sources ofsupply for a location product with procurement type In-house production(E), CTM can only fulfill a demand by using existing supplies. If thereare no supplies, CTM cannot cover the demand.

Hint: So that CTM planning can use a source of supply for in-houseproduction, the location products of all components of the sourceof supply for in-house production must be contained in the masterdata selection.

You can also have the system select all master data required to cover a demand. Ifyou enter a specific location product, transportation lane, or source of supply forin-house production, the system selects all location products, sources of supplyfor in-house production, and transportation lanes that are related to the masterdata object specified across all BOM levels. The system starts in the BOM in



the item for the given location product, transportation lane, or source of supplyfor in-house production, and selects all the corresponding master data that iscontained further down in the BOM.

The function of the Master Data Selection is quite powerful. Using the selectionand splitting the planning in different steps with a CTM profile, gives moreflexibility to achieve desired planning results. This is used in many customercases. It is possible for example to exclude the PPMs from a planning run, thus aproduction cannot be triggered. This can be used to ensure that first all stocks andpossible substitution for stock is used to fulfill a demand. In a second planningrun which covers the PPMs, the production can be planned which fulfills theremaining demands. Additionally, a profile that only deletes orders can also bequite useful. It can be used to clear the whole planning version before severalcombinations of profiles and thus combinations of functions are used.

Figure 84: Flexible (static) Master Data Selection

Static Selection: The system saves the master data determined according tothe selection criteria. If you then add further master data to the original supplychain model, this change does not have an automatic effect on any subsequentCTM planning. In static master data selection, you can use selection criteria andselections, and can also copy master data to or remove it from your selectionmanually.



Dynamic Selection: For dynamic master data selection, enter the name of aselection. In each CTM planning run, the system collects the master data againon the basis of the selection criteria. This means that all changes to the originalsupply chain model have an effect on the selection of master data. This may causeCTM planning to report missing master data.

Hint: The system also displays inactive sources of supply for in-houseproduction in the master data selection. However, CTM planning does notuse these sources of supply for in-house production.

Figure 85: Manual Data Selection

Once you have created the Master Data Selection ID, the next step is to selectthe data. By selecting , you can specifically add which Location/Products,External Procurement, and in-house Production, sources of supply you wish to useto resolve the shortage. In addition to the selection window, users can manuallyadd, insert, additions to the plan, and delete master data options that are notapplicable to this scenario.

Caution: If a selection ID has not been created, this data will have to bemanually selected versus the use of a saved selection ID.



Automatic Master Data SelectionYou can also have the system select all master data required to cover a demand. Ifyou enter a specific location product, transportation lane, or source of supply forin-house production, the system selects all location products, sources of supplyfor in-house production, and transportation lanes that are related to the masterdata object specified across all BOM levels. The system starts in the BOM inthe item for the given location product, transportation lane, or source of supplyfor in-house production, and selects all the corresponding master data that iscontained further down in the BOM.

Figure 86: Automatic Dependent Master Data Selection

Manual Selection: Start the selection of dependent master data directly whenprocessing the master data selection by choosing . You can check the selectionthere and then save it with the master data selection. The result of the selectionis always a static master data selection (see below).

Automatic Selection: Set the Automatically Select Dependent Data indicator. Ifyou use the master data selection in the CTM profile, the system waits to selectthe dependent master data until the data is needed (for example, during the CTMplanning run or order selection). For automatic selection, you can use the dynamicas well as the static selection (see below). While you process the master dataselection, you can also check the result of the selection on the correspondingtab pages.

Auto Selection by ProductsIn this situation, a planner wishes to plan a certain number of top level items, andconsider all supplies underneath the starting locations.



This function requires the user to enter a dynamic selection ID or to manuallyassign finished goods. In addition, the indicator Select Dependent DataAutomatically must be set.

Figure 87: Selection By Products

When using Location Products as the selection for in-house produced products,the profile will select all dependent components in the valid PDS/PPMs in allBOM levels that are selected.

In the example above, Product A was selected by the Selection ID. The PPM wasincluded as a result of the dependent data being selected automatically. The PPMwas exploded and components A1 and A2 were included since they are dependent.Component A1's PPM is selected due to the necessary dependency. The PPM forcomponent A1 identifies the need for components A11 and A12 as part of the plan.The analysis of component A2, identifies the need for using the transportation laneto a supplies to delivery A21 (purchased material)

For externally procured materials, this will include all supplier locations if validtransportation lanes exist.

Selection by Source of SupplyIn this situation, a planner wishes to plan the production location and all supportingsupplies. There are no concerns for higher level locations, on the lower levels ofthe supply chain.



This function requires the user to enter a dynamic selection ID or to manuallyassign finished goods. In addition, the indicator Select Dependent DataAutomatically and Start Also for Specified Supply sources must be set.

Figure 88: Selection by Source of Supply

Single Level Data Selection and ProductInterChangeablityThis situation could be compared to Master Production Scheduling in that youwish to limit the bill explosion and amount of items planned or consider a dynamicsituation where substitutes (product interchangeability) are present.

This function requires the user to enter a dynamic selection ID or to manuallyassign location products. In addition, the indicator Select Dependent DataAutomatically and Perform Only Single-Level Selection must be set.



Figure 89: Single Level Data Selection

In the first example above, product A is selected. Since the Select Dependent DataAutomatically indicator is set, the PPM for product A is selected. As a result,the BOM will be exploded. However, it will only be exploded for level 1 of theproduction process. Here, a planner may wish to analyze the results before havinganother CTM run or an SNP or PPDS planning run to manage the balance of thematerials not planned in the original CTM profile.

The second example allows a planner to use the Product Interchangeabilityfunctionality in data selection. This will use the product interchangeability masterdata to determine what other products other than the ones originally selected to beincluded in the CTM profile.

Master Data CheckerYou can use the master data check in Capable-to-Match (CTM) to display masterdata that you require for your planning before you actually perform the CTMplanning run, and to check this data for consistency. The system displays the datain the same way as it is used in the planning. This means that the system convertsthe data for the master data check and uses the settings from the CTM profile. Forexample, if you have set the Ignore Production Horizon indicator in the CTMprofile, the system converts activity durations for a production process model(PPM) into seconds, or displays all location products without a production horizon.



Figure 90: CTM Master Data Checker

The CTM master data check checks and displays all master data that you selectedin the planning scope of the relevant CTM profile. You can also restrict the checkand display to location products or sources of supply. If you use a check profilefor the master data check, you can quickly find any products and sources of supplythat have incorrectly maintained values.

In the check profile, you can enter allowed intervals for time periods (productionhorizon, stock transfer horizon, and planned delivery time) and lot sizes. Forexample, if the production horizon for a location product falls outside thepermitted interval, the system issues a message after the master data check.

You can use the Business Add-In (BAdI) /SAPAPO/CTM_MCHECK to add yourown master data checks to the standard CTM checks.

In the CTM profile, choose Check CTM Master Data. In a separate window,select the master data objects for the system to check. Once the system hasperformed the master data check, the CTM Master Data screen appears.



To display a specific master data object, select the object in the navigation tree. Tosee detailed information, choose Detail Data or double-click on the relevantmaster data object.

Hint: When you display resources, the system always shows you thecurrent capacity data. If activities are already allocated to the relevantresources (by CTM planning or another application), the system displaysthe reduced capacity. When displaying the capacity data, the system doesnot take into account the fact that CTM often deletes orders in a subsequentplanning run. If the system actually deletes these orders and you performanother master data check, the system displays the changed capacity.

Displaying Messages in the Master Data CheckIf a message exists for a master data object, the master data object and allsuperordinate entries are highlighted in the navigation tree. To display themessage, select the master data object and choose Messages. The systemonly displays the message for the incorrect master data object, and not for thesuperordinate entry in the navigation tree.

Master data objecthighlighted in red

Data inconsistency that you must resolve in order thatthe CTM planning run does not terminate

Master data object withred text

Missing data or settings, which however do not causethe planning run to terminate

Master data objecthighlighted in yellow

Warning that does not lead to errors in planning

Master data object withblue text

Information message

Maintaining Master Data Objects DirectlyIn the navigation tree, you select the master data object, then select the relevantfunction from the context menu. The transaction for maintaining master dataobjects appears. If you have created data for the master data object for the planningversion used, the system displays the version-specific data. If you have not createdthe data for a specific version, the system displays the non-version-specific data.

When you access the maintenance transaction directly, you can make changes tothe master data that do not have an immediate effect on the data displayed forthe master data check. If you have made changes in the same session, end themaster data check and choose Update in the CTM profile. If you have madethe changes in another session, end the transaction and call it up again, so that thesystem can make use of the changed data.



Changing the Sorting of Specific Master Data ObjectsFor location products, resources, and external procurement sources of supply,you can change the sorting in the navigation tree. From the context menu in therelevant folder, select the appropriate function (such as Sort By Location).

Performing the Master Data Check as a Background JobIf you want to check a very large supply chain model, you can perform the masterdata check as a background job. From the SAP Easy Access screen, chooseMultilevel & Supply Matching→ Reporting→ Consistency Check for CTMMaster Data. On the CTM Model Consistency Check, enter the necessary dataand set the Display messages as a list indicator. Choose Program→ Executein the background. The system displays all messages in the form of a list, butdoes not display detailed data for the master data objects and master data objectswithout messages.





Exercise 6: Master Data Selection

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a flexible master data selection profile

Business ExampleYour company manufactures vastly different product lines from pumps to personalcomputers. You will need to use CTM in several different scenarios. Create masterdata profiles that can be used in multiple CTM Profiles.

Task 1: Master Data CheckDue to the robust nature of CTM, it is very easy to miss a parameter or leave somemaster data unchanged that will cause an issue with the CTM engine. Set upmaster data checkers to ensure you will have no issues with your master data inthe future when you execute CTM runs.

1. Create a Model Consistency Check Profile GR##_PUMP (Group ## CTMPump Check) for CTM. Set the scope of check to include all objects relevantfor CTM. Set the check mode to Check data independent of CTM profile

Set the message type toMessages.

Task 2: Master Data SelectionYour pump division is having difficulties meeting their current and projecteddemand. You have suggested using CTM to resolve or prioritize these shortageissues. Create a Flexible Master Selection profile for you pumps.

1. To make your master data selection easier, create a selection ID PUMP-##for your pumps T-F2##, T-F3## and T-F4##, for locations 1000, 2300,2400, and 2500.

2. To find your selections more easily at another time, add your selectionPump-## to your user specific selection.

3. Create a Dynamic Master data selection PUMP_## , (Group ## Pumps)that will include all methods of procurement for your T-F2##, T-F3## andT-F4## products and their components, for Model 000. Use your selectionPump-## , to make this process easier.

Make sure your master data selection is using the consistency check profileGR##_Pump that you created in the previous task.




4. To ensure data consistency in your new master data selection PUMP_##,review the dependent products, transportation lanes, and PPMs that will beused with this master data selection profile.

Task 3: Manual Data SelectionTo better understand how some of the finer points of CTM work, we want to havea very simple scenario. Create another master data selection profile to support theplanning of your simplified pump T-F##.

1. Create a static master data selection T-F## , (Group ## Simple Pump) thatwill include all methods of procurement for your T-F##, T-SF1## , T-T-##,products in plant 1000 and 2400, and their supporting master data for Model000. Add your master data check profile GR##_Pump to the master dataselection



Solution 6: Master Data SelectionTask 1: Master Data CheckDue to the robust nature of CTM, it is very easy to miss a parameter or leave somemaster data unchanged that will cause an issue with the CTM engine. Set upmaster data checkers to ensure you will have no issues with your master data inthe future when you execute CTM runs.

1. Create a Model Consistency Check Profile GR##_PUMP (Group ## CTMPump Check) for CTM. Set the scope of check to include all objects relevantfor CTM. Set the check mode to Check data independent of CTM profile

Set the message type toMessages.

a) APO → Master Data → Model Consistency Check → ProfileMaintenance

b) Enter Profile Name GR##_PUMP and select Create.

c) Enter a description Group ## CTM Pump Check.

d) Select the CTM tab.

e) Set the Check mode to Check data independent of CTM profile.

f) Select All parameters for the Scope of Check.

g) Set the Standard Value: Message Type toMessage.

h) Select Save.




Task 2: Master Data SelectionYour pump division is having difficulties meeting their current and projecteddemand. You have suggested using CTM to resolve or prioritize these shortageissues. Create a Flexible Master Selection profile for you pumps.

1. To make your master data selection easier, create a selection ID PUMP-##for your pumps T-F2##, T-F3## and T-F4##, for locations 1000, 2300,2400, and 2500.

a) APO menu path APO→ Multilevel Supply & Demand Matching→Environment→ Master Data Selection

b) Select Selection Window.

c) In the field Show, select Location Products.

d) In the Row beneath Show, select Product

e) Select Multiple Selection.

f) Enter T-F2##, T-F3##, and T-F4## and select Copy.

g) In the Row beneath Product , select Location.

h) Select Multiple Selection.

i) Enter 1000, 2300, 2400, and 2500 and select Copy.

j) Select Save Selection.

k) Enter Pump-## and select Save.

l) Confirm any messages that may occur (pop up windows)

2. To find your selections more easily at another time, add your selectionPump-## to your user specific selection.

a) Just above your user ID , select the Selection Profile header/button.

b) Drag your selection Pump-## from the right window and drop it onyour user ID in the left window.

c) Select Save.

d) Select Adopt.

3. Create a Dynamic Master data selection PUMP_## , (Group ## Pumps)that will include all methods of procurement for your T-F2##, T-F3## andT-F4## products and their components, for Model 000. Use your selectionPump-## , to make this process easier.




Make sure your master data selection is using the consistency check profileGR##_Pump that you created in the previous task.


b) Enter your Master Data Selection Pump_## and select Create NewMaster Data Selection.

c) Enter a description (Group ## Pumps).

d) Enter Model 000 and Check Profile GR##_Pump.

e) To ensure you only plan your pumps, select the Dynamic indicatorunder the section Selection Type for Product Locations.

f) Enter your selection ID PUMP-## that you created in previous step.

g) Review your selection. Select Evaluate Selection.

h) To get the necessary components, select Select Dependent DataAutomatically.

i) Select Save.

4. To ensure data consistency in your new master data selection PUMP_##,review the dependent products, transportation lanes, and PPMs that will beused with this master data selection profile.

a) To review the dependent components, select the Location products(tab).

b) Select Display Dependent Data.

c) To review the dependent transportation lanes, select the Ext.Procurement (tab).

d) Select Display Dependent Data.

e) To review the dependent PDS/PPMs, select the In-House Production(tab).

f) Select Display Dependent Data.




Task 3: Manual Data SelectionTo better understand how some of the finer points of CTM work, we want to havea very simple scenario. Create another master data selection profile to support theplanning of your simplified pump T-F##.

1. Create a static master data selection T-F## , (Group ## Simple Pump) thatwill include all methods of procurement for your T-F##, T-SF1## , T-T-##,products in plant 1000 and 2400, and their supporting master data for Model000. Add your master data check profile GR##_Pump to the master dataselection


b) Enter your Master Data Selection T-F## and select Create NewMaster Data Selection.

c) Enter a description (Group ## Simple Pump).

d) Enter Model 000.

e) Enter Check Profile GR##_Pump.

f) To ensure you only plan your pump, select the Static indicator underthe section Selection Type for Product Locations.

g) Select the Tab Location Products.

h) Select append Row four times.

i) Enter T-F## @ 1000, T-F## @ 2400, T-SF1## @ 1000, and T-T##@ 1000.

j) Return to the Settings tab.

k) Select Select Dependent Data Manually.

l) Review the Ext. Procurement (tab) and In-House Production (tab).

m) Select Save.



Lesson Summary

You should now be able to:� Demonstrate the Selection Window Function� Demonstrate Static versus Dynamic Selection� Demonstrate Manual versus Automatic Dependent Data Selection� Explain the Master Data Checker and its relevance.



Lesson: Order Selection

Lesson OverviewCapable-To-Match is a very flexible planning tool. Unlike the SNP optimizer thatrequires constant cost maintenance, CTM can be used once or a on a recurringbasis. Within the CTM Profile, users will define the problem and the solution. Thescope of the CTM Profile is controlled through data selection. That is, definingwhat will be planned and what can be used to solve the inherent problem. Inthis lesson, you will explore how data selection will work in defining the scopeof the CTM run.


� Demonstrate Transactional Data Selection

Business ExampleYour business intends to use CTM for a variety of situations. Some situations arestatic, others will change based on consumer needs. Investigate how data selectioncan be managed in CTM to adapt a CTM profile as the real life problems change.

Transactional Data in SCMIn SAP Advanced Planning and Optimization (SAP APO), an order is a technicalobject that defines, for a procurement transaction (in-house production or externalprocurement), when and where products are required and which resources areneeded during this process. Sales orders and forecast requirements are alsomodeled as orders in SAP APO, however may not contain components andactivities. As a result, a sales order will not contain any information about theresource schedule or product receipts, and a purchase order sub-objects will notcontain information about the product requirement or the resource schedule.


SCM235 Lesson: Order Selection

The term Order may refer to the following objects, for example:

� Planned order� Planned independent requirement� Production order� Purchase order� Purchase requisition� Sales document� Reservation (manual)� Transfer order� Scheduling agreement� Stock� Inspection lot� Project order� Maintenance order

Figure 91: Transactional Data Integration

Through the use of the Core Interface (CIF), ECC will transfer many of theexisting stocks, and planned receipts to SCM. In ECC, these objects arerepresented by MRP Elements. In ECC, MRP Elements are controlled by SAP.In SCM, similar objects are called SAP/ATP Categories. SCM will have moreATP categories; the ECC will have MRP elements, because the CIF will transfer



order-related information like, order status, which will cause SCM to map theECC MRP Element to a more detailed ATP Category. Fore example, the MRPelement PA - Planned order maps to 5 ATP categories in SCM, AI, AJ, AK, AL,EE. The ATP Categories in SCM use order status data like Firmed/ATP Check todetermine a more granular level of detail.

Transactional Data (Order) SelectionAs part of the Scope of CTM, users first must decide which master data is neededto generate receipts when existing supplies cannot cover the present demand. Tofill out the balance of the CTM scope, users must define which demands need tobe planned as well as which existing supplies and receipts can be used to coverthe demand being evaluated.

Figure 92: Transactional Data Selection

You can use order selections for the demand selection and the stock selectionin Capable-to-Match planning (CTM). The order selection does not affect thequantity of master data that the system uses during the CTM planning run.

Order selection can be done in the CTM profile in a static fashion or independently.First, you must determine the selection of location products for the order selectionin the Master Data Selection. You can also use general master data selections forthe order selection, or create master data selections yourself. You specify the nameof the master data selection in the corresponding field in the order selection.



Caution: The supply chain model in the master data selection, that youuse in the order selection, must match the supply chain model of the CTMprofile in which you specify the order selection.

You save the order selection under a name that you specify in the CTM profile.The CTM planning run then selects demands or receipts and supplies for theproducts included in both master data and order selection. For location productsincluded in order selection but not in master data selection in the planning profile,the CTM planning run does not select orders.

Caution: If the master data selection and order selection that youspecified in the CTM profile do not include any common locationproducts, CTM cannot select any demands. In this case, the system issuesa corresponding message in the CTM master data check.

You can restrict the selection of orders further using the following criteria:

� Selection Period: Normally, the system selects all orders within the planningperiod specified in the CTM profile. You can use order selection to restrictthis time period further. For example, you can limit the selection of orders totwo months, while CTM can create new orders for the next three months intotal. You can also restrict the selection period depending on the product bychoosing the finish date of the selection period for the corresponding locationproduct. If you have set the Ignore Prod-Spec. Sel. Horizon: Demandsindicator)Settings→ Master Data Settings (Tab), ), CTM planning considersthe time period specified in the order selection or in the CTM profile.

� ATP Categories: You can restrict the selection of orders to certain ATPcategories. For example, you can ensure that the system plans only salesorders, no forecast demands. If you do not specify any particular ATPcategories here, CTM selects orders for all ATP categories.

Order Selection - ATP CategoriesWhen choosing your planning scope, you can choose between all demands for thespecified master data selection, or choose by ATP Category. When choosing bycategory, you can create two selection profiles, one for supply categories and onefor demand categories.



Figure 93: Order Selection

Caution: If Fixed receipts are not included in supply selection, they willnot be used in CTM calculation. This could cause Excess Supply.

Product Specific Order SelectionIn the location product master, you can restrict the selection period for demandsin the Sel.Period Demands field in the SNP 2 view. If, for example, you planproducts with different lead times, you can in this way determine the selectionperiod for the demands of one product differently to the selection period for thedemands of another product. The product-specific selection period for demandshas no effect on the planning start and selection start of the order selection andcannot exceed the planning end or selection end of the order selection.



Figure 94: Selection Horizons

The product-specific selection period for demands relates to today�s date. If theproduct-specific selection period should start on the planning start, set the RelateHorizons to Planning Start indicator in the CTM profile. If CTM planning shouldnot use the product-specific selection period, set the (Ignore) Prod.-Spec. Sel.Horizon: Demands indicator in the CTM profile.





Exercise 7: Order Selection

Exercise ObjectivesAfter completing this exercise, you will be able to:� Select Supply and Demands Using Order selection profiles.

Business ExampleYour company intends to use CTM in several different situations. You wouldlike to have flexibility in choosing what types of supply and demand CTM willconsider for different situations. Create several different order selections that youwill use to test CTM in future lessons.

Task 1: Demand SelectionYour company intends on using CTM for both short-term and long-term planning.However, in doing so, the scope will be different for each of the time horizons.Create two demand selection profiles to restrict the requirements that will beevaluated.

1. Create an order selection GR##_D1 (GR## Short Term Demand) thatwill limit your demand for 60 Days, and only plan against Sales orders,Deliveries, , and Forecasts.

2. Create an order selection GR##_D2 (GR## Long Term Demand) thathas no time limitation and only plans against Sales orders, Deliveries,Inquiries, Quotations, and Forecasts.

Task 2: Supply SelectionYour company intends to use CTM for both short-term and long-term planning.However, in doing so, the scope will be different for each of the time horizons.Create two Supply selection profiles to restrict the stocks and receipts that willbe evaluated during planning.

1. Create an order selection GR##_S1 (GR## Stocks and Receipts) thatwill limit your supplies to 10 Days, and only includes Purchase Orders,Production Orders, Stock Transfer Orders, Unrestricted Stocks, and QIStock.

2. Create an order selection GR##_S2 (GR## Future Receipts) that has notime limitation and only includes Purchase Orders, Production Orders,and Stock Transfer Orders.




Task 3: Create RequirementsTo evaluate the capabilities of CTM, we need to have requirements to plansupplies. Create several requirements to begin testing the CTM Profile and orderselection.

1. Using the APO Product View, create two planned independent requirements(PIRs) in version 000 for T-F2## at location 2500. Create the firstrequirement tomorrow for 15 pcs. Create the second requirement one weekfrom the first requirement for a quantity of 15 pcs.

Task 4: Test Order SelectionFor your planners to understand the flexibility of CTM, they need to understandhow to control the scope of a planning run. Using Profile GR##, change the scopeof planning to determine how order selection works.

1. Currently, your profile GR## has restricted the master data selection togroup 00 and all requirements and stocks for the pumps for group 00 foryour planning version CTM_##. Change the planning version to 000 andsave. Perform a supply simulation.

2. How many supplies will be considered?

3. What ATP Categories were included?

4. Change your CTM profile GR##, so that it uses the supply profile GR##_S2.Save and simulate the Supplies that will be included in the next CTM run.




5. How many supplies will be considered? Why?

6. Change your CTM profile GR##, so that it uses the supply profileSCM235_S. Save and simulate the Supplies that will be included in thenext CTM run.


8. Review the details of order selection SCM235_S.

9. Why was stock not considered in the last simulation?



Solution 7: Order SelectionTask 1: Demand SelectionYour company intends on using CTM for both short-term and long-term planning.However, in doing so, the scope will be different for each of the time horizons.Create two demand selection profiles to restrict the requirements that will beevaluated.

1. Create an order selection GR##_D1 (GR## Short Term Demand) thatwill limit your demand for 60 Days, and only plan against Sales orders,Deliveries, , and Forecasts.

a) APO→ Multilevel Supply and Demand Matching→ Environment→Order Selection (/SAPAPO/CTMORDSEL)

b) Enter Order Selection GR##_D1.

c) Press Enter and answer YES to creating a new order selection.

d) Enter a description GR## Short Term Demand.

e) Set the Time Related Selection to Relative Time Period, and set theduration to 60 days.

f) Select the ATP Categories tab and select ATP Categories: BM, BR,FA , and select Copy Selected Categories.

g) Select Save.

2. Create an order selection GR##_D2 (GR## Long Term Demand) thathas no time limitation and only plans against Sales orders, Deliveries,Inquiries, Quotations, and Forecasts.

a) Select Other Order Selection.

b) Enter Order Selection GR##_D2.


d) Enter a description GR## Long Term Demand.

e) Select the ATP Categories tab and select ATP Categories:BK, BL,BM, BR, FA , and select Copy Selected Categories.

f) Select Save.




Task 2: Supply SelectionYour company intends to use CTM for both short-term and long-term planning.However, in doing so, the scope will be different for each of the time horizons.Create two Supply selection profiles to restrict the stocks and receipts that willbe evaluated during planning.

1. Create an order selection GR##_S1 (GR## Stocks and Receipts) thatwill limit your supplies to 10 Days, and only includes Purchase Orders,Production Orders, Stock Transfer Orders, Unrestricted Stocks, and QIStock.


b) Enter Order Selection GR##_S1.


d) Enter a description GR## Stocks and Receipts.

e) Set the Time Related Selection to Relative Time Period, and set theduration to 10 days.

f) Select the ATP Categories tab and select ATP Categories: AC, AD,BE, BF, BI, CC, CD, CF, and select Copy Selected Categories.

g) Select Save.

2. Create an order selection GR##_S2 (GR## Future Receipts) that has notime limitation and only includes Purchase Orders, Production Orders,and Stock Transfer Orders.


b) Enter Order Selection GR##_S2 .


d) Enter a description GR## Future Receipts.

e) Select the ATP Categories tab and select ATP Categories:AC, AD,BE, BF, BI,, and select Copy Selected Categories.

f) Select Save.




Task 3: Create RequirementsTo evaluate the capabilities of CTM, we need to have requirements to plansupplies. Create several requirements to begin testing the CTM Profile and orderselection.

1. Using the APO Product View, create two planned independent requirements(PIRs) in version 000 for T-F2## at location 2500. Create the firstrequirement tomorrow for 15 pcs. Create the second requirement one weekfrom the first requirement for a quantity of 15 pcs.

a) APO→ Production Planning→ Interactive Production Planning→Product View (/sapapo/RRP3) Drag this into your favorites.

b) Enter Version 000, product T-F2## at location 2500

and press enter.

c) When the popup window appears, select SAP001, and selectcontinue.

d) Select Change.

e) In the first available line, enter an Avail/ReqD of tomorrow and aRec/ReqQty of -15 pieces and press ENTER.

f) In the next available line, enter an Avail/ReqD of one week later fromthe previous requirement you created and enter a Rec/ReqQty of -15pieces and press ENTER.

g) Select Save.




Task 4: Test Order SelectionFor your planners to understand the flexibility of CTM, they need to understandhow to control the scope of a planning run. Using Profile GR##, change the scopeof planning to determine how order selection works.

1. Currently, your profile GR## has restricted the master data selection togroup 00 and all requirements and stocks for the pumps for group 00 foryour planning version CTM_##. Change the planning version to 000 andsave. Perform a supply simulation.

a) APO menu Path: APO→ Multilevel Supply & Demand Matching→ Planning→ CTM Planning

b) Select the tab Planning Scope.

c) Change the Planning Version to 000.

d) Select Save.

e) Select the tab Supplies.

f) Select Simulation.

g) Select Supplies.


Answer: 14 different supplies were selected

3. What ATP Categories were included?

Answer: ATP Category CC - Unrestricted Stock

4. Change your CTM profile GR##, so that it uses the supply profile GR##_S2.Save and simulate the Supplies that will be included in the next CTM run.

a) Select the tab Planning Scope.

b) Change the Supply Selection to Order Selection.

c) Enter order selection GR##_S2.

d) Select Save.

e) Select the tab Supplies.

f) Select Simulation.

g) Select Supplies.

5. How many supplies will be considered? Why?

Answer: None. Category CC - Unrestricted Stock was not included in thesupply selection.




6. Change your CTM profile GR##, so that it uses the supply profileSCM235_S. Save and simulate the Supplies that will be included in thenext CTM run.


b) In the Supply Selection, enter order selection SCM235_S.

c) Select Save.

d) Select the tab Supplies.

e) Select Simulation.

f) Select Supplies.


Answer: None

8. Review the details of order selection SCM235_S.


b) In the Supply Selection, drill into order selection SCM235_S.

9. Why was stock not considered in the last simulation?

Answer: In the ATP Category tab, category CC, unrestricted stock was tobe included in the profile. However, in the tab Time-Related selection, thesupplies were restricted to 60 days. More importantly, the selection wastriggered to start 10 days from the start of the planning horizon (today).This type of selection could be very important with Long-term CTMscenarios. Problems can arise when a CTM profile is planning a 6 - 18 monthhorizon. In this situation you would not want supplies to cover longer termrequirements since they may not be available for a short-term planning run.



Lesson Summary

You should now be able to:� Demonstrate Transactional Data Selection



Lesson: CTM Planning Horizon

Lesson OverviewThe CTM profile can be set up for scenarios that are fixed or that constantlychange. Part of the CTM problem is defining how far into the horizon are yourequired to plan. In this lesson, you will explore CTM Time Streams and howsetting the CTM horizon can affect the use of existing receipts and requirements inthe planning run.


� Demonstrate the ability to create CTM Time Streams� Demonstrate how the CTM horizon can affect existing plans.

Business ExampleYour company is considering CTM as one of the tools to use to prepare supplyreplenishment plans. However, your users are concerned that it cannot handle bothshort-term and long-term planning. Investigate how the CTM Time Stream givesusers robust functionality to control the time horizons for which CTM can plan.

SAP SCM Calendars and Time StreamsThe planning period for Capable-to-Match planning (CTM planning) is determinedby the time stream in the CTM profile. You can use further periods and horizons torestrict the planning period, but not to extend it. With these periods and horizons,you can determine a period in which CTM selects the demands and receipts forplanning and a period in which CTM creates or deletes orders. You define theperiods and horizons in the CTM profile and in the location product master.

The time streams in CTM are different than the time streams that are used in thelocation masters. The Shipping and Receiving calendars will be used in CTM,otherwise CTM will rely on resources for the available capacity.


SCM235 Lesson: CTM Planning Horizon

Figure 95: CTM Time Streams

CTM time Streams can be found independently of the CTM profile using menupath APO→Multilevel Supply and Demand Matching→ Environment→ CurrentSettings→ Maintain CTM Planning Calendar (Time Stream) or within the CTMProfile Edit→ CTM Time stream.

The CTM time stream is broken down into two parts. The first is identifying thestart horizon in which CTM will perform planning, and the second being thelength and time granularity in which it will plan.

The start date can be either fixed, using specific calendar dates; or a rolling start,using the current date as a starting period. With the relative start, users canidentify an offset, either positive or negative, to determine the start of the planninghorizon. In addition, users have the opportunity to determine a recurring start datebased on the day of the week.

The second part of the time stream is determining the length of the horizon, aswell as if there will be any aggregated planing.

Note: Aggregated planning will only occur if other settings in the CTMprofile are in play. This will be discussed in later lessons.

Although you can create specific CTM time streams, users can define the normaltime streams that are attached to location masters. See appendix for more details.



Caution: If using normal time streams, the time streams must be createdwithout gaps. This means that no factory calendars should be used.The CTM engine will be using other calendars when appropriate to doscheduling.

CTM Planning Horizon

Figure 96: CTM Planning Horizon

When specifying the planning horizon, users must be aware of how requirementsand receipts outside the horizon will be affected. If a planner specifies a startdate later than the current period, it is likely that receipts and requirements willbe outside the horizon.

Caution: Only demands inside the horizon will be taken intoconsideration. Supplies outside the horizon will be considered.

Fixed orders cannot be deleted by a CTM planning run. An order is fixed forCTM if one of the following conditions is fulfilled.

1. An order can be fixed manually. This is already done if the quantity of anorder is changed in PP/DS or SNP or a fixing flag is set explicitly.

2. A CTM planning run can only delete planned orders, purchase requisitions,stock transfer requisitions and substitute requisitions. All the other ordertypes like forecast, sales order, stock and so on, cannot be deleted at all by aCTM planning run. Therefore, these orders are always considered as fixed by



CTM. Please note that Subcontracting scenario is an exception to this rule. Ifa stock transfer requisition for a subcontractor is deleted, the correspondingsubcontractor production order is also deleted even if it is fixed.

3. Already created PP/DS orders are considered as fixed if a CTM planning runcreates SNP Orders; but note created SNP orders are NOT fixed when CTMcreates only PP/DS orders.

4. CTM considers receipts which are not inside the planning horizon also asfixed. Thus a CTM planning run will not delete such orders. An order isconsidered fixed if the start date is before the planning start date or if the enddate is after the planning end date, as indicated in the graphic above.

5. Orders are considered fixed if they are lying inside the planning horizon andhave been pegged to orders or demands outside the planning horizon.

6. CTM takes into account various Horizons maintained in the Product LocationMaster during creation of an order as shown below :

� Production Order: Production Horizon of the Main Output Product� Stock Transfer Orders: Stock Transfer Horizon (Transport Horizon).

(With Source Location) By default it is maintained at the destinationlocation, but in Planning Version management this can be changed tothe source location.

� Purchase Requisition: Planned Delivery Time. (Without SourceLocation) This is also a horizon like the two others. It refers always tothe system date or current date. It can be also alternatively referred tothe panning start. The maintenance is always at the destination locationbecause a source location simply doesn�t exit.

7. When planning in the active version 000:

� The setting in the CTM profile �Planning results not transferred� or�Only new orders transferred� is used. This refers to the integrationwith R/3 and ensures data consistency between APO and R/3. If thedeleted orders are not transferred to R/3, then deletion is prevented byconsidering those orders as fixed.

� If orders exists in both systems, APO and ECC, orders which only exitin APO are not fixed and can be deleted by CTM.

Note: Note the planning strategies of CTM also have an impact on whichorders are fixed and which are not.



Figure 97: Fixed Orders (Master Data Selection)

Orders which have at least one component which does not belong to a masterdata selection of the CTM profile are considered as fixed as well. Order 1 in thefigure above for example is fixed because one of its input components (Ib) isnot inside the master data selection, thus Order 2 is fixed as well. The Order 3and the rest of the order tree are not fixed because they belong completely to themaster data selection.



Exercise 8: The CTM Planning Horizon

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create time streams to limit the time horizon for CTM� Create time streams to perform time aggregated planning

Business ExampleDuring the course of a normal year, a planner will need to determine the durationthat they want a planning run to review. In the situation with Supply NetworkPlanning (SNP), you will be limited to the SNP horizons defined in the productmasters as well as the Time Bucket Profiles that are attached to the data views thatwill be used for SNP type planning . With the production planning piece of APO,you will be limited to the PPDS horizon that is defined for each product/locationcombination. In detailed scheduling, you are limited to the duration defined inthe time profile.

Within each CTM profile, you will be able to define a time stream that will definethe duration for planning. In addition, if you choose to perform aggregatedplanning, the CTM time steam will allow you to group requirements togetheracross the horizon.

In this exercise, you will create two times streams, one for short-term detailedplanning, and one for mid-term rough-cut planning.

Task 1: Creating CTM Time StreamsYour business needs to use CTM as a detailed planning tool as well as a rough-cutplanning tool. To control the horizons that will be analyzed during planning,create time streams to support these planning efforts.

1. Create a CTM time stream GR##_T1 (Group ## Short Term Horizon) thatwill plan your products from the current period, in detail for the next 60 days.

2. Create a second time stream GR##_T2, (Group ## Mid Term Horizon),that will plan a horizon that will start 60 days from the current period andcontinue for 6 months. However, we want to perform time based aggregatedplanning plan the first 12 periods in weeks and then the remaining periodsin months.




Task 2: Create CTM ProfileAt this point, you have created several of the necessary elements to determine thescope of a CTM profile. You will now create several CTM profiles that you willuse to test various features and functions in Capable to Match.

1. Create a time continuous CTM profile GR##_1 (Group ## CTM Profile1: Pump TC/ST), that will use Planning Version 000, Check your MasterData Selection PUMP_##, your Demand order selection GR##_D1, use allsupplies in the version, and Time Stream GR##_T1.

2. To minimize confusion during the CTM run, update your new CTM ProfileGR##_1, so that you will ignore certain master data settings. Set the MasterData Parameters so the CTM Run ignores: Production Horizon, StockTransfer Horizon, and Planned Delivery Time.

In addition, set the Order Creation Start and Deletion Start to one day each.

3. For an easier time trouble shooting planning or CTM engine issues,update your CTM Profile GR##_1 with your Master Data Check ProfileGR##_Pump.

4. Create a Bucket Plng CTM profile GR##_3 (Group ## CTM Profile3: Pump - Bucket/LT), that will use Planning Version 000, your MasterData Selection Pump_##, your demand order selection GR##_D2. Use allsupplies in the version, and Time Stream GR##_T2.


6. For an easier time trouble shooting planning or CTM engine issuesupdate your CTM Profile GR##_3 with your Master Data Check ProfileGR##_PUMP.

7. Create a Time continuous CTM profile GR##_4 (Group ## CTM Profile4: T-F## - TC/ST), which will use Planning Version 000, your Master DataSelection T-F##, your Demand order selection GR##_D1. Use all suppliesin the version, and Time Stream GR##_T1






Task 3: Order Deletion ProfilesFor certain large planning tasks, it makes sense to delete the receipts that are notfixed in a separate planning run. Create new CTM Profiles to delete all ordersfor both your Pump and PC scenarios.

1. Create a Time continuous CTM profile GR##_5 (Group ## CTM PumpOrder Deletion), that will use Planning Version 000, your Master DataSelection PUMP_##, your Demand order selection GR##_D1. Use allsupplies in the version and Time Stream GR##_T1.

Set the Planning Mode to Replan All Orders, the Deletion Mode to DeleteOrders That Are Not Firm, and a Deletion Start of 1 day.

So that All the receipts are selected, set the Master Data Parameters so theCTM Run ignores: Production Horizon, Stock Transfer Horizon, andPlanned Delivery Time.

To only delete the receipts set the Planning Steps parameter to :End ofPlanning Run After Order Selection

2. Create a Time continuous CTM profile GR##_7 (Group ## T-F## OrderDeletion), that will use Planning Version 000, your Master Data SelectionT-F##, your Demand order selection GR##_D1. Use all supplies in theversion, and Time Stream GR##_T1. Set the Planning Mode to ReplanAll Orders, the Deletion Mode to Delete Orders That are Not Firmed,a Deletion Start of 1 day and set the Planning Steps to End of PlanningRun After Order Selection.



Task 4: Profile CheckNow that you have created several profiles, run the Master Data consistency checkto see if there are any issues with your selections.

1. While in the CTM profile GR##_1, perform a CTM Master Data Check soyou avoid any errors during planning.



Solution 8: The CTM Planning HorizonTask 1: Creating CTM Time StreamsYour business needs to use CTM as a detailed planning tool as well as a rough-cutplanning tool. To control the horizons that will be analyzed during planning,create time streams to support these planning efforts.

1. Create a CTM time stream GR##_T1 (Group ## Short Term Horizon) thatwill plan your products from the current period, in detail for the next 60 days.

a) Application Menu Path: Advanced Planning and Optimization→Multi Level Supply and Demand Matching→ Environment→ CurrentSettings→ Maintain CTM planning Calendar (Stream)

b) Enter Time Stream GR##_T1 and select Create.

c) Enter a description, Group ## Short Term Horizon.

d) In the field (1) Period Type, enter 01 - Days.

e) In the field, Number of Periods , enter 60 days.

f) Select Save.

2. Create a second time stream GR##_T2, (Group ## Mid Term Horizon),that will plan a horizon that will start 60 days from the current period andcontinue for 6 months. However, we want to perform time based aggregatedplanning plan the first 12 periods in weeks and then the remaining periodsin months.

a) In the initial screen of the Time Stream select Other Time Stream.

b) Enter Time Stream GR##_T2 and select Create.

c) Enter a description, Group ## Mid Term Horizon.

d) Enter a relative start date of 60 days.

e) In the field (1) Period Type , enter 02 - Weeks.

f) In the field, Number of Periods , enter 12 weeks.

g) In the field (2) Period Type , enter 03 - Months.

h) In the field, Number of Periods , enter 3 Months.

i) Select Save.




Task 2: Create CTM ProfileAt this point, you have created several of the necessary elements to determine thescope of a CTM profile. You will now create several CTM profiles that you willuse to test various features and functions in Capable to Match.

1. Create a time continuous CTM profile GR##_1 (Group ## CTM Profile1: Pump TC/ST), that will use Planning Version 000, Check your MasterData Selection PUMP_##, your Demand order selection GR##_D1, use allsupplies in the version, and Time Stream GR##_T1.

a) Advanced Planning and Optimization→ Multi Level Supply andDemand Matching→ Planning→ CTM Planning

b) Enter CTM Profile name GR##_1 and press Enter.

If you already have a profile visible, select Other CTM Profile.

c) When Prompted Do you want to create a CTM profile for time-continuous or bucket-oriented planning? , answer T-ContPlng.

d) Enter the Description Group ## CTM Profile 1: Pump TC/ST.

e) Select the Planning Scope Tab.

f) Enter Planning Version 000.

g) Select Master Data Selection and enter Pump_##.

h) In the Demand Selection, choose Order Selection and enter GR##_D1.

i) Enter Time Stream GR##_T1.

j) Select Save.



a) Select Strategies tab, in the fields Order Creation Start and DeletionStart and enter 1.

b) Select the Settings Tab, and select Master Data Settings.

c) In the section labeled Ignore Master Data, set the indicators forProduction Horizon, Stock Transfer Horizon, and Planned DeliveryTime.

d) Select Save.




3. For an easier time trouble shooting planning or CTM engine issues,update your CTM Profile GR##_1 with your Master Data Check ProfileGR##_Pump.

a) Select the Settings tab.

b) In the Basic Settings tab enter your Master Data Check profileGR##_PUMP in the Check Profile parameter.

c) Select Save.

4. Create a Bucket Plng CTM profile GR##_3 (Group ## CTM Profile3: Pump - Bucket/LT), that will use Planning Version 000, your MasterData Selection Pump_##, your demand order selection GR##_D2. Use allsupplies in the version, and Time Stream GR##_T2.

a) Select Other CTM Profile.


c) When prompted Do you want to create a CTM profile for time-continuous or bucket-oriented planning? , answer Bucket Plng,

d) Enter the description Group ## CTM Profile 3: Pump - Bucket/LT.

e) Select the Planning Scope tab.


g) Select Master Data Selection and enter Pump_##.



j) Select Save.


a) Select the Settings tab, and select Master Data Settings.

b) In the section labeled Ignore Master Data, set the indicators forProduction Horizon, Stock Transfer Horizon, and Planned DeliveryTime.

c) Select Save.




6. For an easier time trouble shooting planning or CTM engine issuesupdate your CTM Profile GR##_3 with your Master Data Check ProfileGR##_PUMP.

a) Select the Settings tab.

b) In the Basic Settings tab, enter your Master Data Check profileGR##_PUMP in the Check Profile parameter.

c) Select Save.

7. Create a Time continuous CTM profile GR##_4 (Group ## CTM Profile4: T-F## - TC/ST), which will use Planning Version 000, your Master DataSelection T-F##, your Demand order selection GR##_D1. Use all suppliesin the version, and Time Stream GR##_T1



If you already have a profile visible select Other CTM Profile.

c) When prompted Do you want to create a CTM profile for time-continuous or bucket-oriented planning? , answer T-ContPlng.

d) Enter the description Group ## CTM Profile 4: T-F## - TC/ST).



g) Select Master Data Selection, and enter T-F##.



j) Select Save.






a) Select the Strategies tab. In the fields Order Creation Start andDeletion Start , and enter 1.

b) Select the Settings Tab, and select Master Data Settings.

c) In the section labeled Ignore Master Data, set the indicators forProduction Horizon, Stock Transfer Horizon, and Planned DeliveryTime.

d) Select Save.

Task 3: Order Deletion ProfilesFor certain large planning tasks, it makes sense to delete the receipts that are notfixed in a separate planning run. Create new CTM Profiles to delete all ordersfor both your Pump and PC scenarios.

1. Create a Time continuous CTM profile GR##_5 (Group ## CTM PumpOrder Deletion), that will use Planning Version 000, your Master DataSelection PUMP_##, your Demand order selection GR##_D1. Use allsupplies in the version and Time Stream GR##_T1.

Set the Planning Mode to Replan All Orders, the Deletion Mode to DeleteOrders That Are Not Firm, and a Deletion Start of 1 day.





To only delete the receipts set the Planning Steps parameter to :End ofPlanning Run After Order Selection




c) When prompted Do you want to create a CTM profile for time-continuous or bucket-oriented planning? , answer T-ContPlng.

d) Enter the description Group ## CTM Pump Order Deletion.



g) Select Master Data Selection and enter PUMP_##.


i) Enter Time Stream GR#_T1.

j) On the Strategies tab, ensure the Planning Mode is set to Replan AllOrders, and the Deletion Mode is set to Delete Orders That AreNot Firm.

k) Set a Deletion Start of 1 day.

l) Select the Settings tab, and select Master Data Settings.

m) In the section labeled Ignore Master Data, set the indicators forProduction Horizon, Stock Transfer Horizon, and Planned DeliveryTime.

n) Select the Settings tab, and on the Basic Settings tab, set the PlanningSteps to activate End of Planning Run After Order Selection.

o) Select Save.

2. Create a Time continuous CTM profile GR##_7 (Group ## T-F## OrderDeletion), that will use Planning Version 000, your Master Data SelectionT-F##, your Demand order selection GR##_D1. Use all supplies in theversion, and Time Stream GR##_T1. Set the Planning Mode to ReplanAll Orders, the Deletion Mode to Delete Orders That are Not Firmed,a Deletion Start of 1 day and set the Planning Steps to End of PlanningRun After Order Selection.









c) When prompted Do you want to create a CTM profile fortime-continuous or bucket-oriented planning? , answer T-ContPlng.

d) Enter the description Group ## T-F## Order Deletion.



g) Select Master Data Selection and enter T-F##.


i) Enter Time Stream GR#_T1.

j) On the Strategies tab, ensure the Planning Mode is set to Replan AllOrders, and the Deletion Mode is set to Delete Orders That areNot Firmed.

k) Set an Order Creation Start of 1 day and a Deletion start of 1 day.

l) Select the Settings tab, and on the Basic Settings tab, set the PlanningSteps to activate End of Planning Run After Order Selection.

m) Select the Settings tab, and select Master Data Settings.

n) In the section labeled Ignore Master Data, set the indicators forProduction Horizon, Stock Transfer Horizon, and Planned DeliveryTime.

o) Select Save.




Task 4: Profile CheckNow that you have created several profiles, run the Master Data consistency checkto see if there are any issues with your selections.

1. While in the CTM profile GR##_1, perform a CTM Master Data Check soyou avoid any errors during planning.


b) Enter profile GR##_1 and press Enter.

c) Menu Path: Edit→ Check CTM Master Data

d) When the popup window appears, make sure all items in the CTMPlanning Run section are selected, and select .

e) Review the results and consult your instructor if any unexplainedwarning or error messages appear. If necessary repeat any of the MasterData exercises steps executed earlier



Lesson Summary

You should now be able to:� Demonstrate the ability to create CTM Time Streams� Demonstrate how the CTM horizon can affect existing plans.


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Demonstrate the Selection Window Function� Demonstrate Static versus Dynamic Selection� Demonstrate Manual versus Automatic Dependent Data Selection� Explain the Master Data Checker and its relevance.� Demonstrate Transactional Data Selection� Demonstrate the ability to create CTM Time Streams� Demonstrate how the CTM horizon can affect existing plans.


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 4CTM Planning Results Analysis

Unit OverviewUnlike the other planning tools, the CTM results analysis can be configured. Inthis unit, you will investigate how to set up the results analysis tool to get thecorrect level of feedback to ensure the best results from the CTM Engine.


� Apply the Explanation Tool� Set up the Explanation Tool� Explain the Results Indicators� Explain the Supply Chain Viewer

Unit ContentsLesson: CTM Evaluation Tools... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232

Exercise 9: CTM Evaluation Tools .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247


Unit 4: CTM Planning Results Analysis SCM235

Lesson: CTM Evaluation Tools

Lesson OverviewIn this lesson, you will explore various tools and settings that can deliver variouslevels of detail on the outcome of the CTM Planning run.


� Apply the Explanation Tool� Set up the Explanation Tool� Explain the Results Indicators� Explain the Supply Chain Viewer

Business ExampleAs the CTM super user for your company, you will be responsible for trainingthe company's planners and trouble shooting issues or unexplained results. Topreform these tasks better, you need to understand what tools are available to youto understand the CTM planning results.

CTM Evaluation ToolsBecause the CTM engine is so complex, planners may need a variety of tools toreview and trouble shoot the details of a CTM run.

The following tools are available to assist planners with the CTM run:

� Demand/Supply Simulation� Order Context� Explanation Tool� CTM Messages� Supply Chain Viewer

Demand/Supply SimulationPrior to executing a CTM run, planners have the opportunity to simulate thedemand situation. This must be performed interactively in the CTM profile inthe Demands tab.


SCM235 Lesson: CTM Evaluation Tools

Figure 98: CTM Demand Simulation

By selecting Simulation, the CTM profile will simulate demand selection,aggregation, and prioritization. This will give the planner the opportunity toreview some of the inputs prior to executing a run. This list can also be reviewedafter an interactive CTM run to analyze how the CTM engine planned the list ofselected demands.



Figure 99: CTM Demand Details

Based on the CTM profile and the planning situation, additional informationregarding the demands will be made available to the planners. If plannershave activated rules based ATP or production interchangeability, the relevantsubstitutions are available for review. Data from the sales orders, which is relevantto demand prioritization is visible. If descriptive characteristics are being usedfor forecasts, the characteristic values in the consumption group (product master)are visible. When demand aggregation is active, the aggregated requirements arevisible, since the data was acquired at the order level.



Figure 100: CTM supply simulation

In addition to demand simulation, planners can review which fixed receipts areselected and considered during the demand and supply matching process.

Order Context ReportPrior to, and during the CTM run, pegging relationships can and will be generated.Pegging is used to assign suitable existing product receipts and product stocks,which can cover the requirement, to a product requirement. Pegging organizes thematerial flow through all BOM levels, from the procurement of components andraw materials to the delivery of a sales order, for example. Orders that are linkedtogether, and their pegging relationships, form a pegging structure.

A pegging structure describes the material flows between product receipts(purchase orders, purchase requisitions, planned orders, production orders andstocks) and product requirements (sales orders, planned independent requirements,dependent requirements and stock transport requirements). It describes therelationships of orders at all BOM levels, and for sales orders from the receiptelements of the ordered products and the required components, to the receiptelements for the raw materials.



A material flow is possible between two orders, that is, a pegging relationshipcan be created between orders:

� If the orders are in the same pegging area, for example, if the product,location, account assignment and planning version of the orders are the same

� If the product receipt is before the product requirement

If this is not the case, the pegging relationship cannot be created and/or an alert willbe created. The exact behavior is dependent on the type of pegging relationship(dynamic or fixed) and on the settings in the product master. The quantities ofproduct receipts and product requirements can deviate from each other. In thiscase, a requirement may have to be covered by several product receipts. A productreceipt can also cover several requirements. The relationship between productreceipts and product requirements is therefore an n:n relationship.

Figure 101: Order Context

You can call the Context of an Order from the order processing view using thebutton. In the context of an order, you can display the pegging structure containedin the order that you are currently processing in the order processing view. Youcan also manually create or delete single-level or multi-level fixed peggingrelationships for an order. This report can be accessed from several differentplaces. From the product view, select an ATP category in the list and select thebutton. This will perform both upwards and downwards pegging.

Pegging Concepts will be discussed in a later lesson.



Introduction CTM Explanation ToolA CTM planning run always makes its decisions based on well defined rulesand priorities. However, it often is difficult and time-consuming for the user tounderstand at each step of the solution why a decision was chosen. Particularlywith regard to partial or non-delivery of demands, the user gets no informationwhy a demand could not be fulfilled. Therefore, often even for uncomplicatedscenarios, expert consulting is needed for understanding the results of the CTMengine.

� Production/Transport/Planned Delivery Horizon� Resource Capacity Constraints (Finite/Multilevel)� Source Determination (Lot sizes, Validity)� Quota, Priority, Costs� Target Days Supply for FG (Soft )� Target Days Supply for SFG (Hard)� Maximum Pegging length (Hard)� Lot sizes� Supply Consumption� Search Strategy� Scheduling Direction� Late Demand Handling� Substitutions and Interchangeability� ... and more

Having the opportunity to consider all these constraints for a large set of data, willbe too difficult for most planners to digest.



Figure 102: Purpose of CTM Explanation Tool

The goal of the explanation tool is to provide assistance in analyzing andunderstanding the plans generated by the CTM engine. For that purpose, thefollowing help will be offered: By presenting the user with a detailed insight inthe process of the solution search, in particular the non successful trials within thesearch, the user gets the possibility to understand the solution. An easy to navigatetree-like structure will be offered, where the decisions which lead to a fail, can beinvestigated in detail.

The CTM engine has the ability to consider the following constraints:

� Production/Transport/Planned Delivery horizon� Resource Capacity constraints (Finite, Multilevel)� Source Determination (Lot sizes, Validity)� Quota, Priority, Costs� Target days of supply (Soft constraint for finished prod)� Target days of supply (Hard constraint for dependent prod)� Maximum Pegging Length (Hard Constraint of all levels)� Lot sizes� Supply Consumption� Search Strategy� Forward/Backward Scheduling� Late Demand Handling (Airline/Domino)� Substitutions/Interchangeability/FFF Classes� ��and a lot more !



Figure 103: Assigning Explanation Profile

For a Capable-to-Match (CTM) planning run, you can have the system explainthe possible reasons why CTM only partially fulfilled demands or did not fulfillthem at all (Explanation tool).

To activate the explanation tool, select 'Use planning explanation' within thetechnical settings tab of a CTM profile. The results of a planning run areshown from the CTM application log after displaying the details to the message'Explanations to CTM planning run', or from transaction /SAPAPO/OPT11 afterhaving pressed on the "Explanation Log" icon.

Explanation Profile DetailsThe Explanation Profile is defined independently of the CTM Profile, but it willbe assigned in the CTM Profile.



Figure 104: Details of Explanation Profile

The master data selection will allow you to restrict which product/locationcombinations that can have detailed explanations written. Without this, theexplanation tool could generate explanations for every product location and thismay cause performance problems.

With Explained Demands for Each Location Product, you can restrict the numberof demands you want to verify. This can be limited to 1 or as high as 9,999,999.By leaving it blank, it will generate an evaluation for all late requirements



Figure 105: CTM Explanation Tree

Within the profile, you can restrict the number of steps that the explanation treecan generate. For big CTM profiles, it is recommended to use an explanationprofile with the setting "Display last steps only" maintained. Huge explanationdata may cause runtime and memory problems. To restrict the amount of data theCTM engine collects, use an explanation profile

The left tree shows the search tree of the engine. The right tree shows theexplanation tree, which will be computed by the explanation tool and shown to theuser. In the above example, the engine should satisfy demand C.



The CTM engine will follow the following series of steps:

1. The CTM engine first tries to find stock for location product C (1).2. Because there is no stock, the engine now tries to produce C (2).3. There is enough capacity but the BOM explosion, creates two dependent

demands which need the products A (3) and B (4)4. Based on the Bill of material, A will be selected randomly5. There is no stock of A (5).6. Production of A fails for some reason (6).7. A can be delivered from another location STR (7).8. Location receives STR (8).9. STR is checked against stock for A (9).

There is no fail for product A and A is not the reason for the non deliveryof demand C, thus the whole search for A (3 - 9) will not be reported inthe explanation tree.

10. There is no stock of B (10).11. Production of B fails for some reason (11).12. There is enough capacity but the BOM explosion creates dependent demands

which need the products D (13)13. A can be delivered from another location STR (13).14. However, for product B, all the trials (10, 11, 12) fail at the end, thus all the

fails for product B are reported in the explanation tree. The top node of a treerepresents a primary demand. For this node, additional information will beprovided (for example, settings like late demand handling strategy)

You can also restrict the amount of information and data which have to be reportedto the user by deselecting the information messages within the explanation profile.The explanation tree concentrates then on "important" fails which are part of areason of a non-delivery.



Warning Messages:

� Resource &3: No dispatching possible with duration &1 / capacity reqmt &2� Activity &2 / Mode &1 cannot be scheduled� Resource &3: Dispatch not possible from &1 to &2� No stock found� Procurement alternative excluded: &1� Source of supply validity starts after demand date &1� Demand quantity &1 falls below minimum lot size &2 of source of supply� Fell short of minimum consumption: Activity &1 / mode &2 / resource &3� Fell short of minimum consumption: Activity &1 / product &2 / location &3� Fell short of minimum duration: Activity &1 / mode &2� No source of supply found in subcontractor� Product explosion for component requirements is not allowed� Source of supply cannot be used in forecast segment� Source of supply generates cyclical product explosion� Empty scheduling interval: No scheduling after &1 or before &2

Information Messages:

� Activity &1 / mode &2 can be scheduled� Order start on &1 at the earliest because of &2� Order start on &1 at the latest because of &2� Order end on &1 at the earliest because of &2� Order end on &1 at the latest because of &2� Maximum earliness for receipt from &1� Late demand fulfillment: &1� Search for late demand fulfillment� Search for timely demand fulfillment� Quota arrangement with demand split activated� Subcontracting� Stock Substitution� Stock withdrawal on &1 at the earliest due to &2� Stock withdrawal on &1 at the latest due to &2

Supply Chain ViewerThe Supply Chain Viewer is a tool that you can use, for example, to analyze theresults from the CTM planning run. You can display information about orderscreated by CTM as well as other applications.



Figure 106: The CTM Supply Chain Viewer

The Supply Chain Viewer provides you with an order-oriented visualization ofyour entire supply chain. You can graphically display the supply and demandmatching process over multiple levels of your supply chain. To display the SupplyChain Viewer, choose Multi-Level Supply & Demand Matching→ Reporting→Supply Chain Viewer, or choose the Supply Chain Viewer icon from the CTM:Results Analysis screen.

Demand SelectionIn this section, enter the planning version, product, location, and time frame thatyou wish to display. Choose Enter. You can only view one Location Productat a time.

As a result, this will yield a sub section labeled Selected Demands.

Selected DemandsIn this section, the individual demands (including the date, time, category, andtotal quantity) are then displayed in this area. Double-click on a particular demandto graphically display the details on the right-hand side of the screen.



Supply Chain ViewerHaving double-clicked on a particular demand, the information relevant for itthroughout the entire supply chain is now displayed in the Gantt chart on theright-hand side of the screen. In the graphic, you have the following displayoptions:

You can toggle between the Gantt chart and the legend for the icons on the chartby clicking on the Chart Type icon.

Click on the Settings icon and choose Display object information. A dialog boxappears. By placing your cursor on the graphic, you can display informationcorrespondent to the current location of your cursor.

For example, by placing your cursor on the top of the supply tree, you can displayinformation (product, location, quantity, and time) about the initial demand inthe dialog box. As you move your cursor down the supply tree, the informationchanges and adjusts to the current position of your cursor on the graphic. So, forinstance, you might then see information about an activity (including resource,location, quantity, and time), and so on.

To close the dialog box, choose the Settings icon and Display object informationagain. Then, choose the OK icon on the dialog box.

You can show/hide the icons on the graphic by choosing the Settings icon andDisplay Bitmap.

You can show/hide the pegging relationships between the planning objects bychoosing the Settings icon and Display supply tree.

If you choose the Settings icon and then Further settings, the Configure Viewerdialog box is displayed. In the dialog box, you can determine, for example,whether to display the bucket-oriented or time-continuous capacity for mixedresources. You also can determine whether or not the planning object is displayedin one line or in several, and which of the three display periods is to be used:an optimal period (the time is determined by the supply tree, that is, the first�activity� and the last �activity� in the supply tree define the time frame), a fixedperiod (the start and end dates that you specify), or the CTM time stream (whichyou previously created).

CTM Log FileIf there are problems with CTM planning, you have to generate input data files toreproduce the problem in the development environment.



Figure 107: CTM Log File

To generate the CTM input data file, use the setting "Generate File for Input Data"in the CTM profile under "Settings", "Technical Settings". This setting does notcause any serious performance problems during logging. The log file can beaccessed via APO→ Multilevel Supply & Demand Matching→ Reporting→Optimizer Log Data (/SAPAPO/OPT11). Select the Planning run entry Extras→Display Log File or Download Data File.

Caution: In SCM 5.0, logging input and output data of the CTMEngine can cause severe performance problems. In productionenvironments with large datasets that are used for CTM planning,you have to select the setting "No Input or Output Data" to deactivatethe CTM Engine logging.



Exercise 9: CTM Evaluation Tools

Exercise ObjectivesAfter completing this exercise, you will be able to:� Set up the CTM explanation profile for use in CTM run analysis� Use the CTM explanation tool for analysis� Use the CTM results indicator for further detailed analysis� Use the Supply Chain Viewer for solution analysis

Business ExampleIn using CTM your company expects that not every demand will be satisfied.However, they would like to be able to analyze the decision tree CTM used to seeif the source determination could be improved. To perform this function, you mustset an explanation profile that can be used in your CTM profiles.

Task 1: Setup CTM Explanation ProfileTo meet demands with the constraints your supply chain has placed on you,CTM has been chosen to perform the planning. To understand the solutionsearch methods, you need to activate the CTM explanation profile to be ableto determine how CTM works and if the profile can be altered to improve thesolution. Because you are new users, you will set the explanation tool up to giveas detailed information as possible

1. Create an explanation profile GR##_Pump (Group ## Pump Explanation)for your pump scenario that will provide as much data as possible on thesolution that the CTM run will generate.

2. Create a second explanation profile T-F## (Group ## Simple PumpExplanation) for your Personal Computer scenario that will provide as muchdata as possible on the solution that the CTM run will generate.

Task 2: Assign and Activate Evaluation Tool andResults IndicatorsTo understand the results of the CTM engine better, you want to activate andassign the explanation profiles you created in the previous tasks. In addition,you will activate the results indicator.

1. Update your CTM Profile GR##_1 with the explanation tool profileGR##_Pump and activate all message indicators. Deactivate singlemessages.




Caution: For performance reasons, Do Not Activate Log File. Thiscould cause liveCache to fail.

2. Update your CTM Profile GR##_3 with the explanation tool profileGR##_Pump and activate all message indicators. Deactivate Singlemessages.


3. Update your CTM Profile GR##_4 with the explanation tool profile T-F##and activate all message indicators. Deactivate single messages.


Task 3: Explanation ToolTo trouble shoot issues with the CTM run, planners need a tool that will tell themwhere problems were incurred and how the system worked around it if possible.Using one of your new profiles, test the explanation tool.

1. Execute a planning run using your profile GR##_1.

2. Review your evaluations to see if there were any unfulfilled or late demands.




3. Where any demands unfulfilled?

4. Which demand was partially fulfilled?Hint: CTM Planning Run→ Explanations→ Explanations for CTMPlanning Run Details Exist

5. How did the CTM engine try to fulfill the demand?Hint: Drill into demand

6. View the details of the planning run in the product view for 000/T-F2##/2500.

7. Select the second FCreq and execute the Order Context report.



Solution 9: CTM Evaluation ToolsTask 1: Setup CTM Explanation ProfileTo meet demands with the constraints your supply chain has placed on you,CTM has been chosen to perform the planning. To understand the solutionsearch methods, you need to activate the CTM explanation profile to be ableto determine how CTM works and if the profile can be altered to improve thesolution. Because you are new users, you will set the explanation tool up to giveas detailed information as possible

1. Create an explanation profile GR##_Pump (Group ## Pump Explanation)for your pump scenario that will provide as much data as possible on thesolution that the CTM run will generate.

a) APO→ Multilevel Supply and Demand Matching→ Environment→Explanation Profile (/sapapo/CTMEXPL)

b) Enter GR##_Pump and select Create New Profile.

c) Enter a description Group ## Pump Explanation.

d) Enter a Master Data Selection for Location Products Pump_##.

e) Select a Search Path Display All Steps.

f) Select a Supply Search Always Display.

g) Make sure all Warning and Information messages are activated.

h) Select Save.

2. Create a second explanation profile T-F## (Group ## Simple PumpExplanation) for your Personal Computer scenario that will provide as muchdata as possible on the solution that the CTM run will generate.

a) Select Edit other Profile.

b) Enter T-F## and select Create New Profile.

c) Enter a description GR ## Simple Pump Explanation.

d) Enter a Master Data Selection for Location Products T-F##.

e) Select a Search Path Display All Steps.

f) Select a Supply Search Always Display.

g) Make sure all Warning and Information messages are activated.

h) Select Save.




Task 2: Assign and Activate Evaluation Tool andResults IndicatorsTo understand the results of the CTM engine better, you want to activate andassign the explanation profiles you created in the previous tasks. In addition,you will activate the results indicator.

1. Update your CTM Profile GR##_1 with the explanation tool profileGR##_Pump and activate all message indicators. Deactivate singlemessages.


a) Menu Path: APO→ Multilevel Supply and Demand Planning→Planning→ CTM Planning (/sapapo/CTM).

b) If necessary select Other CTM Profile.

c) Enter CTM Profile GR##_1.

d) Select the Settings tab, and select Technical Settings.

e) In the logs section, select: Save CTM Messages, select all GeneralResults Indicators, select Use Planning Explanation, and enterexplanation profile GR##_PUMP.

f) Deselect Create Single Messages.

g) Select SAVE.

2. Update your CTM Profile GR##_3 with the explanation tool profileGR##_Pump and activate all message indicators. Deactivate Singlemessages.





a) Menu Path: APO→ Multilevel Supply and Demand Planning→Planning→ CTM Planning

b) Select Other CTM Profile.



e) In the logs section, select: Save CTM Messages, select all GeneralResults Indicators, deselect Create Single Messages, select UsePlanning Explanation, and enter explanation profile GR##_Pump.

f) Select SAVE.

3. Update your CTM Profile GR##_4 with the explanation tool profile T-F##and activate all message indicators. Deactivate single messages.


a) Menu Path: APO→ Multilevel Supply and Demand Planning→Planning→ CTM Planning




e) In the logs section, select: Save CTM Messages, select all GeneralResults Indicators, deselect Create Single Messages, select UsePlanning Explanation, and enter explanation profile T-F##.

f) Select SAVE.




Task 3: Explanation ToolTo trouble shoot issues with the CTM run, planners need a tool that will tell themwhere problems were incurred and how the system worked around it if possible.Using one of your new profiles, test the explanation tool.

1. Execute a planning run using your profile GR##_1.


b) Enter CTM Profile GR##_1.

c) Press F8 to execute a planning run or select Planning Run tab, andselect Start Planning Run.

2. Review your evaluations to see if there were any unfulfilled or late demands.

a) Select Evaluations.

b) CTM Planning Run→ Quantitative Results

3. Where any demands unfulfilled?

Answer: One demand was partially fulfilled

4. Which demand was partially fulfilled?

Hint: CTM Planning Run→ Explanations→ Explanations for CTMPlanning Run Details Exist

Answer: The FCreq for T-F2## at location 2500 for 15 pcs due tomorrow

5. How did the CTM engine try to fulfill the demand?

Hint: Drill into demand

Answer: 1. Looked for Stock in location 2500, 2. Create Stock Transfer to1000, 3. Looked for Stock in location 1000, 4. Tried to plan production inplant 1000, 5. Create Stock Transfer from location 2300.

6. View the details of the planning run in the product view for 000/T-F2##/2500.

a) Return to the CTM profile.

b) Select Product View.

c) Enter Planning Version 000, Product T-F2##, and Location 2500 andpress Enter.

7. Select the second FCreq and execute the Order Context report.

a) Select the second FCreq by highlighting the entire line.

b) Select Order Context.

c) Select the FCreq in the lower section and select Expand Subtree.



Lesson Summary

You should now be able to:� Apply the Explanation Tool� Set up the Explanation Tool� Explain the Results Indicators� Explain the Supply Chain Viewer

Related Information

� 1087416 - 5.0 CTM Explanation Tool


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Apply the Explanation Tool� Set up the Explanation Tool� Explain the Results Indicators� Explain the Supply Chain Viewer


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 5CTM Planning Strategies

Unit OverviewNow that you understand how to control the selection of the problem or scenario,you will be introduced to some of the control parameters that will influencethe outcome of the CTM planning engine. Not all control parameters will bediscussed in this unit, as some of the features are for advanced users and will beaddressed in later units.


� Use applications and conditions for dynamic pegging� Use fixed pegging.� Clearly present concepts in order creation and deletion control parameters� Demonstrate scheduling capabilities of CTM� Apply concepts of pegging during planning� Demonstrate options of the planning mode related to pegging� Show an understanding of Net Change and Regenerative Planning� Demonstrate a detailed knowledge of Net Requirements Planning in CTM� Exhibit an understanding of the effects of late fulfillment

Unit ContentsLesson: Pegging in SCM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .260

Exercise 10: Pegging in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .275Lesson: CTM Planning Strategies Part I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .282

Exercise 11: CTM Planning Strategies Part I . . . . . . . . . . . . . . . . . . . . . . . . . . .293Lesson: CTM Planning Strategies Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310

Exercise 12: CTM Planning Strategies Part II . . . . . . . . . . . . . . . . . . . . . . . . . .325Lesson: CTM Special Planning Strategies ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .348

Exercise 13: CTM Special Planning Strategies .. . . . . . . . . . . . . . . . . . . . . . .361


Unit 5: CTM Planning Strategies SCM235

Lesson: Pegging in SCM

Lesson OverviewPegging relationships create relationships between requirement coverage elementsand requirements that can be used by subsequent procedures.


� Use applications and conditions for dynamic pegging� Use fixed pegging.

Business ExampleYour company intends to use CTM for both short and long term scenarios. Themain reason for using CTM is due to the opportunity to prioritize the matching ofdemands to supplies. To understand how you can make use of these opportunities,you need to understand how pegging can influence the outcomes of CTM Planning.

PeggingWe call the assignment of product requirements to product receipts pegging.Pegging describes which receipt covers which requirement. This is a non-trivialalgorithm which constantly raises questions, such as: What is pegging requiredfor? What is the difference between fixed pegging and dynamic pegging?

Pegging determines which product requirement is covered from which receiptelement. This information is required to display the shortage/surplus quantity inthe product view. The 'Surplus/shortage' column is displayed for each receipt orrequirement element, for which the receipt quantity is not needed or for whichthe quantity of a requirement is not covered. The context display shows whichfinished product requirements are covered from a selected receipt element onany manufacturing level and which receipt elements are required here for theraw materials. The surpluses and shortages of location products are displayed inthe alert monitor.


SCM235 Lesson: Pegging in SCM

Figure 108: Pegging Relationships

Pegging establishes a link between the receipt and issue elements of a product in alocation. The system uses pegging to assign receipts to relevant requirements.

The pegging strategy defines how requirements are covered when receipts areassigned. There are two strategies that can be entered in the product.

Dynamic PeggingIn APO, we differentiate between fixed pegging and dynamic pegging. In the caseof dynamic pegging, the pegging relationships between product requirements andproduct receipt elements are calculated again every time a receipt or requirementelement changes.



Figure 109: Pegging Across the Entire BOM Structure

The system creates a pegging network of orders linked to one another, whichrepresents the relationships between the receipt and issue elements of a BOMstructure. For pegging relationships to be created, the product, location, accountassignment (make-to-stock and make-to-order production), and planning version(active or inactive version) must be the same. Pegging relationships are onlycreated within one pegging area. Furthermore, in characteristics-based planning,the characteristics must be the same.

Pegging AreaCombination of product, location, account assignment object and planningversion. A requirement, stock or receipt element is in a specific pegging area.Only stock and receipt elements that lie within the same pegging area can beassigned to a requirement element. The stock and receipts of a pegging areacan only therefore cover the requirements from the same pegging area.The pegging area is identical to the planning segment in ECC, with theexception of the planning version. In APO, the term "planning segment" isoften used as a synonym for "pegging area".

Example:

Jan 1st Stock +100 units

Jan 2nd Sales order -100 units

Jan 3rd Purchase requisition +50 units

Jan 4th Forecast - 50 units



At the moment, the stock dynamically covers the sales order. The purchaserequisition (PReq) covers the planned independent requirements. If the date ofthe sales order now changes to a date after the planned independent requirements(January 5), then the stock automatically covers the planned independentrequirements. The sales order is partially covered from the PReq and partiallyfrom the stock.

The requirements and receipt elements are assigned according to the availabilitydate/time and requirement date/time. Consequently, dynamic peggingrelationships change if the requirements or receipts change. Pegging enables amultilevel transfer of changes.

The pegging structure for an order is an evaluation that is ordered according to theBOM structure of all related products and represents the relationships between thereceipt elements and the issue elements. It provides an overview of the orders thatare required to produce a finished product or assembly for a certain requirement.

There are several advantages to Dynamic Pegging:

� By reallocating the receipt quantities to the product requirements followinga change to any receipt or requirement element, you get a more favorableplanning situation. For example, in the above example, this allows you tomove the PReq to the later date of January 5 and, as a result, to possiblychoose a more suitable vendor.

� Dynamic pegging is very robust for all types of document changes� Dynamic pegging handles under-deliveries and over-deliveries well� Dynamic pegging allows you to form lots and, in particular, to also

recalculate lots again after changes to requirements. If, for example, youare working with weekly lots and the requirements change within a week,then a heuristic can calculate the new receipt element from the total ofrequirements in the period

Conditions for DynamicPegging Interval

Time segment around a requirements date containing the receipt elementsthat the system can assign to a requirement in dynamic pegging. The systemcannot assign receipt elements with availability dates outside the pegginginterval to the requirement. Dynamic pegging relationships are thereforeonly created within the pegging interval.



Figure 110: Pegging Intervals

With the pegging interval, ideally, the availability and requirements dates should bethe same. Generally, this is not fully achieved in planning; that is, the availabilitydates can be earlier or later than the requirements date. In certain circumstances,deviations are permissible. If the availability date is too late, this can lead toproblems with a lack of material or with adherence to sales order dates. If theavailability date is too early, this does not make sense economically or can causestorage problems. You can exclude receipts that are too late or too early via thepegging interval. The pegging interval has the following role in displaying alerts:

Date alerts and pegging interval: The system can only generate date alertsfor requirements and receipts that are linked by a pegging relationship and aretherefore in the pegging interval. In the location product master, you can determinefrom which time deviations between the requirements and availability date thesystem should create date alerts. The alert thresholds must be in the pegginginterval; if the alert thresholds are outside the pegging interval, the system nevergenerates alerts, since it never creates dynamic pegging relationships between arequirement and receipts that are outside the pegging interval.

Hint: You should carefully reconcile the pegging interval and the alertthresholds for the date alerts to your planning requirements. It can makesense, for example, to define a relatively large pegging interval that alsoallows a requirement to be linked with late receipts (backward pegging)and to be made aware of the date problems via alert thresholds adjustedto the planning requirements. To avoid meaningless alerts, the alertthresholds should not be too small: if, for example, delays of up to sixhours would not create a problem for you that would require planningaction, you should not define an alert threshold of one hour.



Quantity alerts and pegging interval: If the quantities of the receipts within thepegging interval are insufficient to cover a requirement, there is a shortage for therequirement. Receipts that the system cannot link to a requirement via a dynamicpegging relationship generate a surplus. Note: The main cause of a quantity alertis missing pegging relationships between requirements and receipts. Quantityalerts can be due to missing or surplus receipts but can also be due to the pegginginterval being too small, which then prevents sufficient existing receipts beinglinked with the requirements. The receipts total can, for example, agree with therequirements total and quantity alerts can nevertheless occur. Therefore, it canmake sense to define a pegging interval that is not too small.

Figure 111: Conditions for Dynamic Pegging

When scheduling orders that it recreates in automatic planning, the system canconsider the pegging interval and thereby avoid shortage and surplus problems. Inthe detailed scheduling strategy, you can define whether or not the system shouldcreate orders so that the availability dates are within the pegging interval and (astimely as possible) before the requirements date.

The maximum earliness of a receipt specifies the maximum period of time bywhich a receipt element can precede requirement element. This allows the systemto create a pegging relationship in spite of the time interval. However, peggingrelationships cannot be created in the case of long intervals. You similarly set thelevel of earliness as of which a date/time alert is issued.

Similarly, the maximum delay specifies the maximum period of time by whicha requirement element can precede a receipt element. This allows the systemto create a pegging relationship in spite of the time interval. However, peggingrelationships cannot be created in the case of long intervals.



The format for all time entries is HHHHHH:MM, with HHHHHH standing forhours and MM for minutes. This means that a maximum of 999999 hours and 99minutes can be entered. An uninterrupted time stream is used to calculate theduration, which means a factory calendar or shift model is not taken into account.

If a pegging relationship cannot be created between a requirement and a receiptelement, a quantity alert is generated.

To receive date/time alerts, it may be useful to use almost endless maximumdelays for a receipt in most cases. However, with SCM 4.0, the days' supplyanalysis is based on pegging relationships, which means that this setting does notgenerally allow for a reliable days' supply report. Therefore, the days' supplylogic is changed as of SCM 4.1 so that the first shortage or the first date/timealert defines the days' supply.

Figure 112: Pegging Strategies



You can use different strategies to calculate dynamic pegging. SAP provides twoof these types of pegging strategies:

� FIFO: Here, the system uses the earliest receipts in the pegging interval tocover a requirement, that is, first the first receipt in the pegging interval, thenthe second and so on. Using this strategy, surplus receipts only becomeavailable later.

� Using punctual receipts: Here, the system uses the most punctual receiptsfor covering a requirement. Starting from the requirements date, the systemtherefore first searches backwards up until the beginning of the pegginginterval. If it does not find any receipts in this direction, the system searchesforwards from the requirements date up to the end of the pegging interval.Using the backwards search, starting from the requirements date, ensuresthat any possible surpluses are made available early.

Example:

Jan 1st Purchase requisition +50 units

Jan 2nd Planned Order +50 units

Jan 3rdSales Order - 50 units

With the FIFO strategy, the sales order is covered from the PReq. Theplanned order gets an over-coverage alert. With the 'Use punctual receipts'strategy, the sales order is covered from the planned order. The PReq getsthe over-coverage alert. If the planner deletes all receipt elements with anover-coverage alert, then he/she deletes the planned order with the FIFOstrategy. The product is kept for an unnecessarily long time in the warehouse.

The over-coverage alert should, to all intents and purposes, be understood as arequest to the planner to check whether the receipt element can be deleted. Ofcourse, stocks can no longer be deleted from the planner. Therefore, stocks arepegged in advance. With the FIFO strategy, this is achieved by stocks specifyingthe earliest possible availability date. With the 'Use punctual receipts' peggingstrategy, a check is made for every requirement (starting with the first requirementfrom a time point-view) to see whether these requirements can still be coveredfrom the stock. If this is not the case, a suitable receipt element is then found,working backwards from the requirements date.



Additional Pegging Control in the Product Master

Figure 113: More on Pegging and Alerts in the Product Master

You can make various additional settings for dynamic pegging and the generationof alerts in the product master. For example, pegging relationships can begenerated with a minimum number of alerts. This option enhances the peggingstrategy and is associated with an increased performance requirement.

Dynamic pegging can be deactivated in the product master. If you select thisoption, note that it affects all applications that use dynamic pegging: detailedscheduling, PP/DS optimization, certain PP/DS heuristics. In particular, date/timealerts can no longer be generated because there are no longer any links betweenrequirement elements and procurement elements. Instead, the system generatesquantity alerts.

You can filter the generation of alerts for each product. You can deactivate allalerts or network alerts only.

Special problemsIn the section about symptoms above, we have given an example where arequirement is covered from several receipt elements. This also includes coverfrom a receipt element, which would be able to cover the total requirementsalone. This behavior is caused by the pegging algorithm described above. Withthe FIFO logic, the system uses the first receipt it finds to cover a requirement.This also applies if the receipt cannot cover the requirements completely. Withthe 'Use punctual receipts' pegging strategy, the system first searches for receiptelements in the present. In our example, these receipt elements cannot cover the



requirements completely but they are, nevertheless, pegged with each availablepartial quantity. The system then tries to cover the remaining requirements bysearching for suitable receipt elements in the future.

By setting the 'Consume total order quantity' switch in the product master, you canensure that receipt elements are always completely consumed by a requirement. Inthis example, you can therefore achieve a better pegging result.

Fixed PeggingIn fixed pegging, a relationship set once is retained between a receipt element anda requirement element if other receipt elements or requirement elements change.Fixed pegging enables you to fix a pegging relationship, that is, the peggingrelationship will not be changed automatically by the system during planning.You can fix a particular quantity of a product receipt (manually, with heuristicsPPDS, or in the CTM profile) to a specific requirement. You can manually fixthe pegging for a receipt/requirements element by editing the pegging structurefrom the product view.



If you use fixed pegging to assign a requirement to a receipt element, then thismeans that the requirement should be filled from the selected receipt element.Other receipt elements are not taken into account. This has the followingconsequences, for example:

� Fixed pegging was used to assign a requirement to a planned order orpurchase requisition. The planned order or purchase requisition is not fixed.Due to an unplanned goods movement, a new stock is created. The sameeffect occurs if a production order or purchase order is created manually inECC. The requirement could now be covered from the stock, productionorder or purchase order. Even though the planned order or purchaserequisition is not fixed, the system is not able to automatically delete theplanned order or purchase requisition. Fixed pegging is still used to assignthe requirement to the planned order or purchase requisition. The stock,production order or purchase requisition can be identified using an excesscoverage alert. The planner must then delete the fixed pegging relationshipor the planned order manually.

� Fixed pegging is used to partially assign the receipt quantity of a plannedorder or purchase requisition to a requirement. However, fixed pegging isnot used to assign the other part of the receipt quantity to a requirement. Thispartial quantity takes part in dynamic pegging, that is, requirements of thesame location product can be covered with this receipt quantity if theserequirements are not already covered by fixed pegging. If there are no suchrequirements, then the partial quantity that did not take part in fixed peggingis a surplus. There is a corresponding alert. Even if the planned order orthe purchase requisition itself is not fixed, the standard lot size heuristicis not able to reduce the receipt quantity of the planned order or purchaserequisition to the quantity required by fixed pegging. Instead, the systemregards the entire planned order or purchase requisition as having been fixed.

Advantages of fixed pegging: With fixed pegging, a relationship set once isretained between a receipt element and a requirement element if other receiptelements or requirements elements change.



Figure 114: Fixed Pegging Inheritance

Up to and including APO Release 4.0, fixed pegging relationships disappearwhen a document is changed. With SCM 4.1, fixed pegging relationships areretained when switching documents. For example, if a planned order is connectedto a requirement, such as a sales order, with a fixed pegging relationship, thenthis relationship will be retained when you convert the planned order to amanufacturing order. In this way, you can be sure that fixed pegging relationshipsbetween receipt elements and requirement elements are retained in ProductionPlanning and during the execution of production, even after various documentswitches (see SAP note 698427).

You must activate this function in ECC Customizing to transfer a peggingrelationship from a production order to on-hand stock (Customizing step �Activatefixed pegging for stocks�).

In total, note that fixed pegging is purely a function of APO that is not integratedwith ECC. This means that relationships between requirement and receiptelements that are created in ECC cannot cause fixed pegging relationships in APO.

Note the following process-related restrictions: The shelf life process, the limitedcapacity of a container resource, and APO production confirmations are notsupported. In addition, a fixed pegging relationship is not transferred from aplanned independent requirement to the sales order for consumption. For moreinformation, read SAP Note 704583.

When you create fixed pegging relationships, you can define criteria withuser-defined settings in the sort profile that is used for sorting the selecteddocuments in processing. The sorting assigns priorities to the documents.Documents at the beginning of the sorting have a higher priority (they areprocessed first) than documents at the end.



Fixed Pegging in APO and Batch Selection in R/3The fixed pegging in APO and the batch selection in ECC are not integrated witheach other. Setting a fixed pegging relationship in APO does not result in thebatch selection in ECC and vice versa.

Fixed pegging in APO permanently assigns a receipt element to a requirementelement. The batch selection in ECC has a similar business function. When youselect a batch in a reservation or sales order, you also define that the requirementsshould be covered by a specific receipt/stock. However, there are also a lot ofdifferences at the technical level. For example, the batch selection requires that arequirement for the entire amount is covered from a batch. If the receipt quantityis insufficient, a batch split must be carried out. A new reservation item ordependent requirement is then created.

With fixed pegging, an n:m assignment of requirement elements and receiptelements is to be split up, possibly without the dependent requirement. Thesame problem can be solved with the batch split. The implementation howeveris different, and this makes it difficult to integrate fixed pegging and the batchselection.

This function is planned for a future release. The release has not yet beenscheduled, however.

Examine the following alternatives to fixed pegging:

� Make-to-order, MTO.� Characteristics Dependent Planning CDP. CDP allows you to transfer

the batch characteristics valuation from R/3 to the APO system. Thecharacteristic requirements for the dependent requirements are alsoexchanged between APO and R/3. Using dynamic characteristics pegging,you can ensure that stocks only cover a requirement if the characteristicsare compatible.

Pegging Controls in CTMCTM automatically creates pegging relationships between receipt elements andthe corresponding demand elements. Planners can control what type of peggingrelationships are created during each CTM run. Pegging relationships can have adramatic affect on the planning run as it can be used to determine the scope of aplanning run. This will be discussed in more detail in the next lesson.



Figure 115: Pegging Controls in CTM

When CTM planning is set to create �fixed pegging�, the CTM engineautomatically creates fixed pegging relationships between receipt elements andthe corresponding demand elements. Planners can use fixed pegging to ensure thesystem keeps the pegging relationships created in CTM planning in the liveCache.

The system may not change the fixed pegging relationships that you have createdmanually in the product view, in a subsequent CTM planning. If, however, thesystem deletes non-firm orders, all corresponding fixed pegging relationships aredeleted, even if you have fixed them manually beforehand.

Planners can use dynamic pegging if the system is to cover newly created salesorders immediately with existing receipts. In this case, the system determines thepegging relationships dynamically at the time of the query, in other words, theresult may vary from the original pegging relationships determined by CTM.

Note that dynamic pegging relationships created in the liveCache may vary frompegging relationships that CTM planning determined. This may be the casewhen you allow late demand fulfillment or use CTM demand prioritization. Toensure that the system does not change the pegging relationships in the liveCachedetermined by CTM planning, use fixed pegging.

Note: You can change the pegging type selected in the CTM profile forindividual demands, by using a calculation profile in the rule maintenance.





Exercise 10: Pegging in CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Gain an understanding of how pegging works in SCM

Business ExamplePegging is one of the primary control mechanisms in controlling the outcome ofthe CTM Algorithm. Through CTM parameters, pegging can be used to determinewhich receipts will cover which requirements. In this exercise you will execute asimple CTM run to understand pegging better.

Task 1: Dynamic PeggingIn a previous exercise, you created several requirements for the T-F2## at location2400. Now you will execute a simple CTM planning run and examine the peggingresult.

1. To understand the results of CTM better, you will need to see what types ofalerts are generated by changes in supply and demand. Assign the alertprofile Pump ## to your User ID in the product view. Use Planning Version000, Product T-F2## and Location 2400 to access the details of the productview.

2. Assign your PPDS Alert Profile Pump ## to your CTM Profile GR##_1.

3. In your CTM Profile GR##_1, update the profile so that the CTM enginerounds order quantities. Save your updates and execute a planning run.

4. Review the Evaluations of the planning run.




5. Review the Quantitative results of the Demand Prioritization. How manydemands were selected?

6. Review the Quantitative results for the CTM Planning Run. What was theresult of the CTM Run?

7. Review the Quantitative results of the Create Orders evaluation. Whatwas the result?

8. Open another session, and review the pegging details in the PeggingOverview tab of the product view for your T-F2## at location 2500. Whatare the pegging results of the CTM run?

Task 2: Alerts in CTMWhile CTM has its own planning engine, it does not have its own alerts. Therefore,you will be dependent upon the PPDS (order based) or SNP (macro based) alerts.Review how the alerts will be triggered as a result of the CTM Planning run.

1. In a separate session, review the product view for version 000, productT-F2## at location 2500. Make sure you have assigned Alert Profile Pump## to your user logon. Refresh the screen once complete.




2. What was the result of assigning an alert profile?

3. What were the Alerts on the requirement?Hint: Drill into the Alert Icon.

4. From the Elements tab of the Product View for T-F2## at 2500, select thefirst PurRqs and execute the Order Context Report.

5. What type of pegging relationships were created?Hint: Look for the pegging type column



Solution 10: Pegging in CTMTask 1: Dynamic PeggingIn a previous exercise, you created several requirements for the T-F2## at location2400. Now you will execute a simple CTM planning run and examine the peggingresult.

1. To understand the results of CTM better, you will need to see what types ofalerts are generated by changes in supply and demand. Assign the alertprofile Pump ## to your User ID in the product view. Use Planning Version000, Product T-F2## and Location 2400 to access the details of the productview.

a) APO→ Production Planning→ Interactive Production Planning→Product View (/sapapo/RRP3)

b) Enter Planning Version 000, Product T-F2## and Location 2400, andpress Enter.

c) Settings→ Alert Profile , enter alert profile PUMP ## and selectContinue.

2. Assign your PPDS Alert Profile Pump ## to your CTM Profile GR##_1.

a) APO→ Multilevel Supply and Demand Matching→ Planning→CTM Planning

b) Select Other CTM profile and Enter GR##_1.

c) Select Settings→ Basic Settings tab, and enter a PP/DS Alert ProfilePump ##.

d) Select Save.

3. In your CTM Profile GR##_1, update the profile so that the CTM enginerounds order quantities. Save your updates and execute a planning run.

a) Select your CTM Profile GR##_1.

b) Select the Settings→ Technical Settings tab. Set the Round parameterto Round Order Quantities.

c) Select Save.

d) Select the Planning Run tab and select Start Planning (Engine).

e) The result should be a green light to the right of the Evaluations button.

4. Review the Evaluations of the planning run.

a) Select Evaluations.




5. Review the Quantitative results of the Demand Prioritization. How manydemands were selected?

Answer: Two demands were selected. These would be the two PIRs createdin the previous exercise.

6. Review the Quantitative results for the CTM Planning Run. What was theresult of the CTM Run?

Answer: 1 demand was fulfilled completely, and on time.1 demand was partially fulfilled, but on time.

7. Review the Quantitative results of the Create Orders evaluation. Whatwas the result?

Answer: Results may vary depending upon requirement dates:5 production (planned) orders, 1 transport orders, and 15 pegging lanes(relationships)

8. Open another session, and review the pegging details in the PeggingOverview tab of the product view for your T-F2## at location 2500. Whatare the pegging results of the CTM run?

Answer: 2 FIXED pegging lanes were created. This is a result of one of thesettings in the CTM profile that will be discussed later.

Task 2: Alerts in CTMWhile CTM has its own planning engine, it does not have its own alerts. Therefore,you will be dependent upon the PPDS (order based) or SNP (macro based) alerts.Review how the alerts will be triggered as a result of the CTM Planning run.

1. In a separate session, review the product view for version 000, productT-F2## at location 2500. Make sure you have assigned Alert Profile Pump## to your user logon. Refresh the screen once complete.

a) From within the CTM Profile, select Product View.

b) Enter version 000, product T-F2## at location 2500 and press ENTER.

c) Settings→ Alert Profile

d) If necessary, enter alert profile PUMP ## and select Continue.

e) Select Update to refresh the product view.

2. What was the result of assigning an alert profile?

Answer: A quantity alert appears next to the first FCreq.




3. What were the Alerts on the requirement?

Hint: Drill into the Alert Icon.

Answer: The alert Requirement under coverage (stock shortage)

4. From the Elements tab of the Product View for T-F2## at 2500, select thefirst PurRqs and execute the Order Context Report.

a) Select the entire line for the first purchase requisition for T-F2## at2500.

b) Select Order Context.

c) Highlight the FC req. and select Expand Subtree.

5. What type of pegging relationships were created?

Hint: Look for the pegging type column

Answer: Mainly A - Automatic Fixed pegging. However there may beseveral instances of C - combined pegging. This is mainly due to rounding atthe lower levels



Lesson Summary

You should now be able to:� Use applications and conditions for dynamic pegging� Use fixed pegging.

Related InformationConsulting Notes:

� 163576 - Required and confirmed quantity in APO planning (Docu)� 393437 - Pegging in APO: background information (documentation)� 458996 - Fixed pegging in SAP APO (documentation)� 698427 - Fixed pegging: Supported document changes and replacements� 704583 - Fixed pegging in APO: Symptoms and restrictions� 744583 - Removing Dynamic Pegging�



Lesson: CTM Planning Strategies Part I

Lesson OverviewThe CTM planning engine is an extremely robust planning tool. The flexibility ofthe tool allows planners the opportunity to control the extent of the planning run.This includes the scheduling direction, application of pegging during planning,and the extent of order creation. In this lesson, will explore the options availableto the planners


� Clearly present concepts in order creation and deletion control parameters� Demonstrate scheduling capabilities of CTM� Apply concepts of pegging during planning

Business ExampleYour company finds itself in a situation where demand is greater than supply. Inorder to deliver on some of the forecasts, your planners need to execute CTMplanning runs. To understand the outcome of the CTM runs, your planners must befamiliar with the control parameters regarding the CTM profile. Investigate whatimpact the Planning Strategy parameters have on the outcome of the CTM run.

CTM Planning ProcessThe CTM planning process is broken down in to several steps. It is important toknow, however, that it is not necessary to perform every step during each planningrun.


SCM235 Lesson: CTM Planning Strategies Part I

Figure 116: The CTM Planning Process

Often, due to the extent of the planning run, companies will run two CTM runs insequence. The first is expected to clean up the existing plan, and the second tocreate the new replenishment plan based on the detailed parameters.

Order Creation/Deletion ParametersBefore Capable-to-Match (CTM) starts with the Planning Algorithm, the systemprepares the transaction data that it requires for planning.

If you have not made any restrictions, Capable-to-Match (CTM) selects alldemands and receipts that have a demand and availability date within the planningperiod (time stream). For the selection of demands and receipts, the planningperiod can also start in the past. For the selection of receipts, CTM also usesreceipts with availability dates that lie before the planning start.

In the CTM profile, you can use the order selection to limit the selection ofdemands and receipts with a fixed or relative time period as well as ATPCategories. For the selection of demands, the time period must lie within theplanning period (Time Stream). For the selection of receipts, you can choose thetime period so that the selection start lies before the planning start.



Normally, the system selects all orders within the planning period specified in theCTM profile. You can use order selection to restrict this time period further. Forexample, you can limit the selection of orders to two months, while CTM cancreate new orders for the next three months in total.

Note: You can also restrict the selection period depending on the productby choosing the finish date of the selection period for the correspondinglocation product. If you have set the Ignore Prod-Spec. Sel. Horizon:Demands indicator, CTM planning considers the time period specified inthe order selection or in the CTM profile.

Figure 117: Order Creation

So that the system considers unfulfilled demands from the past in a CTM planningrun, you can have the planning start in the past. However, this means that CTMplanning might create orders in the past. To prevent this, you can use a value todetermine as of when CTM planning can create orders within the planning period.



Enter the value in days. The value refers to the current date (0:00:00). You canenter positive and negative values. With value 1, the system calculates the nextday as the earliest time for creating orders. With value 2, the system creates theday after the next day as the earliest time, and so on. If you enter 0 or no value atall, the system uses the current date.

Note: The earliest time that the system calculates for creating ordersmust lie within the planning period. When the system calculates a timethat lies before the planning start, CTM planning only creates orders asof the planning start. If the calculated time lies after the planning end,CTM planning cannot create orders.

CTM planning also considers the horizons you calculated (productionhorizon, stock transfer horizon, planned delivery time, and so on). Thismeans that the horizons can shift the earliest time for creating ordersfurther backward.

Production HorizonIn the location product master, you can determine the production horizon in theSNP Prod.Hor. field or in the Model and Version Management in the PP/DSHorizon field. If you have specified a value for both options, CTM planning usesthe SNP production horizon.

The production horizon starts on today�s date and ends after the specified numberof days. So that the production horizon has an effect on CTM planning, you mustspecify a value larger than 1.

Within the production horizon, CTM planning does not delete any planned orders,nor does it create new ones. CTM planning can only then delete planned orderswhen they lie entirely outside the production horizon. CTM planning can onlyrecreate planned orders after the production horizon procedure. CTM planningalso considers the production horizon during creation and deletion of ProductSubstitution Orders, but not during deletion and creation of purchase requisitionsor stock transfers.

If CTM planning should not use the production horizon, set the (Ignore)Production Horizon indicator in the CTM profile.

Hint: Unlike in CTM planning, the system creates planned orders withinthe production horizon in Production Planning and Detailed Scheduling(PP/DS). However, this is not valid for planned orders that CTM planningcreates with order category PP/DS Order. CTM planning can createthese planned orders in the same way as it creates planned orders withorder category SNP Order, except they must be outside of the productionhorizon.



Stock Transfer HorizonIn the location product master, you can determine the SNP stock transfer horizonin the Stock Transfer Horizon field. Within the stock transfer horizon, CTMplanning does not delete any stock transfers, nor does it create new ones.

CTM planning uses the stock transfer horizon of the destination location product.Only the receipt element of the stock transfer must lie outside the stock transferhorizon. The start of the order, however, can lie within the horizon. CTM planningcan also delete the order if the order starts within the horizon, but finishes outsideof it. CTM planning only considers this order as fixed if the order lies completelywithin the horizon. Then it does not delete it.

In Model and Version Management, you can determine that planning is to usethe stock transfer horizon of the source location. In this case, the stock transfersthat CTM planning is to delete or create from new must lie completely outsideof the stock transfer horizon.

The stock transfer horizon starts on today�s date and ends after the specifiednumber of days. If CTM planning should not use the stock transfer horizon, setthe (Ignore) Stock Transfer Horizon indicator in the CTM profile.

Planned Delivery TimeIn the location product master, you can determine the planned delivery time.Within the planned delivery time, CTM planning does not delete any purchaserequisitions or create any purchase requisitions without source locations. Theplanned delivery time does not have any effect in CTM planning on stock transfers.

CTM planning should not use the planned delivery time. Set the (Ignore) PlannedDelivery Time indicator in the CTM profile.

Hint: CTM planning can also create and delete fixed peggingrelationships within the production and stock transfer horizons and theplanned delivery time.

Note: The time period that you specify usually starts on today�s date.However, for the production horizon, stock transfer horizon, and theplanned delivery time, you can set that the defined time period is to starton the planning start. Set the Relate Horizons to Planning Start indicatorin the CTM profile.



Order DeletionWithin Capable-to-Match planning (CTM planning), you can delete existingorders. You can therefore, for example, react to a planning situation that hasdramatically changed since the last CTM planning run. So that CTM can deletean order, it must fulfill particular conditions. If the order does not fulfill theseconditions, CTM considers the order as fixed. CTM cannot delete fixed orders.

With the planning and deletion modes in the CTM profile, you determine theconditions for the deletion of orders (see Planning Mode and Deletion ModeCombinations). Further conditions are listed here. The orders must fulfill theseso that CTM can delete them.

CTM can delete the following orders:

� Planned orders� Stock transport requisitions and reservations� Purchase requisitions� Product substitution orders

CTM can delete orders that fulfill the following prerequisites:

� They are within the planning and deletion periods.� They do not have pegging relationships with demands outside of the

planning period.� They lie outside of the production horizon, stock transfer horizon, and the

planned delivery time.

Figure 118: Order Deletion Period



In the CTM profile, you can determine the start for the deletion of orders (plannedorders, purchase requisitions, and stock transfers) within the planning period inthe Deletion Start field. Starting at the calculated time for the creation of orders,the system determines the deletion start. Only when CTM has determined thedeletion start does the system consider a time for the creation of orders that liesoutside the planning period. You can therefore also delete orders that lie before theplanning period.

Caution: The system only replans the demands that lie in the deletionperiod and in the planning period.

Orders which fall inside this extension (Deletion period + Planning Horizon) arenot treated as fixed by CTM anymore; thus they can be deleted.

Fixed OrdersFixed orders cannot be deleted by a CTM planning run. An order is fixed for CTMif one of the following conditions is fulfilled. Note also the planning strategies ofCTM have an impact on which orders are fixed and which are not.

� Orders that are not part of your master data selection� Orders that you have specified in the PP/DS product view as firm (OutPut

Firmed (F))� Orders within the product horizon (SNP Production Horizon or PPDS

Horizon (version))� Orders outside of the planning horizon (time Stream or Order Selection)� Sales orders, stock, or forecasts� PP/DS orders if you have selected SNP Order in the current CTM profile, tab

page Settings, under Basic Settings� Receipts pegged to orders outside the Planning Horizon� Fixed Pegging Relationships



Figure 119: Criteria for Fixed orders in CTM

Scheduling DirectionsOnce the CTM engine determines a shortage and creates the receipt, master dataselection will take place. This will be discussed in more detail later. However,once the system determines the source of supply, the engine needs to begin toschedule the receipt and any lower level receipts as well.

Figure 120: Scheduling Directions



In CTM, planners can choose between Backwards or Forwards scheduling.Backwards scheduling causes CTM planning to schedule orders backwardsstarting from the demand date. Receipts are therefore created as close to thedemand date as possible. Since CTM will plan order by order, it will exhaust allmethods of supply until the engine determines that a timely receipt is not possible.At this juncture, planners will decide how the system will cope with late demand.Is late demand acceptable or should you assume a back-order process?

In backward scheduling, the rule of thumb is: Time beats quantity. Thus, CTMtries to produce as close as possible to the demand, even if that will require toconsume smaller capacities first.

Forward scheduling causes CTM planning to create all receipts as early aspossible. This is different from PPDS or ECC MRP scheduling in that the systemdoes not forward schedule from the requirement date, but in fact forward schedulesfrom the current day. This could cause the inventory to be built well in advance.

Hint: CTM is not designed to control inventory levels; it is designedto match supply with demand requirements.

In forward scheduling, maximizing the quantity is the more important goal. Thus,if there is the maximum capacity available closer to the demand then any othersmaller capacity, then CTM will first create a planned order consuming themaximum capacity and by this maximizing the quantity for one order before ittries to consume the other smaller capacities. As a general rule of thumb: Quantitybeats time.

Pegging Type in CTMBy definition, CTM is an order-based planning system. Therefore, it is imperativethat users understand what relationships are created after each order is planned.As discussed in an earlier lesson, pegging will give planners the informationnecessary to determine how CTM plans from one order to the next.



Figure 121: Pegging Types

Most users are used to the aspect of dynamic pegging. Fixed pegging will becomeextremely useful as users want to keep existing relationships in play, specifically ifyou have maximized the prioritization process of CTM.

With Dynamic Pegging, the pegging relationships determined by CTM are notfixed in the liveCache, but dynamically determined by the liveCache. Usersshould choose dynamic pegging when you want newly created demands to befulfilled immediately with existing receipt objects, without having to execute anew planning run. The system can therefore immediately react to changes in thedemand situation. This is extremely relevant when using planning strategies thatinitially begin planning with forecast requirements, which are later replaced bysales orders when they are entered into the system.

Note: Dynamic pegging relationships created in the liveCache may varyfrom pegging relationships that CTM planning determined. This may bethe case when you allow late demand fulfillment or use CTM demandprioritization. To ensure that the system does not change the peggingrelationships in the liveCache determined by CTM planning, use fixedpegging.

When the Fixed Pegging indicator is set, CTM planning automatically createsfixed pegging relationships between receipt elements and the correspondingdemand elements. Use fixed pegging to ensure the system keeps the peggingrelationships created in CTM planning in the liveCache.



In a subsequent CTM planning run, the system may not change the fixed peggingrelationships that you have created manually in the product view. If, however, thesystem deletes non-firm orders, all corresponding fixed pegging relationships aredeleted, even if you have fixed them manually beforehand.



Exercise 11: CTM Planning Strategies PartI

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate order creation and deletion controls in the CTM profile and

Product Master� Demonstrate an understanding of CTM scheduling parameters� Demonstrate CTM pegging parameters

Business Example

Task 1: Order Creation/DeletionDuring the CTM planning process, one of the steps of the engine is to determineorder selection, order deletion, and order creation. In this task, you will use severalof the CTM parameters to control these options.

Hint: During your CTM planing exercises, you should consider using atleast three SAP Sessions. One for the product view, one for your CTM runto create new plans, and another for CTM run to delete receipts.

1. Delete all the existing receipts from the previous scenario. In a separatesession, go to CTM Profile GR##_5 (Group ## CTM Pump OrderDeletion) and execute a CTM Planning Run.

2. In another session, go to the product view for 000/T-F2##/2500, delete thetwo PIRs that were created in an earlier exercise.

3. Back in your session with the Product View, change to material T-F2##/1000and create a single FC Req for - 30 pieces Two weeks from today. Savethe results.

4. Using the CTM profile GR##_1, double check the following parameters: theplanning strategies set to Deletion Start is set to 1 day, Planning Mode is setto Replan All Orders and the Deletion Mode to Order Tree of SelectedDemands.

In addition, make sure the scheduling direction is set to BackwardsScheduling.

Execute a planning run.




5. Return to the product view for Version 000 for the product T-F2## atlocation 1000. Update the results. What was the result of the CTM Run?

6. Execute a planning run in profile GR##_5 that will delete the planned orderthat was just created and save the results.

7. In the CTM Profile GR##_1, you do not wish to create orders for thefirst 10 days of the horizon. Set the Order Creation Start parameter to 10days and execute a planning run. In addition, in the special strategies tab,activate the rules by using Use Specified Rule For All Demands, and useRule SCCM235_2.

8. Return to the product view for Version 000 for the product T-F2## atlocation 1000. What was the result of the CTM Run?

9. Select the largest planned order for the T-F2##/1000 and execute the OrderContext report. Review the details of the T-B3##, as to when the order startscompared to today's date.

10. Return to the CTM Profile GR##_1 and set the Order Creation Startparameter to 1 day so it will not schedule production today. Additionally,deactivate the rules by setting the rule parameter to Do Not Apply Rules.

Task 2: CTM Scheduling DirectionsWithin the CTM Engine parameters, planners can control the direction ofscheduling. However, the CTM parameters can work differently than traditionalSAP methodology. In this task test how the scheduling directions will work.


2. In the Product View, change the existing FC Req of - 30 pieces to a dateFour weeks from today. Save the results.

3. Using the CTM profile GR##_1, execute a planning run.





5. Delete all the existing receipts from the previous run. Use CTM ProfileGR##_5 (Group ## CTM Pump Order Deletion) and execute a CTMPlanning Run.

6. Return to the CTM profile GR##_1 and change the scheduling direction toForwards. Save and Execute a CTM Run.


Task 3: CTM Pegging ControlsPegging will be one of the corner stone functions in CTM. You are typically usingCTM because you are facing a constrained supply situation and need a tool toprioritize how you want to manufacture goods. To keep the majority of plansintact, you may need to use pegging to lock in certain supplies into supportingspecific demands.


2. Back in your session with the Product View change to material T-F2##/2500and create a single FC Req, for - 10 pieces Four weeks from today. Savethe results.

3. In your CTM Profile GR##_1, change the scheduling parameters toBackwards Scheduling and the pegging type to Dynamic. Save.

4. Using CTM profile GR##_1, execute a planning run.




5. Go to the product view for Version 000 for the product T-F2## at location2500. What was the result of the CTM Run?Hint: Look at the pegging overview.

6. In the session with the Product View for material T-F2##/2500 , createanother FC Req, for - 10 pieces three weeks from today.

7. Review the results in the pegging overview in the product view. What haschanged?

8. Delete the earlier FCreq for -10 pcs (3 weeks out) and Save.

9. In your CTM Profile GR##_1, change the pegging type to Fixed and Save.



12. In the session with the Product View for material T-F2##/2500, createanother FC Req, for - 10 pieces three weeks from today.





14. Using the CTM profile GR##_1, change the planning mode to OrdersWithout Fixed Pegging. Save the update and Execute a planning run.




18. Using the CTM profile GR##_1, change the planning mode back to ReplanAll Orders. Save the update and execute a planning run.


20. Create a sales order in ECC using Order Type OR, in Sales Organization1000, Distribution Channel 10, and Division 00. Use Sold-to/Ship-to 1000,and Purchase Order ##for 15 pieces of T-F2##, for delivery six weeks.

Cancel any confirmations and error messages and Save.




21. Return to the product view. What has changed since entering the Sales Order?Hint: Review the Pegging over view as well as the Elements

22. What is the Order number for you planned order for T-F2## at location 1000?

23. In a separate session, use transaction code /n/SAPAPO/OM16. Review theOutput Node Pegging for the order you noted in the previous step.

24. What type of pegging nodes exist for your planned order?

25. Return to the CTM profile GR##_1 and execute a planning run.

26. What has changed in the product view?Review the pegging results as well


28. Return to ECC and delete your sales order for the T-F2##.

29. In the product view for the T-F2##/1000 delete any existing requirements inorder to avoid capacity situations.



Solution 11: CTM Planning Strategies PartITask 1: Order Creation/DeletionDuring the CTM planning process, one of the steps of the engine is to determineorder selection, order deletion, and order creation. In this task, you will use severalof the CTM parameters to control these options.

Hint: During your CTM planing exercises, you should consider using atleast three SAP Sessions. One for the product view, one for your CTM runto create new plans, and another for CTM run to delete receipts.


a) APO→ Multilevel Supply & Demand Matching→ Planning→ CTMPlanning

b) Go to profile GR##_5 and press F8 or, on the Planning Run tab, selectStart Planning.

c) Select Evaluations.

d) Order Selection→ Quantitative Results, double-click

e) Approximately 6 unfixed orders and 1 Fixed pegging lane were deleted.


a) APO→ Production Planning→ Interactive Production Planning→Product View

b) Enter 000 for the product T-F2## at location 2500 and selectContinue or press Enter.

c) Select Change.

d) On the Elements tab, select the two FC req. lines and select DeleteOrders/Schedule lines and answer Yes to delete the orders.

e) Select Save.




3. Back in your session with the Product View, change to material T-F2##/1000and create a single FC Req for - 30 pieces Two weeks from today. Savethe results.

a) In the Elements tab of the Product View, in the first changeable line,enter a date two weeks from today, and in the Rec/ReqQty, enter - 30.

b) Press Enter and select Save.

c) Stay in this transaction!

4. Using the CTM profile GR##_1, double check the following parameters: theplanning strategies set to Deletion Start is set to 1 day, Planning Mode is setto Replan All Orders and the Deletion Mode to Order Tree of SelectedDemands.

In addition, make sure the scheduling direction is set to BackwardsScheduling.


a) Enter your CTM profile GR##_1 and press Enter.

b) Select the Strategies tab.

c) In Planning Strategies tab, set the Deletion Start parameter to 1, thePlanning Mode to Replan All Orders, and the Deletion Mode toOrder Tree of Selected Demands.

d) In addition, make sure the Scheduling direction is set to BackwardsScheduling

e) Select Save,

f) Press F8 or select the Planning Run tab and select Start Planning(Engine).

5. Return to the product view for Version 000 for the product T-F2## atlocation 1000. Update the results. What was the result of the CTM Run?

Answer: A timely planned order (PlOrd) for 30 pieces was created on 12:00Noon, on the same day of the requirement.

6. Execute a planning run in profile GR##_5 that will delete the planned orderthat was just created and save the results.

a) Go to the session with profile GR##_5 open, and on the PlanningRun Tab select Start Planning.




7. In the CTM Profile GR##_1, you do not wish to create orders for thefirst 10 days of the horizon. Set the Order Creation Start parameter to 10days and execute a planning run. In addition, in the special strategies tab,activate the rules by using Use Specified Rule For All Demands, and useRule SCCM235_2.

a) Select the Strategies tab.

b) In Planning Strategies tab, set the Order Creation Start parameterto 10 days.

c) In the Special Strategies tab, set the Rule parameter to Use SpecifiedRule For All Demands, and use Rule SCCM235_2.

d) Select Save.

e) Press F8 or select the Planning Run tab and select Start Planning(Engine).


Answer: Results may vary based on requirement date: but you should see alateness of approximately 5 days.Since you added an order creation date of 10 days, CTM is not allowed tocreate any orders in this window. As a result, there is not enough lead time tosupport the manufacturing of all 30 pumps. Therefore, you should see onelarge order and several smaller orders prior to the FC req. or a shortageafter the requirement day.Currently, the system does not allow delayed receipts.

9. Select the largest planned order for the T-F2##/1000 and execute the OrderContext report. Review the details of the T-B3##, as to when the order startscompared to today's date.

a) Select the row for your planned order so it is highlighted. SelectOrder context.

b) Drill down to the largest planned order for the T-B3## and look at theorder details.

c) Result: order does not start until 10 days from today.




10. Return to the CTM Profile GR##_1 and set the Order Creation Startparameter to 1 day so it will not schedule production today. Additionally,deactivate the rules by setting the rule parameter to Do Not Apply Rules.


b) In Planning Strategies tab, set the Order Creation Start parameter to1 day.

c) In the Special Strategies tab, set the Rule parameter to Do Not ApplyRules.

d) Select Save.

Task 2: CTM Scheduling DirectionsWithin the CTM Engine parameters, planners can control the direction ofscheduling. However, the CTM parameters can work differently than traditionalSAP methodology. In this task test how the scheduling directions will work.


a) Go to profile GR##_5, press F8 or select the Planning Run tab andselect Start Planning.

2. In the Product View, change the existing FC Req of - 30 pieces to a dateFour weeks from today. Save the results.

a) In the Elements tab of the Product View, in the first changeable line,enter a date four weeks from today,



a) Press F8 or select the Planning Run tab and select Start Planning(Engine).


Answer: A timely planned order (PlOrd) was created on 12:00 Noon, onthe same day of the requirement. In the order details you can see the orderstarted approximately 6 days prior to the requirement date.

5. Delete all the existing receipts from the previous run. Use CTM ProfileGR##_5 (Group ## CTM Pump Order Deletion) and execute a CTMPlanning Run.





6. Return to the CTM profile GR##_1 and change the scheduling direction toForwards. Save and Execute a CTM Run.


b) In Planning Strategies tab, set scheduling direction to ForwardsScheduling.

c) Select Save.

d) Press F8 or select the Planning Run tab and select Start Planning(Engine).


Answer: A planned order (PlOrd) was created however, it was createdapproximately 10 calendar days in advance of the actual requirement.This was because forward planning works from the current date not therequirement date.Select the row for your planned order so it is highlighted. Select OrdercontextDrill down to the planned order for the T-B3## and look at the order detailsand you will see the order start date is tomorrow.

Task 3: CTM Pegging ControlsPegging will be one of the corner stone functions in CTM. You are typically usingCTM because you are facing a constrained supply situation and need a tool toprioritize how you want to manufacture goods. To keep the majority of plansintact, you may need to use pegging to lock in certain supplies into supportingspecific demands.



2. Back in your session with the Product View change to material T-F2##/2500and create a single FC Req, for - 10 pieces Four weeks from today. Savethe results.

a) In the Elements tab of the Product View, in the first changeable line,enter a date four weeks from today, and in the Rec/ReqQty, enter - 10.






3. In your CTM Profile GR##_1, change the scheduling parameters toBackwards Scheduling and the pegging type to Dynamic. Save.


b) In Planning Strategies tab, set scheduling direction is set to BackwardsScheduling and the Pegging Type to Dynamic.

c) Select Save.


a) In the CTM profile GR##_1, press F8 to execute a planning run.

5. Go to the product view for Version 000 for the product T-F2## at location2500. What was the result of the CTM Run?

Hint: Look at the pegging overview.

Answer: No Receipts were created, since the stock covers the FCreq. Adynamic pegging lane was created from the FCreq

6. In the session with the Product View for material T-F2##/2500 , createanother FC Req, for - 10 pieces three weeks from today.

a) In the Elements tab of the Product View, in the first changeable line,enter a date three weeks from today, and in the Rec/ReqQty, enter - 10.




Answer: Because the situation was planned previously with dynamicpegging, the new requirement has re-pegged to the stock, leaving the originalrequirement uncovered.

8. Delete the earlier FCreq for -10 pcs (3 weeks out) and Save.

a) On the Elements tab, select the earliest FC req. lines and selectDelete Orders/Schedule lines and answer Yes to delete the orders.

b) Select Save.

9. In your CTM Profile GR##_1, change the pegging type to Fixed and Save.


b) In Planning Strategies tab, set scheduling direction to BackwardsScheduling and the Pegging Type to Fixed.

c) Select Save.





a) Press F8 or select the Planning Run tab and select Start Planning(Engine).



Answer: No receipts were generated since enough stock is available tocover the FCreq. However, a fixed pegging lane has been created betweenthe stock and the FCreq four weeks out.

12. In the session with the Product View for material T-F2##/2500, createanother FC Req, for - 10 pieces three weeks from today.

a) In the Elements tab of the Product View, in the first changeable line,enter a date three weeks from today, and in the Rec/ReqQty, enter - 10.




Answer: Because the situation was planned previously with fixed peggingthe original requirement is still pegged and the new requirement is leftuncovered.

14. Using the CTM profile GR##_1, change the planning mode to OrdersWithout Fixed Pegging. Save the update and Execute a planning run.


b) In Planning Strategies tab, set the Planning Mode to Orders WithoutFixed Pegging.

c) Select Save.




Answer: A receipt was generated to cover the first FCreq. This meansthe stock will sit an extra week since it is fixed pegged to the FCreq fourweeks out.





a) Go to profile GR##_5, press F8 or select the Planning Run Tab selectStart Planning.


a) APO→ Production Planning→ Interactive Production Planning→Product View

b) Enter 000 for the product T-F2## at location 2500 and selectContinue or press Enter

c) Select Change.

d) On the Elements tab, Select the two FC req. lines and select DeleteOrders/Schedule lines and answer Yes to delete the orders.

e) Select Save.

18. Using the CTM profile GR##_1, change the planning mode back to ReplanAll Orders. Save the update and execute a planning run.


b) In Planning Strategies tab, set the Planning Mode to Replan AllOrders.

c) Select Save.




Answer: A timely planned order was created and a planned to be receivedprior to the 30 piece FC req. In the Pegging overview you will see that thethere is now a fixed pegging edge created between the FC req. and the PlOrd.

20. Create a sales order in ECC using Order Type OR, in Sales Organization1000, Distribution Channel 10, and Division 00. Use Sold-to/Ship-to 1000,and Purchase Order ##for 15 pieces of T-F2##, for delivery six weeks.




Cancel any confirmations and error messages and Save.

a) ECC Menu Path: Logistics→ Sales and Distribution→ Sales→Order→ Create (VA01)

b) Enter Order Type OR, in Sales Organization 1000, DistributionChannel 10, and Division 00 and press Enter.

c) Enter Sold-to Party 1000, Ship-to Party 1000and PO Number ##.

d) Enter a Req. deliv. date of six weeks from today and press Enter.

Enter through any warnings regarding the date.

e) Enter material T-F2## and Order Quantity of 15 pieces, and pressEnter.

f) At the ATP confirmation, select Continue without confirming.

g) Select Save.

21. Return to the product view. What has changed since entering the Sales Order?

Hint: Review the Pegging over view as well as the Elements

Answer: A Sales Order category has now appeared in the elements tabafter the FC req. Due to the proposed strategy (strategy group ECC) the 15pieces sales order has consumed 15 of the 30 pieces of FC req. leavingonly 15 to plan against.In the Pegging overview, the sales order has dynamically pegged to theoriginal 30 piece PlOrd. However, the FC req still has a Fixed peggingquantity of 30 pieces. Although only 15 are actually pegged.

22. What is the Order number for you planned order for T-F2## at location 1000?

Answer: It varies

23. In a separate session, use transaction code /n/SAPAPO/OM16. Review theOutput Node Pegging for the order you noted in the previous step.

a) In the transaction code box, enter /o/SAPAPO/OM16.

b) Select the Orders Tab.

c) Enter Location 1000 .

d) Enter your planned order number (use 6 leading zeros) and selectExecute.

e) Select the order you noted in the previous step, and select andchoose Output Node Pegging.

f) Select each line and choose Details.




24. What type of pegging nodes exist for your planned order?

Answer: Two pegging edges existThe first is a type 0 for 15 pieces representing the 15 pieces dynamicallypegged to the sales order, and second with type 2 for 15 pieces whichrepresents the 15 pieces fixed pegged to the FC req.


a) APO→ Multilevel Supply and Demand Matching→ Planning→CTM Planning

b) Select the Planning Run tab and select Start Planning (Engine).

26. What has changed in the product view?

Review the pegging results as well

Answer: Two new planned orders were created: One for 15 pieces to coverthe FC req and another for 15 pieces to cover the sales order. Due to theprofile settings, both have fixed pegging lanes.



28. Return to ECC and delete your sales order for the T-F2##.

a) Tcode VA02.

b) Enter your Sales order number and press ENTER.

c) Sales Document→ Delete

29. In the product view for the T-F2##/1000 delete any existing requirements inorder to avoid capacity situations.



Lesson Summary

You should now be able to:� Clearly present concepts in order creation and deletion control parameters� Demonstrate scheduling capabilities of CTM� Apply concepts of pegging during planning



Lesson: CTM Planning Strategies Part II

Lesson OverviewThe CTM planning engine is an extremely robust planning tool. The flexibilityof the tool allows planners the opportunity to control the extent of the planningrun. This includes consideration of the existing supply plan, the schedulingdirection, and the extent of order creation. In this lesson, we will explore theoptions available to the planners.


� Demonstrate options of the planning mode related to pegging� Show an understanding of Net Change and Regenerative Planning

Business ExampleYour company finds itself in a situation where demand is greater than supply. Todeliver on some of the forecasts, your planners need to execute CTM Planningruns. To understand the outcome of the CTM runs, your planners must be familiarwith the control parameters regarding the CTM Profile. Investigate what impactsthe Planning Strategy parameters have on the outcome of the CTM run.

Planning StrategiesPlanning mode selects the orders (demands and supplies) based on peggingrelationships for the planning run. Deletion mode determines which orders can bedeleted during the planning run.


SCM235 Lesson: CTM Planning Strategies Part II

Figure 122: Planning Strategies in CTM

The planning modes determine what is selected or should be used for the planningrun. The selection is based on the pegging. Therefore, it fixes orders based onthe pegging and thus these orders are not touched for this planning run (it sayshow the pegging is handled). The deletion determines if the selected orders aredeleted or not deleted in the planning run. The deletion of an order deletes thecorresponding pegging relationship also.

Additionally the planning modes consider the input and output nodes of an orderwhereas the deletion modes only recognize the complete orders. The planningstrategies are not only valid for sales orders or forecasts, but also for dependentdemands.

Planning ModeThe planning mode considers, as mentioned the in/output nodes and referstherefore also to the pegging. This means the decision is made based on itspegging type whether or not an order is replanned (recreated). This setting hasnothing to do with the deletion of orders. In summary, it defines which type ofpegging is recreated and it allows the creation of new orders.



Figure 123: Planning Modes

An order is considered as fixed if it has at least one fixed (soft or hard fixed)pegging edge. The orders can get these fixed pegging edges by a CTM planningrun or pegging edges can also be fixed manually. This can be done in the productview for instance

Note:

� The difference between the terms hard and soft fixed is only used forthe pegging. In the CTM engine, orders are either fixed or unfixed.No other criteria exist to distinguish

Soft fixed pegging edges are generated when the CTM planningprofile is set with a pegging type Fixed Pegging. Hard fixedpegging edges are generated when users manually fixed peggingrelationships.

� A fixed order can never be deleted by CTM

Deletion ModesThe deletion mode refers just to orders. Therefore, the decision is set there whetheran order is deleted or not. Corresponding pegging edges are deleted as well.

The deletion step takes place before the CTM planning. Depending on the deletionmode, it takes place in different sequences:



Do not Delete Orders:

1. Selection of Demands2. Planning run

Delete all Unfirmed Orders:

1. Check and delete orders2. Determine (select) demands3. Planning run

Order Trees of Select Demands:

1. Select demands2. Supplies of selected demands are deleted3. Planning run

The deletion mode parameters perform the following tasks:

Do not delete ordersSupplies are not deleted at all. Only the pegging edge could be deleted basedon the planning mode.

Delete all unfirmed ordersThis mode deletes all unfirmed or unfixed orders before the planning modeis taken into account. Unfirmed orders are orders which do NOT fulfillthe conditions listed under Fixed Orders or which have NOT been fixedmanually.

Order tree of selected demandsThis deletion mode only deletes an order if it supplies demands beingselected for a CTM planning run. This is determined by the planningmode and the pegging type linking orders to each other. It deletes also allsupply-orders which are not fixed. Please NOTE only the fixed orders arenot deleted; all previous and subsequent orders can be deleted depending onthe demand selection.



Before discussing combinations of planning mode and deletion mode, note thereasons for firmed/fixed orders:

� Receipt has been changed manually (date/qty)� Receipt is a Fixed receipt (Stock/Prod. Order/STO/PO)� PPDS orders in SNP CTM profile (create SNP orders)� Planned receipts outside planning horizon (before & after)� Receipts within Product Horizons (SNP Prod/Transfer horizon/Plnd Deliv.

Time)� Receipts before Deletion Start date (strategy tab)� Receipts pegged to requirements outside Planning Horizon� Receipts in which one component does not belong to Master Data Selection

Planning Mode - Orders without PeggingThe planning mode Orders without Pegging option describes that onlyrequirements which do not have any pegging edge (lane) at all, are planned. Inother words, when using this planning mode an order is already fixed if it hasat least one pegging edge no matter whether it is dynamic or fixed pegging.Therefore, such an order will not be deleted even the deletion mode �delete allunfirmed orders� is set. Only the unfixed orders can be deleted if an accordingdeletion mode is set.

Figure 124: Orders Without Pegging



Example: (figure above)

Step 1 - An FC Req (A) of 15 pcs is entered into the system. The material has afixed lot size of 30. During the planning run, the CTM engine creates one plannedorder for 30 pcs. As a result, a dynamic pegging edge is created between the FCReq and the Plnd Ord.

Step 2 - A second FC Req(B) of 15 pcs is created, but the date is prior to the receiptcreated in the previous CTM run. Now, because the pegging settings in the productmaster do not allow pegging to late receipts, no pegging edge is created, and youwill receive a lateness alert on the FC Req and a surplus alert on the Plnd Ord.

Step 3 - A second CTM run is executed with the planning mode Orders withoutPegging. As a result, a new Plnd Ord. is created to cover FC Req (B). The resultof this will be two surplus alerts.

Order without Pegging / Del. Mode: Do not delete ordersIf this combination is chosen, all demands without a pegging edge are selected. Inother words, all demands and supplies, which do not have any kind of a peggingrelationship are planned. The existing pegging relationship and the orders are notchanged. The pegging is kept no matter whether it is dynamic, soft or hard fixedpegging. Thus, only new pegging edges and new orders (if required) are created.

Order without Pegging / Delete all unfirmed ordersUsing this combination again only demands which do not have any peggingrelationship are selected. Also, all supplies without any pegging edge are takeninto account for the planning. After the selection step of the planning run, allunfirmed orders are deleted. Unfirmed orders are orders which do NOT fulfill theconditions listed under Fixed Orders . If the selected supply is unfirmed and it ispegged (dynamic, fixed) to any demand which is not selected, then this supplyis not deleted. The pegging is again kept no matter which type it is but only thepegging related to unfirmed orders is deleted.

Order without Pegging / Del. Mode: Order treeof selected demandsThis combination is not possible because the planning mode �Order withoutpegging� selects only the orders that do not have any pegging edges, that is, whichdo not have any order tree. Hence there are no orders (Order tree) for deletion.

Planning Mode - Order without Fixed PeggingThis planning mode considers an order as fixed if it has at least one fixed peggingedge. This means all orders which haven�t a pegging edge or which have adynamic pegging edge are replanned. Therefore, depending on the deletion mode,those orders can also be deleted. Only if the deletion mode �Do not delete orders�is also set, would those orders be kept.



Figure 125: Orders Without Fixed pegging, Do Not Delete Orders

Example 1 :

Step 1 - An FC Req (A) of 15 pcs is entered into the system. The material has afixed lot size of 30. During the planning run, the CTM engine creates one plannedorder for 30 pcs. As a result, a dynamic pegging edge is created between theFC Req and the Plnd Ord. Additionally, you will receive a surplus alert due tothe fixed lot size.

Step 2 - A second FC Req (B) of 15 pcs is created, but the date is prior to the receiptcreated in the previous CTM run. Now, because the pegging settings in the productmaster do not allow pegging to late receipts, no pegging edge is created, and youwill receive a lateness alert on the FC Req and a surplus alert on the Plnd Ord.

Step 3 - A second CTM run is executed with the planning mode Orders withoutFixed Pegging. Since the FC Req (A) is dynamically pegged to the Plnd order,the planned order will be selected. When deletion mode Do Not Delete Ordersis selected, you will get two planned orders, and a surplus of 30 pcs, 15 fromeach Plnd Ord.



Figure 126: Orders Without Fixed pegging, Delete Orders That Are Not Firm

Example 2:

Step 1 - An FC Req (A) of 15 pcs is entered into the system. The material has afixed lot size of 30. During the planning run, the CTM engine creates one plannedorder for 30 pcs. As a result, a dynamic pegging edge is created between theFC Req and the Plnd Ord. Additionally, you will receive a surplus alert due tothe fixed lot size.


Step 3 - A second CTM run is executed with the planning mode Orders withoutFixed Pegging. Since the FC Req (A) is dynamically pegged to the Plnd order,the planned order will be selected. When the deletion mode is set to DeleteOrders that are not firmed, a new Plnd Ord. will be created which will coverboth FC Req. (A) and (B). This is because FC Req (B) will be covered first dueto chronological order, and since we have fixed lot size of 30, the balance ofthe Plnd Ord. will cover FC Req (A).



Figure 127: Orders Without Fixed pegging (Fixed Pegging Present)

Example 3:

Step 1 - An FC Req (A) of 15 pcs is entered into the system. The material has afixed lot size of 30. During the planning run, the CTM engine creates one plannedorder for 30 pcs. As a result, a dynamic pegging edge is created between the FCReq and the Plnd Ord. At some point after that a fixed pegging relationship iscreated between FC Req (A) and the Plnd Ord. Additionally, you will receive asurplus alert due to the fixed lot size.


Step 3 - A second CTM run is executed with the planning mode Orders withoutFixed Pegging. Since the FC Req (A) is dynamically pegged to the Plnd order, theplanned order will be selected. If the deletion mode is set to Delete Orders thatare not firmed, a new Plnd Ord. will be created which will cover both FC Req.(A) and (B). This is because FC Req (B) will be covered first due to chronologicalorder, and since we have fixed lot size of 30, the balance of the Plnd Ord. willcover FC Req (A). If deletion mode Do Not Delete Orders is selected, you will gettwo planned orders, and a surplus of 30 pcs, 15 from each Plnd Ord.



Orders without fixed pegging / Del. Mode: Do not delete ordersThe demand selection contains, in this case, all demands with dynamic or withoutany pegging relationship. Thus, all demands without a fixed pegging or nopegging are selected. The same is valid for the supplies. When the planning iscarried out, all the dynamic pegging is deleted. Orders are not deleted; only newsupply orders can be created.

Orders without fixed pegging / Del. Mode: Deleteall unfirmed ordersThe demand and supply order selection is the same as before. Orders are selectedif they have a dynamic or no pegging relationship. Supply orders are deletedif they are not firmed. Unfirmed orders are orders which do NOT fulfill theconditions listed under Fixed Orders or which have NOT been fixed manually.The dynamic pegging and all related pegging edges to supply orders which havebeen deleted are also deleted.

Orders without fixed pegging / Del. Mode: Ordertree of selected demandsBecause of the planning mode, the selection of the Demand and Supply ordersis still the same. The deletion of orders is now only carried out for orders whichbelong to the tree of a selected demand. The deletion of the order tree startsstraight after the independent demand and stops when the order which should bedeleted is fixed or firmed. As in the previous cases, the criteria for unfirmedorders are the same. Only if a dependent demand on a lower level of the tree isalso selected for planning, (for example, because of dynamic pegging) then theorder tree deletion would also be carried out for this demand. (See also DeleteOrder tree of selected Demands.)

Planning Mode - Replan All OrdersAll orders are selected for planning, irrespective of the pegging relationshipbetween the orders. Therefore, all orders are replanned (recreate Peggingrelationships or create new Supplies if required). Note all orders and all peggingedges are replanned; only hard fixed pegging (set manually in product view) edgesand relating orders are kept. Replanned means that the orders are not necessarilydeleted but the pegging edges are deleted and created again. The deletion of ordersdepends on the deletion mode.



Figure 128: Delete Order tree of selected Demands

Example:

Firstly only the demands A and B are selected (NOTE demand of C is not selected)for a planning run. This could be done by a master data selection which justincludes Product A and B. In this case, CTM would delete the supply orders D andE. F is not deleted because of the pegging relationship between C and F. The orderof F is considered as fixed because of its pegging relationship to C. G is not deletedas well because the dependent demand of F (input node of F) is not selected.

Therefore, this is the only planning mode which replans �fixed orders�. The onlyorders which are still fixed are those fulfilling one of the conditions mentionedbefore in Fixed Orders .

Orders can only be deleted depending on the deletion mode. Thus, when an orderis deleted also its pegging is deleted whether it is fixed (soft or hard fixed) or not.



Figure 129: Replan all orders

Example:

Step 1: Requirement (A) for 15 pcs is created. CTM generates a 30 pc plannedorder due to shortages and fixed lot size. Of the 15 pcs of supply needed, theplanner manually fixes 10 of the 15 pieces of supply need to cover the requirement.Surplus alerts will then be generated due to the fixed lot size (30) being greaterthan the requirement (15)

Step 2: A second Requirement (B) appears but it is prior to the delivery of the firstplanned order for 20 pcs. If the product master allows late pegging, shortageand lateness alerts will appear.

Step 3: A planning run is executed with Replan All Orders and deletion modeOrder Trees of selected Demands. As a result of this the original planned order isdeleted even though a fixed pegging relationship existed. A new planned order iscreated to cover both requirements. The pegging lanes that will be generated as aresult of the CTM will depend on the pegging type setting in the CTM profile. Inthis case, it was set to Dynamic. Therefore, the fixed pegging was deleted andreplaced by dynamic pegging



Replan all Orders / Del. Mode: Do not delete ordersAll demands and supply orders are now selected for a planning run even if theyhave fixed pegging. The pegging is completely deleted in a planning run. Theorders are not deleted at all because of the deletion mode. Therefore, using thiscombination will recreate the pegging (except hard-fixed pegging edges), and willnot delete any of the unfirmed supplies. New supplies will be created if required.

Mode: Replan all Orders / Del. Mode: Delete all unfirmed ordersAll demands and supply orders are selected again independently of the peggingtype. The pegging is also completely recreated (except hard-fixed pegging).Orders are deleted if they are not firmed. Unfirmed orders are orders which doNOT fulfill the conditions listed under Fixed Orders or which have NOT beenfixed manually.

Mode: Replan all Orders / Del. Mode: Order treeof selected demandsThe demand and supply order selection is the same because of the same planningmode. The pegging is also completely recreated (except hard-fixed peggingedges). The orders are only deleted if they belong to the tree of a selected demand.Depending on the planning mode, all demands should be selected. The onlyexception could be demands which are excluded by a master data or transactionaldata selection. Also, in this case, the deletion of the supply order tree stops ifthere is a firmed order (see Lesson : CTM Planning Strategies Part I), but assoon one of the dependant demands on a lower level belongs to the demandselection, the deletion of the tree of this dependant demand continues. (Seealso Delete Order tree of selected Demands )

CTM Regenerative PlanningAs you have figured out by now, CTM planning is very different than PPDS, SNP,or ECC MRP planning. The concept of the scope of the planning run is verydifferent. In MRP, PPDS and SNP planners can make use of a report called thePlanning File Entry. This can control just how many materials will be plannedby the engine.

Net change planning will be covered in more detail in a later lesson.



Figure 130: CTM Regenerative Planning

To perform aRegenerative Planning Run, which will include all materials, youshould select Planning mode Replan All Orders. This option will select allrelevant demands and supplies. The Deletion mode will instruct the system as tohow extensive the replanning is.

Do not Delete OrdersOrders are created using existing demands and supplies. All existing peggingrelationships, except for pegging relationships that have been fixed manually bythe user, are deleted. This would not be considered Regenerative Planning sinceexisting receipts are not affected.

Delete all Unfixed OrdersAll unfixed receipts are deleted. Pegging relationships play no role here. However,automatically fixed pegging relationships between fixed orders are not deleted.

Order Trees of Selected DemandsThe system first determines the demands using the demand selection, then deletesall orders directly or indirectly connected to your selected demand (with the ordertree). The exception here is a fixed order. Deletion of an order tree halts when itcomes across fixed orders. Neither fixed nor other orders on lower levels in theorder tree are deleted.





Exercise 12: CTM Planning Strategies PartII

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate Knowledge of Planning Mode settings� Demonstrate Knowledge of Deletion Mode Settings

Business ExampleYour company which makes Pumps, just implemented SCM/APO. Your managerhas asked you to use CTM to plan some of your pump products that seemto constantly have supply issues. To understand how to apply CTM in thesesituations better, you need to understand how CTM makes demand selection andthe use of existing supplies in each planning run.

The CTM planning run consists of several steps. The first step is order selection.This is where the CTM engine gathers the relevant demands. The second step isthe deletion of existing supplies. The follow-on steps will create receipts andeventually build the plan. In this section, you will explore the Planning andDeletion Mode parameters. As you proceed with the exercise steps, rememberthat the planning mode is responsible for evaluating the pegging relationships asto which demands can be evaluated, and the deletion mode will indicate whichsupplies will be deleted and possibly replanned.

Task 1: Setup for Planning and Deletion ModeTo understand how the Planning Mode and Deletion Mode interact, you willchange your master data to generate surplus during some of the planning runs tosee how this affects the pegging edges. You will create a very simple demandsimulation to see how the parameters work with each other.

1. You are going to produce your pumps in fixed lot sizes. Change the productmaster for T-F3## at location 1000 to reflect a fixed lot size of 30 pieces.

2. Go to the product view for Version 000, Product T-F3##, at Location 1000.

Create an FC req four weeks out for 15 pieces.




3. What type of pegging relationships does this requirement have?Hint: Look at the Pegging Overview

Task 2: Planning Mode - Orders without PeggingIn this section, you will test how the Planning Mode, Orders without Pegging,works with the different Deletion Modes.

Note: Planning Mode Orders without Pegging, does not work withDeletion Mode Order Trees For Selected Demands. This is evidencedby the fact the Deletion Mode is not available for Selection.

1. Return to your CTM Profile GR##_1 and set the Planning Mode to Orderswithout Pegging and Deletion Mode Do Not Delete Any Orders. Savethe profile and execute a CTM run.

You will perform backwards scheduling and generate Dynamic PeggingRelationships.

2. Return to the session with the product view for Version 000 for the productT-F3##, at location 1000. What was the result of the CTM Run?

3. While still in the product view, create a second FC req for 10 pieces one daybefore the first requirement (and Pl Ord). Save and return to the CTM Profile.

4. What effects did the new requirement have on pegging?

5. Return to the CTM profile GR##_1, and execute a planning run with thesame parameters.




6. Return to the product view for Version 000 for the product T-F3##, atlocation 1000. What was the result of the CTM Run?

7. Return to your CTM Profile GR##_1 and set the Deletion Mode DeleteOrders That are Not Firm. Save the profile and execute a CTM run.

8. Return to the product view for Version 000 , product T-F3##, and location1000. What was the result of the CTM Run?

9. Return to the CTM Profile and review the evaluations from the Run. Whydid nothing change?

Task 3: Planning Mode - Orders Without Fixed PeggingIn this section, you will test how the Planning Mode Orders without FixedPegging works with the different Deletion Modes.

1. Return to your CTM Profile and set the Planning Mode to Orders withoutFixed Pegging and the Deletion Mode to Do Not Delete Any Orders. Savethe profile and execute a CTM run.




2. Review the Evaluation that was generated. How many orders were deleted?(See Order Selection - Quantitative) Why?

3. Review the Evaluation that was generated. How many demands wereevaluated (Demand Prioritization - Quantitative)?

4. Review the evaluation that was generated. How many orders were created(Create Orders- Quantitative)?

5. Change your CTM Profile so the Planning Mode is set to Orders withoutFixed Pegging and the Deletion Mode is set to Delete Orders That are NotFirmed. Save the profile and execute a CTM run.

6. Review the Evaluation that was generated. How many orders were deleted(Order Selection - Quantitative)? Why?

7. Review the evaluation that was generated. How many demands wereevaluated (Demand Prioritization - Quantitative)?




8. Review the Evaluation that was generated. How many orders were created(Create Orders- Quantitative)?

9. Go to the Product View for Planning Version 000, for the product T-F3##, atlocation 1000. What was the result of the CTM Run?

10. In your CTM Profile GR##_1, go to the Supplies tab and review suppliesand receipts that where used in this planning run. What is the difference inthis run versus the last run?

11. Review the Evaluation that was generated. Which orders were deleted (seeOrder Selection - Messages)?

12. While still in the product view for the T-F3##/1000, fix the pegging edgebetween the 15 piece FCreq, and the existing planned order.

13. Return to the Elements tab of the product view and a create a new FCreq,for 5 pieces, one day prior to the existing FCreq of 10 pieces for theT-F3##/1000. Save.

14. Before executing the CTM run review which demands will be consideredduring the next planning run




15. Which demands will be considered during the next planning run?

16. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?To see which supplies were considered during the planning run, select theSupplies tab, select Simulation. Then, review the results in theDisplay Supplies list.

17. In the Profile GR##_1, execute a CTM Planning Run.

18. Go to the Product View for Version 000, for the product T-F3##, at location1000. What was the result of the CTM Run?

19. Return to your CTM Profile and set the Deletion Mode is set to Order Treesof Selected Demands. Save the profile.

20. Before executing the CTM run, review which demands will be consideredduring the next planning run.





22. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?To see which supplies were considered during the planing run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.


24. Go to the Product View for Version 000 for the product T-F3## at location1000. What was the result of the CTM Run?

Task 4: Planning Mode - Replan All OrdersNow that you have seen how the first two planning modes work with the threeDeletion modes, you will test how the Planning Mode Replan all orders workswith the different Deletion Modes.

1. Return to your CTM Profile GR##_1 and set the Planning Mode to ReplanAll Orders and the Deletion Mode to Do Not Delete Any Orders. Savethe profile.






4. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?To see which supplies were considered during the planing run, select theSupplies tab, select Simulation. Then, review the results in theDisplay Supplies list.

5. Change your CTM Profile GR##_1, so that the Planning Mode is set toReplan All Orders and the Deletion Mode to Delete Orders that are notFirmed. Save the profile.






8. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?To see which supplies were considered during the planning run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.

9. Go to the Product View for Version 000 for the product T-F3## at location1000. Note the planned order numbers.

10. Return to the CTM Profile and Execute a CTM Planning Run.


12. Return to your CTM profile GR##_1 and set the Deletion Mode to OrderTrees of Selected Demands. Save your profile.




13. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?To see which supplies were considered during the planning run, select theSupplies tab, select Simulation. The review the results in the DisplaySupplies list.

14. From the Product view for T-B3##/1000, set the output firmed indicatorfor the planned order. Save.

15. Note the planned order number for the T-F3##/1000.

16. Return to the CTM profile GR##_1.To see which supplies were considered during the planning run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?

17. Will the 30 piece PlOrd for T-B3## at 1000 be deleted and replanned?

18. Execute a CTM run and review the results for the T-F3##/1000. Did theplanned order number change?

19. From the product view for T-B3##/1000, remove the �output firmed�indicator from the PP firmed planned order. Save.



Solution 12: CTM Planning Strategies PartIITask 1: Setup for Planning and Deletion ModeTo understand how the Planning Mode and Deletion Mode interact, you willchange your master data to generate surplus during some of the planning runs tosee how this affects the pegging edges. You will create a very simple demandsimulation to see how the parameters work with each other.

1. You are going to produce your pumps in fixed lot sizes. Change the productmaster for T-F3## at location 1000 to reflect a fixed lot size of 30 pieces.

a) APO→ Master Data→ Product→ Product

b) Enter T-F3## at location 1000 , and select Change,

c) Select the Lot Size tab.

d) Select the radio button for Fixed Lot Size and enter a quantity of 30.

e) Select Save.

2. Go to the product view for Version 000, Product T-F3##, at Location 1000.

Create an FC req four weeks out for 15 pieces.

a) Select Product View and enter Version 000, Product T-F3##, atLocation 1000, and press Enter.

b) Select Change.

c) In the Elements tab of the Product View, in the first changeable line,enter a date four weeks from today, and in the Rec/ReqQty, enter 15.

d) Press Enter and select Save.

3. What type of pegging relationships does this requirement have?

Hint: Look at the Pegging Overview

Answer: No pegging edges have been generated, since no supplies exist.




Task 2: Planning Mode - Orders without PeggingIn this section, you will test how the Planning Mode, Orders without Pegging,works with the different Deletion Modes.

Note: Planning Mode Orders without Pegging, does not work withDeletion Mode Order Trees For Selected Demands. This is evidencedby the fact the Deletion Mode is not available for Selection.

1. Return to your CTM Profile GR##_1 and set the Planning Mode to Orderswithout Pegging and Deletion Mode Do Not Delete Any Orders. Savethe profile and execute a CTM run.

You will perform backwards scheduling and generate Dynamic PeggingRelationships.

a) APO→ Multilevel Supply & Demand Planning→ Planning→ CTM


c) In the Planning Strategies tab, select Deletion Mode Do Not DeleteAny Orders and planning mode Orders without Pegging.

d) In addition, make sure the Scheduling direction is set to BackwardsScheduling and the Pegging type set to Dynamic Pegging.

e) Select Save.

f) Select the Planning Run tab and select Start Planning (Engine).

2. Return to the session with the product view for Version 000 for the productT-F3##, at location 1000. What was the result of the CTM Run?

Answer: A timely planned order (PlOrd) was created at 12:00 Noon, on thesame day of the requirement. However, there is a surplus of 15 pcs dueto the fixed lot size.The only reason the planned order was created was because there was nopegging relationship for the FC req. as instructed by the Planning ModeOrders without Pegging. In this case, since there was no plan, the DeletionMode Do Not Delete Any Orders was not relevant.

3. While still in the product view, create a second FC req for 10 pieces one daybefore the first requirement (and Pl Ord). Save and return to the CTM Profile.

a) In the product view, select Change.

b) In the Elements tab of the Product View, in the first changeableline, enter a date one day prior to the first requirement, and in theRec/ReqQty, enter - 10.

c) Press Enter and select Save.




4. What effects did the new requirement have on pegging?

Answer: No effect. Since the product master does not allow pegging to latereceipts, no pegging edge is created.Hint: By viewing the Pegging overview, you will see there is no pegginglane created between the new requirement and excess stock.

5. Return to the CTM profile GR##_1, and execute a planning run with thesame parameters.

a) Select the Planning Run tab and select Start Planning (Engine).

6. Return to the product view for Version 000 for the product T-F3##, atlocation 1000. What was the result of the CTM Run?

Answer: A timely planned order (PlOrd) was created at 12:00 Noon, on thesame day of the new requirement. However, you will see two alerts arepresent. Both alerts deal with excess stock. This was a result of the fixed lotsize of 30 pieces you entered in the previous step.Because of the Planning Mode Orders without Pegging, the first plannedorder was not deleted or changed because a pegging edge existed. Inaddition, the Deletion Mode Do Not Delete Any Orders was also relevant,so the existing planned order was not removed.

7. Return to your CTM Profile GR##_1 and set the Deletion Mode DeleteOrders That are Not Firm. Save the profile and execute a CTM run.


b) In the Planning Strategies tab, select Deletion Mode Delete OrdersThat are Not Firm.

c) Select Save.


e) Do not leave this transaction!

8. Return to the product view for Version 000 , product T-F3##, and location1000. What was the result of the CTM Run?

Answer: No change took place.Because of the Planning Mode Orders without Pegging, both FCreqshad existing pegging edges and none of the demands were considered forplanning. Therefore, the Deletion Mode Delete Orders That are Not Firmwas not put into play.




9. Return to the CTM Profile and review the evaluations from the Run. Whydid nothing change?

Answer: In the Demand Prioritization report, you will see that no demandswere selected. That is because both FCreqs were pegged and therefore didnot qualify for planning.

Task 3: Planning Mode - Orders Without Fixed PeggingIn this section, you will test how the Planning Mode Orders without FixedPegging works with the different Deletion Modes.

1. Return to your CTM Profile and set the Planning Mode to Orders withoutFixed Pegging and the Deletion Mode to Do Not Delete Any Orders. Savethe profile and execute a CTM run.


b) In the Planning Strategies tab, select the Planning Mode to Orderswithout Fixed Pegging and the Deletion Mode to Do Not DeleteAny Orders.

c) Select Save.


2. Review the Evaluation that was generated. How many orders were deleted?(See Order Selection - Quantitative) Why?

Answer: No Orders were selected and therefore none were deleted. Thisis evidenced by the fact that no Order Selection - Quantitative report isavailable.This is due to the Deletion Mode Do Not Delete Any Orders.To see which supplies were considered during the planing run, select theSupplies tab. Then, review the results in the Display Supplies list.Result: Several receipts were considered. Cat CC = Unrestricted Stock, AI= Planned Orders. The two existing planned orders for the T-F3##/1000were considered to cover the requirements however.

3. Review the Evaluation that was generated. How many demands wereevaluated (Demand Prioritization - Quantitative)?

Answer: Two demands were evaluated. The two FC req for the T-F3##/1000. This was due to the Planning Mode Orders without Fixed Pegging. Thedetails can be evaluated by going to the Demands tab, and selectingDisplay Demands. Notice Pegging type 2 - Dynamic.




4. Review the evaluation that was generated. How many orders were created(Create Orders- Quantitative)?

Answer: No orders were created. This is evidenced by the absence of theCreate Orders- Quantitative report. Since all demands were covered, noorders were created. By reviewing the CTM Planning Run - QuantitativeResults, 2 demands were covered.

5. Change your CTM Profile so the Planning Mode is set to Orders withoutFixed Pegging and the Deletion Mode is set to Delete Orders That are NotFirmed. Save the profile and execute a CTM run.


b) In the Planning Strategies tab, select the Planning Mode to Orderswithout Fixed Pegging and the Deletion Mode to Delete Orders Thatare Not Firmed.

c) Select Save.


6. Review the Evaluation that was generated. How many orders were deleted(Order Selection - Quantitative)? Why?

Answer: 10 Unfixed orders were deleted. This is written in Order Selection- Quantitative results report.This is due to theDeletion ModeDelete Orders That are Not Firmed. Noneof the orders had a fixed pegging edge or were firmed by the requirementscovered in one of the previous lessons.

7. Review the evaluation that was generated. How many demands wereevaluated (Demand Prioritization - Quantitative)?

Answer: Similar to the previous run, two demands were evaluated. The twoFC req for the T-F3##/1000 . This was due to the Planning Mode Orderswithout Fixed Pegging.

8. Review the Evaluation that was generated. How many orders were created(Create Orders- Quantitative)?

Answer: Five production Orders were created.

9. Go to the Product View for Planning Version 000, for the product T-F3##, atlocation 1000. What was the result of the CTM Run?

Answer: A single planned order is covering both FC reqmts. This is duein part to the fixed lot size which would create a surplus of 20 pieces afterthe first requirement was covered and allowing the second FC req for 15pieces to peg to the surplus.Because of the Planning Mode Orders without Fixed Pegging, both FC reqhad existing dynamic pegging edges.




10. In your CTM Profile GR##_1, go to the Supplies tab and review suppliesand receipts that where used in this planning run. What is the difference inthis run versus the last run?

Answer: The previous run used the existing receipts for the T-F3##/1000. Inthis run those receipts and their lower level plans were deleted.

11. Review the Evaluation that was generated. Which orders were deleted (seeOrder Selection - Messages)?

Answer: Order numbers will be noted but no details.

12. While still in the product view for the T-F3##/1000, fix the pegging edgebetween the 15 piece FCreq, and the existing planned order.

a) Select Change.

b) Select the Pegging Overview tab.

c) Select the line with the FC req of 15 pieces and select Qty (Fixcomplete Quantity).

d) Select Save.

13. Return to the Elements tab of the product view and a create a new FCreq,for 5 pieces, one day prior to the existing FCreq of 10 pieces for theT-F3##/1000. Save.

a) In the Elements tab of the Product View, in the first changeable line,enter a date of one day prior to the existing FCreq of -10 pcs, and inthe Rec/ReqQty, enter - 5.


14. Before executing the CTM run review which demands will be consideredduring the next planning run

a) Select the Demands tab.

b) Select Simulation.

c) The review the results in the Display Demands


Answer: Only two demands will be considered. T-F3## at 1000: - 5 FCreq and -10 FC req.The other FC req (-15 pcs) for T-F3## at 1000 was not considered. This isdue in part to the Planning Mode Orders without Fixed Pegging. Since thepegging edge was fixed in a previous step this demand will not be consideredin the CTM Planning run




16. Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?

To see which supplies were considered during the planning run, select theSupplies tab, select Simulation. Then, review the results in theDisplay Supplies list.

Answer: Of the existing planned order (AI), the engine will see 15 of the30 pieces available. The system will therefore not delete this planned order.This is due to the Deletion Mode Delete Orders That are Not Firmed. The30 piece PlOrd is considered firm by the CTM run, since a fixed peggingedge exists.



18. Go to the Product View for Version 000, for the product T-F3##, at location1000. What was the result of the CTM Run?

Answer: A new PlOrd for 30 pieces was created to cover the shortage of the5 pieces. Again, the 30 pieces was due to the fixed lot size. Even though theoriginal planned order would have covered all the demand, 5 pieces wouldhave been late. Since requirements are not allowed to peg to late receipts,and because the order was not considered due to the Deletion Mode DeleteOrders That are Not Firmed, the previous order was not considered norreevaluated.Unfortunately, you now face a situation where you have a surplus of 30pieces.

19. Return to your CTM Profile and set the Deletion Mode is set to Order Treesof Selected Demands. Save the profile.


b) In the Planning Strategies tab, set the Planning Mode to Orderswithout Fixed Pegging and the Deletion Mode to Order Trees ofSelected Demands.

c) Select Save.




c) The review the results in Display Demands.





Answer: No change from the previous run.Only two demands will be considered. T-F3## at 1000: - 5 FC req and-10 FC req.The other FC req (-15 pcs) for T-F3## at 1000 was not considered. This isdue in part to the Planning Mode Orders without Fixed Pegging. Sincethe pegging edge was fixed in a previous step, this demand will not beconsidered in the CTM Planning run.


To see which supplies were considered during the planing run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.

Answer: No Change from the previous run.The engine will see 15 of the 30 pieces available. The system will thereforenot delete this planned order. This is due in part to the Planning ModeOrders without Fixed Pegging and the Deletion Mode Order Trees ofselected Demands. Since the 15 piece FC requirement has a fixed peggingedge, the 30 piece PlOrd is considered fixed and therefore neither thedemand nor the supply will be evaluated. The fixed pegging effect is evenfurther evidenced by the fact that the planned order for the subassemblyT-B22## is not included in the supplies. Since the 30 piece order is fixed, sois the supply for the sub assembly.




Answer: The planned order for 30 pcs covering the -5 pc FCreq was deletedand a new PlOrd for 30 pieces was created to cover the shortage of the 5pieces. Again, the 30 pieces was due to the fixed lot size. Even though theoriginal planned order would have covered all the demand, 5 pieces wouldhave been late.




Task 4: Planning Mode - Replan All OrdersNow that you have seen how the first two planning modes work with the threeDeletion modes, you will test how the Planning Mode Replan all orders workswith the different Deletion Modes.

1. Return to your CTM Profile GR##_1 and set the Planning Mode to ReplanAll Orders and the Deletion Mode to Do Not Delete Any Orders. Savethe profile.


b) In the Planning Strategies tab, set thePlanning Mode to Replan AllOrders and the Deletion Mode to Do Not Delete Any Orders.

c) Select Save.




c) The review the results in the Display Demands.


Answer: Only Two of the three FCreqs. will be considered. The FCreqsfor T-F3## at 1000: - 5 , and -10.This is due to the new Planning Mode Replan All Orders . This modedoes not change manually fixed pegging relationships between two firmorders. Previously, you fixed the relationship between the - 15 pc FCreq.and the planned order.


To see which supplies were considered during the planing run, select theSupplies tab, select Simulation. Then, review the results in theDisplay Supplies list.

Answer: The engine will see both of the 30 pieces PlOrd available.However, the second order only has 15 pieces available because of the fixedpegging edge. Because of the Deletion Mode Do Not Delete Any Orders,your surplus of 30 pieces will still be in place.




5. Change your CTM Profile GR##_1, so that the Planning Mode is set toReplan All Orders and the Deletion Mode to Delete Orders that are notFirmed. Save the profile.


b) In the Planning Strategies tab, set theDeletion Mode to Delete Ordersthat are not Firmed.

c) Select Save.




c) The review the results in the Display Demands.


Answer: This time all 3 demands will be considered. The three FCreqs forT-F3## at 1000: - 5 ,-10 and ,15 pcs.This is due to the new combination of Planning Mode Replan All Ordersand Deletion Mode Delete Orders that are not Firmed. This combinationselects all demands regardless of the pegging edges automatically ormanually.


To see which supplies were considered during the planning run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.

Answer: Only Stocks will be considered during this run. This is due in partto the combination of Planning Mode Replan All Orders and DeletionMode Delete Orders that are not Firmed. The planning mode causes alldemands to be evaluated regardless of pegging.

9. Go to the Product View for Version 000 for the product T-F3## at location1000. Note the planned order numbers.

Answer: Varies

10. Return to the CTM Profile and Execute a CTM Planning Run.






Answer: All Planned orders were deleted. Only one planned order nowexists that covers all three FCreqs. Even the Fixed Pegging was deleted asa result of the plan.Therefore, the combination of Planning Mode Replan All Orders andDeletion Mode Delete Orders that are not Firmed is equivalent to aRegenerative Planning run.

12. Return to your CTM profile GR##_1 and set the Deletion Mode to OrderTrees of Selected Demands. Save your profile.


b) In the Planning Strategies tab, set theDeletion Mode to Order Trees ofSelected.

c) Select Save.


To see which supplies were considered during the planning run, select theSupplies tab, select Simulation. The review the results in the DisplaySupplies list.

Answer: The engine will delete the existing planned orders, since thereare no �fixed� relationships.

14. From the Product view for T-B3##/1000, set the output firmed indicatorfor the planned order. Save.

a) Drill into the details of the planned order and set the Output Firmedindicator.

b) Select Save.

15. Note the planned order number for the T-F3##/1000.

16. Return to the CTM profile GR##_1.

To see which supplies were considered during the planning run, select theSupplies tab, and select Simulation. Then, review the results in theDisplay Supplies list.

Will the 30 piece PlOrd for T-F3## at 1000 be deleted and replanned?

Answer: The engine will delete the existing planned orders, since there areno �fixed� relationships at this level (T-F3##).

17. Will the 30 piece PlOrd for T-B3## at 1000 be deleted and replanned?

Answer: Since the planned order is firmed, all receipts for this level andbeneath, will not be replanned.




18. Execute a CTM run and review the results for the T-F3##/1000. Did theplanned order number change?

Answer: The Planned orders for the T-F3##, T-B1##, T-B22##, and T-B4##were replanned but not the T-B3##. This can be viewed in the Evaluations→ Order Selection→ Messages.

19. From the product view for T-B3##/1000, remove the �output firmed�indicator from the PP firmed planned order. Save.



Lesson Summary

You should now be able to:� Demonstrate options of the planning mode related to pegging� Show an understanding of Net Change and Regenerative Planning



Lesson: CTM Special Planning Strategies

Lesson OverviewIn this lesson, you will learn how to add another level of complexity in the CTMrun by adding additional constraints or considerations during the planning run.


� Demonstrate a detailed knowledge of Net Requirements Planning in CTM� Exhibit an understanding of the effects of late fulfillment

Business ExampleYour company has situations that will require CTM to manage the supply anddemand situation constantly. Therefore, you may periodically need to change thescope of the CTM Solver. Review some of the parameters such as Net-changePlanning, Capacity Planning, and other parameters to improve the result of yourCTM Scenario.

Net Change PlanningNet Change is only reasonable in combination with the planning mode �replan allorders�. Net change actually restricts the amount of demands which have to beplanned based on any changes to these demands. It is actually only necessary ifthe demand quantity decreases. If it increases, the orders could also be selectedby other settings. For example, if a requirement quantity increases by 10 pieces,then only this additional 10 pieces would also be fulfilled by the CTM engine ifthe �order without pegging� and �do not delete orders� have been set without�net change�. In the case of a quantity decrease, the combination �order withoutpegging� and �do not delete order� would not change this order. Only anappropriate planning/deletion mode combination with net change planning wouldreplan the order with the decreased quantity.


SCM235 Lesson: CTM Special Planning Strategies

Figure 131: CTM Net Change Planning

A change of the order date is already enough that an order is taken into account fora net change planning run. When an order is selected because of changes, then thecomplete quantity or the whole order is always replanned. For example, if thereare two demands in the system and only one of them is changed, then only thisdemand should be shown in the demand simulation and only this demand shouldbe planned if Net Change is used.

Net change should not be used in combination with the deletion modes �Deleteall unformed orders� and �Do not delete orders�. If the mode �Do not deleteorders� is set, then the deletion of supplies which fulfill demands replanned by NetChange cannot be deleted. Thus, an extra supply is planned which causes excesssupply. If the mode �Delete all unfirmed orders� is used, backlogs can appearbecause CTM then deletes all unfirmed supplies first, and only the demands withthe Net Change flag are planned again. Thus, all demands without a Net Changeflag, that is, without any changes stay unfulfilled.

It is only recommended to use the deletion mode �Order Trees of selectedDemands�. In this case, only the supplies of the selected demands are deletedand the selected demands are only those with a Net Change flag if Net change isapplied. Thus, all the supply corresponding to the aforementioned demands canbe created again. For example, if a demand change would decrease the demandquantity, then the exact supplying order would need to be deleted and completelyrecreated to gain an appropriate Net Change functionality. This can only beachieved if the deletion Mode �Order Trees of selected Demands� is set. Thus,only the changed demands are selected and only their supply trees are deletedand can be therefore replanned.



As a conclusion, it is recommended to use the planning/deletion mode combination�replan all orders� and �Order Trees of selected Demands� together with fixedpegging. The combination �Orders without fixed pegging�, �Order Trees ofselected Demands� and dynamic pegging is also possible but not recommended.The reason for this is that due to the dynamic pegging, the order tree is not 100%clearly defined.

Note:

� Net change also satisfies demands, besides the changed demands,which are not fulfilled.

� Net change can be controlled by setting CTM profile→ Strategies→ Special Strategies→ Net Change Planning for Demands andSupplies. This setting also covers certain problems with excesssupply.

Late Demand FulfillmentCTM planning always attempts to fulfill a demand on time. If CTM cannotschedule a receipt before the demand date, the demand is not considered fulfilled.With the late demand fulfillment, CTM uses a particular procedure to fulfill thedemand after the demand date.

Forward and backward scheduling in late demand fulfillment in Capable-to-Match(CTM) corresponds with the standard procedure for timely fulfillment. Thismeans that CTM also uses the Search Strategy for the late demand and the SourceDetermination to determine the source of supply with the best quota arrangement,the highest priority, or the lowest costs. Because CTM keeps shifting the datefurther into the future when trying to fulfill the demand, the system uses the searchstrategy again each time and executes the source determination again each time.



Figure 132: Late Demand Fulfillment

So that you can use the standard procedure for late demand fulfillment, you mustmake the following settings:

� In Customizing for Multilevel Supply and Demand Matching (SDM)→Capable-to-Match (CTM)→ Define Global Values and Default Values, setthe Allow Late Demand Fulfillment indicator on the Demand-DependentConstraints tab page.

� In the CTM profile, on the Strategies tab, under Special Strategies, inthe field Late Demand Fulfillment, choose Use Standard Procedure forScheduling.

You can execute the standard procedure with both forwards scheduling andbackwards scheduling. If using the standard Procedure with Forward Scheduling,CTM attempts to determine a date at the end of the planning period or period formaximum delay, on which the system can determine the demand. To fulfill thedemand as early as possible with the source of supply that has the best quotaarrangement, the highest priority, or the lowest costs, CTM uses the search strategyand the source determination criteria.



If using the standard procedure with Backward Scheduling, CTM first shifts thedemand date by one day into the future and attempts to fulfill the demand on thisdate. CTM uses the search strategy and executes the source determination withthis new date as the demand date. The way in which the system proceeds fromhere is dependent on the result of this planning step:

� If CTM can completely fulfill the demand on this date, the system endsthe late demand fulfillment.

� If CTM cannot fulfill the demand completely or even partially on this date,the system continues with step 2.

� If CTM can schedule a partial quantity of the demand on this date, thesystem shifts the demand date by one more day in to fulfill the remainingquantity of the demand.

� If CTM can also schedule a partial quantity of the demand on this new date,then CTM shifts the date by one day again and again further into the future.CTM shifts the date again and again until the demand is completely fulfilled,or until the system can no longer create orders by shifting any further. Areason for this may be that the date falls at a weekend. In this case, CTMcontinues with step 2.

If the first step does not find a source of supply, to determine a possible date forscheduling the demand, CTM now uses forwards scheduling. Starting on this date,CTM attempts to schedule the demand or a partial quantity of the demand withbackwards scheduling.

Finally, if CTM can only partially fulfill the demand on this date, but notcompletely, CTM starts to shift the last determined date again, as described in step1. If the system can no longer create orders by shifting the date further, CTMcontinues with step 2.

Capacity PlanningAs a part of the control parameters of the CTM Profile, users will have the abilityto tighten and loosen constraints that the CTM algorithm can consider. The mainconstraints that the CTM algorithm needs to consider are related to either materialor capacity availability. Material availability will be discussed in later lessons

The Master Data Management team in ECC will initially have the option ofcontrolling which resources are finitely or infinitely planned. These parameters setin the ECC system will transfer to the Resource in APO via the Core Interface.



Figure 133: Capacity Planning

Within the Resource Master in APO, two sets of parameters can affect the CapacityPlanning in CTM. The Finite Scheduling indicator identifies that a plannerwished to constrain scheduling on this resource in a finite manner. This meansthat the CTM algorithm will adhere to the start and stop times of the capacity aswell as the number of capacities at each resource. This means that if a resource isdesignated as Finite, then only one job can be scheduled per capacity. If the flagis not checked, CTM will still consider the start and stop times as a constraint,however it will ignore the number of available capacities.

Inside the CTM Profile, a planner can decide how to interpret capacity planning,by setting the parameter Capacity Planning.

Planners can make the following Settings:

Plan all Resources Finitely: CTM planning plans finitely by considering theexisting capacity load of the resources. The system does not observe whether youhave defined the resources in the resource maintenance under Finite Planning asfinite or infinite.

Use Setting from Resource: CTM planning considers whether you have definedthe resources in the resource maintenance under Finite Planning as finite orinfinite.



Plan all Resources Infinitely: CTM planning plans infinitely, without consideringthe existing capacity load of the resources. The system does not observe whetheryou have defined the resources in the resource maintenance under Finite Planningas finite or infinite.

Note: Only Production, Handling, and Transport resources can be plannedin a finite manner.

The Resource Utilization Factor and Unscheduled Breaks are only supported forBucket Planning.

Retain PeggingThis means pegging between firmed orders is kept no matter which pegging typeit is or which planning/deletion mode combination is set. Note, it must be betweentwo firmed orders; if it is between a firmed and an unfirmed order, the peggingwill be deleted depending on its type and the planning/deletion mode combination.This is used to keep the pegging that has been set by planning runs of otherplanning methods. For example by PP/DS planning methods.

Figure 134: Regain Fixed Pegging

Example:



Step 1: Two Requirements exist. During a planning run, a planned order for30 pieces (Fixed Lot Size) was created to cover these requirements. After thePlanning run, the FC rqmt for 15 pcs has a Fixed Pegging lane created to thereceipt.

Step 2: A third requirement is created, with a date prior to the previous existingrequirement. During the follow up planning run, the fixed pegging lane iskept intact due to the Retain Pegging indicator in the CTM Profile. The newrequirement is then dynamically pegged. Even through there is technically asurplus, a new order is created and pegged to one of the older requirements.

Store Transport at Destination LocationThis setting plans stock transfer orders as close to the supply elements (pl. order,purchase receipt) as possible. Thus, stock doesn�t build up at the source locationany more. The stock is immediately transported by the aforementioned stocktransfer order to the destination location.

Figure 135: Store Transport at Destination Location

Example:

In this case, you have a demand at the Distribution Center, that will be replenishedby a stock transport request (STR). In Case A, the indicator Store Transport atDestination Location is not set. Therefore, the receipt is planned as close to therequirement as possible. If the STR is covering an FC req, there is no rush to



resupply. However, if your material has a high forecast error, the real demand(sales order) may come in sooner and you could be facing a service delay, byhaving the replenishment arrive in a timely fashion.

In Case B, the indicator Store Transport at Destination Location is set. In thiscase, the demand is satisfied by several supplies (two Planned Orders) muchearlier in the time horizon. As a result of the indicator being set, the single stocktransfer order is just moved back to match the date of the latest supply element.This will cause the destination location (distribution center in this case) to receivethe inventory earlier.

Note: The parameter Transport Receipt Elements Individually could alsobe applied in this situation.

Transport Receipt Elements IndividuallyOften, a requirement, if large enough, may end up being covered by severalreceipts. These receipts may be spread over a period of time due to materialor capacity availability issues. Instead of holding your receipts until the entirerequirement is covered, you may wish to ship the inventory as it becomes availableto avoid service issues - especially if your planning run is considering forecastrequirements.

Figure 136: Transport Receipt Elements Individually



As shown in Case A, a demand at the Distribution Center, can be satisfied by oneStock Transfer Request (STR) which is covered by several supplies. Using thefunction Transport receipt elements individually, CTM plans a separate stocktransfer order for each supply, but each STR will arrive as close to the requirementdate as possible. This is shown in Case B.

Figure 137: Transport Receipt Elements Individually and Store at DestinationLocation

It is possible to combine the setting �Transport receipt elements individually�with �Store transport and prod. substitution receipts at destination location�. InCase A, a timely STR is created even though the supplies at another locationare arriving much earlier in the time horizon. Thus, all stock transfer orders aremoved as close to their supplies as possible to move the stock from the sourcelocation the destination location as soon as possible. See Figure 27 Case D. Thissetting is also used for subcontracting scenarios. If this function is used then itis applied to all transportation lanes.

Plan Minimum Receipts QuantityIn certain industries like High Tech, Original Equipment Manufacturers (OEMs)often have contractual agreements with suppliers or contract manufacturers forminimum production or purchasing requirements. Often, these are factored intothe contracts or scheduling agreements. As of SCM 5.1, CTM does not consider



contracts or scheduling agreements. In addition, there are no parameters inExternal Purchasing relationships that have this type of constraint for minimumbuilds - especially one that is time dependent.

With the delivery of SCM 5.1, planners can now use time-dependent SNP datato deliver minimum production constraints to the CTM engine for in-houseproduction. These time-dependent requirements can be included in the CTM run,however at this time do not have any liveCache ATP categories that are visiblefrom the Product view.

Figure 138: Plan Minimum Receipts



Prior to activating the CTM Profile parameters, several setup steps must theperformed first:

1. In BW, create a new key figure to house your minimum physical Quantities2. Copy Planning Area, 9ASNP05, and add your new key figure to the planning

area. Be sure the key figure semantic is 000 TS.3. Generate a time series for the necessary planning version and time period.4. Copy the Planning Book/Data view 9ASNP_SSP/Safety.5. Reassign the new planning book to your new planning area.6. Add the new key figure to your data view.7. If necessary, check and activate all macros.8. In configuration, IMG→ APO→ Supply Chain Planning→ Multilevel

Supply and Demand Matching→ CTM→Make SNP Key Figures Available,add an entry for your new planning area and key figure, and assign it toPhysical Minimum.

9. Enter the time-dependent minimums for each product and time period inthe SNP book,

APO→ Supply Network Planning→ Planning→ Interactive SupplyNetwork Planning (all Books)

10. In your CTM Profile, Select the Settings tab, and select Technical Settingstab.

Here, you will select the Planning Area that will house your time-dependentminimums.

11. Lastly, activate the Physical Minimum Quantities and the Balance Surplus orShortfall indicators if situation warrants it.Note: During the development of this class, it was noted that if anyrelevant or dependent materials were not marked�SNP-relevant� (ProductMaster, SDP Relevant), and error, No Production Location Combinations, errors would be generated. In addition, if this parameter is set After theSNP time series was generated you many get an error liveCache anchornot found. To correct this, generate the time series objects again, and makesure master data is being created.

Balance Surplus and Short Fall QuantityBalance Surplus and Shortfall Quantity Defines how CTM should proceed if thedesired minimum receipt quantity cannot be reached. This can happen if, forexample, CTM can only plan a larger quantity due to lot size constraints or asmaller quantity due to capacity restrictions.

If you set this indicator, CTM takes a surplus or shortfall caused by this intoaccount when planning the subsequent period.



Figure 139: Balance Surplus and Short Fall Quantity

You have defined a fixed lot size of 150 pieces for your location product. For theminimum receipt quantity, you have planned the following quantities in interactiveplanning: First period: 100 pieces; Second period: 100 pieces; Third period: 100pieces. If you have set this indicator in the CTM profile, CTM proceeds as followsduring the planning run: In the first period, CTM generates a receipt element for150 pieces based on the lot size (this results in a surplus of 50 pieces). In thesecond period CTM takes this 50 piece surplus into account and generates anadditional receipt element of 150 pieces based on the lot size (the surplus is now100 pieces). In the third period CTM uses this 100 piece surplus for the demandof this period. If you have not set this indicator, CTM ignores the surplus andgenerates another receipt element for 150 pieces in the third period.



Exercise 13: CTM Special PlanningStrategies

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate Net Change Planning capabilities of CTM� Demonstrate Capacity Planning capabilities

Business ExampleYour organization is trying to compare CTM strategies to typical MRP orSNP/PPDS concepts. Since CTM is somewhat unique in its nature, explore howCTM will handle certain special planning applicaitons.

Task 1: Net Change Planning in CTMNet Change Planning is only reasonable in combination with the planning mode�replan all orders�. Net change actually restricts the amount of demands whichhave to be planned based on any changes to these demands. In this section youwill explore the specifics about how Net-change planning works in CTM.

1. Execute a CTM Planning run with profile GR##_5 to delete all receipts.

2. From the product view, delete all requirements for the T-F3##/1000. Save.

3. In ECC, create a planned independent requirement for the T-F4## at plant1000, for 25 pcs five weeks from today. Save.

4. Execute a CTM Planning Run with profile GR##_1. The planning modeshould be set to Replan All Orders and the deletion mode to DeletedOrders That are Not Firmed.

5. Set up your CTM profile GR##_1 so that if will perform a Net-changePlanning run, which will only pick up changed demand.

6. Simulate the Demand, and review the results. Which demands will beplanned based on your situation and the new settings?

7. In ECC, change the PIR to 26 pcs and save.




8. In the CTM Profile GR##_1, simulate the Demand, and review the results.Which demands will be planned based on your situation and the new settings?

9. Deselect the Execute Net Change Planning indicator, save the results andsimulate the demand. What is the results?

10. Change the planning mode to Orders without Pegging. Save the results.Simulate the demand. What is the result?

11. Execute a planning run with profile GR##_1.

12. In your profile GR##_1, simulate the demand again. Result:

Task 2: Capacity Planning in CTMYour current planning situation requires both finite and infinite scheduling runs.Determine if CTM can handle these requirements.

1. Change your profile GR##_1 so the Planning Mode is set to Replan AllOrders, the Deletion Mode to Delete Orders That Are Not Firmed, andthe Capacity Planning parameter to Plan All Resources Infinitely.

2. In another session, via the Product View, create another FC Req for T-F4##at location 1000 for 26 pieces on the same day as the existing FC Req at00:00:00 hour. Save.




3. Execute a planning run with Profile GR##_1.

4. Review the results in the Product view. What happened?

5. Drill into the details of one of the planned orders. Select the Alert Monitor tosee if CTM created any problems.

6. Do you have any problems?

7. Change your profile GR##_1 so the Capacity Planning is set to Plan AllResources Finitely.







Solution 13: CTM Special PlanningStrategiesTask 1: Net Change Planning in CTMNet Change Planning is only reasonable in combination with the planning mode�replan all orders�. Net change actually restricts the amount of demands whichhave to be planned based on any changes to these demands. In this section youwill explore the specifics about how Net-change planning works in CTM.

1. Execute a CTM Planning run with profile GR##_5 to delete all receipts.

a) From your session with CTM Profile GR##_5 select F8

2. From the product view, delete all requirements for the T-F3##/1000. Save.

a) In the bottom grid, select Select all.

b) Select Delete Orders/Schedule Lines.

c) Answer Yes to the delete the FCreqs.

3. In ECC, create a planned independent requirement for the T-F4## at plant1000, for 25 pcs five weeks from today. Save.

a) ECC menu path:Logistics→ Production→ Production Planning→Demand Management→ Independent Requirement→ Create (MD61).

b) Enter Material T-F4## plant 1000, and planning period Day.

c) Select the Schedule lines tab.

d) In the Reqmt Date field, enter a date Five weeks from today.

Enter a Quantity of 25 pieces.

e) Select Save.

4. Execute a CTM Planning Run with profile GR##_1. The planning modeshould be set to Replan All Orders and the deletion mode to DeletedOrders That are Not Firmed.

a) APO→ Multilevel Supply & Demand Matching→ Planning→ CTMPlanning

b) Select Profile GR##_1

c) Select the Strategies→ Planning Strategies tabs, The planning modeshould be set to Replan All Orders and the deletion mode to DeletedOrders That are Not Firmed

d) Save and Execute.




5. Set up your CTM profile GR##_1 so that if will perform a Net-changePlanning run, which will only pick up changed demand.

a) In your CTM Profile GR##_1 , select the Strategies → SpecialStrategies tabs.

b) Select the Execute Net Change Planning and set the Demandsparameter to Plan Changed Demand.

c) Select Save.

6. Simulate the Demand, and review the results. Which demands will beplanned based on your situation and the new settings?

Answer: As a result of the Net Change indicator, no demands were selected.

7. In ECC, change the PIR to 26 pcs and save.

a) ECC menu path:Logistics→ Production→ Production Planning→Demand Management→ Independent Requirement→ Change (MD62)

b) Enter Material T-F4## plant 1000, and planning period Day.

c) Select the Schedule lines tab.

d) Change the existing entry to a Quantity of 26 pieces.

e) Select Save.

8. In the CTM Profile GR##_1, simulate the Demand, and review the results.Which demands will be planned based on your situation and the new settings?

Answer: As a result of the change to the requirement in ECC and the NetChange indicator in the CTM profile, the PIR for 26 pcs will be considered.This is because the order has an internal flag for a CTM Net Changeindicator, whereas PPDS and SNP will use the planning file entries instead.

9. Deselect the Execute Net Change Planning indicator, save the results andsimulate the demand. What is the results?

Answer: Based on the planning mode, replan all orders, the PIR for 25pcs will be considered.

10. Change the planning mode to Orders without Pegging. Save the results.Simulate the demand. What is the result?

Answer: Since only part of the requirement is pegged to the original plannedorder for 25 pcs, only the demand for one piece will be created.

11. Execute a planning run with profile GR##_1.





12. In your profile GR##_1, simulate the demand again. Result:

Answer: In the previous step, the CTM run created a new planned order for1 piece. This time, the entire requirement is covered, so the system will notplan any requirements since all requirements are pegged to receipts.

Task 2: Capacity Planning in CTMYour current planning situation requires both finite and infinite scheduling runs.Determine if CTM can handle these requirements.

1. Change your profile GR##_1 so the Planning Mode is set to Replan AllOrders, the Deletion Mode to Delete Orders That Are Not Firmed, andthe Capacity Planning parameter to Plan All Resources Infinitely.

a) Strategies→ Planning Strategies tabs.

b) Set the Planning Mode to Replan All Orders, the Deletion Mode toDelete Orders That Are Not Firmed.

c) Strategies→ Special Strategies tabs.

d) Set the Capacity Planning parameter to Plan All Resources Infinitely.

e) Select Save.

2. In another session, via the Product View, create another FC Req for T-F4##at location 1000 for 26 pieces on the same day as the existing FC Req at00:00:00 hour. Save.

a) In your session with the product view, enter T-F4## and location 1000and press <Enter>

b) Enter change mode by selecting Change

c) In the grid below using the date of the requirement above, enter00:00:00 and a quantity of -26 pcs

d) Select Save




Answer: The CTM engine created two planned orders for 26 pieces, whichare finishing at the exact time.





a) Double-click on one of the planned orders for the T-F4##/1000.

b) Select Alert Monitor.

c) Drill down under the Resource View→ 1000→ WT-L##_1000_001and set the Selection indicator.


Answer: Three alerts: 3 for Resource Overload Activity, two for each orderand one cross order alert

7. Change your profile GR##_1 so the Capacity Planning is set to Plan AllResources Finitely.

a) Strategies→ Special Strategies tabs.

b) Set the Capacity Planning parameter to Plan All Resources Finitely.

c) Select Save.




Answer: The CTM engine created two planned orders for 26 pieces,however these orders are finishing at different times.


a) Double-click on one of the planned orders for the T-F4##/1000.

b) Select Alert Monitor.


Answer: No alerts, since the CTM profile had to schedule each order sothat it did not overload the resource.



Lesson Summary

You should now be able to:� Demonstrate a detailed knowledge of Net Requirements Planning in CTM� Exhibit an understanding of the effects of late fulfillment


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Use applications and conditions for dynamic pegging� Use fixed pegging.� Clearly present concepts in order creation and deletion control parameters� Demonstrate scheduling capabilities of CTM� Apply concepts of pegging during planning� Demonstrate options of the planning mode related to pegging� Show an understanding of Net Change and Regenerative Planning� Demonstrate a detailed knowledge of Net Requirements Planning in CTM� Exhibit an understanding of the effects of late fulfillment


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 6CTM Demand Aggregation

Unit OverviewIn this unit, we will address how CTM can be used to plan in the mid and longrange time horizons. Since CTM is an order-based planning system, you will notuse the traditional approach like SNP, to perform aggregated Planning.


� Demonstrate Time Aggregation in CTM� Demonstrate Order Aggregation in CTM

Unit ContentsLesson: Time Based CTM Aggregation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .374

Exercise 14: CTM Demand Aggregation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .381


Unit 6: CTM Demand Aggregation SCM235

Lesson: Time Based CTM Aggregation

Lesson OverviewCTM can perform both detailed and rough cut planning. However, CTM isinitially an order-based planning system, and will take a unique perspective tomanage rough cut planning. Unlike SNP, CTM will not use planning areas tomanage the aggregation process. In this lesson, you will learn how CTM managesthe process for rough cut planning


� Demonstrate Time Aggregation in CTM� Demonstrate Order Aggregation in CTM

Business ExampleYour business wants to do rough cut planning, but there is a need to manage thepriorities of how demand or materials will be planned. SNP heuristics do notallow any type of prioritization, and the SNP Optimizer is too sophisticated fororganization at this time. Examine how CTM may be able to balance the need todo rough cut planning for your business.

Demand Aggregation in the CTM Process

Figure 140: Demand Aggregation in the CTM process


SCM235 Lesson: Time Based CTM Aggregation

Demand aggregation is an optional process in CTM. It is the third step in theprocess for the CTM engine prior to planning taking place.

Time AggregationWhether it is in the short, mid or long range horizons, many companies need toperform planning above the order level.

Figure 141: CTM Time Aggregation

The Time Aggregation in CTM is done based on the time stream maintained in theCTM profile in the tab Planning Scope.. The degree of aggregation is based onthe defined period in the time stream. For example, if days are defined, then alldemands and supplies of days are summarized; if weeks are defined the same isdone on a weekly basis.

Supply and Demand AggregationThe first step of the aggregation process is to create the time stream usingaggregated periods like weeks and months. After this process is done, you mustactivate the indicator Time Based Aggregation in the Aggregation tab of theCTM profile.

Note: Without this parameter set, the CTM engine will ignore the timesteam buckets and only use the start and end dates. All requirementswill be planned at the order level.



Normally, only orders from the same category are aggregated. However, you mustidentify which ATP categories you wish to have aggregated. For aggregation towork, you must enter the ATP Categories in the table labeled Aggregation in theAggregation tab of the CTM profile.

Figure 142: Demand and Supply Aggregation

The aggregation is generally only possible for demands and supplies which areshown in the demand/supply simulation. To aggregate them, set the aggregationflag in the CTM profile at the aggregation tab and put the corresponding (ATP)category in the table beneath the flag. Thus, if nothing exists apart from theforecast or the sales orders (independent demands), only they can be aggregated.Supplies which are not planned yet cannot be aggregated. This means to aggregateany kind of supplies, you need to do two runs. One to plan the supplies and asecond one the aggregate them.



Figure 143: Aggregated Demand Attributes and Fixed Pegging

However, it is possible to aggregate orders from different categories, but suppliesand demands can never be aggregated. To aggregate across ATP categories, selectthe indicator Aggregate Demands and Receipts from Different ATP Categories.This will cause all demands to be grouped into one period bucket.

By simulating the demand and reviewing the results, planners can see what theCTM engine will do. By reviewing the Requirement Info after demand simulation,planners can see what was aggregated from one bucket to the next.

In addition, if users wish to offset the use of specific ATP Categories, they canuse the field Start Days. This field specifies the number of days after the start ofplanning when aggregation begins. Thus, the system only aggregates the orders ofa complete planning period. If the start of aggregation does not coincide with thestart of a planning period, the aggregation starts with the next planning period.

Example: If you enter 30 as the start of aggregation, orders are first aggregatedafter the 30th day of the planning period.

Aggregated Supply and Demand DateOnce time buckets have been selected and requirement categories identified,planners need to consider where they would like CTM to analyze the timing ofthe demand and of the supply. For example, in one week, you have five forecastrequirements, one for each day of the week. For scheduling purposes, whereshould CTM place the planing of the receipts? Beginning, middle or end of theperiod.



In the customizing, IMG→ APO→ Supply chain Planning→ Multilevelsupply & Demand matching→ CTM → Global Values and Defaults , intransaction /SAPAPO/CTMCUST, the tab �General Customizing� is necessaryto define at which part of the aggregated period the supplies or demands areavailable/requested. For example, you can specify that weekly aggregateddemands are available at the beginning of the week, at the middle or at the end. Itis also possible to define the date of availability at the date of the first or last orderof all orders in one aggregation period.

Figure 144: Aggregated Demand and Supply Date

Generally, it is recommended to set aggregated demands to the beginning of theperiod and supplies to the end of the aggregated period. The reason for this is �tomake� demands earlier than necessary to make sure they can be fulfilled on timeand �to make� supplies later than necessary to increase the possibility that theavailable resource offer can cover the requested quantity on time.

Demand Aggregation by Rounding ValueAnother method of aggregation is available to the user, by using planningparameters in the CTM Engine.



Figure 145: Demand Aggregation by Rounding Value

If the requirement quantity does not correspond to the multiple of the roundingvalue of the lot size profile, CTM will always generate the next smaller quantity.However, it is not possible to generate more and use the surplus for followingrequirements. Inside the CTM Profile, Control→ Planning Parameters, usingthe control parameter DEMAGGBYLOTSIZE, requirement quantities are nowdetermined according to the rounding value in the product master, that is, therequirement quantity is adjusted to the rounding value, where the next highervalue is always used.

The resulting surplus is taken into account for the quantity calculation of furtherrequirements. You can use this type of requirements prioritization if CTM cancompletely fulfill the requirement quantities, that is, in a scenario without anycapacity restrictions.





Exercise 14: CTM Demand Aggregation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Set up and execute CTM Demand Aggregation

Business ExampleUp to this point, you have been planning daily demand. However, yourorganization needs to plan out several months and does not need CTM to plan inas much detail as you have been doing up to this point. SNP heuristics does notgive you the ability to develop a feasible plan for the mid to long term. Explore ifyour organization can use CTM as a substitute for SNP Heuristics.

Task 1: Demand AggregationYour organization wants to speed up planning in the mid to long term in CTM.To do this, you will set up a special profile that will allow you to do aggregatedorder planning in CTM. In an earlier exercise, you created CTM Profile GR##_3,which offset the planning horizon by 30 days and used time buckets of weeks andmonths instead of days. Release a forecast from DP and investigate how to useCTM to perform rough cut planning.

1. Your demand planning group generates a twelve month forecast everymonth. Release the mid term section of this forecast for your product T-F2##which will be between 60 and 240 days from now. Use variant SCM235to release the demand to liveCache.

2. Review the product view for your T-F2## material in locations 2400 and1000.

3. Review your profileGR##_3 Group ## CTMProfile 3: Pump Bucket/MT.When does the planning horizon start and stop?

4. In your CTM Profile GR##_3, execute a demand simulation. What is theresult?

5. What was the result of the simulation? Were the demands aggregated?

6. Change your CTM profile GR##_3 so that Time-Based Aggregation isactive. Save and simulate your demand prioritization.




7. Did the time based aggregation have any effect on the demand?

8. Change your CTM profile GR##_3 so that ATP Category FA (FCreq)aggregates. Save and simulate your demand prioritization.

9. Review the simulation results. Did the additional ATP Category have anyeffect on the demand?

10. Analyze the first requirement. How many demands were aggregated?Hint: Highlight requirement and select requirement info.

11. Are the sales orders with CTM Demand category CO aggregated?

12. Change your CTM profile GR##_3 so that ATP Category BM (Sales Order),BK (Inquiry), BL (Quotation) all aggregate. Save, and simulate your demandprioritization.




13. Have the sales orders been aggregated?

14. Do you have any FC and CO categories in the same time period? If sowhy? Note the location/product, time period and total quantities for all ATPCategories in that bucket.Yes, there are two periods where we have requirements for both sales ordersand forecasts in the same time period. Based on the current parameters, CTMcannot group demands from different ATP Categories.

15. Change your CTM profile GR##_3 so that all demands for a time periodaggregate into one demand. Save and simulate your demand prioritization.

16. Has the demand been aggregated?

17. Select the requirement that should have combined sales order and forecastData (four weeks into play). Select Requirement Info. Is there informationhere that is helpful disseminating what the engine did?

Task 2: Aggregated Demand and Supply DatesYour manager wants to start generating feasible plans for the mid to long-termhorizon. Currently, SNP optimizer is not an option and SNP heuristics are givingyou mixed results.

1. Prior to executing your aggregated CTM run, set the following parameters inyour CTM ProfileGR##_3:

Remove Aggregating Demands and receipts from different categories.

Round Order Quantities




Activate all messages and assign CTM evaluation profile GR##_Pump.

Caution: Do not activate the log files.

2. Using the CTM Profile GR##_3, execute an aggregated CTM planning run.

3. Review the evaluations for the CTM. Were there any problems meetingdemand? (CTM Planning Run→ Quantitative Results)

4. Which demands were not met?(CTM Planning Run→ Explanations→Results indicators for CTM Planning Run→ Details→ Demand Coverage)

5. In another session, using the Product View, review the details of T-F2##/1000. What type of receipts were created?

6. Review the results of your plan through the SNP Planning board to get moreaccurate results from a rough cut perspective. Show the information by APOLocation Product and restrict it to only your product T-F2##.




7. Load T-F2##/1000 into the planning table. What types of demand do youhave for T-F2##/1000?Hint: scroll to the right and expand the Total Demand key figure.

8. For a Sales Order row (key figure), find a period that has a value and viewthe details. What are the results?

9. From the SNP Planning Board, change to the capacity planning view, andload the results for the resourceWT-L##_1000_001. If necessary, changethe data view and use time bucket profile 104WEEKS to view more periods.



Solution 14: CTM Demand AggregationTask 1: Demand AggregationYour organization wants to speed up planning in the mid to long term in CTM.To do this, you will set up a special profile that will allow you to do aggregatedorder planning in CTM. In an earlier exercise, you created CTM Profile GR##_3,which offset the planning horizon by 30 days and used time buckets of weeks andmonths instead of days. Release a forecast from DP and investigate how to useCTM to perform rough cut planning.

1. Your demand planning group generates a twelve month forecast everymonth. Release the mid term section of this forecast for your product T-F2##which will be between 60 and 240 days from now. Use variant SCM235to release the demand to liveCache.

a) APO→ Demand Planning→ Planning→ Release→ Release DemandPlanning to Supply Network Planning (/sapapo/MC90)

b) Select Get Variant.

c) Enter Variant SCM235, remove the Created by parameter, and selectExecute.

d) Change the product to include your material.

e) Select the results log.

f) Select Execute.

2. Review the product view for your T-F2## material in locations 2400 and1000.

a) APO→ Production Planning→ Interactive Production Planning→Product View (/sapapo/RRP3)

b) The result should be daily requirements starting about 6 months out.

3. Review your profileGR##_3 Group ## CTMProfile 3: Pump Bucket/MT.When does the planning horizon start and stop?

a) APO→ Multilevel Supply & Demand Matching→ Planning→ CTMPlanning (/sapapo/CTM)


c) Enter profile GR##_3.

d) Select the Planning Scope tab.

e) Planning period Start and End. Result will vary based on class dates,but it should start 60 days from today and end 240 days from today.




4. In your CTM Profile GR##_3, execute a demand simulation. What is theresult?

a) Select the Demand tab and select Simulate Demand Prioritization.

5. What was the result of the simulation? Were the demands aggregated?

Answer: A list of over 360 demands is present for T-F2## at locations1000, 2400, and 2500 on a daily basis.The demands were not aggregated.

6. Change your CTM profile GR##_3 so that Time-Based Aggregation isactive. Save and simulate your demand prioritization.

a) Select the Aggregation tab.

b) Select the indicator for Activate Time-Based Aggregation.

c) Select Save.

d) Select the Demand tab and select Simulate Demand Prioritization.

7. Did the time based aggregation have any effect on the demand?

Answer: No it did not have any affect. The requirements are still at a dailylevel and this should be evidenced by the volume

8. Change your CTM profile GR##_3 so that ATP Category FA (FCreq)aggregates. Save and simulate your demand prioritization.


b) Make sure the indicator for Activate Time-Based Aggregation is set.

c) Enter ATP Category FA - FC req in the Aggregation table.

d) Select Save.

e) Select the Demand tab and select Simulate Demand Prioritization.

9. Review the simulation results. Did the additional ATP Category have anyeffect on the demand?

Answer: The demands for Category FA have been aggregated byProduct/Location/Time bucket. The time bucket is initially weeks but then,later, becomes Months.

10. Analyze the first requirement. How many demands were aggregated?

Hint: Highlight requirement and select requirement info.

Answer: In the aggregation tab, you will see all the requirements that wereaggregated to one FA requirement. It may vary based on time of year but youshould have 5 category FAs.




11. Are the sales orders with CTM Demand category CO aggregated?

Answer: No, sales orders are still individual requirements.Select a sales order line and select Requirement Info. Here, you can seeadditional data about each demand.

12. Change your CTM profile GR##_3 so that ATP Category BM (Sales Order),BK (Inquiry), BL (Quotation) all aggregate. Save, and simulate your demandprioritization.



c) Enter ATP Category BM - Sales Order, BK - Inquiry, and BL -Quotation in the Aggregation table.

d) Select Save.


13. Have the sales orders been aggregated?

Answer: Yes. This can be seen by larger totals for a product/location/date.When you review the requirement info, no sales order data is available.Select a sales order line and select Requirement Info. Currently, thereis no sales order data. However, you can see in the Aggregation tab, thatseveral orders have been grouped together.

14. Do you have any FC and CO categories in the same time period? If sowhy? Note the location/product, time period and total quantities for all ATPCategories in that bucket.

Yes, there are two periods where we have requirements for both sales ordersand forecasts in the same time period. Based on the current parameters, CTMcannot group demands from different ATP Categories.

15. Change your CTM profile GR##_3 so that all demands for a time periodaggregate into one demand. Save and simulate your demand prioritization.



c) Set the indicator for Aggregate Demands and Receipts fromDifferent Categories.

d) Select Save.





16. Has the demand been aggregated?

Answer: Yes the demands have all been changed to category AG -Aggregated Demand. Note the period you chose earlier should now haveonly one demand for a total combined quantity. Unlike SNP, which uses aplanning area and ATP Category Groups attached to key figures, CTM usesthe ATP Category and aggregates all the categories into one requirementper period.

17. Select the requirement that should have combined sales order and forecastData (four weeks into play). Select Requirement Info. Is there informationhere that is helpful disseminating what the engine did?

Answer: In the Aggregation tab, you can see all of the individualrequirements that the CTM engine grouped together.

Task 2: Aggregated Demand and Supply DatesYour manager wants to start generating feasible plans for the mid to long-termhorizon. Currently, SNP optimizer is not an option and SNP heuristics are givingyou mixed results.

1. Prior to executing your aggregated CTM run, set the following parameters inyour CTM ProfileGR##_3:

Remove Aggregating Demands and receipts from different categories.

Round Order Quantities

Activate all messages and assign CTM evaluation profile GR##_Pump.

Caution: Do not activate the log files.


b) Remove the indicator for Aggregate Demands and Receipts fromDifferent Categories.

c) Select the Settings→ Technical Settings tab.

d) Set the Round parameter to Round Order Quantities.

e) Set all message indicators, and assign CTM evaluation profileGR##_Pump.

f) Select Save.

2. Using the CTM Profile GR##_3, execute an aggregated CTM planning run.

a) Select the Planning Run tab.

b) Select Execute.




3. Review the evaluations for the CTM. Were there any problems meetingdemand? (CTM Planning Run→ Quantitative Results)

Answer: Results may vary based on time of year. However, there may besome situations where some demands where late or not fulfilled at all.

4. Which demands were not met?(CTM Planning Run→ Explanations→Results indicators for CTM Planning Run→ Details→ Demand Coverage)

Answer: Results may vary based on time of year. However, there may besome situations where some Product locations were filled completely andothers experience delays or shortages.

5. In another session, using the Product View, review the details of T-F2##/1000. What type of receipts were created?

Answer: At the beginning of each demand period, an SNP: PL-ORD wascreated.

6. Review the results of your plan through the SNP Planning board to get moreaccurate results from a rough cut perspective. Show the information by APOLocation Product and restrict it to only your product T-F2##.

a) From the CTM profile, select SNP Planning Board.

b) If necessary, select planning book/data view 9ASNP94/SNP94(1) -SNP Plan.

c) Select Selection Window.

d) In the Show field, select APO Location Product.

e) Restrict your data by Planning Version 000 and APO Product T-F2##.

f) Select Adopt.

7. Load T-F2##/1000 into the planning table. What types of demand do youhave for T-F2##/1000?

Hint: scroll to the right and expand the Total Demand key figure.

Answer: Three types of demand. Forecast, Sales Orders, and StockTransport Requests.

8. For a Sales Order row (key figure), find a period that has a value and viewthe details. What are the results?

Answer: Via the context menus, Display Details.The result is that you have two sales orders and can see the actual orderdetails.




9. From the SNP Planning Board, change to the capacity planning view, andload the results for the resourceWT-L##_1000_001. If necessary, changethe data view and use time bucket profile 104WEEKS to view more periods.

a) From the SNP Planning board in the left window, in the section labeledPlanning Book/Data View, double-click on the data view SNP94(2) -Capacity Check.

b) Select Selection Window.

c) In the Show field, select APO Resource.

d) Restrict your data by Planning Version 000 and APO - ResourceWT-L##_1000_001.

e) Select Adopt.

f) Double-click on the entry in the selection area.

g) In the left window, in the section labeled Selection profile, select theicon labeled Period structure settings.

h) Select Current settings and enter a TB profile ID (future) 104WEEKS.

i) Select Adopt Settings.



Lesson Summary

You should now be able to:� Demonstrate Time Aggregation in CTM� Demonstrate Order Aggregation in CTM

Related InformationConsulting Notes

� 303311 - CTM:Requimnt aggr. acc. to round. value of lot size


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Demonstrate Time Aggregation in CTM� Demonstrate Order Aggregation in CTM


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 7CTM Demand Prioritization

Unit OverviewDemand prioritization is the backbone of the planning engine in CTM. CTM is anorder-based planning engine and will plan only one order at a time. Therefore, itis imperative that you understand how CTM will sequence each demand. SinceCTM plans multi-level, capacity and materials will be reserved on a first comefirst serve basis.


� Demonstrate Simple Prioritization� Execute Complex Prioritization using sort lists

Unit ContentsLesson: Demand Prioritization ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398

Exercise 15: CTM Demand Prioritization... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .413


Unit 7: CTM Demand Prioritization SCM235

Lesson: Demand Prioritization

Lesson OverviewCTM is an order-based planning system, which is built on the premise of beingable to prioritize which demands will be covered first. In this lesson, you willlearn how to manage demand prioritization in CTM.


� Demonstrate Simple Prioritization� Execute Complex Prioritization using sort lists

Business ExampleYour business has decided to use CTM in scenarios where demand is greaterthan supply. You have done this because CTM has the ability to prioritize howthe demands will be managed in a sequence during planning. Execute demandprioritization for several different situations.

Demand Prioritization in the CTM Process

Figure 146: Demand Prioritization in the CTM process

Demand aggregation is an optional process in CTM. It is the third step in theprocess for the CTM engine prior to planning taking place.


SCM235 Lesson: Demand Prioritization

Concept of Demand PrioritizationCTM is, by definition, an order-based planning system. That means that a plannermay have hundreds or thousands of orders to consider during each run. Unlike theSNP optimizer that considers all demands simultaneously, CTM only considers oneorder at a time. Therefore, it is imperative that planners provide the CTM enginewith the necessary parameters to determine which orders to plan first, and so on.

With demand prioritization, you can determine the criteria to be used inCapable-to-Match planning (CTM) for sorting demands and the sequence in whichCTM is to cover these demands.

Figure 147: Demand Prioritization

So that the system can execute a demand prioritization, you must determine thesort sequence. You have two ways of determining the sort sequence:

� You determine the criteria and their sort sequence in the CTM profile onthe Demands tab page. The position of the individual criteria in this tabledetermines the sequence in the sorting.

� You define the criteria and the sort sequence in a sort profile in CTMCustomizing.

In the CTM Profile, on the Demands tab, you enter the criteria in the particularsequence in which CTM planning is to sort the demands. In the PrioritizationSequence, you can choose one or more parameters to control the sorting process.

The existing parameters are :



Field Name Short Description Asc./Desc.Sorting

SpecialSorting

ANTLF Maximum Number of Partial DeliveriesAllowed per Item

Yes No

ATPCAT Category of Stock/Receipt/Require-ment/Forecast

No Yes

BMENG Confirmed Qty Yes NoBZIRK Sales District Yes YesCNFPART ATP, BOP: Confirmed Portion Yes NoCOUNC Country code Yes YesCTMQTY CTM Qty Yes NoDELNR Order Number from Connected OLTP

SystemYes No

DELPS Order Item Yes NoEKGRP Purchasing Group YesERTMS Date when the Record was added No NoGMENG Receipt or Requirements Qty Yes NoGRKOR Correlation Group (Items are Delivered

Together)Yes Yes

KDGRP Customer Group Yes NoKUNNR Location (Customer number - Sold-To

Party)Yes yes

KVGR1 Customer Group 1 Yes NoLFTMS Delivery Date/Time No NoLIFPRIO Delivery Priority Yes NoLOCNO Location (Location Master) Yes YesLOCPRIO ATP, BOP: Location Priority Yes NoMATKL Material Group Yes NoMATNR Product Number Yes YesMATPRIO Priority of Product Yes NoMBDAT Material Availability Date Yes NoMRANK Rank of Product Yes NoORDPRIO Order Priority Yes NoPKUNWE Ship-To Party NoPRIO_REQ Requirement Priority Yes No



Field Name Short Description Asc./Desc.Sorting

SpecialSorting

PSTYV Sales Document Item Category No YesRULE_MATNRInternal Product Name Yes NoRULE_WERKSInternal Location Name Yes NoUSEREXIT Priority of User Exit Yes NOVBTYP Sales Document Category No YesVKORG Sales Organization Yes NoWTWEG Distribution Channel Yes NoWKCOU Country Code Yes NoWKREG Region Yes NoWKUNNR Customer No.: Plant Yes NoWMENG Requested Qty Yes No

Once the parameters are chosen, planners will determine for each parameter ifthey want the sort to be in ascending or descending order.

Note: APO→ Multilevel Supply and Demand matching→ Planning→CTM Planning

Sort is only applied for the finished product demand, planned in the CTMrun. Dependent demands are not sorted as the sort sequence is propagatedtop-down.

CTM planning first sorts the demands according to the first criterion. Only thosedemands that were sorted by the first priority and showed the same value are thenalso sorted according to the second criterion, and so on.

Caution: If there is a tie between records and no other criteria is available,the system will use a GUID (random) logic.

Sort Criteria with Information About the Origin and Usability of Criteria



Crite-rion

FromR/3SalesOrders

ForDemandOrders

ForSalesOrders

For Depen-dent Re-quirements

Used asDescriptiveCharacteristics

ANTLF Yes No Yes No NoATP-CAT

No Yes Yes Yes No

BMENG No Yes Yes Yes NoCNF-PART

Yes No Yes No No

CT-MQTY

No Yes Yes Yes No

DELNR Yes No Yes No NoDELPS Yes No Yes No NoERTMS Yes No Yes No NoGMENG No Yes Yes Yes NoGRKOR Yes No Yes No NoKUNNR Yes No Yes No YesLFTMS Yes No Yes No NoLIF-PRIO

Yes No Yes No No

LO-CONO

No Yes Yes Yes No

LOCPRIONo Yes Yes Yes NoMATNR No Yes Yes Yes NoMAT-PRIO

No Yes Yes Yes No

MBDAT No Yes Yes Yes NoMRANK No Yes Yes Yes NoORD-PRIO

No No No Yes No

PSTYV Yes No Yes No YesUSEREXITNo Yes Yes Yes NoVBTYP Yes No Yes No YesWENG No Yes Yes Yes No



MATPRIOThe field MATPRIO (Product Priority) on the SNP 2 tab of the product master,only allows values up to 255. Over that and you will be given a hard error. Youcan specify the priority in values from 0 to 255. The value 1 stands for the highestpriority, whereas the value 255 is the lowest priority you can assign.

Note: If you enter the value 0 or no value, the system equates this withpriority 256.

Figure 148: MATPRIO Limitations

To compensate for this limitation, the time-dependent field MRANK (SNP 2 tab)in the Product Master is made available. This field is 5 characters, thus giving ahigher limit.

Sort ProfileDepending on the level of skill of the planners utilizing CTM, you may want tostandardize the sort process. This will ensure consistency every time you executethe CTM profile.

You can define the criteria and the sort sequence in a sort profile in CTMCustomizing and save the profile under a name. Specify this sort profile in theCTM profile. You can maintain a sort profile in Customizing under AdvancedPlanning and Optimization→ Supply Chain Planning→ Multilevel Supply &Demand Matching (SDM)→ Capable-to-Match (CTM)→ Demand Prioritization→ Define Sort Profile.



Figure 149: Sort Profile for Demand Prioritization

Once the sort profile is defined in customizing, planners can apply the profile inthe CTM profile in the Demand tab.

Special SortingIn defining your sort profile, certain criteria will not adhere to ascending anddescending logic properly. Criteria like ATPCAT, Locno/Kunnr, VBTYP, typicallywill require customer logic, since each planner may have a different goal.



Figure 150: Special Sort Sequence

In customizing IMG→ APO→ Supply Chain Planning→ MultlLevel Supply &Demand Matching→ CTM→ Demand Prioritization→ Define Special Sorting

In this step, you maintain a particular sorting for the special sorting in the sortprofile. Sorting ensures that order items are arranged in a processing sequence forprioritizing demand (priority assignment).

Example: You define a special sorting for the criterion 'sales document category'in the sort profile:

Item Sales document category1 Order2 Quotation3 Query

Special sorting is limited to the following Parameters:

FieldName

Short Description

ATPCAT Category of Stock/Receipt/Requirement/ForecastVBTYP Sales Document CategoryPSTYV Sales Document Item CategoryKUNNR Location (Customer number - Sold-To Party)



FieldName

Short Description

MATNR Product NumberLOCNO Location (Source Location)GRKOR Delivery Group (Correlation Group)

Order TypeCustomer Type

The transaction for special sorting does not allow users to create multiple entries,which implies you only have one set of sequences to use per system. However,by using a sort/special sort variant, planners can apply different criteria to eachplanning run. If no sort variant is identified then, it will use the default value fromcustomizing. The sort variant is maintained in customizingIMG→ APO→ SupplyChain Planning→ MultlLevel Supply & Demand Matching→ CTM→ DemandPrioritization→ Define Variants of Special Sorting.

Note: The Sort Variant will override the default setting in customizing.

Caution: If using the CTM prioritization sequence criteria and a sortvariant, when selecting the criteria and then Display Special Sorting, thesort variant does not appear - only the default values. However, the sortvariant will work when executing the simulation.

CTM Demand AttributesIn the process of prioritizing the demands, CTM can take additional criteria intoaccount.



Figure 151: CTM Demand Attributes

These Different criteria will allow planners to see how the CTM engine willmanage each individual requirement. Each individual requirement could have adifferent constraint based on pegging type (F/D), the Category, and whether ATPrules or product substitution is relevant. These attributes, along with the sortcriteria, will play a critical part of instructing the CTM engine on how to solvethe particular problem.

In customizing, a company can set generic rules on how it wishes to handledemand that can not be covered in a timely manner (late demand). In addition,there are strategies to also control early fulfillment.

While these will be discussed in another lesson, the parameters are visible withinthe demand attributes. This can help planners to debug or reverse engineerthe planning results. Customizing Menu Path: IMG→ APO→ Supply ChainPlanning→ MultiLevel Supply & Demand Matching→ CTM→ Global Valuesand Defaults , Demand-Dependent Constraints tab

Demand Dependent ConstraintsIn addition to control parameters and sort criteria like Customer, Delivery Priority,and general defaults for earliness and lateness, CTM also allows you to use thisinformation on a more advanced level in a conditional format.



Figure 152: Demand Dependent Constraints - Calculation Profile

By using other ATP tools like GATP, CTM can use demand conditions (DemandOrders/ Sales Orders/ Dependent Demand), and using the condition technique,take demand related data and apply new rules to earliness and lateness. This canallow you to treat sale orders differently than forecast requirements, or treat a salesorder for customer A differently than customer B in respect to earliness or lateness.

This functionality will be covered in more detail in another lesson, but theparameters are visible from the demand list.

Prioritization Criteria USEREXITInstead of entering a sort criterion, you can also call a user exit on each sortinglevel. You can use the user exit, for example, to evaluate combinations of criteria.



Figure 153: Demand Prioritization - USEREXIT

This parameter is intended to apply the sort criteria to each block of demand.From the Graphic Above, the system first sorts by material availability date,which creates two blocks

For very specific or detailed sorts, use the criteria USEREXIT. A more indirectapproach can be managed by using the user exit APOB020. This happens after allthe demands have been prioritized by the CTM criteria.

Example: In the figure above, after the list has been sorted by MBDAT, you canuse an �explicit� user exit, and sort within the blocks by date. After the third sortis done, ATPCAT, and other Explicit USEREXIT is executed by with the ATPCategories of each block. Then, after the MATPRIO sort is complete, using theuser exit, APOB020, you can sort the entire list.

By applying the user exit EXIT_/SAPAPO/SAPLBOP_SORT_020 of theenhancement APOBO020 (Include ZXBOPUSERU01), you can change thebehavior of demand prioritization in CTM.

Parameter CT_LIST is filled with a demand table of the structure:

DATA: BEGIN OF CT_LIST OCCURS 0,

demidold TYPE /sapapo/ctmobjid,

sortstr(35) TYPE c.

INCLUDE STRUCTURE /sapapo/ctm_demand.

DATA: END OF CT_LIST.

It is not necessary to sort CT_LIST. Instead the field CT_LIST-DEMID shouldbe filled with values, by which the table will be sorted later (ascending) outsidethe user exit.



In CTM, the criterion USEREXIT can be set for more than one level of the sortingprofile. Parameter IF_SORTLEVEL contains the actual calling level. Sorting for agiven level (that is, setting of CT_LIST-DEMID) has to be done in the user exitfor the whole table. Outside the user exit, it is guaranteed that the sorting takeseffect only for the actual calling level.

Additionally (whether the criterion USEREXIT is set in the sorting profile ornot), the user exit is called at the very end of the prioritization procedure withIF_SORTLEVEL = 0. Any sorting done here is final and overwrites all sortingsdone on the levels of the sorting profile.

Note: For sample code, see Transaction SMOD, enhancementAPOBO020.

Demand Prioritization - PRIOBYSHIPDATEIn demand prioritization, we normally use the demand due date if the criteriondate is chosen. With this planning parameter, it is possible to use a modifieddemand date.

Figure 154: Demand Prioritization - PRIOBYSHIPDATE

In the above example, you have a situation that demand at location D1 isplanned before D2 if using MBDAT as the prioritization criterion. With thePRIOBYSHIPDATE parameter, it is possible to use a modified demand date. TheCTM Variable Parameter PRIOBYSHIPDATE can be used to prioritize demandsbased on the dependent requirement date at the plant, taking into consideration thetransport duration from each of the locations.



The transportation duration for all transportation lanes ending at the demandlocation is subtracted from the initial demand due date. The prioritization is thenapplied for the modified date. With this, it is possible to take into account also thetransportation lead time during demand prioritization. During the CTM planningrun, the initial demand date is used again for scheduling.

Note: This parameter was introduced to solve a special customerrequirement. The application of this parameter depends on the specificscenario. In the first value field you have to set a "X" to activate theplanning parameter.

Value1 = X : The parameter is enabled and is applied to the transport lanes forwhich quota exists (Quota > 0).

Value1 = X , Value2 = X: The parameter is enabled and is applied to all thetransport lanes.





Exercise 15: CTM Demand Prioritization

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate Sort Sequences� Demonstrate Sort Profiles� Apply Special Sorts� Apply Sort Variants

Business ExampleYour business unit plans to use CTM in several situations where demand is greaterthan supply. To make effective use of CTM in these situations, your planners mustbe able to determine which demands have a higher priority over others. In thisexercise, you will learn how to use sort profiles and variants to customize yourprioritization parameters from one situation to another.

Task 1: CTM Sort SequenceYour planners want the ability to change the sort sequence on the fly. To dothis, you must determine the sort sequence specifically for each CTM profileyou intend to use. In a previous exercise, you released a forecast for the productT-F2##. In addition, there were several sales orders on different dates for differentpumps. Use demand prioritization functionality in CTM to organize in whichorder you want CTM to sort.

1. Change your CTM profile GR##_3, so that it performs detailed planningand execute a demand simulation.

2. How did CTM sort the requirements? Why?

3. Update the CTM profile GR##_3 so that Location Priority (ascending order)is included with that of Material Availability Date. Simulate the DemandPrioritization.





5. Update the CTM profile GR##_3 so that demand is sorted by LocationPriority first, then by Material Availability Date. Simulate the DemandPrioritization.


7. Update the product master for T-F2##/1000 and give it a priority (SNP2)of 2.



10. Update the CTM profile GR##_3 so that demand is sorted by ProductPriority first, then with Material Availability Date. Simulate the DemandPrioritization.


12. Update the product master for T-F2##/1000 and give it a time dependentlocation priority (SNP2) of 2 for the next months, and then change it to 3up to the end of next year.

13. Update the product master for T-F2##/2400 and give it a time dependentlocation priority (SNP2) of 3 for the next four months and then change it to 1up to the end of next year.





15. Return to the CTM profile GR##_3 and simulate the Demand Prioritizationagain.

16. How did CTM sort the requirements? Why

Task 2: Sort ProfilesIn your PC business, you always find yourself high in demand and low on supply.To inject some consistency into the business, you want the planners to usepredetermined �standard� sequence for planning. In a previous task, plannerscould change the sequence randomly. In this case, you want to standardize theprocess for the background jobs.

1. Create a sort profileGR##_SP1, that will sort first by Receipts/Requirementsquantity and then Material Availability Date.

2. Return to your CTM Profile GR##_3, and use the new sort profile to drivedemand prioritization. Simulate the demand prioritization.

3. What was the result?

Task 3: Special SortingDuring certain times of the year your pump business requires a more detailed,standard sort process in which you want to use attributes like customer number,requirement type, and quantities to determine the order of priority. Set up a specialsort process that will allow your planners to determine the sort sequences usingorder-specific attributes.

1. Create a Variant GR##_SSV (Group 02 Special Sort Variant) to supportspecial sorting for specific CM profiles.




It must sort Order Categories: Deliveries, Sales Orders, Quotations,Inquiries, Forecasts

Customers: 0000001321, 0000001032, 0000001000, 00000010320

2. Update your CTM Profile GR##_3, so that it will use the sort variantGR##_SSV. In addition, you need to change the prioritization sequence sothat Category of Stock/Receipt/Requirement/Forecast is used first, Customerlocations second, and Material Availability Date third. Save and simulatethe demand.

3. What is the result of the new sort?

Task 4: Aggregated Demand PrioritizationIn the last tasks, you did demand prioritization for each requirement which couldbe expected for a short term plan. Now, you need to see how demand prioritizationwill work with Aggregated Planning.

1. Change your CTM profileGR##_3, so that it aggregates time based planningfor your ATP Categories BK, BL, BM, and FA.

2. Using your CTM Profile GR##_3, change the settings so that it willuse the sort variant GR##_SSV. Currently, the sort is set for Categoryof Stock/Receipt/Requirement/Forecast is used first, Customer locationssecond, and Material Availability Date third.

Execute a Demand Prioritization Simulation

3. What was the result of the sort?


Note: Delete the time dependent parameters entered earlier.






7. Using your CTM Profile GR##_3, it should be so that it will use thesort variant GR##_SSV. Currently, the sort is set for Category ofStock/Receipt/Requirement/Forecast is used first, Customer locationssecond, and Material Availability Date third.

Add MATPRIO (Ascending) as the fourth option. Execute a DemandPrioritization Simulation

Save the update and execute a Demand Simulation.


Task 5: ** Required Clean Up **Clean up the existing scenario so you can continue to use the T-F products

1. Set your CTM profile GR##_3 so that it will delete only the receipts. Saveand execute a planning run.

2. To clean up the planning runs and product view, adjust (delete) all FCreqsfor Planning Version 000 your product T-F2## at all locations from nowup to the end of next year



Solution 15: CTM Demand PrioritizationTask 1: CTM Sort SequenceYour planners want the ability to change the sort sequence on the fly. To dothis, you must determine the sort sequence specifically for each CTM profileyou intend to use. In a previous exercise, you released a forecast for the productT-F2##. In addition, there were several sales orders on different dates for differentpumps. Use demand prioritization functionality in CTM to organize in whichorder you want CTM to sort.

1. Change your CTM profile GR##_3, so that it performs detailed planningand execute a demand simulation.


b) Deselect the indicator for Activate Time-Based Aggregation.

c) Deselect the indicator for Aggregate Demands and Receipts fromDifferent Categories if necessary.

d) Remove any ATP Categories in the Aggregation table.

e) Select Save.

f) Select the Demand tab and select Simulate Demand Prioritization.


Answer: First by earliest requirement date, then by location (GUID) 1000,2400, 2500.On the demand tab, the prioritization sequence was MBDAT (availabilitydate), and it was done in ascending order.Note: by using transaction code se17, and viewing table /sapapo/locmap youcan see the GUID or location IDs for 1000, 2400, and 2500. If you put thesein a spreadsheet and sorted them, they would list: 1000, 2400, 2500

3. Update the CTM profile GR##_3 so that Location Priority (ascending order)is included with that of Material Availability Date. Simulate the DemandPrioritization.


b) The Prioritization Sequence table, enter LOCPRIO (ATP,BOP:Location Priority).

c) Select Ascending order.

d) Select Save.

e) Select Simulate Demand Prioritization.





Answer: First by earliest requirement date, then by location 2400, 2500, andthen 1000. In the Location master General tab, the field location priorityallows planners to distinguish which locations have a higher priority andneed to be planned first. Location 2400 has priority 1, location 2500 haspriority 2, and location 1000 has no priority.If you do not enter a value, the system automatically assigns the value 0 or255, giving the location the lowest priority. This is the case with location1000.

5. Update the CTM profile GR##_3 so that demand is sorted by LocationPriority first, then by Material Availability Date. Simulate the DemandPrioritization.


b) In the Prioritization Sequence table, select MBDAT - MaterialAvailability Date and select Delete Row.

c) In the row beneath LOCPRIO, enterMBDAT - Material AvailabilityDate and specify Ascending order.

d) Select Save.



Answer: First by Location 2400, then by date, then by location 2500, thenby Date, then Location 1000.



b) Enter product T-F2## and location 1000 and select Change.

c) In the SNP 2 tab, enter a priority of 2.

d) Select Save.





d) Select Save.








d) Select Save.

10. Update the CTM profile GR##_3 so that demand is sorted by ProductPriority first, then with Material Availability Date. Simulate the DemandPrioritization.

a) Select the Demands Tab.

b) In the Prioritization Sequence table, selectLOCPRIO (ATP, BOP:Location Priority) and select Delete Row.

c) Select the rowMBDAT - Material Availability Date and selectInsert Row.

d) AddMATPRIO - Priority of Product and specify Ascending order.

e) Select Save.

f) Exit the CTM planning transaction, and return (reloads master data).

g) Select Simulate Demand Prioritization.


Answer: First by Product (T-F2##)/Location 2500, then by date, then bylocation 1000, then by date, then Location 2400, then by date. Notice at thebottom you see T-F3## and T-F4## since they have no MATPRIO value.

12. Update the product master for T-F2##/1000 and give it a time dependentlocation priority (SNP2) of 2 for the next months, and then change it to 3up to the end of next year.



c) In the SNP 2 tab, select Time Dependent Prod. Priority.

d) Enter a date that is at the end of the current month plus 3 and entera priority of 2.

e) Enter a date that is at the end of next year and enter a priority of 3.

f) Select Cont..

g) Select Save.







c) In the SNP 2 tab, select Time Dependent Prod. Priority.

d) Enter a date that is at the end of the current month plus of 3 and entera priority of 3.

e) Enter a date that is the end of next year and enter a priority of 1.

f) Select Cont..

g) Select Save.



b) Enter product T-F2## and location 2500 and select Change

c) In the SNP 2 tab, select Time Dependent Prod. Priority

d) Enter a date that is at the end of the current month plus of 3 and entera priority of 1.

e) Enter a date that is the end of next year and enter a priority of 3.

f) Select Cont..

g) Select Save.

15. Return to the CTM profile GR##_3 and simulate the Demand Prioritizationagain.

a) Select the Demands Tab.

b) Exit the CTM planning transaction, and return (reloads master data).

c) Select Simulate Demand Prioritization.

16. How did CTM sort the requirements? Why

Answer: The engine sorted first by Location (2500), for approximately thefirst month, then the priority switched (2400) and at the cut off date (onemonth into the planning horizon) the priorities change.




Task 2: Sort ProfilesIn your PC business, you always find yourself high in demand and low on supply.To inject some consistency into the business, you want the planners to usepredetermined �standard� sequence for planning. In a previous task, plannerscould change the sequence randomly. In this case, you want to standardize theprocess for the background jobs.

1. Create a sort profileGR##_SP1, that will sort first by Receipts/Requirementsquantity and then Material Availability Date.

a) APO→ Multilevel Supply & Demand Matching→ Environment→Current Settings→ Demand Prioritization→ Sort Profile

b) Select New Entries.

c) Enter GR##_SP1 and press ENTER.

d) Select the entry GR##_SP1 and double-click on the criteria folderin the left window.

e) Select New Entries.

f) Enter GMENG and press ENTER.

g) EnterMBDAT and press ENTER. All sort criteria should be ascending.

h) Select Save.

2. Return to your CTM Profile GR##_3, and use the new sort profile to drivedemand prioritization. Simulate the demand prioritization.


b) Select Sequence from Customizing.

c) Enter Sort Profile GR##_SP1.

d) Select Save.


3. What was the result?

Answer: The CTM engine prioritized all the smallest requirements first and,when in ascending order, to the larger orders.Note: not always best practice!




Task 3: Special SortingDuring certain times of the year your pump business requires a more detailed,standard sort process in which you want to use attributes like customer number,requirement type, and quantities to determine the order of priority. Set up a specialsort process that will allow your planners to determine the sort sequences usingorder-specific attributes.

1. Create a Variant GR##_SSV (Group 02 Special Sort Variant) to supportspecial sorting for specific CM profiles.

It must sort Order Categories: Deliveries, Sales Orders, Quotations,Inquiries, Forecasts

Customers: 0000001321, 0000001032, 0000001000, 00000010320

a) APO→ Multilevel Supply & Demand Matching→ Environment→Current Settings→ Demand Prioritization→ Variant-DependentSpecial Sorting

b) Select New Entries.

c) Enter GR##_SSV, and press ENTER.

d) Enter description Group ## Special Sort Variant.

e) Select the entry GR##_SSV and double-click on the Category folderin the left window.

f) Select New Entries.

g) Enter Sort Item 1 and Category BM

h) Enter Sort Item 2 and Category BL

i) Enter Sort Item 3 and Category BK

j) Enter Sort Item 4 and Category FA

k) Save.

l) Double-click on the Customer folder in the left window.

m) Select New Entries.

n) Enter Sort Item 1 and Location 0000001321

o) Enter Sort Item 2 and Location 0000001032

p) Enter Sort Item 3 and Location 0000001000

q) Enter Sort Item 4 and Location 0000001320

r) Save.




2. Update your CTM Profile GR##_3, so that it will use the sort variantGR##_SSV. In addition, you need to change the prioritization sequence sothat Category of Stock/Receipt/Requirement/Forecast is used first, Customerlocations second, and Material Availability Date third. Save and simulatethe demand.


b) Select Define Sequence For This Profile.

c) Enter Sort Variant GR##_SSV.

d) In the Prioritization Sequence table, select all rows and selectDelete Row.

e) Add ATPCAT - Category of Stock/Receipt/Requirement/Forecastand specify Special Sorting order.

f) Add KUNNR - Location (Sold-to) and specify Special Sorting order.

g) AddMBDAT - Material Availability Date and specify Ascendingorder.

h) Select Save.

i) Select Simulate Demand Prioritization.




3. What is the result of the new sort?

Answer: The sort is designed to filter by ATP Category, Customer number,and Date.The first three requirements are for the T-F2##, T-F3##, and T-F4##. If youlook at the requirement info, you will see they all belong to the same salesorder, but more importantly, customer 1321, which has the highest priority.The fourth, fifth, and sixth requirements are for the T-F2##, T-F3##, andT-F4##. If you look at the requirement info, you will see they all belong tothe same sales order but more importantly, customer 1032, which has thesecond highest priority.The seventh requirement is for the T-F2## but it has ATP Category BK -Inquiry, but more importantly, it has customer 1032.Requirements 8 - 10 are for the T-F2##, T-F3##, and T-F4##. If you look atthe requirement info, you will see they all belong to the same sales order butmore importantly, customer 1000, which has the third highest priority.The eleventh requirement is for the T-F2## but it has ATP Category BL-Quotation, but more importantly, it has customer 1000. The list has sorted bycustomer first then by order type.Requirements 12 - 15 are for the T-F2##, T-F3##, and T-F4##. If you look atthe requirement info, you will see they all belong to the same sales order butmore importantly, customer 1320, which has the lowest priority.The remainder of the requirements are for forecasts. In this case, forecast isthe lowest priority order type, there is no customer. However, the balanceof the requirements are sorted by delivery date.

Task 4: Aggregated Demand PrioritizationIn the last tasks, you did demand prioritization for each requirement which couldbe expected for a short term plan. Now, you need to see how demand prioritizationwill work with Aggregated Planning.

1. Change your CTM profile GR##_3, so that it aggregates time based planningfor your ATP Categories BK, BL, BM, and FA.


b) Select the indicator for Activate Time-Based Aggregation.

c) Add ATP Categories BK, BL, BM, and FA in the aggregation table.

d) Select Save.

2. Using your CTM Profile GR##_3, change the settings so that it willuse the sort variant GR##_SSV. Currently, the sort is set for Categoryof Stock/Receipt/Requirement/Forecast is used first, Customer locationssecond, and Material Availability Date third.




Execute a Demand Prioritization Simulation


b) Select Simulate Demand Prioritization.


Answer: That system has first sorted by ATP Category. That is evident inthat the BM items are listed first, then BL, then BK. Because the categoriesare aggregated, the demands cannot be sorted by KUNNR. Then the systemsorts by MBDAT.


Note: Delete the time dependent parameters entered earlier.




d) Select Time Dependent Prod. Priority.

e) Highlight all rows and select .

f) Select Save.





d) Select Save.




c) In the SNP 2 tab enter a priority of 4.

d) Select Save.

7. Using your CTM Profile GR##_3, it should be so that it will use thesort variant GR##_SSV. Currently, the sort is set for Category ofStock/Receipt/Requirement/Forecast is used first, Customer locationssecond, and Material Availability Date third.




Add MATPRIO (Ascending) as the fourth option. Execute a DemandPrioritization Simulation

Save the update and execute a Demand Simulation.


b) AddMATPRIO - Priority of Product and specify Ascending order.

c) Select Save.

d) Select Simulate Demand Prioritization.


Answer: That system has first sorted by ATP Category. That is evident inthat the BM items are listed first, then BL, then BK. Because the categoriesare aggregated the demands cannot be sorted by KUNNR. Then the systemsorts by MBDAT. Then since there were several materials on the same day,the list was sorted by material priority: 1) T-F4##, 2) T-F3##, 3) T-F2##

Task 5: ** Required Clean Up **Clean up the existing scenario so you can continue to use the T-F products

1. Set your CTM profile GR##_3 so that it will delete only the receipts. Saveand execute a planning run.

a) In CTM profile GR##_3, select the Settings tab.

b) In the Basic Settings tab, select End Planning Run after Orderselection.

c) Save.

d) Press F8 to execute the planning run (this will delete the receipts forthe long term plan).

2. To clean up the planning runs and product view, adjust (delete) all FCreqsfor Planning Version 000 your product T-F2## at all locations from nowup to the end of next year

a) APO→ Production Planning→ Environment→ Adjustment ofForecast

b) Enter Planning Version 000.

c) Enter Product T-F2##.

d) Enter requirement dates of today until the end of next year.

e) Select Delete Orders.

f) Remove the Test Mode indicator.

g) Select Execute.



Lesson Summary

You should now be able to:� Demonstrate Simple Prioritization� Execute Complex Prioritization using sort lists

Related InformationSAP Consulting Notes

� 450794 - CTM: User Exit EXIT_/SAPAPO/SAPLBOP_SORT_020� 619050 - PRIOBYSHIPDATE parameter does not prioritize demands� 1022484 - Demand prioritization by MBDAT


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Demonstrate Simple Prioritization� Execute Complex Prioritization using sort lists


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 8CTM Supply Categorization/Search

Strategy

Unit Overview


� Explain the general concept of supply categorization� Define supply categorization by using supply limits� Demonstrate supply categorization using ATP categories� Explain how search strategies can enhance your CTM solutions

Unit ContentsLesson: Supply Categorization .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .434

Exercise 16: Supply Categorization in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . .447


Unit 8: CTM Supply Categorization/Search Strategy SCM235

Lesson: Supply Categorization

Lesson OverviewIn some cases, you want to be able to control the type of receipts CTM can use forcoverage prior to production or after product capabilities are considered. In theCTM engine, planners can devise ways of categorizing inventory, receipts, andproduction capacities to be considered at different times in the CTM run. Whilesupply categorization is not required in CTM, we will explore its usefulness inseveral situations.


� Explain the general concept of supply categorization� Define supply categorization by using supply limits� Demonstrate supply categorization using ATP categories� Explain how search strategies can enhance your CTM solutions

Business ExampleYour company is planning to use CTM in several situations where demandprioritization is critical. In some cases, you want to be able to control what type ofreceipts CTM can use for coverage prior to production or after product capabilitiesare considered. While supply categorization is not required in CTM, we willexplore its usefulness in several situations.


SCM235 Lesson: Supply Categorization

Where Supply Categorization Fits in the CTM Process

Figure 155: Supply Categorization in the CTM Process

Once the CTM engine is engaged, a series of steps are put into action. During thethird step of the CTM engine, the system aggregates demand if necessary. It thenprioritizes the demand which is a requirement, and as the last part of the third stepsupply categorization can be performed.



Supply categorization can be used to modify the CTM search strategy. Bydefault, supplies are consumed simply in the order of their availability date. Thissequence can be changed so that they are consumed according to the order ofsupply categories defined in the search strategy. To make use of this function, thefollowing master data needs to be set up:

� Search Strategy: It is used to define in which sequence the different supplycategories are used to fulfil demands.

� Supply Categories: This is just to define types of categories or levels ofdifferent supplies. In which sequence they are used and therefore which oneis used first, is defined in the search strategy.

� Supply Categorization Profile: It is used to define the mapping of suppliesfrom LC into supply categories by two different criteria: Firstly, by ATPcategories. One or more ATP categories are assigned to a supply category.As a result, all supplies from LC with these ATP categories acquire the samesupply category. Secondly, by supply limits: This is used to define thequantity ranges for the different supply categories. For example, if limits of0 - 100 and 100 - 200 are maintained and categories A and B are associatedto these limits, the supplies of 100 and 50 would be categorized with supply100 to A and with supply 50 to B.

It is important to understand that supply categorization is OPTIONAL, during theCTM Planning process.

Figure 156: Search Strategy Overview



During the matching process of demand to supply, the CTM engine will follow avery distinct process as to how it will match supply to demand. Typically, CTMwill search for stock and then perform source determination. This may take theform of a stock transfer, planned order, or purchase request.

In certain situations, companies may want to influence how this is done bybreaking firmed and fixed receipts into different supply categories.

Concept of Supply CategorizationDuring the initial steps of the CTM engine, order selection will take place. Thiswill select both the relevant requirements and supply elements that will not bedeleted, but used in planning. Supplies are normally consumed in order of theiravailability date. However, with the use of supply categorization, planners cancontrol the use of supplies in the planning run.

Figure 157: Supply Categorization

The first step in the categorization process is to create supply categories. Forexample, Excess, Normal, and Target can be defined in customizing. Applicationmenu path:APO→ Multilevel Supply and Demand Matching→ Environment→Current Settings→ Supply Categorization→ Supply Categories or Customizingmenu path: Reference IMG→ APO→ Supply Chain Planning→ MultilevelSupply & Demand Matching→ Capable-to-Match→ Define Supply Categoriesor via the CTM profile Edit→ Supply Categories.

Existing supplies are then categorized by supply limits (quantities) or ATPcategory/category group.



During the planning run, supplies that are selected for CTM planning will beassigned to the correct CTM category. CTM Category 00 is the default categoryand is assigned to all supplies by default. CTM category 00, is also used for alldemands before using source determination and creating new orders. Any ATPcategories not included, will automatically fall into category 00. Any new receiptswith surpluses will, by default, be assigned to this category. This can be changedin the supply categorization profile under Category for New Receipts.

Note: Supply categorization is applied locally for each product locationcombination. The search strategy, will then be applied locally for eachlocation product.

Application of Supply CategoriesWithin the CTM Profile, planners can assign the Supply Categorization Profile inthe Supplies tab. This will effectively allow the CTM engine to group the receiptsfrom either the supply limits or the ATP categories.

Figure 158: CTM Categorized Supplies

Within the CTM profile, planners will have the opportunity to simulate the supplycategorization. This will help trouble shoot the assignment of the supply limits orATP Categories to the CTM supply categories.



Supply Categorization Using Supply LimitsSupply limits are the original form of supply categorization. These limits arebased on a fixed lower and upper quantity limit. Limits will be interpreted in thebase unit or measure of the location product.

Figure 159: Supply Categorization Using Supply Limits

Supply limits can be maintained via several menu paths: Application menupath:APO→Multilevel Supply and Demand Matching→ Environment→ CurrentSettings→ Supply Categorization→ Supply Limits or via the CTM profile Edit→Supply Limits. Once supply limits are created, they must be assigned to a SupplyCategorization Profile, which will then be assigned to the CTM Profile (Supplies)

For example, assume we have the same situation as mentioned before. If limitsof 0 - 100 and 100 � 200 are maintained and categories A and B are associatedto these limits, the supplies of 100 and 50 would be categorized with supply 100to A and with supply 50 to B.

In the Category profile, if the setting �split supplies� is not set, then only thecomplete quantities of orders are assigned or grouped to categories. If the setting isset, the quantities of orders are split exactly and assigned to categories dependingon the supply limits. The stock quantity available on the demand�s date is alwaysused to determine the available categories depending on the limits. During thesupply categorization for each location product, the CTM engine will cumulate allthe relevant supplies into the first category on an order by order basis. When oneof the orders exceeds the limit, the engine will assign all subsequent receipts to thenext category. For example, using the example above, assume we have stock of 10pcs, two planned orders one for 91 pcs and one for 101 pcs.



ATP Category Qty Cumulative Qty CategoryCC: Stock 10 10 AAG: Plnd Ord 91 101 AAG: Plnd Ord 101 202 B

Even though the second element (Plnd Order) puts the cumulative quantity overthe limit (100), the system assigns it to Category A since it cannot split theQuantity. Even though the third element puts the cumulative total over the secondlimit (200), the system still assigns the receipt to Category B

When setting �split supplies�, the orders are split according to the supply limitsand the exact split quantities are assigned to the categories. This would look likeas in the table below:

ATP Category Qty Cumulative Qty CategoryCC: Stock 10 10 AAG: Plnd Ord 90 100 AAG: Plnd Ord 1 101 BAG: Plnd Ord 99 200 BAG: Plnd Ord 2 202 C

Supply Categorization Using ATP CategoriesFor many companies, trying to categorize their supplies by quantity limits doesnot give them enough control over the solution. Therefore, using ATP categoriesand/or groups could allow organizations to be more selective about how theywish to resource certain requirements.

As part of the integration setup with ECC, SAP has delivered many ATP categoriesand linked them with the ECC MRP elements. These ATP categories are verydetailed supply and demand elements. For the purposes of planning in SNP, ATPcategory groups have been created to group certain receipts and requirementstogether to allow rough cut planning.

The SAP delivered ATP categories can be viewed in configuration using thefollowing customizing menu path: SAP Reference IMG→ APO→ Global ATP→ General Settings→ Maintain Category. To view the delivered ATP categorygroups or to create your own, use the following customizing menu path: SAPReference IMG→ APO→ Supply Chain Planning→ Supply Network Planning→ Basic Settings→ Maintain Category Groups.

In CTM, planners can use either ATP categories or ATP category groups to assignreceipts to the appropriate CTM supply categories.



Figure 160: Supply Categorization with ATP Categories

Within the supply categorization profile, planners can assign ATP categories andgroups to CTM supply categories. In addition, in the General Settings section ofthe profile, planners can define which category unassigned ATP categories willfall into.

CTM Search StrategiesThe CTM search strategy determines, in which sequence the CTM engine evaluatesthe different possibilities to satisfy a demand. The following �procurementalternatives� exist in CTM: consumption of existing supplies, creation of a plannedorder, creation of a stock transfer order, creation of a substitution order, creation ofa purchase requisition. Some parts of the search strategy are hard-coded and somecan be determined by the user. The user can assign existing supplies to differentCTM supply categories and define the sequence in which the CTM engine shouldconsume supplies of the different CTM supply categories.

Note: FFF(Fit/Form/Function) classes will be applied together with theother replenishment alternatives (production, transportation).

This is indicated in the CTM search strategy by the entry �source of supplydetermination�. The following table shows a search strategy with 3 supplycategories:



Sequence Category Text1 03 Supply Category 03 (Excess)2 02 Supply Category 02 (Target)3 ** Source of Supply Determination4 01 Supply Category 01 (Normal)

In this example, CTM first tries to satisfy a demand by a supply of the sameproduct which was assigned to supply category 01 by CTM supply categorization.If the demand cannot be fulfilled by such a supply, supplies of category 02 aretaken into account. If the demand is still not satisfied completely, a source ofsupply determination takes place. Depending on the procurement type, CTMtries to create a stock transfer order or an in-house production (if no FFF classexists). For the dependent demands, the search strategy is applied again. Only ifthe demand cannot be satisfied by production/transportation, supplies of category03 are used. The entry �Source of supply determination� can not be deleted by thecustomer. Only the sequence is variable.

Figure 161: Sequence of Supply Consumption

The search strategy is oriented firstly to an internal system sequence that youcannot influence, and secondly to a sequence that you define. The systemalways uses the search strategy locally for a location product. When covering arequirement for a specific location product, the receipts and supplies for otherlocation products are irrelevant. The system also uses the search strategy locallyfor a location product when covering a dependent requirement.



If you do not enter a search strategy, or enter a strategy where you have not enteredany supply categories, the system uses the internal search strategy as follows:

Se-quence

Cat-e-gory

System Behavior

1 00 Consume receipts and supplies from the predefined standardcategory

2 00 Replace receipts and supplies from standard category 00.3 Determine source of supply and create purchase requisition

To do this, the system first searches for receipts and supplies from the predefinedstandard category 00. During supply categorization, the system assigned allreceipts and supplies to standard category 00, which you had not previouslyassigned to a supply category. If no receipt exists from the standard category 00for the (original) location product, the system evaluates existing rules. The systemcan only substitute receipts from standard category 00.

If the system does not find any receipts from standard category 00, or if thereceipt found cannot be used in time to cover the requirement, CTM planninguses the procurement type of the location product to perform source of supplydetermination. If there are no sources of supply for the location product, in thecase of external procurement, CTM creates a purchase requisition.

In the search strategy, you can define the sequence in which CTM planning shoulduse receipts and supplies to cover requirements. You must have defined supplycategories that you then enter in the search strategy in your desired sequence.

Note: CTM planning can only use receipts and supplies from supplycategories that are contained in the search strategy. The system can alwaysuse receipts and supplies from standard category 00.

Example of user defined Search Strategy:

Se-quence

Cat-e-gory

System Behavior

1 00 Consume receipts and supplies from the predefined standardcategory

2 01 Consume receipts and supplies from supply category 013 00 Replace receipts and supplies from standard category 00.



4 01 Substitute receipts and supplies from supply category 015 ** Determine source of supply and create purchase requisition6 02 Consume receipts and supplies from supply category 02

Note: If you use rules in CTM planning, the substitutions are madeimmediately, before sources of supply are determined. The systemprocesses receipts and supplies for the substitute product in the samesequence as the receipts and supplies of the original product, in otherwords, before planned orders or stock transfers are generated. In thecase of a down binning scenario, the system evaluates the substitutionstogether with the source of supply determination. This will be addressedin a separate lesson.

Hint: The system assigns receipts generated by the system duringplanning, but which are not totally used to immediately fulfill arequirement (for example, when using lot sizes or co-products), to asupply category. If you do not enter a supply category for these receipts,the system assigns the receipts to the standard category 00. The systemalso uses the search strategy accordingly for these receipts.

Figure 162: Multilevel Search Strategy



The CTM search strategy can be applied in a multilevel scenario if the masterdata exists to support it. Cross location searching is possible if first source failsto provide any solution. �**� is the CTM internal search sequence for sourcedetermination (TLane or PPM), and is included by default.

In the example above, 50 pcs of demand are being planned by the CTM engine.The search strategy will check �normal� supplies first, then execute sourcedetermination, then finally check �excess� inventory.

The engine will proceed through the following steps:

StepsSupplyCate-gory

Lo-ca-tion

Comment

1 C1 DC-2400

Check Receipts in category C1 checked at DC 2400. Noreceipts found.

2 ** DC-2400

Source determination is executed. Two TLanes exist.

3 C1 Plant1000

Due to higher priority in TLane, receipts in category C1checked at Plant 1000. No receipts found.

4 ** Plant1000

Source Determination executed at Plant 1000. PurchaseRequisition created. Cannot deliver on time.

5 C2 Plant1000

Check Receipts in category C2 checked at Plant 1000. Noreceipts found.

6 ** DC2400

Source determination is executed. One TLane exits, (2300)which has not been tested.

7 C1 Plant2300


8 ** Plant2300

Source Determination executed at Plant 2300. PurchaseRequisition created. Cannot deliver on time.

9 C2 Plant2300


10 C2 DC2400

Check Receipts in category C2 checked at DC 2400. Noreceipts found.





Exercise 16: Supply Categorization in CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how supply limits can be used in CTM for supply categorization� Demonstrate how ATP categories can be used in CTM for supply

categorization� Demonstrate search strategies in CTM

Business ExampleYour supply with production, planned receipts, and inventory are no match foryour demand. You want to be able to allocate your inventory, firmed receipts, andproduction capacities in such a way that you can maximize your customer servicelevel. You will explore using supply categorization as a means of allocating yourproduction capabilities in a shortage environment

Task 1: Reset Data SetTo understand how supply categorization works in CTM better, you must clean upyour plan. Execute a planning run to delete supplies and then adjust the dependentrequirements for the mid range plan.

1. In a separate session, execute a planning run with profile GR##_5, to deleteany receipts in the mid term.

2. Adjust the planned independent requirements in Planing Version 000 for themid term, starting eight weeks from now through to six months for yourproduct T-F2## at all locations.

Task 2: Categorization Using Supply LimitsYour system already has supply categories set up. You need to set up supplylimits for one of your materials to see if quantity based upper and lower limits canallow you to manage limited supply effectively. Test these limits in a simulationsituation.

1. Create supply limits G## (Group ## Supply Limits) for your productT-F2## at location 2400, that are valid from today until the end of next year.Create your limits as such:

Limit 1 = 50

Limit 2 = 100

Limit 3 = 150




Task 3: Categorization Using ATP CategoriesUse ATP categories and category groups to control your supply allocation at amore detailed level, using receipt elements instead of quantities.

1. Create three ATP category groups that you will want the CTM engine to useto allocate existing and planned receipts. Participant groups 1-10 will useY#A, Y#B, Y#C, Participant groups 11-20 will use Z#A, Z#B, Z#C. (#refers to your group number 1-9). A - Stocks, B - Confirmed Receipts, C -Requested Receipts.

2. Update your new ATP groups to contain the following ATP Categories:

A = CC, CD, CF

B = AA, AB, AC, AD, BE, BF, BI, EI

C = AG, AI, AJ, AK, AL, BH

Task 4: Categorization ProfilesTo use supply limits and ATP category groups efficiently, you need categorizationprofiles. Create two categorization profiles, one for supply limits and one for ATPcategories. These will be used in CTM profiles in later tasks.

1. Create a Categorization Profile GR##_SL (Group ## Supply Limits) thatwill assign your supply limits to existing supply categories in the followingmanner:

Stocks = 0 �> 1

Fixed Receipts = 1 �> 2

Firmed Receipts = 2 �> ....

2. Create a Categorization Profile GR##_ATP (Group ## ATP Categories) , that will assign the ATP category groups you created previously, in thefollowing manner:

Stocks

Fixed Receipts = Y/Z#B

Firmed Receipts = Y/Z#C

Task 5: Search StrategiesDefine search strategies that will allow CTM to analyze your stocks, requestedreceipts, and firmed receipts to try to improve your level of customer service.

1. Create a search strategy G##A (Group ## SL Search Strategy). Youwant to first look at 1) Firmed Receipts, 2) Fixed Receipts , 3) SourceDetermination, 4) Stocks.




2. Create search strategy G##B (Group ## ATP Search Strategy). In thissituation, you want to look at 1) Firmed Receipts , 2) Source Determination,3) Fixed Receipts 4) Stocks.

Task 6: Application of Search Strategies and SupplyLimitsYour division has products with seasonality. During the high peak periods, certainproducts have limited inventory and capacity. Therefore, you want the option ofparceling out the inventory and capacity in a controlled manner. Use the searchstrategy and the categorization profiles for supply limits you created previously, tomanage your demand.

1. In ECC, Create 25 pieces of stock for the T-F2## at location 2400, storagelocation 0001. Use movement type 501.

2. Update your CTM profile GR##_1, with search strategy G##A and yourcategorization profile GR##_SL. In addition, assure your Planning Mode isset to Replan All Orders, and your Deletion Mode is set to Delete OrdersThat Are Not Firm. Save your profile and execute a supply simulation.

3. What was the result of the supply simulation?

4. Why was only the T-F2## at location 2400 given category 01?

5. In the session with the Product View, enter a 10 FC req for the T-F2## atlocation 2400, with a date of three weeks from today.

6. Using your CTM profile GR##_1, execute a planning run.




7. Review the results in the product view. What was the result of the CTM?Explain.

8. In a separate session, execute a planning run with profile GR##_5, to deleteany receipts.

9. Create another 50 pieces of stock for the T-F2## at location 2400, storagelocation 0001. Use movement type 501.

10. Return to the session with the CTM profile. Execute a supply simulation.

11. What was the result related to T-F2## at location 2400?



14. Update your supply categorization profile GR##_SL, so the receipts can besplit, and broken into the correct categories.

If you used the delivered supply categorization profile SCM235_SL, reviewthe profile SCM235_SL2. Do not make any changes.

15. Return to the session with the CTM profile GR##_1, exit the profile andreturn to reset configuration. Execute a supply simulation.

If you used the delivered supply categorization profile SCM235_SL,change your profile GR##_1, and update the Categorization Profile toSCM235_SL2. Save the updates and simulate.







Task 7: Application of Search Strategies and ATPCategoriesAfter working with the supply limits, you would like more control over supplyrather than just quantities. Use the search strategy and the categorization profilesfor ATP categories you created previously, to manage your supplies with morecontrol.

1. Update your CTM profile GR##_1, with search strategy G##B and yourcategorization profile GR##_ATP. Save your profile and execute a supplysimulation.

Note: If using the delivered parameters, use search strategy G00B.





3. In the session with the Product View, what is the T-F2## at location 2400?


5. Review the results in the product view. What was the result of the CTM?


7. In ECC, create a stock transport order for T-F2## at location 2400 for 20 pcs,supplied from plant 2300.

Use Purchase Org 2400, Purchasing group 000

8. Return to the session with the CTM profile, execute a supply simulation.







12. In your CTM profile GR##_1, remove the categorization profile, and thesearch strategy and save the updates to your profile.



Solution 16: Supply Categorization in CTMTask 1: Reset Data SetTo understand how supply categorization works in CTM better, you must clean upyour plan. Execute a planning run to delete supplies and then adjust the dependentrequirements for the mid range plan.

1. In a separate session, execute a planning run with profile GR##_5, to deleteany receipts in the mid term.

a) Select the Planning Runtab.

b) Select Start Planning Engine.

2. Adjust the planned independent requirements in Planing Version 000 for themid term, starting eight weeks from now through to six months for yourproduct T-F2## at all locations.

a) Menu path: APO → Production Planning → Environment →Adjustment of Forecast

b) Enter Planning Version 000.

c) Enter Product T-F2##.

d) Select Delete Orders and All planning segments.

e) Deselect Test Mode.

f) Select Execute.

Task 2: Categorization Using Supply LimitsYour system already has supply categories set up. You need to set up supplylimits for one of your materials to see if quantity based upper and lower limits canallow you to manage limited supply effectively. Test these limits in a simulationsituation.

1. Create supply limits G## (Group ## Supply Limits) for your productT-F2## at location 2400, that are valid from today until the end of next year.Create your limits as such:

Limit 1 = 50

Limit 2 = 100




Limit 3 = 150

a) APO→ Multilevel Supply and Demand Matching→ Environment→ Current Settings→ Supply Categorization→ Supply Limits(/sapapo/CTM02)

b) Enter G##, and the description Group ## Supply Limits.

c) Enter Product T-F2## and Location 2400, with a Start Date of Todayand End Dateof the End of Next Year.

d) Enter Limit 1 = 50

Limit 2 = 100

Limit 3 =150

e) Select Save.

Task 3: Categorization Using ATP CategoriesUse ATP categories and category groups to control your supply allocation at amore detailed level, using receipt elements instead of quantities.

1. Create three ATP category groups that you will want the CTM engine to useto allocate existing and planned receipts. Participant groups 1-10 will useY#A, Y#B, Y#C, Participant groups 11-20 will use Z#A, Z#B, Z#C. (#refers to your group number 1-9). A - Stocks, B - Confirmed Receipts, C -Requested Receipts.

a) APO customizing menu path: SAP Reference IMG→ APO→ SupplyChain Planning→ Supply Network Planning (SNP)→ Basic Settings→ Maintain Category Groups

b) Select new entries.

c) Enter Y/Z#A and press ENTER; use description Stocks.

d) Enter Y/Z#B and press ENTER; use description Confirmed Receipts.

e) Enter Y/Z#C and press ENTER; use description Requested Receipts.

f) Select Save.

g) Do not leave this screen. Proceed immediately to the next step.

2. Update your new ATP groups to contain the following ATP Categories:

A = CC, CD, CF

B = AA, AB, AC, AD, BE, BF, BI, EI




C = AG, AI, AJ, AK, AL, BH

a) Select the ATP group Y/Z#A and double-click on the folder Categories.

b) Enter category group Y/Z#A and category CC.

c) Enter category group Y/Z#A and category CD.

d) Enter category group Y/Z#A and category CF.

e) Select Save.

f) Select Back twice.

g) Select the ATP group Y/Z#B and double-click on the folder Categories.

h) Enter category group Y/Z#B and category AA.

i) Enter category group Y/Z#B and category AB.

j) Enter category group Y/Z#B and category AC.

k) Enter category group Y/Z#B and category AD.

l) Enter category group Y/Z#B and category BE.

m) Enter category group Y/Z#B and category BF.

n) Enter category group Y/Z#B and category BI.

o) Enter category group Y/Z#B and category EI.

p) Select Back twice.

q) Select the ATP group Y/Z#C and double-click on the folder Categories.

r) Enter category group Y/Z#C and category AG.

s) Enter category group Y/Z#C and category AI.

t) Enter category group Y/Z#C and category AJ.

u) Enter category group Y/Z#C and category AK.

v) Enter category group Y/Z#C and category AL.

w) Enter category group Y/Z#C and category BH.

x) Select Save.




Task 4: Categorization ProfilesTo use supply limits and ATP category groups efficiently, you need categorizationprofiles. Create two categorization profiles, one for supply limits and one for ATPcategories. These will be used in CTM profiles in later tasks.

1. Create a Categorization Profile GR##_SL (Group ## Supply Limits) thatwill assign your supply limits to existing supply categories in the followingmanner:

Stocks = 0 �> 1

Fixed Receipts = 1 �> 2

Firmed Receipts = 2 �> ....

a) APO→ Multilevel Supply and Demand Matching→ Environment→Current Settings→ Supply Categorization→ Categorization Profile

b) Select Create new Categorization Profile.

c) Enter profile GR##_SL and description (Group ## Supply Limits),and select Save.

d) Select Categorization using Supply Limits.

e) In the left hand window, drill into your new profile, and select SupplyLimits.

f) Enter Supply Limits Group G##.

g) Select Insert Assignment three times.

h) In the first line, select category Stocks (01).

i) In the second line, select category Fixed Receipts (02).

j) In the last line, select category Firmed Receipts (03).

k) Select Save.

2. Create a Categorization Profile GR##_ATP (Group ## ATP Categories) , that will assign the ATP category groups you created previously, in thefollowing manner:

Stocks

Fixed Receipts = Y/Z#B




Firmed Receipts = Y/Z#C

a) Select Create new Categorization Profile.

b) Enter profile GR##_ATP and description (Group ## SupplyLimits)and select Save.

c) Select Categorization using ATP Categories.

d) In the left hand window, drill into your new profile, and select ATPCategories.

e) In the bottom table, Assign Supply Category Stocks (01) to ATPCategory Y/Z#A.

f) Assign Supply Category Fixed Receipts (02) to ATP Category Y/Z#B.

g) Assign Supply Category Firmed Receipts (03) to ATP CategoryY/Z#C.

h) Select Save.

Task 5: Search StrategiesDefine search strategies that will allow CTM to analyze your stocks, requestedreceipts, and firmed receipts to try to improve your level of customer service.

1. Create a search strategy G##A (Group ## SL Search Strategy). Youwant to first look at 1) Firmed Receipts, 2) Fixed Receipts , 3) SourceDetermination, 4) Stocks.

a) Configuration menu:SAP Reference IMG→ APO→ Supply ChainPlanning→Multilevel Supply & Demand Matching→ CTM→ DefineSearch Strategies

b) Enter GR##A and select Create New Profile.

c) Enter description Group ## Search Strategy.

d) Highlight the existing row with Sequence 1, and select InsertAssignment.

e) Enter Category (03) Firmed Receipts.

f) Highlight the row with Sequence 2, and select Insert Assignment.

Enter Category (02) Fixed Receipts.

g) Select New Entry and enter category (01) Stocks so that it is consideredafter source determination.

h) Select Save.




2. Create search strategy G##B (Group ## ATP Search Strategy). In thissituation, you want to look at 1) Firmed Receipts , 2) Source Determination,3) Fixed Receipts 4) Stocks.

a) Select Other Search Strategy.

b) Enter GR## and select Create New Profile.

c) Enter description Group ## Search Strategy.

d) Highlight the existing row with Sequence 1, and select InsertAssignment.

e) Enter Category (03) Firmed Receipts.

f) Select New Entry and enter category (02) Fixed Receipts so that it isconsidered after source determination.

g) Select New Entry and enter category (01) Stocks so that it is consideredafter (02) Fixed Receipts.

h) Select Save.

Task 6: Application of Search Strategies and SupplyLimitsYour division has products with seasonality. During the high peak periods, certainproducts have limited inventory and capacity. Therefore, you want the option ofparceling out the inventory and capacity in a controlled manner. Use the searchstrategy and the categorization profiles for supply limits you created previously, tomanage your demand.

1. In ECC, Create 25 pieces of stock for the T-F2## at location 2400, storagelocation 0001. Use movement type 501.

a) ECC menu path: Logistics→ Material Management→ InventoryManagement→ Goods Movement→ Goods Receipt→ Other (MIGO)(MIGO_GI)

b) Change the transaction to Goods Receipt.

c) Above the bottom set of tabs select New Item.

d) Enter material T-F2##.

e) In the Quantity tab, enter 25 pc.

f) In the Where tab, enter movement type 501, plant 2400, and storagelocation 0001.

g) Select Post.




2. Update your CTM profile GR##_1, with search strategy G##A and yourcategorization profile GR##_SL. In addition, assure your Planning Mode isset to Replan All Orders, and your Deletion Mode is set to Delete OrdersThat Are Not Firm. Save your profile and execute a supply simulation.

a) Select Supplies tab, and enter your search strategy G##A, and yourcategorization profile GR##_SL.


c) Set your planning mode to Replan All Orders, and your DeletionMode to Delete Orders That Are Not Firm.

d) Select Save.

e) Select Sim Supply Categorization.


Answer: Stock was selected for 17 location products. However, productT-F2##/2400 was given supply category 01.

4. Why was only the T-F2## at location 2400 given category 01?

Answer: When you created your Supply Limit Group G##, you only limitedthe supply to product T-F2##/2400. Therefore all other materials will fallunder the default category 00.

5. In the session with the Product View, enter a 10 FC req for the T-F2## atlocation 2400, with a date of three weeks from today.

a) Select Change.

b) In the table below, select a date three weeks from today, and enter aquantity of 10.

c) Select Save.

d)

Note: The availability quantity will show a surplus of 15 pcs.








Answer: A timely PurReq for 10 pcs was created, and a surplus of 25 pcsremains.As a result of the supply limits, the 25 pcs of inventory fall into category 01.Based on the search strategy, category 01 will be the last thing used. TheCTM engine will use: 1) quantities > 150 pcs, 2) quantities <150 pcs, >100pcs, 3. Source Determination, 4) quantities < 50 pcs




9. Create another 50 pieces of stock for the T-F2## at location 2400, storagelocation 0001. Use movement type 501.

a) ECC menu path:Logistics→ Material Management→ InventoryManagement→ Goods Movement→ Goods Receipt→ Other (MIGO)(MIGO_GI)

b) Change the transaction to Goods Receipt.

c) Above the bottom set of tabs select New Item.

d) Enter material T-F2##.

e) In the Quantity tab, enter 50 pc.

f) In the Where tab, enter movement type 501, plant 2400, and storagelocation 0001.

g) Select Post.

10. Return to the session with the CTM profile. Execute a supply simulation.

a) Select the Supplies Tab.

b) Select Sim Supply Categorization.


Answer: Only one supply of 75 pcs of unrestricted stock (CC), belonging tocategory 01. However, based on your supply limits it should have a category02, since 75 pcs is more than the limit for category 01.








Answer: The PurReq for 10 pcs was created, and a surplus of 75 pcs remains.As a result of the supply limits, the 75 pcs of inventory falls into category01. Even though the limits are 0 �> 50, and 51 �> to 1000. Based on thesearch strategy, category 01 will be the last thing used. Thus, a anotherpurchase requisition was created.

14. Update your supply categorization profile GR##_SL, so the receipts can besplit, and broken into the correct categories.

If you used the delivered supply categorization profile SCM235_SL, reviewthe profile SCM235_SL2. Do not make any changes.

a) APO→ Multilevel Supply and Demand Matching→ Environment→Current Settings→ Supply Categorization→ Categorization Profile

b) Drill into supply categorization profile GR##_SL.

c) SelectSupply limits .

d) Select Change Mode.

e) Set the Split Supplies indicator.

f) Select Save.

15. Return to the session with the CTM profile GR##_1, exit the profile andreturn to reset configuration. Execute a supply simulation.

If you used the delivered supply categorization profile SCM235_SL,change your profile GR##_1, and update the Categorization Profile toSCM235_SL2. Save the updates and simulate.




Answer: Now two supplies exist for the T-F2## at location 2400. Only onesupply of 50 pcs of unrestricted stock (CC), belonging to category 01, and 25pcs of unrestricted stock belongs to category 02.








Answer: The PurReq for 10 pcs was deleted, and a surplus of 65 pcs remains.Based on your change to the categorization profile, and as a result of thesupply limits, the 25 pcs of inventory fall into category 02. Due to yoursearch strategy, category 02 will be used prior to source determination.

Task 7: Application of Search Strategies and ATPCategoriesAfter working with the supply limits, you would like more control over supplyrather than just quantities. Use the search strategy and the categorization profilesfor ATP categories you created previously, to manage your supplies with morecontrol.

1. Update your CTM profile GR##_1, with search strategy G##B and yourcategorization profile GR##_ATP. Save your profile and execute a supplysimulation.

Note: If using the delivered parameters, use search strategy G00B.

a) Select the Supplies tab, and enter your search strategy G##B, and yourcategorization profile GR##_ATP.

b) Select Save.

c) Select Sim Supply Categorization.


Answer: Stock was selected for 17 location products. All locations/productswere labeled with supply category 01. This is because ATP Category CC -unrestricted stock falls in to Category 01 (stocks).

3. In the session with the Product View, what is the T-F2## at location 2400?

Answer: A surplus of 65 pcs exists.




5. Review the results in the product view. What was the result of the CTM?

Answer: A timely PurReq for 10 pcs was created, and a surplus of 75 pcsremains.As a result of the categorization profile, the 75 pcs of unrestricted stockfalls into category 01. Based on the search strategy, category 01 will be thelast thing used.







7. In ECC, create a stock transport order for T-F2## at location 2400 for 20 pcs,supplied from plant 2300.

Use Purchase Org 2400, Purchasing group 000

a) ECC menu path: Logistics→Materials Management→ Purchasing→Purchase order→ Create→ Vendor/Supplying Plant Know (ME21N)

b) Change the document type to Stock transport ord. (2nd option in list).

c) Enter supplying location 2300.

d) Enter Purchase Org, 2400, and Purchasing group 000.

e) EnterMaterial T-F2##, Quantity of 20 pcs, and the Plant 2400.

f) Confirm any warnings (pop ups) and select Save.

8. Return to the session with the CTM profile, execute a supply simulation.




Answer: Two supply elements: 75 pcs category 01, with ATP category CC.20 pcs category 02 with ATP Category BF





Answer: A timely PurReq for 10 pcs was created, and a surplus of 95 pcsremains.As a result of the categorization profile, the 75 pcs of unrestricted stockfalls into category 01. The purchase order falls into category 02. and basedon the search strategy category 02, and 01 will be used only after sourcedetermination

12. In your CTM profile GR##_1, remove the categorization profile, and thesearch strategy and save the updates to your profile.



Lesson Summary

You should now be able to:� Explain the general concept of supply categorization� Define supply categorization by using supply limits� Demonstrate supply categorization using ATP categories� Explain how search strategies can enhance your CTM solutions


� None


Unit Summary SCM235

Unit SummaryYou should now be able to:� Explain the general concept of supply categorization� Define supply categorization by using supply limits� Demonstrate supply categorization using ATP categories� Explain how search strategies can enhance your CTM solutions



Test Your Knowledge



Answers


Unit 9CTM Planning Engine Algorithm

Unit OverviewAt this point, you understand the basics of how to define the scope of the problem,and how to define some of the basic control parameters. Now, we will beginto dive into the CTM algorithm in more detail, so that you can understand theadditional control parameters and how the sourcing decisions will be made.


� Explain at a high level, the elements of the CTM Algorithm.� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity� Explain in detail the multilevel production process during CTM scheduling� Explain how the CTM engine will cope with multiple input components� Describe in detail the concept of �Depth First Strategy�� Demonstrate how CTM manages the selection process when alternative

sources are available� Demonstrate how the concept of maximum earliness can impact the results

of the CTM planning run.� List options for late demand handling� Demonstrate standard late demand handling� Demonstrate late demand offset

Unit ContentsLesson: Introduction To The CTM Algorithm ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471Lesson: PPM Selection ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .483

Exercise 17: PPM Selection In The CTM Engine .. .. . . . . . . . . . . . . . . . . . .495


Unit 9: CTM Planning Engine Algorithm SCM235

Lesson: Using Quota Arrangements in CTM... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .504Exercise 18: Using Quota Arrangements in CTM.... . . . . . . . . . . . . . . . . . .515

Lesson: Scheduling in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526Exercise 19: Scheduling in CTM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .541

Lesson: Managing Lateness in CTM.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .561Exercise 20: Managing Late Demand Fulfillment in CTM... . . . . . . . . . .581


SCM235 Lesson: Introduction To The CTM Algorithm

Lesson: Introduction To The CTM Algorithm

Lesson OverviewIn this lesson, you will address concepts/methods within the CTM algorithm thatwill be used to determine a solution during CTM Planning.


� Explain at a high level, the elements of the CTM Algorithm.

Business ExampleDue to component shortages and capacity constraints, you will use CTM toplan your distribution and production. To understand how CTM will approacha solution, you must understand the basic premise of the CTM engine and itsalgorithm.

CTM Algorithm ConceptsThe planning algorithm determines the orders Capable-to-Match (CTM) creates,along with the quantity and the date, and which receipts and stocks CTMconsumes.

After the preparation of transaction data, CTM transfers the master and transactiondata that the system requires for the planning run to the optimization server. CTMexecutes the planning run completely on the optimization server, so that during theplanning run, the system does not access the data in APO.

Note: As there is no communication during the CTM planning runbetween CTM and SAP APO, you cannot influence this planning stepwith Business Add-Ins (BAdIs).

CTM now processes the demands in the sequence according to your priorities.CTM planning uses the search strategy for each demand and executes the sourcedetermination and scheduling for the demand and relevant secondary demands.When CTM has fulfilled the demands, the system transfers the orders and peggingrelationships that CTM created to the SAP liveCache. You can make a setting inCTM Customizing that specifies when CTM is to transfer the orders. The systemcan already transfer the orders if CTM has fulfilled a particular partial quantityof the demands (asynchronous transfer) or only if CTM has fulfilled all demands(synchronous transfer).



Figure 163: CTM Algorithm Concepts

CTM is an order-based solver, which solves one requirement at a time (unlessaggregation is in play, then it still only plans total requirement). In this sense, thealgorithm is heuristic-based, since it does not look at multilevel constraints nordoes it look across locations simultaneously.

Being an order-driven solver, it is also a priority-driven solver. This means thedemand must be sequenced and solved in a user defined priority list. The mainmethod of the CTM algorithm is to build search trees that will analyze the variablesone level at time. First the demand prioritization will determine which requirementto solve first. Then, based on preestablished rules, the algorithm will use masterdata, priorities, and costs to determine which solution method will be tried first.

The benefit of the search tree method is that the algorithm will allow�backtracking�. This means that when a constraint, for example, material orcapacity availability, is violated, the solver will back up to the previous leveland try an alternative solution.

Finally, the CTM algorithm allows constraint propagation. This means thatmaterial or resource availability at a lower level will cause the engine to reevaluatea previous level and possibly change the original results.

Note: For this reason, CTM is an ideal solver to split requirements, wheretools like the PPDS or SNP heuristic will not split a requirement and coverwith multiple receipts, unless directed by quota arrangements or lot sizes.



Demand ProcessingOne of the first steps of the CTM engine is to determine what demand will beplanned.

Figure 164: CTM Algorithm for Demand Processing

Once this is accomplished, demand prioritization must take place. Demandprioritization will create a list of demands (orders), and sequence them based onthe established priority. The CTM algorithm with then try to satisfy demand ontime. In doing so, it will exhaust all means of supply and potentially split therequirements amongst several supply options.

If the demand is fully satisfied, then the solution is saved. If the demand cannotbe fully satisfied, then the lateness parameters in the CTM profile are taken intoconsideration.

If the profile settings allow a late demand, the CTM algorithm will search for thepossibilities that are the �least late�.

If the demand is fulfilled completely, but late, the solution will be saved.

If the demand is still not completely fulfilled, then the CTM profile settings forpartial fulfillment are brought into play. If partials are allowed, the solution issaved. If not, the solutions are rejected and the demand will not be fulfilled. Thealgorithm will proceed with the next highest priority demand.



Constraint PropagationThe benefit of constraint propagation is allowing one requirement to be sourced bymultiple means of supply. This is in no way �optimal�, but can in many instances,can be a good solution to ensure that a requirement is fully covered.

Figure 165: Constraint Propagation Example

The figure above is an example of constraint propagation.

In the initial situation, a requirement of 1000 pieces needs to be fulfilled. Capacityis available to cover the 1000 pieces. Component quantities are only 800 piecesin total.

During the first step of the solve, the CTM engine finite schedules the order usinga PDS/PPM. This establishes the order start and stop dates, as well as operationand activity start and stop dates. Level one check is successful.

In step two of the solve, now that activity dates have been established, dependentrequirement quantities and dates can be established. However, when the CTMalgorithm checks for the material availability, there are only enough componentsto make 800 assemblies. This constraint is then propagated back up the searchtree, causing the order to be changed from 1000 to 800 pieces, since this is all thatcan be accomplished from this portion of the search. Assume for this exampleonly, additional components cannot be acquired.

Note: The component check is not a configurable ATP check, but only anet requirements calculation (search for surplus).



CTM Search StrategyA search strategy is always used in the CTM algorithm. It will either use theinternal methods, or use internal methods combined with user defined methods.

The search strategy is applied locally for each location product. This will definethe sequence of supply consumption based on supply categories.

The variable part of the search strategy is the supply categorization and theconsumption of the categorized supply, as this can be controlled by the planner.This was covered in a previous lesson.

The fixed part of the search strategy is imbedded in the program and cannot bechanged once the data reaches the CTM engine.

During a previous search tree, excess supplies may have been caused by roundingor lot sizing. These surpluses that have not yet been saved to liveCache areassigned to category 00 by default. Supplies in Category 00 will be used beforeother supply categories are considered and before creation of new orders.

In APO 3.0/3.1, the category for excess supplies can be changed by applyingplanning parameter ExcessSupplyCategory (first value is set to desired supplycategory). Starting with release SCM 4.0, the excess supply category can be set inthe CTM profile on the supplies tab, in the field Category for New Receipts.

Assigning a different supply category than the default one for the excess supplieswill allow you, for instance, not to consume any of the excess supplies by using anonexistent supply category, or using the supplies only after a procurement step,by using a supply category that is listed after the procurement step in the searchstrategy.

Once all supplies in category 00 are consumed, substitution or down binning canbe triggered. Substitutions are only possible when consuming existing surplussupplies. Substitution cannot trigger a procurement or transfer. The searchstrategy in the case of substitutions is fixed:

1. Search for supply of current demand2. Search substitute supply for current demand3. Try to produce for current demand4. Search supply for current demand (down binning)5. Search substitute supply for current demand (down binning)



Figure 166: CTM Decision Criteria

If no supplies on the substitutes are found, then the product/procurement/transferstep will be initiated.

The CTM engine will explode the complete supply chain network for each demandindividually. It then uses standard decisions criteria to fulfill the demand . Thedecision criteria are applied locally at each level/node.

Note: The details of this process will be covered in a later lesson.

Building the CTM Search TreeThe CTM algorithm will involve the creation of a search tree to analyze thesourcing possibilities if no excess supplies are found. As mentioned before, thenetwork will be exploded so the algorithm can review the sourcing options andpriorities



Figure 167: CTM Search Tree (1)

The figure above shows the extended network the CTM algorithm will explode.To cover the first requirement, CTM will have three alternatives to choose from.Each one of these options must have a priority/cost for the algorithm to distinguishthe preferred methods of supply. Two of the alternatives (2&3) have only onesource of supply on the second level, where only one option (1) has two options ofsupply at level 2.

Step 1: As the CTM algorithm begins its search, it will choose alternative 1,since it is the highest priority.

Step 2: Once it has established start dates for level one, it explodes the PPM/PDS,and can create dependent requirements with quantities and dates at level 2.




Step 3: After exploding the PDS/PPM, CTM analyzes the options at level 2, againgoing with (1) being the higher priority option.

Step 4: After Selecting priority 1 in the second level, the solution meets aconstraint that will cause it to be late, and therefore this solution it not an option.

Step 5: Realizing that priority one will not give a feasible solution, the algorithmbacktracks up a level to reestablish another solution path.




Step 6: After backtracking up to the first level, the CTM engine now choosesoption 2.

Step 7: In analyzing the second priority in level 2, the solution meets a constraintthat will cause it to be late, and therefore this solution it not an option.

Step 8: The CTM Engine now backtracks to level one to review another otheroptions.




Step 9: The solution now fails for priority 1 on level one, since neither of the level2 options will deliver on time.

Step 10: Due to constraint propagation, the engine will now reevaluate its optionsat level 1.

Step 11: The second alternative on level one is now choose due it being the nexthighest priority.




Step 12: Scheduling is performed on alternative 2, and the PDS/ PPM is explodedcreating dependent requirements at level 2.

Step 13: Using alternative 2, only one choice is available at level 2.

Step 14: The CTM engine now plans to cover the dependent requirements createdby the explosion at the previous level. Excess supply is available or can beprocured in a timely fashion.

Step 15: Solution is found and fixed. Any follow on demand cannot change thisresult/solution. The third alternative will not be evaluated since solution wasfound prior to it.



Lesson Summary

You should now be able to:� Explain at a high level, the elements of the CTM Algorithm.


� None


SCM235 Lesson: PPM Selection

Lesson: PPM Selection

Lesson OverviewDuring the search for a feasible solution, the CTM algorithm will have the optionto perform source determination. This will allow the CTM engine to choose thesource of supply with the highest priority. When production is involved, thecomplexity of the solution increases rapidly. In this lesson, you will explore howthe CTM algorithm performs source determination related to production options.


� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity

Business ExampleYour business is planning to use CTM to help allocate your limited productioncapacity and component availability. One of the keys to this is understanding howthe CTM engine will select sources of supply when more than one exists. Explorehow CTM will react in situations where multiple PPMs are valid and available.

Source DeterminationDuring the CTM search strategy, the algorithm will, at some point, execute sourcedetermination if a requirement has not been fulfilled. The first step in the processwill be to determine the procurement method, which can be found in the LocationProduct Master, on the Procurement tab.





Figure 172: CTM Decision Criterion: Sources of Supply

� (E) - In-house production

� If a source of supply for in-house production exists, CTM planningcovers the demand by consuming existing receipts and stocks orcreating a planned order

If you want CTM to consume only existing receipts and stocks,exclude the procurement alternatives production process model(PPM) and production data structure (PDS) in the CTM profile.

� If a source of supply for in-house production does not exist, CTMplanning covers the demand by consuming existing receipts and stocks.The system does not create a new order.

� (F) - External procurement

� If a transportation lane exists, CTM planning covers the demand byconsuming existing receipts and stocks or creating a stock transfer. Ifyou want CTM to consume only existing receipts and stocks, excludethe procurement alternative external procurement in the CTM profile.

� If a transportation lane does not exist, CTM planning covers thedemand by consuming existing receipts and stocks or creating apurchase requisition.

� (X) - In-house production or external procurement

� If a source of supply for in-house production or a transportation laneexists, CTM planning covers the demand by consuming existingreceipts and stocks or creating a planned order or stock transfer.

If you want CTM to consume only existing receipts and stocks, excludethe procurement alternatives PPM, PDS, and transportation lanes in theCTM profile.

� If no sources of supply for in-house production or transportation laneexist, CTM planning covers the demand by consuming existing receiptsand stocks or creating a purchase requisition.

� (P) - External procurement planning

� CTM planning does not check whether there are receipts and stocksthat the system can use to cover the demand. CTM creates dependentdemands that are processed further in another system.

PDS/PPM SelectionMaterials in ECC with more than one production version, will, in most cases, havemore than one PDS/PPM in APO. If this is the case, you must understand howCTM will select your manufacturing data when more than one item exists.



During the Planning run, the CTM engine will analyze a materials procurementtype (Procurement tab of Product Master). Based on a procurement type E or X,CTM will search for a PDS or PPM. At this stage, the product master setting Planexplosion will come into play as to whether you will be using at CTM PDS orthe PPDS/SNP PPM.

Figure 173: PPM Selection

Reasons for PPM Exclusion

� PDS/PPM with a minimum lot size larger than the quantity to be produced� A PDS/PPM is inactive (blocked)� PDSs/PPMs which are not assigned to the model used for planning� If the PDS/PPM type (SNP or PP/DS) is not selected in the CTM profile� If the PDS/PPM is not included in the Master Data selection of the CTM

profile



Figure 174: CTM Decision Criterion: Priority Versus Cost

During the planning process, CTM will perform a five step process for determiningthe selection of a PPM. The system repeats the steps until only one PPM is leftbased on the selection criteria. The sequence of the steps also reflects the priorityof each single step:

1. On-time fulfillment:2. Priority/Costs or Quota3. Validity Period4. Lot Size5. Random Selection6. Late Demand Analysis

In the first step, CTM looks for PPMs that can fulfill the demand on time. Thisdecision can be further impacted by the scheduling direction.

During the second step, CTM will analyze the Priorities or Quota Arrangements.If both are maintained, the quota will be considered. Otherwise, the procurementpriorities for the single PPMs are taken into account. If there are PPMs with equalprocurement priorities, then CTM uses the multilevel costs of the Plan as criteria.

Note: Quota Arrangements can be disabled during planning in the CTMProfile (Settings→ Master Data Settings).

If more than one solution option is found, CTM will analyze the PDSs/PPMsValidity Period. The PDS/PPM with the validity period that is the closest to thedemand date will be selected.



Priority/Cost SelectionProcurement priorities for the PDS/PPM only became available starting with SCM4.1. Fore previous releases, the multilevel costs in the plan were used.

The multilevel costs are used in CTM as a priority value to select a PPM fromseveral alternatives with identical procurement priority. Multilevel costs areinterpreted as priorities by CTM: Priority for the PPM = (Variable MultilevelCost * Quantity to be produced) + fixed multilevel costs.

Figure 175: PPM Costs and Priorities

The PPM with the smallest cost value (priority) will be used first. Smallest costvalue is 0. In case of procurement type �X� (External Procurement or In-HouseProduction), this value is compared with the procurement priority field of thetransportation lane. As soon as at least one incoming quota arrangement exists forthe corresponding location, priorities are no longer applicable. All alternativeswith a quota arrangement of �0�, or those without a quota arrangement are ignored.



PDS/PPM Lot Size ValidityIf more than one PDS/PPM is valid, lot size validity will be considered. Thefollowing sub-process is used:

1. The PDS/ PPM with the greatest maximum lot size is considered first.2. If this selection criterion does not lead to a unique selection, then the

PDS/PPM with the smallest minimum lot size is used.3. If this process at this time still has not isolated a single PDS/PPM, a

random selection will pick a PDS/PPM from the remaining PDSs/PPMs.

Caution: The lot size maintained in the PPM is used for PPM selectiononly. The lot size maintained in the product master is used for the creationof planned orders. For the PDS/ PPM the lot size is initially pulled fromthe production version in ECC.

Figure 176: PPM Lot Size Validity

Example for PPM Selection:

Assume we have the following PPMs. (Assume also that quotas are not takeninto account)

PPM Number Priority Validity Period Lot Size Validity

1 1 01.01 - 01.03 00 - 1000



2 1 15.02 - 01.07 50 - 5003 2 15.02 - 01.07 00 - 1004 1 15.02 - 01.07 20 - 200

Figure 177: PPM Lot Size Validity (1)

Situation 1: A demand of 10 pieces is required on April 1st. During the CTM run,PPM1 is chosen because PPM2 and PPM4 are ignored due to minimum lot size(50/20), because they are higher than the demand. Apart from that, PPM1 has ahigher priority than PPM3. Therefore, PPM1 is chose over PPM3.




Situation 2: A demand of 40 pieces is required on April 15th. PPM4 is chosenbecause PPM2 does not meet the minimum lot size (50) and the order quantity is40. PPM3 has a lower priority and is therefore neglected. PPM1 is ignored due tothe validity period ending March 1st.




Situation 3: A demand of 80 pieces is required on March 1st. PPM2 is chosenbecause PPM3 has a lower priority. PPM1 is not as close to the demand date asPPM2, and PPM4 has a smaller lot size than PPM2.

PDS/PPM Date ValidityDuring the PPM selection process, date effectivity can play a role in PPMselection. However this can be very different from other planning algorithms.When using CTM, planners must keep in mind that inventory builds and surplusis not something CTM is concerned with. Meeting delivery dates is the focusof CTM.

Figure 180: PPM Date Validity in CTM

In this situation, the two PPMs are not valid after April 1st. However, CTMwill select the PPM with closest validity date and that can deliver closest to thedelivery time.

Effectivity Mode ParameterDuring PPM selection, the standard setting is that the end of the last activity has tobe inside the validity interval.



Figure 181: PPM Date Validity: EffectivityMode Parameter

Planning parameter EffectivityMode allows the following setup:

First value =

0: Both start of first activity and end of last activity have to be inside the validityinterval.

1: The end of the last activity has to be inside the validity interval.

2: The start of the first activity has to be inside the validity interval. The standardsetting is that the end of the last activity has to be inside the validity interval.





Exercise 17: PPM Selection In The CTMEngine

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate PPM selection with priorities� Demonstrate PPM selection using costs

Business ExampleUp to this point, you have been using a complex pump scenario. Now, you willuse a simplified scenario to understand how the CTM engine works better. Bydoing this, your opportunity for multiple production versions, hence multiplePDS/PPMs increases dramatically. Because you are using CTM, your plannersmust become aware of how the CTM engine decides which PDS/PPM to selectfor planning production

Task 1: Using Priorities to Enhance PPM SelectionThe production of your T-F## at location 1000 poses a challenge for CTM, due theexistence of more than one production version (PPM). Define some procurementpriorities to influence how CTM will select which production version (PPM) touse.

1. Review The PPM(s) for product T-F## at location 1000.

2. How many PPMs/production versions exist? Note the Plan numbers.

3. In the product view for material T-F## at location 1000, create an FC reqfor 10 pieces five weeks out at 00:00:00 hour. Save the results.

4. In another session, execute a CTM planning run using CTM profile GR##_4.However, prior to executing the planning run, activate all the messages andassign your explanation profile T-F## to your profile.




5. Return to the product view for T-F## at 1000. What was the result? WhichPPM was selected if any?

6. What was the source of the receipt? How was it determined?

7. Update your PPM for production version A001 for the T-F## at 1000. In thePPM section, add a priority of 1. Activate the PPM.

8. Execute a CTM planning run using CTM profile GR##_4. Refresh yourprofile first to reload the master data.


Task 2: Using Costs to Enhance PPM SelectionThe production of your T-F## at location 1000 poses a challenge for CTM due theexistence of more than one production versions (PPM). In addition to multipleproduction versions, more than one material uses that resource. Define multilevelcosts to influence how CTM will select which production version (PPM) to use.

1. In another session, update your PPM for production version A002 for theT-F## at 1000. In the PPM section, remove the priority of 1, and add afixed cost of 1. Activate the PPM.

2. In the other session, execute a CTM planning run using CTM profileGR##_7, to delete the existing receipts.

3. In the other session, execute a CTM planning run using CTM profileGR##_4. If this profile was already loaded, back out and return to reloadthe master data.





Task 3: Using Lot Size to Enhance PPM SelectionDue to the flexibility of your manufacturing process, certain PPMs will berestricted by lot size. CTM is somewhat unique in the way that it interprets PPMselection when lot sizes are involved. Execute a scenario with different lot sizeselections to see how the CTM engine will react.


2. In another session, update your PPM for production version A001 for theT-F## at 1000. In the PPM section remove the fixed cost of 1. In addition,change the maximum lot size to 100. Activate the PPM.




6. In another session, update your PPM for production version A001 for theT-F## at 1000. Change the maximum lot size back to 999,999. Activatethe PPM.



Solution 17: PPM Selection In The CTMEngineTask 1: Using Priorities to Enhance PPM SelectionThe production of your T-F## at location 1000 poses a challenge for CTM, due theexistence of more than one production version (PPM). Define some procurementpriorities to influence how CTM will select which production version (PPM) touse.

1. Review The PPM(s) for product T-F## at location 1000.

a) Menu Path: APO→ Master Data→ Production Process Model→Production Process Model

b) Select Choose Plan via PPM, enter product T-F## and location 1000.

c) Press Enter.

2. How many PPMs/production versions exist? Note the Plan numbers.

Answer: Two PPMs exist.The names will be different, but should look like: N5000134801A001T-F021000 and N5000134802A002T-F02 1000.The emphasized section refers to the production version, product, and plant.

3. In the product view for material T-F## at location 1000, create an FC reqfor 10 pieces five weeks out at 00:00:00 hour. Save the results.

a) Menu Path: APO→ Production Planning→ Interactive ProductionPlanning→ Product View (/sapapo/RRP3)

b) Enter your product T-F## and location 1000.

c) In change mode, enter a date five weeks from today, and a quantity10pcs.

d) Select Save.




4. In another session, execute a CTM planning run using CTM profile GR##_4.However, prior to executing the planning run, activate all the messages andassign your explanation profile T-F## to your profile.

a) Menu Path: APO→ Multilevel Supply & Demand Matching→Planning→ CTM (/sapapo/CTM


c) Enter GR##_4.

d) Select the Settings→ Technical Setting tab.

e) In the bottom section, set all indicators for messages and logs. Activateand assign your explanation profile T-F##.

f) Select the Planning Run tab.

g) Select Start planning Engine.

5. Return to the product view for T-F## at 1000. What was the result? WhichPPM was selected if any?

Answer: A timely planned order was created for 10 pcs. The CTM engineselected the PPM linked to version A001.


Answer: Randomly based on an internal GUID selection

7. Update your PPM for production version A001 for the T-F## at 1000. In thePPM section, add a priority of 1. Activate the PPM.


b) Select Choose Plan via PPM and enter product T-F## and location1000.

c) Press Enter.

d) Select the plan that is linked to production version A001.

e) Select Change Plan.

f) In the Plan section, select Product Plan Assignment.

g) In the Prod. Process Model section, scroll to the procurement prioritysection and enter a 1.

h) Select Activate.




8. Execute a CTM planning run using CTM profile GR##_4. Refresh yourprofile first to reload the master data.

a) If you currently have this profile open in another session, back out andreturn to profile GR##_4.

b) Select the Planning Run tab.

c) Select Start planning Engine.


Answer: The planned order is using the PPM A002. By updating PPMA001 with a priority of 1, PPM A002 became the higher priority. In thePPM a priority of 0 is the highest

Task 2: Using Costs to Enhance PPM SelectionThe production of your T-F## at location 1000 poses a challenge for CTM due theexistence of more than one production versions (PPM). In addition to multipleproduction versions, more than one material uses that resource. Define multilevelcosts to influence how CTM will select which production version (PPM) to use.

1. In another session, update your PPM for production version A002 for theT-F## at 1000. In the PPM section, remove the priority of 1, and add afixed cost of 1. Activate the PPM.



c) Enter a Multilevel Fixed Cost of 1

d) In the Plan section, select Product Plan Assignment.

e) In the Prod. Process Model section, scroll to the procurement prioritysection and remove any value.

f) Select Activate.


a) Press F8


a) Press F8.





Answer: The CTM engine selected the PPM A002. This was because thePPM A001 had a multilevel fixed cost of 1, versus a cost of 0 for PPM A002.

Task 3: Using Lot Size to Enhance PPM SelectionDue to the flexibility of your manufacturing process, certain PPMs will berestricted by lot size. CTM is somewhat unique in the way that it interprets PPMselection when lot sizes are involved. Execute a scenario with different lot sizeselections to see how the CTM engine will react.


a) Select F8.

2. In another session, update your PPM for production version A001 for theT-F## at 1000. In the PPM section remove the fixed cost of 1. In addition,change the maximum lot size to 100. Activate the PPM.



c) Remove the Multilevel Fixed Cost of 1 from PPM A001.

d) In the Plan section, select Product Plan Assignment.

e) In the Prod. Process Model section, scroll to the Maximum Lot sizefield and change it to 100.

f) Select Activate.


a) Select F8 to Execute.


Answer: The CTM engine selected PPM A002. The first criterion is prioritywhich is the same, the second is cost which is the same. In CTM, if cost andpriority are the same, the system will use the PPM with the largest lot size.A002 has a max lot size of 999999 verses A001 that is set to 100.






b) Select Start planning Engine.

6. In another session, update your PPM for production version A001 for theT-F## at 1000. Change the maximum lot size back to 999,999. Activatethe PPM.



c) In the Plan section, select Product Plan Assignment.

d) In the Prod. Process Model section, scroll to the Maximum Lot sizefield and change it to 999,999.

e) Select Activate.



Lesson Summary

You should now be able to:� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity



Lesson: Using Quota Arrangements in CTM

Lesson OverviewDuring the search for a feasible solution, the CTM algorithm will have the optionto perform source determination. This will allow the CTM engine to choosethe source of supply with the highest priority. When multiple options exist fora location product, tools like quota arrangements may add value to the sourceselection. In this lesson, you will analyze how quota arrangements can influencesource determination.


� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity

Business ExampleYour business is planning to use CTM to help allocate your limited productioncapacity and component availability. One of the keys to this is understanding howthe CTM engine will select sources of supply when more than one exists. Explorehow CTM will react in situations where multiple sources of supply (internal andexternal) are valid and available.

Application of Quota ArrangementsWhen certain products have more than one source of supply, quota arrangementscan be a way of directing the CTM algorithm to the preferred source of supply.


SCM235 Lesson: Using Quota Arrangements in CTM

Figure 182: Purpose of Quota Arrangements

The Capable-to-Match planning run (CTM planning run) considers inbound quotaarrangements. Inbound quota arrangements determine which proportion of thetotal quantity of a product the system procures from which transportation lane orsource of supply for in-house production.

It is not possible to mix priorities and quotas. If one quota exists, all otherpriorities are ignored, even if they are maintained for a different time period. Thisrestriction is only valid per location. In other words, it is possible to have quotas atone location and priorities at another location.

Assume the following situation is modeled:

From 01.xx to 07.xx: quota arrangement 30% / 70%

From 07.xx to 10.xx: priority 2 / 1

Both data items are maintained at the same location.

In this situation, quotas and priorities are mixed. Therefore, only the quotas wouldbe used and the priority would be ignored completely. When using the followingwork-around, the quotas would be treated like priorities by the system:


From 07.xx to 10.xx quota arrangement 0.001% / 99.999%



The quota arrangement 0.001% / 99.999% �simulates� the priority in this case.

Note:

� If neither quotas nor priorities are maintained, CTM looks for othercriteria to distinguish. For example, validity periods. If all theselection criteria (Validity, Lot size, and so on) are identical, thenCTM randomly selects the procurement alternatives (PPMs andTransports). As this selection procedure is arbitrary, it cannot bereproduced.

� History is not taken into account during the CTM run. Quotaarrangements are recalculated for each CTM run.

� If an active quota arrangement exists, alternatives not included in thequota arrangement are ignored.

Quota Arrangements in ECCQuota arrangements in ECC differ as to how quota allocation logic applies to CTM.

Figure 183: Quota Arrangements in ECC

The system assigns a quota rating to each of the sources. The quota rating iscalculated as follows:

Quota rating = (quota-allocated quantity + quota base quantity / quota



The individual values are as follows:

� Quota-allocated quantity

Total quantity of all requirements included in the quota-allocated quantityaccording to the quota arrangement usage indicator in the material masterrecord. The quota-allocated quantity is updated automatically.

� Quota base quantity

Quantity used for manual control of the quota arrangement (for example,when new sources are included).

� Quota

Number that determines how requirements are apportioned among thevarious sources.

In the automatic source determination process, the source with the lowest quotarating is assigned.

The formula yields the following truism: The higher the quota, the lower the quotarating and the greater the probability that the relevant source will be determined asthe valid source.

The quota base quantity can be used on the one hand when a new source isincluded in an already existing quota arrangement and on the other to remedy adisproportion between quota and quota-allocated quantity. You can use the quotabase quantity to prevent the new source from being assigned to all requirements(for example, in the form of requisitions or purchase orders) until such time asits quota-allocated quantity exceeds that of one of the existing sources. This isachieved because the quota base quantity acts as an additional quota-allocatedquantity in the calculation of the quota rating.

Quota Arrangements Without Demand SplitsCTM supports only inbound quotas, but �Supply Distribution� using CTM alsotakes outbound quotas into account.

For each demand, the system examines the possible sources of supply and theirspecified quota arrangements. For each source of supply, the system calculatesby which value the demand quantity falls short or exceeds the given quotaarrangement, if this source of supply was used to procure for the demand. Thesystem favors the source of supply where there is the smallest variance or delta.



Figure 184: Quota Arrangements Without Demand Splits

In the figure above, three requirements need to be covered. The existing quotaarrangement is set up so that 70% of the demand goes to plant 1000 and 30% goesto plant 2400. Demand splitting is not in effect, so each requirement will be singlysourced. To decide where the supply should come from, CTM calculates andcompares a delta for each location and chooses the smallest deviation described asfollows.

Demand 1 is for 130 pieces: if using supply from location 1000, the delta wouldbe: 100%-70%=30%. This means that if the supply is coming from 1000, thenthe quota would be 100% for 1000 and 0% for 2300. The deviation from thequota which should be achieved (70% for 1000 and 30% for 2300) is then100%-70%=30%. When using supply from location 2300 instead of 1000, thevariance/delta is calculated as: 100%-30%=70%. In other words, if the supplyis coming from 2300, then the quota would be 0% for 1000 and 100% for 2300.The variance/delta from the quota which should be achieved (70% for 1000 and30% for 2300) is then 100%-30%=70%. The variances/deltas (30% and 70%) arecompared, and the one which shows up the smallest deviation is chosen. In thiscase, the smaller variance is 30%, therefore, CTM would choose alternative 1000.

Demand 2 is for 130 pieces (Total demand 260 pcs): The system goes through amore complex calculation. First it will add the 130 pieces from the first demand tothe second demand. This represents 100% of the demand. The variance/delta iscalculated at location 1000, 100%-70%=30% and at location 2300 you only have



130 pcs out of a total of 260 pcs. Therefore, the variance is 50%-30%=20%. Thedeltas are determined in the same way as described for the first demand. Thus,the decision would be made on 2300 since 20 < 30.

Demand 3 is for 200 pieces, for a total of 460 pieces, if location 1000 is awardedthe demand: 130 + 200 = 330 pcs. Divide this by the total demand (460) is 71%.71% - 70% (quota) = 1%. If location 2300 is awarded the demand: 130 +200 =330pcs. Divide this by the total demand (460 pcs) is 71%. 71% - 30% (quota) = 41%.Location 1000 has a variance of 1% versus the 41% for location 2300 , thereforelocation 1000 is award the third demand

Note: If quota arrangements should not be taken into account by CTM,then they can be switched off with setting CTM profile, Settings tab,Master Data Settings tab, Ignore Maser Data section, choose theQuota Arrangements indicator. If they are switched off, CTM usesthe maintained priorities instead.

Quotas are technically not maintained in %. They are maintained in ratio values.For example, when setting 5 times 20, the ratio and the percentage value is thesame. However, when deleting one of the quotas so that we have only 4 times 20left, the ratio value is then 20 and the percentage value is 25%. Therefore, thefollowing situation can appear as well. Assuming we have three supply sources,two locations and one PPM, for example: if a specific quota is maintained for onlyone of these sources, no matter which value it is, then everything is taken from thissource. Nothing from the other sources will be delivered to fulfill a demand. Thisquota situation can be displayed in the master data checker.

It is also possible that a different supply distribution than maintained in the quotacomes out of a planning run. The reason for this is other constraints like capacityconstraints for example. Assuming you have a quota of 60%, 40% is maintained,and the supply is distributed 10% and 90%; this could be caused by capacityconstraints for instance.

Quota Arrangements With Demand SplitsAs of SCM 5.0, CTM also plans quota with requirement splitting. Building thesolution tree at any location product level, CTM considers available sourcesthat may supply the demand quantity. In the case of a demand split for a quotaarrangement, two steps are performed:

� The entire quantity is split accordingly across the sources. These demandsare explored consecutively, sorted by first increasing quota and secondsource priority. Any demand fails if the minimum lot size of the sourceexceeds the demand quantity.

� If there is a remaining quantity, the sources are explored again with thedefault procedure.



Figure 185: Demand Split Settings

The quota arrangement can be found via the APO menu path: APO→ MasterData→ Quota Arrangement→ Quota Arrangement.

The �Requirement Split� flag in the Quota Arrangement already existed beforeSCM 5.0, but was only used for PP/DS functionality. If the flag is active in SCM5.0, then a demand split in CTM will be performed. When reviewing the masterdata via the CTM profile Edit→ Check CTM Master Data, the Requirement Splitflag was added to the �Shipment Data� within the CTM Master Data screen.



Figure 186: Quota Arrangements with Demand Splits

In the example above (top), a quota arrangement exists for location 2400, in which30% goes to location 1000, and 70% goes to location 2300. In SCM 4.1, andearly demand splits cannot happen. Therefore, the first demand of 120 is sourcedto location 2300, because its variance is smaller. The second demand of 100, issourced from location 1000, because its variance is smaller. The third demandof 100 is sourced to location 2300, since its calculated variance is smaller thanthat of location 1000.

As of SCM 5.0, each requirement can be split and sourced from more than onelocation.

In the example above (bottom), a quota arrangement exists for location 24000, inwhich 30% goes to location 1000, and 70% goes to location 2300. When CTMexecutes planning, the CTM engine will split the demand for 120 pcs resulting in36 pcs from location 1000, and 84 pcs from location 2300. The second demandfor 100 pcs is split 30 pcs to location 1000 and 70 pcs to location 2300. The lastdemand for 100 pcs is split the same as the second demand: 30 pcs to location1000 and 70 pcs to location 2300



Figure 187: Quota Arrangements with Demand Splits and Constraints

In the figure above, a standard quota arrangement exists for three locations andeach location also has available supply. When using quota arrangements, thepriorities will only be a consideration if locations cannot supply the requirementpassed by the quota.

Location Quota Avail. Supply1000 50 302300 30 501200 20 30

The first demand that CTM plans against is 40 pieces. Based on the quotaarrangement the split is:

Location Quota Qty Remaining Supply1000 50 20 102300 30 12 381200 20 8 22

CTM the plans the second demand for 60 pieces. The first step is to follow thequota:



Location Remain.Supply

Quota QuotaQty

Surplus /Shortage

% Covered oftotal Reqmt

1000 10 50 30 -20 16.7%2300 38 30 20 18 33.3%1200 22 20 12 10 16.7%

However, location 1000 cannot meet the demand since it is 20 pieces short.Location 1000 can only cover 16.7% of the demand compared to the 50% it issupposed to cover. During step 1, 10 pieces will be sourced from location 1000,depleting its supply. Still following the quota arrangement, 20 pieces will comefrom location 2300 and 10 pieces from location 1200, which all can be met. Thisstill leaves a deficit of 20 pcs.

The second step for the 60 piece demand works as follows:

Location Remain.Supply

Quota Rqmt Surplus /Shortage

% Covered oftotal Reqmt

1000 0 NA 20 -20 02300 18 NA 20 -2 30%1200 12 NA 2 10 3.3%

At this point in time, priorities now come into play. Location 2300 is a higherpriority than 1200. However, location 2300 only has 18 pieces of inventory. Theengine will consume all 18 pieces. Considering during the first round of allocationof the 60 pcs, 20 pieces were assigned to location 2300 the first time and now 18pcs(20 +18 = 38). 38 / 60 = 63.3% of the demand. The balance of the requirement tothe next highest priority location which is 1200. 10 + 2 = 12. 12/6 = 20%.

Note: Restrictions on Quota Arrangements:

� Minimum partial split functionality is not supported.� Grouping of requirements is not supported� Lot sizes are not considered for demand split with quota arrangements� Demand split is ignored if the demand is caused by a transport on a

subcontracting transportation lane. Normal quota handling is then applied.





Exercise 18: Using Quota Arrangementsin CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how quota arrangements without splitting work in CTM� Demonstrate how quota arrangements with splitting work in CTM� Demonstrate how to deactivate quota arrangements with CTM

Business ExampleIn your supply chain, you have several instances of multi-sources of supply. Youwould like the CTM engine to potentially consider using quota arrangementsto control the sourcing of the supply.

Task 1: Quota Arrangements Without Demand SplitsYour supply chain currently has quota arrangements set up to direct the flowof supply into your distribution center 2500. To understand how the quotaarrangement calculation works, create a copy of one of your CTM profiles togenerate a simulation situation with version CTM_##. Create a simple demandpattern and execute a CTM planning run. Try to explain the results.

1. Using profile GR##_1, create profile GR##_SIM (Group ## Pumpsimulation). Assign version CTM_## to your new profile, set the CapacityPlanning parameter to Planning All Resources Infinitely and Save.

2. Display quota arrangement for all products that is in place for Model 000,location 2500, version Independent.

3. In the Product View, for Planning Version CTM_##, create requirements forproduct T-F2## at Location 2500, 4 weeks from today based on the chartbelow. Choose a week with 5 working days, but do not exceed 60 days(planning horizon). Create them one day apart:

Demand Qty1 102 103 354 205 20




4. Execute a planning run with your profile GR##_SIM and review resultsin the product view.

Demand Qty Allocated Location1 102 103 354 205 20

5. The chart below gives the details on how the quota worked in this example.

Incoming Quota Arrangements: A/B �> 80% / 20 %DmdQty

CurrentSit.: Abs.(A/B) %(A/B)

After SelectingA:Abs. (A/B) %(A/B)

DeltaA

After SelectingB: Abs. (A/B) %(A/B)

DeltaB

10 0 / 0 10/ 0 20 0 / 10 800% / 0% 100% / 0% 0% / 100%

20 10 / 0 30 / 0 20 10 / 20 47100% / 0% 100% / 0% 33% / 67%

35 30 / 0 65 / 0 20 20 / 35 44100% / 0 100% / 0% 36% / 64%

20 65 / 0 85 / 0 20 65 / 20 13100% / 0% 75% / 25% 77% / 33%

20 85 / 20 85 / 20 0 65 / 40 1880% / 20 % 80% / 20% 61% / 38 %

... 85 / 20 ... ... ... ...80% / 20 %




Task 2: Quota Arrangements with Demand SplitsBased on your results in the previous task, you are not sure you like the waythe quota arrangement allocation works. Create a version dependent quotaarrangement that allows splitting to occur for your pumps at location 2500

1. Create a version (CTM_##) dependent quota for all products from todayuntil the end of time. Include the following details: 1000 (80), 2300 (20) andset required splitting.

2. Return to the session with your profile GR##_SIM . Update the profile soit will perform infinite scheduling. Save your updates, exit the transactionand return to the CTM profile to update the master data buffers and executethe planning run.

3. Review the results of the run in product view. What has changed?

Demand Qty Qty for Loc 1000 Qty for Loc 23001 102 103 354 205 20

Task 3: Ignoring Quota ArrangementsAs a result of interpreting the results of using quota arrangements, you feel thatusing the quota arrangement does not give your organization the best possibleresults. Deactivate the quota arrangement and decipher the results.

1. Return to your CTM profile GR##_SIM and update it so the CTM engineignores the quota arrangement, and execute a planning run.


Demand Qty Qty for Loc 1000 Qty for Loc 23001 102 103 354 205 20




3. Why did the engine source everything from location 1000?

4. Return to your CTM profile GR##_SIM and update it so the CTM enginewill perform finite scheduling on all resources. Save your updates.



Solution 18: Using Quota Arrangementsin CTMTask 1: Quota Arrangements Without Demand SplitsYour supply chain currently has quota arrangements set up to direct the flowof supply into your distribution center 2500. To understand how the quotaarrangement calculation works, create a copy of one of your CTM profiles togenerate a simulation situation with version CTM_##. Create a simple demandpattern and execute a CTM planning run. Try to explain the results.

1. Using profile GR##_1, create profile GR##_SIM (Group ## Pumpsimulation). Assign version CTM_## to your new profile, set the CapacityPlanning parameter to Planning All Resources Infinitely and Save.

a) Select Other Profile, and select GR##_1.

b) From your CTM profile select Copy Profile.

c) Enter profile GR##_SIM and select Copy Profile.

d) Enter description (Group ## Pump simulation).

e) Select Planning Scope , and enter planning version CTM_##.

f) Select Strategies→ Special Strategies tab.

g) Set the Capacity Planning parameter to Planning All ResourcesInfinitely.

h) Select Save.

2. Display quota arrangement for all products that is in place for Model 000,location 2500, version Independent.

a) APO menu path: APO→ Master Data→ Quota Arrangement→Quota Arrangement

b) Enter Model 000, location 2500.

c) Select Display.

d) Select the line for All Products.

e) Select Quota Arrangement Items.

Result:Location 1000 = 80%, and Location 2300 =20%

3. In the Product View, for Planning Version CTM_##, create requirements forproduct T-F2## at Location 2500, 4 weeks from today based on the chartbelow. Choose a week with 5 working days, but do not exceed 60 days(planning horizon). Create them one day apart:




Demand Qty1 102 103 354 205 20

a) Enter the 5 demands and SAVE.

4. Execute a planning run with your profile GR##_SIM and review resultsin the product view.

Demand Qty Allocated Location1 10 10002 10 10003 35 10004 20 23005 20 1000

5. The chart below gives the details on how the quota worked in this example.




Incoming Quota Arrangements: A/B �> 80% / 20 %DmdQty

CurrentSit.: Abs.(A/B) %(A/B)

After SelectingA:Abs. (A/B) %(A/B)

DeltaA

After SelectingB: Abs. (A/B) %(A/B)

DeltaB

10 0 / 0 10/ 0 20 0 / 10 800% / 0% 100% / 0% 0% / 100%

20 10 / 0 30 / 0 20 10 / 20 47100% / 0% 100% / 0% 33% / 67%

35 30 / 0 65 / 0 20 20 / 35 44100% / 0 100% / 0% 36% / 64%

20 65 / 0 85 / 0 20 65 / 20 13100% / 0% 75% / 25% 77% / 33%

20 85 / 20 85 / 20 0 65 / 40 1880% / 20 % 80% / 20% 61% / 38 %

... 85 / 20 ... ... ... ...80% / 20 %




Task 2: Quota Arrangements with Demand SplitsBased on your results in the previous task, you are not sure you like the waythe quota arrangement allocation works. Create a version dependent quotaarrangement that allows splitting to occur for your pumps at location 2500

1. Create a version (CTM_##) dependent quota for all products from todayuntil the end of time. Include the following details: 1000 (80), 2300 (20) andset required splitting.

a) APO menu path: APO→ Master Data→ Quota Arrangement→Quota Arrangement

b) Enter Model 000 and location 2500.

c) Select Version Dependent, and enter version CTM_##.

d) Select Change.

e) Select Creation of new Entry.

f) Select All Products.

g) Start date today, end date 12.31.9999.

h) Select Allow Requirements Spitting.

i) Select Copy and close.

j) Select Save.

k) Select your line in the �All objects �area and, in the bottom section,select Creation of new Entry.

l) Select Quota Arr. for Location, enter Partner Location 1000 andselect Copy.

m) Enter Partner Location 2300 and select Copy and close.

n) For location 1000, enter 80 and for location 2300 enter 20.

o) Select Save.

2. Return to the session with your profile GR##_SIM . Update the profile soit will perform infinite scheduling. Save your updates, exit the transactionand return to the CTM profile to update the master data buffers and executethe planning run.

a) Select the Strategies→ Special Strategies tab.

b) Set the Capacity Planning parameter to Plan All Resources Infinitely.

c) Select F8 to Execute a planning run.





Demand Qty Qty for Loc 1000 Qty for Loc 23001 10 8 22 10 8 23 35 28 74 20 16 25 20 16 4

Task 3: Ignoring Quota ArrangementsAs a result of interpreting the results of using quota arrangements, you feel thatusing the quota arrangement does not give your organization the best possibleresults. Deactivate the quota arrangement and decipher the results.

1. Return to your CTM profile GR##_SIM and update it so the CTM engineignores the quota arrangement, and execute a planning run.

a) Go to Settings→ Master Data Settings tab.

b) In the Ignore Master Data section, select Quota Arrangement.

c) Select Save.

d) In the Planning Run tab, select Start Planning Engine.


Demand Qty Qty for Loc 1000 Qty for Loc 23001 10 102 10 103 35 354 20 205 20 35

3. Why did the engine source everything from location 1000?

Answer: Now that quota arrangements are no longer valid, the engine willuse priorities. The priorities for locations 1000 and 2300 are the same. Thusit moves to cost. Location 1000 costs 70/pc and location 2300, 140/pc.Therefore, location 1000 was selected because of the lower cost.View the master data sheet that you were given in Unit 2




4. Return to your CTM profile GR##_SIM and update it so the CTM enginewill perform finite scheduling on all resources. Save your updates.

a) Go to Strategies→ Special Strategies tab.

b) In the Further Strategies section, set the Capacity Planning parameterto Plan All Resources Finitely.

c) Select Save.



Lesson Summary

You should now be able to:� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity


� Note



Lesson: Scheduling in CTM

Lesson OverviewTo understand and validate the results of the CTM engine, users must have athorough understanding how network scheduling will take place in CTM. In thislesson, we will explore in detail how the CTM engine schedules multilevel planing.


� Explain in detail the multilevel production process during CTM scheduling� Explain how the CTM engine will cope with multiple input components� Describe in detail the concept of �Depth First Strategy�� Demonstrate how CTM manages the selection process when alternative


of the CTM planning run.

Business ExampleThe premise of the CTM engine is that each requirement can be planned whileanalyzing the entire supply chain if necessary. For some scenarios, this may berather complex depending on the amount of instances that multiple sources ofsupply exist. Also, the depth and breadth of the supply chain can add complexityto the solution. To validate the CTM engine results, you must become familiarwith the nuances of the CTM engine.

Multi-Level ProductionIn most scenarios in CTM, planners are using CTM to allocate finished goodsinventory, production capacities, and component inventory, when demand isexceeding supply. The process often starts at the distribution center and willcascade through the supply chain.


SCM235 Lesson: Scheduling in CTM

Figure 188: Multilevel Production

In the figure above, we have a finished product F, that is made up of B1 andB2. B1 is made up of T1 and T2. The scenario also entails a three-levelreplenishment process. The demand is received at the distribution center, wherestock transfer will be created. This stock transfer will create dependent demand atthe manufacturing plant.

Once at the manufacturing plant, the CTM engine will create a planned orderand explode the PDS/PPM, creating dependent demand at the assembly level.This then propagates dependent demand to the next level. At the next level, bothproduction and procurement take place. This process could cascade throughseveral levels of production and procurement. To simplify the example, onlymaterials F, B1, and T1 will be used in this discussion.



Figure 189: Multilevel Production (1)

The first step is to determine the first requirement, which we will assume is at theDC. For this example, we will use the material F and assume the requirement isfor 100 pieces. Based on the scenario that no stock or existing planned supply isavailable and the procurement type is set to F - External, the CTM engine willcreate a Stock Transfer Request for 100 pieces. During this process, the CTMengine will determine the source by:

1. On-time Fulfillment2. Transportation Lane Procurement Priorities3. Quota Arrangements4. Validity Periods5. Means of Transport Costs

During the scheduling of the stock transport request for product F, the systemwill take the Delivery/Due date - GR processing time (Receiving location) -Transportation Duration (means of transport) - GI Processing time (shippingLocation); this now determines the latest possible end date for production.

1st Step of Production: The CTM engine will then select the appropriate PDS/PPMfor F, determining the latest possible start date for production. A planned orderfor 100 pieces is created. At this time, if finite scheduling is active, the systemwill reserve the capacity needed to complete the demand quantity. In addition,dependent requirements are now generated for the required subassembly B1 for100 pieces.



2nd Step of Production: The dependent requirements now determine the latestpossible finish date for B1. Due to the procurement type E - Inhouse production, aplanned order is created for B1. The CTM engine will then select the appropriatePDS/PPM for B, schedule the activities and reserve capacities on the resource.In addition, dependent requirements of 100 pieces are now propagated to thenext level, T1.


The dependent demand for T1 was generated once the planned order for B1was created. This established the latest possible finish date, in the case of a rawmaterial, the delivery date. Based on the procurement type F, the CTM engine willnow create a purchase requisition for 100 pieces to cover the requirement. Thiswill entail analyzing the transportation lanes:

� Procurement Priority� Quota Arrangement� Validity Periods� Means of Transportation Costs.

In this situation, the planned delivery time from the product master of T1 comesinto play. This will not allow any purchase requisitions to be created prior to thisday. The purchase requisition will be created at the end of the planned deliverytime horizon. In this example, there is not enough time between the dependent



requirement date and the start date of the purchase requisition for the T1. Becauseof the planned delivery time, the purchase requisition will be pushed out and T1will be late for the original start date of B1.

Note: The end date of the planned order for the B1 will not be changed.The quantity of the planned order will be reduced to the point that a certainnumber of pieces can be made between the new start date, and the originalfinish date. This will be calculated using the durations in the PDS/PPM.

Based on the previous original finish date, you can only produce 70 pcs of B. Inthis example, the Planned order for B1 will be reduced to 70 pieces since that isthe maximum amount that can be completed once the purchase requisition for T1is received. At this time, the capacity will be consumed and the solution at thislevel will be fixed. Now that a planned order of B1 of 70 pcs is created, a purchaserequisition of 70 pcs for T1 is created at the end of the planned delivery time.

After the B1 solution is fixed, the CTM engine will backtrack up to the plannedorder for F. Since the quantity of B1 was changed to 70 pieces, the size of the orderfor F must be changed based on the availability of B1. This would technicallyinvalidate that option from being used, but since there is no alternative for B, theplanned order for F will be reduced from 100 pieces to 70 pieces. At this point,capacity requirements to make the F and B1 are reduced and capacity is freed upfor other applications.




Due to the reduction of B1, the start date of F was adjusted based on the quantityof B1 available. The finish date is not adjusted at this time. Due to the reductionof the order size of F, more capacity is available for the CTM engine to use.

As a result of capacity being available at the resources of both F and B1, theCTM engine will create a second smaller planned order for both F and B1. Thesystem will check both levels, and in this example planned orders are created for15 pieces for both F and B1.

Based on the new planned order for B1, more requirements (15 pieces) aregenerated for T1. These new requirements will create a new purchase requisitionfor 15 pieces, that will not be affected by the planned delivery time.

The final result is that the original stock transfer request will be changed to 85pieces due to the two planned orders for F of 70 and 15 pieces. The balance of15 pieces must be fulfilled by another means or be handled by the late demandmethods.

Details of the Depth-First Strategy (Multiple InputComponents)When dealing with multiple input components (B1 and B2), the CTM engine useswhat is called the depth-first strategy. This process controls how the CTM enginewill determine and plan each level of a multilevel structure.

The process is as follows:

� First component is determined by internal sorting� Sorting cannot be influenced by user� Build sub-tree for component

As the engine progresses through the first component (B1), it will consume andreserve capacity for finite scheduling activities. In addition, it will consume anyexisting supplies for the components (T1 and T2) of the assembly and reserveany future receipts to cover the necessary demand. Finally, the engine will fixthe dates. Specifically, it will fix the latest finish date as this is what makes thesolution feasible.

Once the first complete solution is found for B1, the engine will progress onto thenext randomly selected component and begin its search. The dates and quantitiesof the orders for first component CANNOT be changed.

However, if no solution can be found for the second component, the systemwill backtrack. This means that the engine will delete the solution for the firstcomponent, and explode the PDS/PPM with the minimum quantity, using theminimum lot size from the product master. If no solution can be found, it willbacktrack further up the tree.



Figure 192: Scheduling Issues - Depth First Strategy

When the CTM engine is planning for a feasible solution, certain situations canlead to no solution being found. During planning, the CTM engine can split thedemand quantity in to many small orders or it may even fail to find and feasiblesolution.

In the figure above, Product P is made up of one each of the components P1 andP2. P1 and P2 however, share the same resource (R1) that can be constrainedfrom time to time. During the initial solve for a demand of 100 units of P, theCTM engine will create a planned order of 100 units for P. The PDS/PPM willbe exploded and 100 units of dependent requirements will be created for both P1and P2.

Through random selection, P1 will be planned first. The PDS/PPM will bescheduled and exploded, capacity requirements will be created and reserved onthe resource R1, and supplies or receipts will be consumed and reserved for theP1 components. Now when the CTM engine begins to plan the 100 units for P2,the PDS/PPM is selected, exploded, and scheduled. However, there is not enoughcapacity available since P1 was planned first. This will cause an invalid solutionand force the CTM engine to backtrack.



Figure 193: Handling of Multiple Input Components

To solve the problem in the previous figure, the CTM engine is instructed toreduce the requirement quantity in an effort to use whatever capacity or inventoryis available in the first solution path. As of SCM 5.0, a new heuristic approach isapplied to this scenario. In this situation, the CTM engine will split the originalrequirement in half to see if it can cover part of the requirement.

In the scenario above, the original requirement of 100 units could not be met,since P1 consumed all available capacity of resource R1. The engine now splitsthe quantity in half to 50 units. A planned order is created for P for 50 units. ThePDS/PPM is exploded, and scheduled. Dependent requirements of 50 units arecreated for P1 and P2.

P1 is randomly planned first. The PDS/PPM is exploded and scheduled. Thisreserves the capacity on resource R1 and consumes the components. P2 is plannednext. The PDS/PPM is exploded and scheduled. This creates the capacityrequirements and reserves the capacity on resource R1. Because the requirementof P1 was reduced, there is enough available capacity to cover the P2 requirementsthis time.

If there is no fail detected, the balance of the requirement, 50 units, is split in halfagain, this time 25 units, and so on. This will lead to more order splits and is not an�optimal� solution, but it gives the advantage of not running into a complete fail.

During this solve, the first hurdle is the lot size. Does the lot size allow reductionof quantity? Second, when a more complex situation presents itself, with severalinput/output components on multiple levels and varying input/output relationships,this algorithm is very complex and time consuming. Lastly, CTM will not revise afixed solution in case of a complete fail.



Scheduling with AlternativesDepending on the master data scenario, the planning engine may have otheroptions to consider during planning to ensure timely delivery. The solutions canget more complicated if given more choices or alternative methods of supply

Figure 194: Scheduling with Alternatives

In the example above, the material has two PDS/PPMs to choose from, PPM1 andPP2. PPM1 has the highest priority and uses resource R1. PPM 2 is the secondpriority and uses resource R2. Both PPMs can produce one unit per day (consumeone box per unit of demand).

The bottom section depicts the program that the CTM engine will use.

The goal is to satisfy demand completely and on time. First, it will select thePPM with the highest priority; partial solutions are acceptable. If the first optioncannot provide any part of the solution, it is deleted from the list and will not beevaluated again.



Figure 195: Scheduling with Alternatives (2)

In the graphic above, we use the two PPMs from the previous example that canproduce one unit per day.

Demand 1 is for 2 units. Based on the master data, PPM 1 will be selected,capacity requirements created, and resource is reserved. In this case, only oneplanned order is created and is on time.

Demand 2 is for 4 units. Based on the master data, PPM 1 will be selected, andcapacity requirements created. However, resource R1 does not have enoughcapacity to deliver on time and in one order due to down times and other orders.Working backwards from the requirement date, a planned order for one unit iscreated using PPM1. Another planned order is created for two units, using that lasttwo buckets of capacity. This still leaves the requirement one unit short. In thiscase, because PPM1 cannot deliver everything on time, the CTM engine engagesPPM2. At this time, a planned order for one unit is created. The overall result isthree planned orders. The first two use PPM 1 and is for 1 and 2 units, the thirduses PPM2 and is for 1 unit. All planned orders deliver on time.

Demand 3 is for 3 units. Based on the master data, PPM 1 will be selected,however no capacity is available in time. Therefore, PPM2 is engaged. Capacityrequirements are created, and resource R2 is reserved for three units. Only oneplanned order for three units using PPM2 was created and delivered on time.

Demand 4 is for 4 units. Based on the master data, PPM 1 will be selected,however no capacity is available in time. PPM2 is then selected, however there isonly enough capacity to cover 1 of the 4 units of demand. A planned order for 1



unit is created. Now, the CTM engine will evaluate options for late delivery. Atthis time, it will select PPM1 based on its high priority. The engine will schedulethe balance of the 3 units using PPM1. The result is a partially satisfied on-timedelivery.

Figure 196: Scheduling with Alternatives (3)

When the CTM engine engages alternatives, it has some limitations, considering itis a heuristic rather that an optimizer. When analyzing alternatives, CTM is notconcerned with building inventory or optimal delivery.

The top section of the figure above depicts how the engine will consideralternatives. It first goes with priority (PPM1) and will build inventory as far inadvance as possible using the highest priority source of supply. Only when thatsource of supply is exhausted, is the next PPM (PPM2) considered.

The bottom section of the figure depicts one of CTM's limitations. Because it isnot concerned with building inventory, only meeting demand, the engine will notgo back and forth between PPMs. In this case, it suggests using PPM1→ PPM2→ PPM1→ PPM2→ PPM1→ PPM2→ and so on. working backwards intime. This would be more of an �optimal� use of capacity which is not the currentgoal of the CTM engine.



Lot-sizingDuring the CTM planning process, planning occurs in a top-down process. Nowthis is influenced by demand selection and prioritization, but this typically startsat the finished good level. Typically, backward scheduling is employed, whichschedules the receipts as close to the demand date as possible.

While planners have control over late fulfillment in regards to independentdemand, dependent requirements cannot be fulfilled late. Since CTM isorder-based, and works with one requirement at a time, lot sizing parameters cancreate additional obstacles for the engine which can lead to fails.

Figure 197: Lot Size Planning Problems in CTM

In the figure above, we have product A, which made up of one of product B.Material A runs on resource R1 and material B runs on resource R2. Product A hasa fixed lot size of 100 units, while product B has a minimum lot size of 500 units.

Product A has two demands that need to be planned, 300 units and 100 units. Thedemand for 300 units will be planned first. The CTM engine will create the firstplanned order for 100 units due to the fixed lot size parameters. The PDS/PPMwill be exploded and scheduled, thus generating 100 units of dependent demandfor product B. The engine then plans the dependent demand of 100 units forproduct B. In this situation, the minimum lot size is going to be 500 units which ismore than what is needed. This is a feasible solution.



The engine now creates the second planned order for 100 units of A. ThePDS/PPM will be exploded and scheduled, thus generating 100 units of dependentdemand for product B. The previous demand caused an order for 500 units to becreated, which gives an excess of 400 units. However, the excess 400 units is notavailable in time to cover the second 100 units of B that is needed. Therefore, asecond planned order of 500 units is created. This now leads to a surplus of 800units of product B.

Finally, the CTM engine will create the third order of product A for 100 units. ThePDS/PPM will be exploded and scheduled, thus generating 100 units of dependentdemand for product B. Now the second dependent demand for 100 units causeda planned order for 500 units of product B to be created, which gives an excessof 800 units. However, the excess 800 units is not available in time to cover thethird 100 units of B that is needed. Therefore, a third planned order of 500 unit iscreated. This now leads to a surplus of 1200 units of product B. In addition, it hasused all capacity to this point

When the second demand for product A of 100 units is considered, the CTMengine will create the planned order for 100 units due to the fixed lot sizeparameters. The PDS/PPM will be exploded and scheduled, thus generating 100units of dependent demand for product B. The engine then plans the dependentdemand of 100 units for product B. In this situation, the minimum lot size is goingto be 500 units which is more than what is needed. Demand 2 will fail becausethere is no available capacity on R2 to make Product B in time. In addition, thethird planned order of B for 500 units will not be completed in time to support thedependent demand created by the second requirement of A.

Controlling Earliness Lateness in CTMThe standard approach to most planning models is to provide inventory in ajust-in-time manner without being late. This is not a standard consideration duringthe CTM engine process. However, there are controls available to control howearly CTM can plan to build a receipt or control how acceptable late receiptscan be considered.

The following example uses the results from the previous section as an example ofhow to control earliness and lateness.



Figure 198: Earliness and Lateness in CTM

In the figure above, three different results could happen based on the same demandsituation, but using different control parameters in the CTM profile.

The first scenario, required demand D1 for 4 units is to be fulfilled on a certainday. The standard CTM process is to use the source of supply with the highestpriority, which in this case would be the PPM using resource R1. However, R1 isoccupied on the day that D1 needs to be fulfilled, so the engine plans on using R1,but building the inventory early. This is in spite of the fact that the PDS/PPM usingR2 is available sooner, and this is because it is a lower priority than resource R1.

The second scenario tries to control the earliness of the planned order, forcing thesystem to review other options that may deliver on time. In this case, a plannercan use the following parameters to avoid using resource R1 because it wouldcause you to build production too early:

� Order Creation Frame� Maximum Earliness for Planned Orders� Maximum Earliness

The engine would normally create two planned orders, using the two availabledays on R1 and creating another order for two units using R2. In this situation,the options mentioned above would negate the available capacity on R1, forcingthe engine to only consider R2.

The final scenario shows both R1 and R2 fully occupied prior to the demand date.The system would normally choose R1, since it is the higher priority PDS/PPM.This option would make the receipt essentially five days late. By controlling the�maximum lateness�, the CTM engine disregarded R1, since R2 could deliverythe receipt sooner, even though it still late. The engine chose the option that madeit the �least late�.



These topics will be covered in more detail in subsequent lessons.



Exercise 19: Scheduling in CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate a thorough understanding of how the CTM engine will perform

scheduling

Business ExampleAs the master planner for your pumps, you are going to run into scenarios wheredemand is greater than available capacity or component supply. To achievemaximum results from the CTM engine, you must understand its idiosyncrasies onhow it schedules. Test several scenarios to achieve a detailed understanding as tohow to CTM schedule works.

Task 1: Scheduling Multilevel ProductionIn most CTM scenarios, replenishing at more than one level is almost always arequirement. Since CTM is looking for a feasible solution and will plan eachrequirement individually, it must explore all levels of the supply chain. Explorehow constraints at lower levels can affect the fulfillment of demand.

1. Execute a CTM planning run using profile GR##_7, to delete the receipts foryour simple pump scenario.

2. From the Product View for 000/T-F##/1000, delete any requirements that arecurrently present and Save.

3. Change your product view selection to T-F##/2400, and create a forecastrequirement for 5 pcs three weeks from today, and Save.

4. In another session, execute a planning run with CTM profile GR##_4 tocover the requirement you just created.

5. Refresh the product view for T-F##/2400. Execute the Order Context Reportand review the details of the replenishment.




6. Drill in the PurReq at location 2400. What is the duration?Hint: �select activities (current length)�

7. Drill in the planned order for T-F## at location 1000. What is the duration?Hint: �Operations �> 0010 �> Produce (current length x Ttl qty)�

8. Drill in the planned order for T-SF1## at location 1000. What is theduration?Hint: �Operations �> 0010 �> Produce (current length x Ttl qty)�

9. Drill in the PurReq for T-T## at location 1000. What is the duration?Hint: �Operations �> 0010 �> Produce (current length x Ttl qty)�

10. Execute a CTM planning run using profile GR##_7 to delete the receipts foryour simple Pump scenario.

11. From the Product View for 000/T-F##/2400, delete any requirements that arecurrently present and save.




Task 2: Understanding Binary SplittingCTM by its design will look for a feasible solution. When it cannot deliver a singlereceipt in a timely fashion, during the solve, it will begin to split the requirementinto smaller pieces so it can try to fulfill as much of the demand as possible.Explore how this splitting logic works.

1. For simulation purposes, create a new CTM profile GR##_4S1 (Group ##Simple Pump Simulation 1), by copying it from GR##_4.

2. Update your new profile GR##_4S1, so that it uses version CTM_##.

In addition, make sure you set an Order Creation Start of 1 day, and aDeletion Start of 1 day.

3. Create a new master data selection T-F##S1, by copying T-F##. Generatethe dependent master data manually, and remove the PPM A002 for T-F##at location 1000. Save and update your new profile GR##_4S1 with thenew master data selection.

4. In the product view for planning version CTM_##, create an FC req. forT-F## at location 1000 for 10 pcs, 11 working days (2 weeks + 1 day fromtoday) at 00:00:00 hour and Save.

5. Using your CTM profile GR##_4S1, execute a planning run to cover therequirement at location 1000.




6. Look in the product view for T-F## at location 1000. What is the result ofthe planning run? Explain.

7. Review the capacity utilization report that is located in your CTM evaluation:CTM Planning Run→ Explanations→ Result Indicator for CTM PlanningRunWhat is the utilization for WT-CTM##_1000_001 prior to the date of therequirement?

8. What is the utilization for WT-CTM1##_1000_001 prior to the date of therequirement?

9. Change your CTM profile GR##_4S1 so that the master data selection isusing your original T-F## selection ID. Save your profile and executea planning run.





Task 3: Scheduling with AlternativesDuring the feasible solve for a requirement, CTM will exhaust all options beforedelaying or shortening a requirement. Explore how in this example the feasiblesolve works with splitting and alternative procurement options.

1. To make your understanding of the CTM algorithm go smoother, we wantto simplify the situation so we will remove the bottleneck. So we do notaffect the real time plan, using ABAP Program /SAPAPO/SJKTST02, create100 pcs of unrestricted stock for the T�SF1## at location 1000 in versionCTM_##.

2. In the product view for CTM_##/T-F##/1000, change the 10 pcs FC req to 6working days from today at 00:00:00, and Save.

3. Execute a planning run using your CTM profile GR##_4S1, and to cover therequirement at location 1000.

4. Look in the product view for CTM_##/T-F##/1000. What is the result ofthe planning run? Explain.

5. In the product view, change the FC req. for CTM_##/T-F##/1000 from 10pcs to 2 pcs and move it five days from today at 00:00:00 hour and Save.

6. Using your CTM profile GR##_4S1, update your settings so that the systemwill round all quantities. Save, and execute a planning run to cover therequirement at location 1000.




7. Look in the product view for CTM_##/T-F## at location 1000. What is theresult of the planning run? Explain.

8. Review the Evaluations; pay particular attention to the resource utilizationfor your resources WT-CTM##_1000_001 and WT-CTMA##_1000_001.What days did the CTM engine utilize? Evaluations→ CTM Planning Run→ Explanations→ Results Indicators for CTM Planning Run (details)→Resource Utilization

9. In the product view, create an additional FCreq. for CTM_##/T-F##/1000for 4 pcs with a date six days from today at 00:00:00 and Save.



12. In the product view, create a third FCreq. for CTM_##/T-F##/1000 for 3 pcswith a date six days from today at 00:00:00 hour and Save.





14. Look in the product view for CTM_##/T-F##/1000 . What is the result ofthe planning run? Explain.

Task 4: Lot Sizing Impacts on SchedulingDuring manufacturing or procurement, you are often required to add minimumor fixed lot size scenarios. Because CTM works one requirement at a time, thissituation could often create supply surpluses, but also resource shortages. Explorehow fixed lot sizes can cause supply issues in the CTM solve.

1. Execute a CTM planning run using profile GR##_7 to delete the receipts foryour simple pump scenario.

2. In the Product View for 000/ T-F##/1000, delete all FC reqs and save.

3. The casing production process can be extensive, so the production managerhas asked to run a days worth of production every you need to manufacturecasings. Change the product master T-SF1## at location 1000 and set aRounding Value technique with a quantity of 8.

4. In the Product View for 000/T-F##/1000, create FC reqs for 1 pc 10 workingdays from today at 00:00:00 hour and save.

5. Using your CTM profile GR##_4, update the strategy so that it will generatefixed pegging lanes and execute a planning run to cover the requirementat location 1000.




6. Look in the product view for 000/T-F##/1000. What is the result of theplanning run? Explain.

7. Look in the product view for 000/T-SF1##/1000. What is the result of theplanning run? Explain.

8. In the Product View for 000/T-F##/1000, create FCreq for 1 pc, one weekfrom today at 00:00:00 and save.

9. Using your CTM profile GR##_4, execute a planning run to cover therequirement at location 1000.

10. Look in the product view for 000/T-F## at location 1000. What is the resultof the planning run? Explain.Hint: Use the explanation tools and capacity utilization reports if necessary



13. Change the product master for T-SF1## at location 1000 so as to removethe Rounding Value .



Solution 19: Scheduling in CTMTask 1: Scheduling Multilevel ProductionIn most CTM scenarios, replenishing at more than one level is almost always arequirement. Since CTM is looking for a feasible solution and will plan eachrequirement individually, it must explore all levels of the supply chain. Explorehow constraints at lower levels can affect the fulfillment of demand.


a) Select the session with your CTM profile GR##_7 and select F8 toexecute a planning run


a) From the session with your product view select change

b) Select the relevant requirements and select Delete Orders

c) Select Save

3. Change your product view selection to T-F##/2400, and create a forecastrequirement for 5 pcs three weeks from today, and Save.


b) in the Chart below, enter a date three weeks from today, and a quantityof - 5 pcs.

c) Select Save

4. In another session, execute a planning run with CTM profile GR##_4 tocover the requirement you just created.


5. Refresh the product view for T-F##/2400. Execute the Order Context Reportand review the details of the replenishment.

a) Select

6. Drill in the PurReq at location 2400. What is the duration?

Hint: �select activities (current length)�

Answer: 19 hours and 41 minutes, which is the duration of the means oftransportation.




7. Drill in the planned order for T-F## at location 1000. What is the duration?

Hint: �Operations �> 0010 �> Produce (current length x Ttl qty)�

Answer: 5 days

8. Drill in the planned order for T-SF1## at location 1000. What is theduration?


Answer: 5 days

9. Drill in the PurReq for T-T## at location 1000. What is the duration?


Answer: 0 days, as long as it is outside the planned delivery time, it will beavailable at the time it is required.

10. Execute a CTM planning run using profile GR##_7 to delete the receipts foryour simple Pump scenario.


11. From the Product View for 000/T-F##/2400, delete any requirements that arecurrently present and save.



c) Select Save

Task 2: Understanding Binary SplittingCTM by its design will look for a feasible solution. When it cannot deliver a singlereceipt in a timely fashion, during the solve, it will begin to split the requirementinto smaller pieces so it can try to fulfill as much of the demand as possible.Explore how this splitting logic works.

1. For simulation purposes, create a new CTM profile GR##_4S1 (Group ##Simple Pump Simulation 1), by copying it from GR##_4.

a) From your session with CTM Profile GR##_4, select Copy Profile.

b) Enter GR##_4S1 and select Copy Profile.

c) Enter a description (Group ## Simple Pump Simulation 1).

d) Select Save.

2. Update your new profile GR##_4S1, so that it uses version CTM_##.




In addition, make sure you set an Order Creation Start of 1 day, and aDeletion Start of 1 day.

a) Select the Planning Scope tab, and enter version CTM_##.

b) Select the Strategies→ Planning Strategies tab.

c) Enter 1 day in both the Order Creation Start and Deletion Start fields.

d) Select Save.

3. Create a new master data selection T-F##S1, by copying T-F##. Generatethe dependent master data manually, and remove the PPM A002 for T-F##at location 1000. Save and update your new profile GR##_4S1 with thenew master data selection.

a) From your CTM Profile GR##_4S1, double-click on the master dataselection T-F##.

b) Copy Master Data Selection, enter T-F##S1 and select Continue

c) Remove the indicator Select Dependent Master Data Automatically.

d) Select Select Dependent Master Data Manually.

e) Select the In-House Production tab.

f) Select the PPM A002 for T-F## at location 1000, and select DeleteRow.

g) Select Save.

h) Select Back.

i) Change the master data selection for your new profile GR##_4S1 sothat it reflects your new master data selection T-F##S1.

j) Save your profile.

4. In the product view for planning version CTM_##, create an FC req. forT-F## at location 1000 for 10 pcs, 11 working days (2 weeks + 1 day fromtoday) at 00:00:00 hour and Save.


b) In the chart below enter a date 11 working days from today at 00:00:00,and a quantity of -10 pcs

c) Select Save


a) Select the session with your CTM profile GR##_4S1 and select F8to execute a planning run





Answer: One planned order, one for 5 pcs. If there were holidays involvedyou may get more than one planned order.For 10 pieces of demand you need 20 days from today, and you only have10. During the first attempt at the CTM solve, the engine tried to plan all 10pieces, but was not successful. Using binary splitting logic, the system triedto plan half the requirement of 10 pieces, which is 5 pieces.Since no delays are allowed at this time, and no other alternatives areavailable, the engine leaves this demand short.

7. Review the capacity utilization report that is located in your CTM evaluation:CTM Planning Run→ Explanations→ Result Indicator for CTM PlanningRun

What is the utilization for WT-CTM##_1000_001 prior to the date of therequirement?

Answer: Utilization is 100% for 5 days leading up to the date of therequirement

8. What is the utilization for WT-CTM1##_1000_001 prior to the date of therequirement?

Answer: Utilization is 100% for 5 days starting tomorrow.By not having any other alternatives for the T-F## at location 1000, theCTM engine split the 10 piece requirement in half and was able to planonly half the requirement.

9. Change your CTM profile GR##_4S1 so that the master data selection isusing your original T-F## selection ID. Save your profile and executea planning run.

a) Select the Planning Scope tab.

b) Change your master data selection from T-F##S1 to T-F##.

c) Select Save.

d) Select F8 to Execute a planning run.





Answer: Two planned orders, one for 5 pcs, and one for 2.5 pcs.For 10 pieces of demand, you need 20 days from today, and you only have10. During the first attempt at the CTM solve, the engine tried to plan all10 pieces, but was not successful. Using binary splitting logic, the systemtried to plan half the requirement of 10 pieces, which is 5 pieces. In doingso, it used up the capacity on WT-CMT1##_1000_001 for 5 days startingtomorrow, and then scheduling WT-CTM##_1000_001.Now this still leaves 5 days of capacity on WT-CMT1##_1000_001 and 5days on alternative resource WT-CTMA##_1000_001. However, these arethe same 5 days when in fact we need 5 concurrent days on each resource.Following the binary splitting logic, the CTM engine tries to schedule an orderfor 2.5 pcs. This will require 2.5 days on resource WT-CTMA##_1000_001first. Then .5 days on resource WT-CTM1##_1000_001. This is in factpossible and the only solution considering that WT-CTM1##_1000_001 isthe bottleneck in the process.

Task 3: Scheduling with AlternativesDuring the feasible solve for a requirement, CTM will exhaust all options beforedelaying or shortening a requirement. Explore how in this example the feasiblesolve works with splitting and alternative procurement options.

1. To make your understanding of the CTM algorithm go smoother, we wantto simplify the situation so we will remove the bottleneck. So we do notaffect the real time plan, using ABAP Program /SAPAPO/SJKTST02, create100 pcs of unrestricted stock for the T�SF1## at location 1000 in versionCTM_##.

a) APO menu path: Tools→ ABAP workbench→ Development→ ABAPEditor (SE38)

b) Enter program /SAPAPO/SJKTST02 and select Execute.

c) Enter Version CTM_##, and Product T-SF1##, and Location 1000,Initial Stock 100, Category CC Execute

2. In the product view for CTM_##/T-F##/1000, change the 10 pcs FC req to 6working days from today at 00:00:00, and Save.


b) For the existing requirement of -10 pcs to a date 6 working days fromtoday and a time of 00:00:00

c) Select Save




3. Execute a planning run using your CTM profile GR##_4S1, and to cover therequirement at location 1000.



Answer: Two planned orders; each one is for 5 pcs and are arriving ontime at the same time. If you scroll to the right in the product view, youcan see that each order used a different resource. The CTM engine triedto schedule the original 10 pcs in one planned order. However, there wasnot enough capacity on WT-CTM##_1000_001 to do all 10 pieces. There,binary splitting was enacted and the CTM engine tried to schedule an orderfor 5 pcs. WT-CTM##_1000_001 had enough capacity to produce 5 pcs,so the order was created. The CTM engine then tried to source the balanceof the requirement (5pcs) from resource WT-CTMA##_1000_001. Thisresource did have enough produce all 5 pcs. By adding inventory on theT-SF1##/1000 you removed the bottleneck that previously caused the CTMengine to create an order of 2.5 pcs instead of 5 pcs.

5. In the product view, change the FC req. for CTM_##/T-F##/1000 from 10pcs to 2 pcs and move it five days from today at 00:00:00 hour and Save.


b) change the existing requirement date to five days from today, changethe time to 00:00:00: and the quantity from -10 pcs to -2 pcs, andchagne the

c) Select Save

6. Using your CTM profile GR##_4S1, update your settings so that the systemwill round all quantities. Save, and execute a planning run to cover therequirement at location 1000.

a) Select Settings→ Technical Settings tab, and set Round to RoundOrder Quantities.

b) Select Save.

c) Select F8 to Execute a planning run.

7. Look in the product view for CTM_##/T-F## at location 1000. What is theresult of the planning run? Explain.

Answer: One planned order, for 2 pcs, finishing at the end of the shift on theprevious day so that it is available at 00:00:00.




8. Review the Evaluations; pay particular attention to the resource utilizationfor your resources WT-CTM##_1000_001 and WT-CTMA##_1000_001.What days did the CTM engine utilize? Evaluations→ CTM Planning Run→ Explanations→ Results Indicators for CTM Planning Run (details)→Resource Utilization

Answer: Because of backwards scheduling, the CTM engine used thecapacity on the two days previous to the requirement date. This leaves onlytwo days (2 pcs) of available capacity on the production line.

9. In the product view, create an additional FCreq. for CTM_##/T-F##/1000for 4 pcs with a date six days from today at 00:00:00 and Save.


b) In the chart below enter a date of 6working days from today, a time of00:00:00 and a quantity of - 4 pc

c) Select Save




Answer:

1. Since you were performing a regenerative planning run, the 2 pcsFCreq was planned first without any problems.

2. The engine tried to plan 4 pcs, but there was not enough capacity on theprimary PPM. There were 3 days of capacity but not consecutive days.

3. Binary splitting occurred (2 pcs) and the system found capacity tomake 2 pieces the 1st priority resource/PPM. (this included tomorrowand they day after).

4. The engine then began binary splitting again (1 pc) and found timeavailable on the 1st priority resource.

5. With only 1 pc remaining, the CTM engine scheduled this requirementon the 2nd priority resource where there was adequate capacity.




12. In the product view, create a third FCreq. for CTM_##/T-F##/1000 for 3 pcswith a date six days from today at 00:00:00 hour and Save.


b) In the chart below enter a date of 6working days from today, a time of00:00:00 and a quantity of - 3pc

c) Select Save



14. Look in the product view for CTM_##/T-F##/1000 . What is the result ofthe planning run? Explain.

Answer: Planned order for 3 pcs was created. This order was scheduledhowever on the 2nd priority resource, which had enough capacity to coverit in one order.

Task 4: Lot Sizing Impacts on SchedulingDuring manufacturing or procurement, you are often required to add minimumor fixed lot size scenarios. Because CTM works one requirement at a time, thissituation could often create supply surpluses, but also resource shortages. Explorehow fixed lot sizes can cause supply issues in the CTM solve.



2. In the Product View for 000/ T-F##/1000, delete all FC reqs and save.



c) Select Save




3. The casing production process can be extensive, so the production managerhas asked to run a days worth of production every you need to manufacturecasings. Change the product master T-SF1## at location 1000 and set aRounding Value technique with a quantity of 8.

a) APO Menu: APO→ Master Data→ Product→ Product

b) Enter T-SF1## and location 1000 and select Change.

c) Select theLot Size→ Quantity and Date Determination tab, and set theRounding Value to a quantity of 8.

d) Select Save.

4. In the Product View for 000/T-F##/1000, create FC reqs for 1 pc 10 workingdays from today at 00:00:00 hour and save.


b) In the chart below enter a date of 10working days from today, a time of00:00:00 and a quantity of - 1 pc

c) Select Save

5. Using your CTM profile GR##_4, update the strategy so that it will generatefixed pegging lanes and execute a planning run to cover the requirementat location 1000.

a) Select Strategies→ Planning Strategies and set the pegging type toFixed Pegging

b) Save and execute a planning run.

6. Look in the product view for 000/T-F##/1000. What is the result of theplanning run? Explain.

Answer: Planned order for 1 piece is arriving at the end of the shift onthe previous day.If you review the order content report you will see an alert for excess

7. Look in the product view for 000/T-SF1##/1000. What is the result of theplanning run? Explain.

Answer: Planned order for 8 pcs is arriving at the end of the shift prior tothe start of the T-F## production.If you review the order content report or product view, you will see analert for excess




8. In the Product View for 000/T-F##/1000, create FCreq for 1 pc, one weekfrom today at 00:00:00 and save.


b) In the chart below enter a date of 5 working days from today, a time of00:00:00 and a quantity of - 1 pc

c) Select Save

9. Using your CTM profile GR##_4, execute a planning run to cover therequirement at location 1000.

a) In the Session with your CTM profile GR##_4 select F8 to executea planning run

10. Look in the product view for 000/T-F## at location 1000. What is the resultof the planning run? Explain.

Hint: Use the explanation tools and capacity utilization reports if necessary

Answer: No planned order was created. If you review the capacityutilization report in the explanations, you will see there is plenty of capacityat both WT-CTM##_1000_001 and WT-CTMA##_1000_001 which couldbe used to produce the T-F##.When the first requirement was planned, the engine created planned orderfor 1 pc of the T-F## which consumed 8 hours or 1 day of capacity. Becauseof the rounding value in the product master for the T-SF1##, a planned orderwas created for 8 pcs, which required 64 hours of capacity or 8 days ofcapacity on the resource WT-CTM1##_1000_001.Now, since the second requirement was earlier than the first (prioritization),the dependent requirement for the T-SF1## was arriving ahead ofthe 8 pcs planned order. Therefore, another 8 pcs order was goingto be created. However, if you look at the utilization report for theWT-CTM1##_1000_001, you will see there is not enough capacity to createthe new order on time, and since the engine is only allowed a 5 day delay, theT-SF1## cannot be made in time, so the requirement goes uncovered.


a) In the Session with your CTM profile GR##_7 select F8 to executea planning run






b) Highlight the relevant requirement and select Delete Orders

c) Select Save

13. Change the product master for T-SF1## at location 1000 so as to removethe Rounding Value .

a) APO Menu: APO→ Master Data→ Product→ Product

b) Enter T-F2## and location 1000 and select Change.

c) Select theLot Size→ Quantity and Date Determination tab, and deletethe Rounding Value

d) Select Save.



Lesson Summary

You should now be able to:� Explain in detail the multilevel production process during CTM scheduling� Explain how the CTM engine will cope with multiple input components� Describe in detail the concept of �Depth First Strategy�� Demonstrate how CTM manages the selection process when alternative


of the CTM planning run.


� None


SCM235 Lesson: Managing Lateness in CTM

Lesson: Managing Lateness in CTM

Lesson OverviewCTM is an order-based scheduling tool that prioritizes demands, and solves oneorder a time. It searches for a feasible solution for each individual order. At somepoint, the engine may not be able to meet all requirements. In this situation, youneed to decide if you wish CTM to continue planning even though the supply willbe late. In this lesson, you will analyze options available to planners to controllateness.


� List options for late demand handling� Demonstrate standard late demand handling� Demonstrate late demand offset

Business ExampleThe premise of the CTM engine is that each requirement can be planned whileanalyzing the entire supply chain if necessary. For some scenarios, this may berather complex, depending on the amount of instances where multiple supplysources exist. Also the depth and breadth of the supply chain can add complexityto the solution. To validate the CTM engine results, you must become familiarwith the nuances of the CTM engine.

Summary of CTM Time ConstraintsCTM is rather unique in that it gives planners a wide variety of parameters tocontrol the CTM engine and its outputs.



Figure 199: Summary of CTM Time constraints

Within CTM, planners can control when orders are created, the earliness of ordersand the lateness of orders.

Order creation can be controlled by:

� SNP Production Horizon (Product Master)*� PPDS Horizon (Planning Version)*� SNP Stock Transfer Horizon (Product master)*� Planned Delivery Time (Product master)*� Order Creation Start (CTM Profile)� Planning Start/End time

*Applied from the planning start dateThese techniques were discussed in detail in earlier lessons.

The earliness of receipts can be controlled by:

� Order Creation Frame (Product Master/Global Settings)

This is applied starting from the top node (N1) until the last node of thesolution tree

� Maximum Pegging Length (MPL) - (Product Master)

This applies to any node ( top - N1, intermediate - N2, N3)

� Maximum Earliness for Production (Global Settings)

This is applied on for the first node (N1) of production



These techniques will be discussed in subsequent lessons.

Late demand scheduling can be controlled by three parameters:

� Late demand handling method� Late demand scheduling strategy� Late demand frame (LDF)

The Late Frame will be controlled via Global Settings and CTM profileparameters. The late frame is applied on the original demand date at the top node.All intermediate nodes (dependent demand) cannot be late.

Figure 200: Alternatives and Controlling Lateness

The graphic above gives a scenario that the CTM engine may have to cope with.The first three demands can be resolved by building the inventory early and usingtwo sources of supply. The fourth and fifth demands will be late. How CTMmanages this lateness will be a function of the sources of supply and how thelateness parameters will be employed.

Within the CTM profile, planners can control how lateness can be handled witheach planning run.



Late Demand Handling (CTM Profile)CTM planning for demands always tries to schedule the orders in time to meet thecomplete required demand quantity. CTM first tries for all possible alternativesfor an on time solution. If no on time solution is found, or a partial on timesolution is found due to capacity or material constraints, then CTM switches tolate demand handling mode.

Figure 201: CTM Profile Strategy for Late Demand Handling

Within the CTM Profile, (Special Strategies tab), planners have the ability tocontrol how CTM can be used to manage late demand. Planners can utilize threeoptions:

1. Use standard procedure for scheduling2. Keep lateness to a minimum3. Gradually postpone demand

If applying the Standard Procedure for Scheduling for late demand fulfillment,CTM planning uses the standard procedure for scheduling and supply sourcedetermination. CTM planning selects the individual demand sources of supplyeither via quota arrangements, or via priorities and costs.

When applying Keep Lateness to a Minimum, CTM planning selects the sourceof supply you can use to fulfill the demand as early as possible. CTM planningonly considers priorities, costs, and quota arrangements when there are severalsources of supply with the same availability date.

Note: With this strategy, the CTM planning run takes longer than it doeswith the standard procedure.



With the last technique, Gradually Postpone Demand Date, CTM planningshifts the demand date by the number of days that you have specified under offset. CTM planning then attempts to fulfill the demand on the new demand date,using the standard procedure for scheduling. If the demand cannot be completelyfulfilled on the new demand date, CTM planning shifts the demand date again bythe specified number of days. CTM planning continues with this process until thedemand is completely fulfilled, or until the system can no longer shift the demanddate because the time period for late demand fulfillment is exceeded. This searchfor a solution will take a long time if you have selected a large time period for thelate demand fulfillment and entered a low value under offset.

Late Demand Handling Settings

Figure 202: Late Demand Fulfillment Controls

Figure 1: Allowing Late Demand Fulfillment means that CTM can schedulereceipt elements later then the demand date and use them to fulfill the demand.The late demand handling method must be activated first in the in CTM globalcustomizing under transaction /sapapo/ctmcust or menu path: IMG→ APO→Supply Chain Planning→ Multilevel Supply and Demand Matching→ CTM→Define Global Values and Default Values.



If you do not set the indicator, CTM cannot schedule receipt elements after thedemand date. CTM attempts to schedule receipt elements either as early aspossible (forward scheduling) or as late as possible (backwards scheduling), butalways observing the demand date. If CTM cannot schedule a receipt elementbefore the demand date, the demand is then not fulfilled.

Once you have activated Late Demand Fulfillment you can specify the LateDemand Fulfillment and Late Demand Fulfillment Strategy.

The Late Demand Fulfillment is the time period (in days) after the demand date,within which the system can still schedule receipt elements. You can enter valuesfrom 1 - 999. The system can schedule receipt elements in the specified timeperiod (demand date + number of calendar days). Remember that non-workdaysare automatically counted as days.

Example: You have specified a valid delay of 14 days for a demand with ademand date of April 22nd. This means that the system can schedule receiptelements, which are necessary to fulfill the demand, in the time period betweenApril 22nd and May 5th.

When allowing demands to be fulfilled late, you can either select the "Airline"or the "Domino" method for planning late demands.

Figure 2: In the CTM profile, a specific LDF value can be set using the variableplanning parameter in the CTM profile. This will over ride the global parameters.

Parameter Name = CTM_MG

Value 1 = nLateShipGlobal

Value 2 = <number of days>

This is only valid from SCM 5.0 release.

Figure 3: A more specific approach can be applied by using the ATP rules (TA/sapapo/rba04). Rule definition contains the CTM calculation profile where LDFvalue can be set. ATP rule evaluation can be set to determine the rule basedon each product and location. Due to performance reasons, this method is notrecommended for CTM planning with large data volumes. This will be covered inmore detail in a later lesson.

Demand specific LDF values can be set using the user exit APOBO020. All thedemands planned with CTM contains the LDF attribute (LATESHIP).

Note: See SAP Note: 450794 - CTM: User ExitEXIT_/SAPAPO/SAPLBOP_SORT_020



Domino Strategy

Figure 203: Domino Strategy

When using the Domino strategy, once the first demand is considered late, this canlead to late fulfillment of subsequent demands during demand prioritization. Thismay be the case if the capacity has already been exceeded.



Airline Strategy

Figure 204: Airline Strategy

When using the Airline strategy, if a demand cannot be fulfilled by the demanddate, the subsequent demands are fulfilled first during demand prioritization. CTMdoes not attempt to fulfill the late demand until the end of demand prioritization.The advantage of using this strategy is that late demand fulfillment does not delaythe fulfillment of subsequent demands. If all demand elements have moved to theend of demand prioritization, CTM switches automatically to the domino strategy.

CTM Algorithm for Standard Late Demand HandlingThe default late demand behavior of CTM is as follows: No matter whether CTMis run in backward or forward scheduling mode; when the demand cannot befulfilled on time, CTM starts the late demand handling. At the beginning of eachday, the demand date is checked for available capacity to fulfill or partially fulfillthe demand quantity. CTM steps forward day by day obtaining the maintainedlate demand handling time frame, doing this until it cannot fulfill any quantity.In this case, the remaining quantity to fulfill the order completely is calculated.After that, CTM switches to forward scheduling and looks for enough capacity tofulfill the remaining quantity with one order. The forward scheduling is only usedto find the possible date for a complete fulfillment of the remaining quantity. Inthis mode, CTM does not use all possible alternatives. Only the first alternative isused. Once the new possible date has been found, CTM uses backward schedulingmode and uses all possible alternatives to fulfill the remaining quantity.



Figure 205: CTM Algorithm for Standard Late Demand Handling

As of APO release 3.0 and 3.1, only the standard procedure was available. As ofrelease SCM 4.0 and later, the new parameter was included in the CTM profile togive planners more control over the engine.

The above algorithm and the further late handling procedures only apply in thecase the Scheduling Direction in the CTM profile is set to Backwards Scheduling.In the case of Forward Scheduling, a simpler late handling is applied: The newdemand date is simply the end of the planning horizon and, from there, a forwardscheduling is performed. The result is the final late solution.

Note: In the late demand handling, when a new demand due datewas determined, all the early constraints: Order Creation Frame, andMaximum Earliness for Planned Orders, are applied with the originaldemand due date. The start of the early frame is still used.



Figure 206: Standard Method (1)

In the example above, assume we have a demand of 4 units.

Step 1: CTM checks to see if demand can be fulfilled on time. No capacity isavailable, therefore the solution fails.

Step 2: Late demand scheduling is initiated. CTM then steps day by day throughthe time grid and looks at each day for available capacity, even if this availablecapacity can only fulfill the demand partially. The engine then shifts the demanddue date by one day. The result is that it can partially fulfill the demand by usingboth PPMs and creating two planned orders for one unit each. A partial solution isreached.

Step 3: The engine then shifts the demand due date by one more day. The resultis that it can completely fulfill the demand by using both PPMs and creatingtwo planned orders for one unit each. A complete solution is found, but it willencompass delays.





Step 1: CTM checks to see if demand can be fulfilled on time. No capacityis available.

Step 2: As part of the standard procedure, CTM shifts the demand due date by onedate, to see if the requirement can be fulfilled. In this case, there is not availablecapacity thus, no solution is found.

Step 3: As part of standard procedure, CTM applies a forward scheduling step.In this process, CTM is using the highest priority source of supply, and applyingforward scheduling to determine when the entire quantity can be produced in oneproduction run. A new demand due date is determined.



Step 4: Now that a new demand due date is determined, backward schedulingis performed.

Note: Prior to the forward scheduling, CTM must determine the quantityto schedule. The following quantities are used:

1. Remaining demand quantity2. Minimum Lot size.

The minimum lot size of a location product is only taken into account ifa PPM/PDS for the location product exists. Yet, the procurement typeof the location product is not relevant in this case. The minimum lotsize of the PPM/PDS is taken into account in releases SCM 4.0 or later.In releases APO 3.0 and APO 3.1, only the minimum lot sizes of thelocation product are used.

There can be different receipt quantities calculated in the forward and backwardscheduling step. It is possible that the forward scheduling step determines apartial solution. Consider that the forward scheduling step is only used to find afeasible new demand due date. With this date and the remaining demand quantity,a backward scheduling step is started. Potentially, the result can be different(because of reversed interpretation of time-dependent planning parameters inPPM/PDS, and so on) from that in the forward scheduling step, for example, agreater quantity can be fulfilled at the same date. For instance, the lead time of thefirst alternative selected in the forward step is longer than a second alternative, sojust by selecting the first alternative a later date was calculated, where using bothfirst and second alternative would have resulted in a date less late.

Because of these differences between forward and backward scheduling, the otherlate demand mode of minimizing the lateness was introduced.





Step 1: CTM checks to see if demand can be fulfilled on time. No capacity isavailable, therefore the solution fails.

Step 2: Late demand scheduling is initiated. CTM then steps day by day throughthe time grid and looks at each day for available capacity, even if this availablecapacity can only fulfill the demand partially. The engine then shifts the demanddue date by one day. The result is that it can partially fulfill the demand by usingboth PPMs and creating two planned orders for one unit each. Eight units ofdemand remain, but a partial solution is reached.

Step 3: The engine then shifts the demand due date by one more day. The resultis that it can partially fulfill the demand by using both PPMs and creating twoplanned orders for one unit each. A partial solution is found but 6 units of demandremain.

Step 4: The engine then shifts the demand due date by one more day. The resultis that it can partially fulfill the demand by using both PPMs and creating twoplanned orders for one unit each. A partial solution is found but 4 units of demandremain.




Step 5: The are 4 units of demand still outstanding. The CTM engine shifts thedue date by one day however, no capacity is available. No solution is found.

Step 6: The engine applies forward scheduling for the remaining 4 units to find anew due date.

Step 7: Once the new due date is found, backwards scheduling takes place. Acomplete solution is found.

CTM Algorithm for Gradually Postpone Demand DateAs of SCM 4.0 and later, another approach to late demand scheduling can beapplied. This is to use an offset (in days) or the Gradually Postpone DemandDate algorithm.

For releases APO 3.0 and APO 3.1, the variable planning parameterLateDemandOffset can be used. The first value specifies the number of daysfor the offset.



Figure 210: CTM Algorithm for Gradually Postpone Demand Date (offset)

The concept of applying a late demand offset is to allow the CTM engine topostpone the delivery based on the number of days identified in the CTM profile.Example: if the normal receipt time was 10 days, and a late demand offset of 5days was applied, this means the time frame for fulfilling the demand would bethen 15 days. The technique can be applied in the CTM profile: Strategies→Special Strategies→ Late Demand Fulfillment with the value Gradually PostponeDemand Date and an insert offset in days.

The concept is to have the CTM engine look at all possibilities, but to do so insmall time increments making sure the requirement is being fulfilled as soon aspossible.

Figure 211: Late Demand Offset (1)

The example above will require CTM to plan a requirement of 14 units.

Step 1: CTM tries to find a timely solution, but no capacity is found. No solution.



Step 2: Due to an offset of three days, CTM shifts the demand due date by threedays. The result is that two planned orders will be created for 3 units each(different PDS/PPM used) and a partial solution is found. 8 units of demand arestill outstanding

Step 3: The three day offset is applied again, another 6 units of capacity are found,and two orders for three units a piece are created. This is a partial solution, butstill 2 units of demand are outstanding.

Step 4: The three day offset is applied a third time (creating new due date). Inthis case, resource R1 can supply the entire balance of the 2 units. Backwardsscheduling is applied and a complete solution is found.

Note: Due to a difference in the demand requirements and the offset, agap is created between the second and third order. For the last two units,the new demand date was enough to plan 3 units. However, since the newdate was further out, the solution leaves a one day gap in the resource.


The example above will require CTM to plan a requirement of 9 units

Step 1: CTM tries to find a timely solution, but no capacity is found. No solution

Step 2: Due to an offset of two days, CTM shifts the demand due date by twodays. The engine finds no capacity available, therefore no forward schedulingis triggered. Still 9 units outstanding.

Step 3: The two day offset is applied again. Now, capacity is available but onlyfor 4 units. A partial solution is found so two planned orders for two units each arecreated. 5 units of demand still remain.




Step 4: The two day offset is applied a third time. Now, capacity is available butonly for 4 units. A partial solution is found so two planned orders for two unitseach are created. 1 unit of demand still remains.

Step 5: The two day offset is applied a fourth time, however now capacity isavailable. Again, no forward scheduling takes place in this scenario.

Step 6: The two day offset is applied a fifth time, moving the due date two daysin the future, even though demand is only enough for one day of capacity. Fromthe new demand date, the system backward schedules, creating one planned orderfor one unit.

Note: Due to a difference in the demand requirements and the offset, agap is created between the second and third order. For the last unit, thenew demand date was enough to plan 2 units. However, since the newdate was further out, the solution leaves a one day gap in the resource.

CTM Algorithm for Minimizing LatenessAs of SCM 4.0 and later, another approach to late demand scheduling can beapplied. This is to use the late demand handling algorithmMinimize Lateness.

For releases APO 3.0 and APO 3.1, the variable planning parameterBackwardProjection can be used. The first value has to be set to 5.



Figure 214: Algorithm for Minimizing Lateness

The goal of this algorithm is to minimize lateness buy using an offset of 1 day.This gives the system the benefit of checking the source of supply on a daily basis.However, this can lead to excessive processing times.

The solution uses the concept of the Binary Search method in the late demandframe (global customizing).

This entails dividing the late demand frame into two parts by setting the newdemand due date in the middle of the current interval for the late demand fame,then checking the new demand due date.

Figure 215: Minimizing Lateness (1)



In the example above, we have a demand for 2 units that can be sourced using twoPDS/PPMs, which use different resources R1 and R2.

Step 1: The CTM engine tries to find capacity prior to the day of the demand.No solution is found, but we can perform Late Demand Scheduling, using theMinimize Lateness algorithm. The late demand frame of 40 days is taken from theglobal parameters in customizing, which in this example is set to 40 days.

Step 2: The CTM engine halves the Late Demand frame (40), which is 20. It addedthe 20 days to the original due date to come up with a new due date. At this point,it selects the PPM with the highest priority, and backwards schedules from the newdate trying to find available capacity. At this step, we find a successful solution.

Step 3: The CTM halves the �new� lateness frame (20), which is 10 days. Itadds the 10 days to the original due date. It backwards schedules the first PPMbut finds no available capacity. It tries the second PPM and finds no availablecapacity. This solution fails.


Step 4: Since the previous solution failed, CTM backtracks and halves the secondlate demand frame (10), which is 5. Instead of adding it from the original date, thesystem adds the 5 days to the previous late frame of 10 days (now 15 days) andsets a new demand date. The engine cannot find any available capacity with PPM1(R1) and therefore schedules with PPM2 (R2). The result is a successful solution.

Step 5: The engine continues to improve the solution by halving the LDF (5)again, which is now 2 days (rounding down). It adds to the 10 day frame (12) andschedules backwards. The resource R1 for PPM1 is not available, and therefore ituses PPM2 and finds capacity on R2. The result is a successful solution.



Step 6: The engine continues to improve the solution by halving the LDF (2)again, which is now 1 day. It adds to the 10 day frame (11) and schedulesbackwards. The resource R1 for PPM1 is not available, and therefore it usesPPM2 and finds only partial capacity on R2. The results is a failed solution.


Result: After the binary search is complete (1 day), the engine will take the bestsolution. This was found in Step 4/5, because PPM2 can complete the demand asearly as possible.



Exercise 20: Managing Late DemandFulfillment in CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate the application of several parameters that affect or control late

fulfillment in the CTM run

Business ExampleYour division often has situations where demand exceeds supply. In this type ofsituation, some requirements may not be covered. Your manager wants to knowhow CTM can cope with this situation and what options are available to considerlateness when executing a CTM solve.

Task 1: Allowing Late DemandWhile CTM searches for a feasible solution, it is by no means optimal. Thisis because it works one requirement at a time. However, when dealing withsituations where demand is greater than supply, some requirements will bepartially filled, delayed, or unfulfilled. Explore how CTM can handle managingdelays during the CTM solve.

Note: Allowing Late Demand must be turned off for this technique towork!


2. In a separate session, from the Product View for 000/T-F##/1000, delete anyrequirements that are currently present and Save.

3. Check the CTM: Global Customizing settings and see if the Allow LateDemand Fulfillment indicator is deactivates. If it is not inform yourinstructor.

4. Return to the session with the Product View , for 000/T-F##/1000, create aFC req for 10 pcs two weeks from today at 00:00:00 hour and Save.

Do not leave the transaction!

5. In a separate session, update your profile GR##_4 so rounding will occurand execute a CTM planning run to create receipts for the new requirement.

Exit and return if necessary due to configuration changes.




6. Return to the Product View and update the results after the CTM run. Whatwas the result?

7. Return to the session with your profile GR##_4, in the CTM Profile andreview some of your evaluations to explain the results of the CTM runfurther.Evaluations→ CTM Planning Run→ Explanations→ ResultsIndicators for CTM Planning Run→ Details→ Resource Utilization→WT-CTM1##_1000_001

8. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute Rule SCM235_1.

Save your updates.

Exit and return (config. changes).


9. Execute a planning run, using CTM profile GR##_4.





Task 2: Late Demand Fulfillment with Domino StrategyRealizing that some demand will be late or unfulfilled, you want to be able tocontrol which requirements are affected by the shorts. In some cases, you feel it isa requirement that the CTM engine solves and fulfills the highest priorities first.Demonstrate that by using the Domino lateness strategy you can affect whichdemands will be fulfilled.


2. In a separate session, from the Product View for 000/T-F##/1000, now createan additional FCreq for 5 pcs two weeks and one day from today at 00:00:00hour and Save.

Do not leave the transaction.

3. In a separate session, execute a CTM planning run using your CTM profileGR##_4.

Note: Remember CTM will work one demand at a time. In this case,it will cover the larger requirement first, since it has an earlier date.

4. In another session, in the Integrated Rule maintenance, review thecalculation profile for rule SCM235_1.





Task 3: Late Demand Fulfillment with Airline StrategyAfter applying the Domino lateness strategy, you feel this will not work for allsituations. In certain scenarios, you would rather sacrifice fulfilling one largedemand, and instead fulfill several smaller requirements. Apply the Airlinestrategy to your lateness scenario to see if this will give you a better result inthis situation.



Then, create a FCreq for 8 pcs for next Monday at 00:00:00 and Save.

Now, create a second FCreq for 4 pcs nine days from today at 00:00:00and Save.

Now create a third FCreq for 4 pcs ten days from today at 00:00:00 and Save.



4. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute rule SCM235_2. This rule is the Domino Strategy with an allowed 5days delay.

Save your updates.





6. Return to the Product View and update the results after the CTM Run. Whatwas the result?



9. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute Rule SCM235_3. This rule is the Airline Strategy with an allowed 5days delay

Save your updates.



Task 4: Standard Scheduling Procedure for LateDemand FulfillmentAfter the previous tasks, you are now more familiar how the basic concept oflate demand fulfillment works. However, when you have many demands beingprocessed by CTM, it may be difficult to figure out exactly what the algorithm isdoing. Create a very simple scenario that will let you understand and explain howthe standard scheduling procedure works for late demand fulfillment.

In a previous exercise, you created two simulation profiles to test CTMScheduling. In this task, you use the same scenario since it has stock for thesubassembly, and this will let you focus on how the CTM engine works withscheduling late fulfillment with alternatives.

1. Using Profile GR##_7 as a template, create profile GR##_7S1.

2. Update your profile GR##_7S1 so that it uses Planning Version CTM_##and save.




3. Execute a CTM planning run using profile GR##_7S1 to delete the receiptsfor your simple pump scenario.

4. In a separate session, from the Product View for CTM_##/T-F##/1000,delete any requirements that are currently present and Save.

Now create an FC req for 15 pcs, for the beginning of next week at 00:00:00,and Save.


5. Update your CTM Profile Return GR##_4S1, so that it will automaticallyexecute rule SCM235_1. This rule is the Domino Strategy with an allowed30 days delay.

In addition, change the strategy by increasing the order creation start, so that the CTM engine will not be able to create orders until past therequirement date that you just created. For example, if it is Thursday, thenyour order creation date needs to 2 days.

Save your updates.



Task 5: Gradually Postponing the Demand Date

1. Review the Product View for CTM_##/T-F##/1000.


3. Back in the Product View for CTM_##/T-F##/1000, change the existingFC req to 10 pcs and Save.

Do not leave the transaction.Continued on next page



4. Update your profile GR##_4S1 so that the engine will use a late demandfulfillment strategy of Gradually Postpone Demand Date by using anoffset of 2 days.

Make sure you have an order creation date that will equate to orders notbeing created until Monday.

Save your updates and execute a planning run.

5. Return to the Product View for CTM_##/T-F##/1000 and update the results.What did the CTM engine do?



Solution 20: Managing Late DemandFulfillment in CTMTask 1: Allowing Late DemandWhile CTM searches for a feasible solution, it is by no means optimal. Thisis because it works one requirement at a time. However, when dealing withsituations where demand is greater than supply, some requirements will bepartially filled, delayed, or unfulfilled. Explore how CTM can handle managingdelays during the CTM solve.

Note: Allowing Late Demand must be turned off for this technique towork!


a) Select the Planning Run tab and select Start Planning Engine.


a) Select Change.

b) Select Select All.

c) Select Delete Orders/Schedule lines.

d) Select Save.

3. Check the CTM: Global Customizing settings and see if the Allow LateDemand Fulfillment indicator is deactivates. If it is not inform yourinstructor.

a) APO→ Multilevel Supply & Demand Matching→ Environment→Current Settings→ Global Settings for CTM

4. Return to the session with the Product View , for 000/T-F##/1000, create aFC req for 10 pcs two weeks from today at 00:00:00 hour and Save.

Do not leave the transaction!

5. In a separate session, update your profile GR##_4 so rounding will occurand execute a CTM planning run to create receipts for the new requirement.




Exit and return if necessary due to configuration changes.

a) Select Settings→ Technical Settings tab.

b) Set the Rounding parameter to Round Order quantities.

c) Select Save.

d) Select F8 to Start Planning Engine.


Answer: Result: Two planned orders 5 pcs and 3 pcs. (remember roundingwas turned on)However a shortage of - 2 pcs exists.

7. Return to the session with your profile GR##_4, in the CTM Profile andreview some of your evaluations to explain the results of the CTM runfurther.Evaluations→ CTM Planning Run→ Explanations→ ResultsIndicators for CTM Planning Run→ Details→ Resource Utilization→WT-CTM1##_1000_001

Answer: No capacity was available between today and the dependentrequirement date.The system executed binary splitting, but there was still not enough capacityto finish on time.

8. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute Rule SCM235_1.

Save your updates.

Exit and return (config. changes).


a) Select the Strategies→ Special Strategies.

b) In the section labeled Substitution, change the parameter Rules to thevalue Use Specified Rule for All Demands.

c) Enter Rule SCM235_1.

d) Select Save.

e) Select the Planning Run tab and select Start Planning Engine.







Answer: Two 1 pc planned orders totalling 2 pcs were created to coverthe shortage, however they are late.

Task 2: Late Demand Fulfillment with Domino StrategyRealizing that some demand will be late or unfulfilled, you want to be able tocontrol which requirements are affected by the shorts. In some cases, you feel it isa requirement that the CTM engine solves and fulfills the highest priorities first.Demonstrate that by using the Domino lateness strategy you can affect whichdemands will be fulfilled.



2. In a separate session, from the Product View for 000/T-F##/1000, now createan additional FCreq for 5 pcs two weeks and one day from today at 00:00:00hour and Save.


a) Add your new requirement.

b) Select Save.

3. In a separate session, execute a CTM planning run using your CTM profileGR##_4.

Note: Remember CTM will work one demand at a time. In this case,it will cover the larger requirement first, since it has an earlier date.

a) Press F8 to Start Planning Engine,





a) Menu Path: APO→ Master Data→ Rule Maintenance→ IntegratedRule Maintenance

b) Locate the rule SCM235_1 and drill into the details.

c) Scroll to the right if necessary and drill in to Calculation ProfileSCM235_1 (select Go to Calculation Profile)

d) Select the tab CTM Calculation Profile.

e) Notice Allow Late Demand Fulfillment is active for a 30 day window.

f) Late demand fulfillment strategy is Domino.

g) Shortages are allowed.

h)


Answer: Production for a total of 15 pcs was created. There are shortageswithin the horizon, but by the end of the horizon all shortages have beenresolved.Result: Because of the setting in the ATP rule SCM235_1, the Dominostrategy is being executed. Once the first requirement is late, all subsequentdemands may be late as well.

Task 3: Late Demand Fulfillment with Airline StrategyAfter applying the Domino lateness strategy, you feel this will not work for allsituations. In certain scenarios, you would rather sacrifice fulfilling one largedemand, and instead fulfill several smaller requirements. Apply the Airlinestrategy to your lateness scenario to see if this will give you a better result inthis situation.


a) Press F8 to Start Planning Engine.


Then, create a FCreq for 8 pcs for next Monday at 00:00:00 and Save.

Now, create a second FCreq for 4 pcs nine days from today at 00:00:00and Save.

Now create a third FCreq for 4 pcs ten days from today at 00:00:00 and Save.





a) Select Change.



d) Select Save.

e) Add your three new requirements.







f) Late demand fulfillment strategy is Domino.


h)

4. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute rule SCM235_2. This rule is the Domino Strategy with an allowed 5days delay.

Save your updates.

a) Select Strategies→ Special Strategies.



d) Select Save.







Answer: Production was created for each requirement, but all three arelate and short!Result: Because of the setting in the ATP rule SCM235_2, the DominoStrategy is being executed. Once the first requirement is late, all subsequentdemands may be late as well.









f) Late demand fulfillment strategy is Airline.


h)

9. Update your CTM Profile Return GR##_4, so that it will automaticallyexecute Rule SCM235_3. This rule is the Airline Strategy with an allowed 5days delay

Save your updates.




d) Select Save.







Answer: Once shortages were detected for the first requirement, the systempushed the requirement to the end of the list and began processing the nextrequirement. In this case the production that was used to support one largeorder was reallocated to several smaller orders. This would indicate there ismore emphasis put on Order fill rate, than line item fill rate.

Result: Because of the setting in the ATP rule SCM235_3, the AirlineStrategy is being executed, once the first requirement is late, it is pushed tothe end of the list and the next requirement is processed.

Task 4: Standard Scheduling Procedure for LateDemand FulfillmentAfter the previous tasks, you are now more familiar how the basic concept oflate demand fulfillment works. However, when you have many demands beingprocessed by CTM, it may be difficult to figure out exactly what the algorithm isdoing. Create a very simple scenario that will let you understand and explain howthe standard scheduling procedure works for late demand fulfillment.

In a previous exercise, you created two simulation profiles to test CTMScheduling. In this task, you use the same scenario since it has stock for thesubassembly, and this will let you focus on how the CTM engine works withscheduling late fulfillment with alternatives.

1. Using Profile GR##_7 as a template, create profile GR##_7S1.

2. Update your profile GR##_7S1 so that it uses Planning Version CTM_##and save.



4. In a separate session, from the Product View for CTM_##/T-F##/1000,delete any requirements that are currently present and Save.

Now create an FC req for 15 pcs, for the beginning of next week at 00:00:00,and Save.





a) Select Change.



d) Select Save.

e) Add your two new requirements.

5. Update your CTM Profile Return GR##_4S1, so that it will automaticallyexecute rule SCM235_1. This rule is the Domino Strategy with an allowed30 days delay.

In addition, change the strategy by increasing the order creation start, so that the CTM engine will not be able to create orders until past therequirement date that you just created. For example, if it is Thursday, thenyour order creation date needs to 2 days.

Save your updates.




d) Change theorder creation start so that orders will not be created untilnext Monday.

e) Select Save.


a) Select F8 to Start Planning Engine.





Answer: Result: all planned orders will be delayed because of the orderstart date.Based on the CTM scheduling logic, since the engine cannot create ordersprior to the requirement date, binary splitting is enacted. This causes thesystem to evaluate all options for supply, moving forward one day at atime. If you look at the resources in the planned order, you will notice theyalternate between WT-CTM##_1000_001 and WT-CTMA##_1000_001.This will happen until a break in the capacity occurs, and this happensbecause of the weekend. Once the break is established, the forwardscheduling logic in CTM only selects the highest priority resource. This iswhy the last planned order is for 5 pcs on resource WT-CTM#_1000_001.

Task 5: Gradually Postponing the Demand Date1. Review the Product View for CTM_##/T-F##/1000.

Answer: As a result of a previous exercise, you had a requirement of 15pcs. After the CTM planning, 10 planned orders for 1 pcs were created and1 planned order for 5 pcs.



3. Back in the Product View for CTM_##/T-F##/1000, change the existingFC req to 10 pcs and Save.


a) Change the quantity on the FC Req.

b) Select Save.

4. Update your profile GR##_4S1 so that the engine will use a late demandfulfillment strategy of Gradually Postpone Demand Date by using anoffset of 2 days.

Make sure you have an order creation date that will equate to orders notbeing created until Monday.




Save your updates and execute a planning run.


b) Change the parameter Late Demand Fulfillment to GraduallyPostpone Demand Date.

c) Enter an Offset of 2 days.

d) Select Save.

e) Select F8 to execute a planning run.

5. Return to the Product View for CTM_##/T-F##/1000 and update the results.What did the CTM engine do?

Answer: Since the supply cannot be created until after the demand, typicallybinary splitting is engaged. Since no supply was created prior to the date,CTM would typically forward schedule the balance of the binary split, whichin this case would be one day = 1 pc. But because of the gradually postponeand the offset of 2 days, CTM will schedule 2 days of capacity per resource.This equates to 1 pc/day in this example, so you get the first two ordersfor 2 pcs each, on one resource WT-CTM##_1000_001 and the other onWT-CTMA##_1000_001.



Lesson Summary

You should now be able to:� List options for late demand handling� Demonstrate standard late demand handling� Demonstrate late demand offset


� 450794 - CTM: User Exit EXIT_/SAPAPO/SAPLBOP_SORT_020


SCM235 Unit Summary

Unit SummaryYou should now be able to:� Explain at a high level, the elements of the CTM Algorithm.� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity� Explain general concepts of source determination� Demonstrate how priorities and costs are used in PPM selection� Demonstrate how CTM interprets date and lot size validity� Explain in detail the multilevel production process during CTM scheduling� Explain how the CTM engine will cope with multiple input components� Describe in detail the concept of �Depth First Strategy�� Demonstrate how CTM manages the selection process when alternative


of the CTM planning run.� List options for late demand handling� Demonstrate standard late demand handling� Demonstrate late demand offset


Unit Summary SCM235



Test Your Knowledge



Answers


Unit 10CTM Inventory Control Methods

Unit OverviewThis unit will address the issue of safety stock and potential inventory build ups.CTM is an order-based system, so safety stock and excess inventory will be dealtwith differently than in PPDS and SNP.


� Identify the different types of inventory control measures� Point out the safety days supply parameters to users� Demonstrate the use of safety days supply and its strategies to control

inventory levels during CTM planning� Describe time-dependent safety days supply� Describe safety stock planning options with SCM� Demonstrate two phase safety stock� Demonstrate single phase safety stock� Demonstrate how the Order Creation Start parameter can be used to control

inventory build ups� Demonstrate how the Order Creation Frame parameter can be used to control

inventory build ups� Demonstrate how pegging can be used to control inventory build ups� Demonstrate how the Maximum Earliness for planned orders can control

inventory build ups� Explain the purpose of supply distribution in conjunction with CTM� Demonstrate supply distribution� Demonstrate supply distribution with lot sizes

Unit ContentsLesson: Safety Days Supply .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .605

Exercise 21: Applying Safety Days Supply in CTM... . . . . . . . . . . . . . . . . .617Lesson: Safety Stock Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .627


Unit 10: CTM Inventory Control Methods SCM235

Exercise 22: Planning with Safety Stock in CTM... . . . . . . . . . . . . . . . . . . . .637Lesson: Restricting Early Demand Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .656

Exercise 23: Restricting Early Demand Fulfillment .. . . . . . . . . . . . . . . . . . .669Lesson: Push Deployment with Supply Distribution... . . . . . . . . . . . . . . . . . . . . .679


SCM235 Lesson: Safety Days Supply

Lesson: Safety Days Supply

Lesson OverviewIn previous lessons, you have learned how CTM will react to planned independentrequirements and customer requirements. In this lesson, you will use the safetydays supply parameters to control your inventory levels during the CTM run


� Identify the different types of inventory control measures� Point out the safety days supply parameters to users� Demonstrate the use of safety days supply and its strategies to control

inventory levels during CTM planning� Describe time-dependent safety days supply

Business ExampleAfter analyzing much of the CTM algorithm, it should be apparent that CTMinitially does not consider inventory builds a concern. You have also not addressedthe issue of any inventory buffers. To keep customer service at an acceptablelevel, your management team has asked you to have CTM consider buildinginventory in advance to delivery concerns. To accomplish this, you will explorehow CTM considers safety days supply.

Inventory ControlDuring the CTM planning process, CTM first selects a demand, prioritizes it,then finally plans the replenishment of the demand. CTM by nature is planningresources or materials that are restricted in supply, therefore surplus inventories aretypically not a consideration during planning. However, there are some parametersthat planners can use to control inventory levels during the CTM planning process.



Figure 218: Inventory Control Options

CTM uses top-down planning logic. As a result, demand is propagated throughoutall levels of the supply network. By default, there is no inventory control on anyspecific level throughout planning horizon and only the firmed demands (FC,SO)are planned without considering any Safety Stock Requirements.

Within the CTM profile, planners can activate Safety Days Supply Planning (time)or Safety Stock Planning (quantity).

Figure 219: CTM Inventory Control Parameters



Safety stock build using Safety Lead Time (Safety Days Supply -SDS) forcesCTM to consider additional time constraints between receipt and issue elementsduring creation of the solution tree in CTM engine.

Safety Stock build using Safety Stock forces the CTM engine to use �virtual�demands calculated according to safety stock requirements instead of the �real�demands. This will be treated as an entirely separate step in the planning run. Thiswill be addressed in a subsequent lesson.

Planners can use a combination of both time and quantity based safety stockplanning.

Safety Days Supply ParametersSafety days supply (SDS) at any given date, specifies the time range withinwhich on hand stock is fulfilling future demand. This is also called target daysof supply. To use SDS, planners must:

� Activate SDS in the CTM Profile� Populate Safety Stock Parameters in Product Master� Define number of Days (Static or Time Dependent)

Figure 220: Safety Days Supply Settings

For CTM to consider SDS in the planning run, it must first be activated in theCTM profile Supplies tab, by setting the Consider Safety Days Supply indicator.



There are four strategies available which control under which circumstances safetydays of supply are taken into account. See CTM profile.

� Always consider� Consider, if possible� Ignore when demand fulfillment is late� Always consider when demand fulfillment is late

CTM Safety Days Supply is located in the location product master (Lot Sizing- Quantity and Date Determination) tab and is useful in cases where a certainsupply level has to be reached per time period, based on the forecast quantities,yet, no additional stock should be created (as it would be the case with activatedsafety stock planning). In this case, you will be stocking quantities prior to theirtrue need date.

Note: In the product master, the safety days supply field is used for CTM,not Target days supply field.

As for safety stock planning, all methods in the location product master aresupported by CTM. The method for the maximum of safety stock and safety dayssupply is realized in CTM by performing a standard CTM run with safety dayssupply activated, and afterwards the safety stock run.

Safety Days SupplyFor independent demand (Forecast/Sales Order), Safety Days Supply or SafetyLead Time, is considered a soft constraint, that is, the created supplies can beearlier or later than the number of days maintained for SDS. The safety lead timewill pull back the original due date by the corresponding number of days. Thatmeans the planning run assumes an earlier due date for on time fulfillment. Thetime range from the new due date to the original due date is considered in latedemand handling. Even if no late demand handling was allowed previously, it isnow allowed until the original due date.

At the start of the planning horizon, it could not be guaranteed that the fullnumber of days can be actually achieved. That is why day by day, starting withthe planning start, the SDS is increased by one day until it finally reaches theintended value. The start for counting up is defined per location product (wheresafety days supply is activated) by: Planning start + Planned Delivery Time +Goods Receipt Time, such that the creation of Purchase Requisitions is possiblefor demands close to the planning start

For dependent demands, safety lead time is a hard constraint, that is, the createdsupplies must not be later than the number of days maintained for SDS. Thatmeans supply used to fulfill a dependent demand must comply with the condition:availability date + safety lead time <= due date. There are four strategies availablewhich control under which circumstances safety days of supply is taken intoaccount for dependent demands.



Caution: The safety days are calculated using calendar days not workingdays.

Figure 221: Example Safety Days Supply

In the example above, assume a demand of 3 units. Production can only produceone unit a day for the final assembly as well as the component. CTM will firstapply the 5 days of Safety Days Supply, to determine a new due date. The finishedgood is scheduled, then a 10 day SDS is applied at the component level, and thenthe component is planned based on the new due date for the dependent demand.

Note: Until SCM 4.1, safety days of supply is available only for backwardscheduling. As of SCM 5.0, it is available also for forward scheduling.

Safety Days Supply - Always ConsiderAlways consider: It is more important to keep the safety days' supply than it isto fulfill the demands on time. The system always creates planned orders whiletaking the safety days' supply into consideration. If the system can only fulfill ademand by violating the safety days' supply, CTM planning does not create anyorders for the corresponding demand. The demand remains unfulfilled.



Figure 222: SDS � Always Consider

In the example above, assume a demand of 3 units. In configuration, late demandis allowed, but only for a maximum of 2 days. Production can only produce oneunit a day for the final assembly as well as the component. CTM will first applythe 5 days of Safety Days Supply to determine a new due date. The finished goodis scheduled, then a 10 day SDS is applied at the component level, and then thecomponent is planned based on the new due date for the dependent demand.

Unfortunately, the start day of the component is in the past, and due to the strategyAlways consider, the system forward schedules the component ( 3 days) from thefirst available work day. Then the system adds the 10 days SDS time for thecomponent. Now, it schedules the finished good (3 days) and then adds the 5 daysfor SDS. Unfortunately with the SDS time added to it, the date will now be pastthe late demand date and therefore no orders will be created.

Safety Days Supply � Consider, if PossibleConsider, if possible: Timely demand fulfillment is more important than keepingto the safety days supply. If CTM planning can only fulfill a demand on time byviolating the safety days supply, the system then ignores the safety days supply. If,however, the system can only fulfill a demand late, the system first attempts tokeep to the safety days supply. If the system cannot fulfill the demand like thiseither, the system fulfills the demand late, without keeping the safety days supply.



Figure 223: SDS � Consider, if Possible

In the example above, assume a demand of 3 units. In configuration, late demandis allowed, but only for a maximum of 2 days. Production can only produce oneunit a day for the final assembly as well as the component. CTM will first applythe 5 days of Safety Days Supply, to determine a new due date. The finished goodis scheduled, then a 10 day SDS is applied at the component level, and then thecomponent is planned based on the new due date for the dependent demand.

Unfortunately the start day of the component is in the past, and due to the strategyConsider if possible,, the system forward schedules the component (3 days)from the first available work day. Then, the system adds the 10 days SDS timefor the component. However, since this would cause it to violate the originalcalculated due date, the system does not use the SDS time on the component.Now it schedules the finished good (3 days) and then adds the 5 days for SDS. Inthis case, it may still use the SDS time for the finished product, but this may beremoved as well if the order is still late.

Safety Days Supply � Ignore when Demand FulfillmentLateIgnore when demand fulfillment is late: CTM planning only considers thesafety days supply when the demand cannot be fulfilled on time. If timely demandfulfillment is not possible when considering the safety days supply, the systemdoes not consider the safety days supply for the corresponding demand.



Figure 224: SDS � Ignore when Demand Fulfillment Late

In the example above, assume a demand of 3 units. In configuration, late demandis allowed, but only for a maximum of 2 days. Production can only produce oneunit a day for the final assembly as well as the component.

Step 1: CTM will first apply the 5 days of Safety Days Supply, to determine anew due date. The finished good is scheduled, then a 10 day SDS is applied atthe component level, and then the component is planned based on the new duedate for the dependent demand.

Step 2: Unfortunately, the start day of the component is in the past, and due tothe strategy Ignore when Demand Fulfillment Late, the system forward schedulesthe component (3 days) from the first available work day. Then, the system addsthe 10 days SDS time for the component. However, since this would cause it toviolate the original calculated due date, the system does not use the SDS time onthe component. The System forward schedules the finished product, then addsthe 5 day SDS time. This causes the order to be late.

Step 3: Rather than not create the orders, both SDS times are removed and sincethe orders are no longer late, the CTM engine keeps the orders.



Safety Days Supply � Always Consider when DemandFulfillment LateAlways consider when demand fulfillment is late: CTM planning tries to fulfilldemand when considering the safety days supply. The system only ignores thesafety days supply when the demand can therefore be fulfilled on time. If thesystem can only fulfill demand late, the safety days' supply is considered.

Figure 225: SDS � Always Consider when Demand Fulfillment Late

In the example above, assume a demand of 1 unit. In configuration, late demand isallowed, but only for a maximum of 5 days. Production can only produce one unita day for the final assembly as well as the component.

Step 1: CTM will first apply the 5 days of Safety Days Supply, to determine anew due date. The system realizes that the start date is in the past, and thereforeforward schedules.

Step 2: It schedules the component first, then adds the SDS time of 10 days. Thistakes the delivery date past the maximum late delivery.

Step 3: the result is that no orders are scheduled.



Variation of the standard settings for the SDSconstraintOn primary demand level (respectively the level of the input demand for a CTMrun) SDS will always be a soft constraint. It is possible to decide whether theSDS constraint is applied for the secondary demand level as well; the followingcases are possible:

1. On-time handling and SDS is applied for secondary demands2. On-time handling and SDS is not applied for secondary demands3. Late handling and SDS is applied for secondary demands4. Late handling and SDS is not applied for secondary demands

From the above cases, the following settings for the CTM search can be selectedin the CTM profile:

� Always consider - performs 1 then 3� Consider, if possible - performs 1, 2, 3 then 4� Ignore when demand fulfillment is late - performs 1, 2 then 4� Always consider when demand fulfillment is late - performs 1, 2 then 3

As applying the SDS constraint virtually shifts the original demand due date toan earlier date based on the number of Safety Days Supply, a possible late framealways applies to the new virtual demand due.

Note: Remember: CTM will NEVER allow lateness on any secondarydemand level. This is generally the case when planning with CTM (alsowhen SDS is applied). The above described settings are available startingwith release SCM4.0.

Time Dependent Safety Days SupplyWhen using safety stock method SZ - Safety Days' Supply from LocationProduct Master, planners will experience a static safety days supply as explainedin the previous sections. However, by using safety stock methodMZ - SafetyDays Supply (Time Based Maintenance), planners have the ability to use a timedependent means of Safety Days supply.



Figure 226: Time Dependent Safety Days Supply

To use the time dependent SDS, planners must do the following:

1. Set the safety stock method in the appropriate location product to MZ2. Initialize Planning Area 9ASNP05 (or similar)3. Make the SNP key figure available to CTM (IMG)4. Define Planning Area in CTM profile (Settings tab)5. Populate appropriate materials with time dependent SDS (interactive SNP all

books)

In the CTM planning run, safety days supply is considered for planning eachsingle order. A safety lead time is inserted between the dates of a receipt elementand the consuming requirement element. In other words, safety days supplycontrols delay of production or transportation start.

The result of this procedure generally does not match with the expected days ofsupply figures except for constant safety days of supply value. Therefore, theCTM planning run converts the safety days of supply figures into safety leadtime figures such that the CTM result will approximately match the initial safetydays of supply figures.





Exercise 21: Applying Safety Days Supplyin CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how safety days supply can be applied to the CTM solve.

Business ExampleUp to this point in your CTM scenarios, you did not allow for any slack in thereplenishment process. You would like to know if CTM can handle situations likesafety days supply, where you want to build inventory early, but also considerwhether it would be feasible or not.

Task 1: Always Consider Safety Days Supply (SDS)Since CTM does not consider things like sequence setup times, you would likethe solver to consider �planning� to build product prior to its actual delivery date.Apply the Safety Days Supply parameter and see what affect it has on your plan.

1. Update the Product Master for T-F##/1000. Set the safety stock method toSZ - Safety Days' Supply from Location Product Master and set theSafety Days Supply to 5 days and save the results.

2. In the Product Master for T-SF1##/1000, Make sure set the safety stockmethod to SZ - Safety Days' Supply from Location Product Master andset the Safety Days Supply to 10 days and save the results.

3. In the session with your CTM profile GR##_4, update your profile so itwill Consider Safety Days Supply.

4. In the session with your CTM profile GR##_4, execute a CTM MasterData Check to review if your new settings take place.

5. In a separate session, execute a CTM planning run using Profile GR##_7 todelete any existing receipts for 000/T-F##/1000.

6. In a separate session, from the Product View for 000/T-F##/1000 delete anyrequirements that are currently present and Save.

Then create a FC req for - 1 pcs 14 days from today, at 00:00:00 and Save.


7. Execute a CTM planning run, using Profile GR##_4 to delete any existingreceipts for 000/T-F##/1000.




8. Return to the Product View for 000/T-F##/1000 and update the results afterthe CTM Run. What was the result?

9. Review the results for the T-SF1## at location 1000. Did CTM adhere to itsSafety Days supply?

10. In a separate session, execute a CTM planning run, using Profile GR##_7 todelete any existing receipts for 000/T-F##/1000.

11. In the product view for the T-F##/1000, change the FC req. to 5 pcs andSave.

12. In the session with your CTM profile GR##_4, change the substitutionprocess so no rules are being used.

This change will make sure the planning run does not allow late demand.

Save and execute a planning run.






Task 2: Considering SDS if PossibleWhile you would like the CTM engine to consider using Safety Days Supply,there are certain situations where this might not be feasible. Check to see if this isa constraint that you can relax from one planning run to the next.


2. In the session with your CTM profile GR##_4, update the Safety DaysSupply Strategy parameters to Consider if Possible.







5. In the Product Master for T-SF1##/1000, make sure you set the safetystock method to Blank and set the Safety Days Supply to 0 days and savethe results.

6. In the session with your CTM profile GR##_4, update your profile toDeactivate Consider Safety Days Supply.



Solution 21: Applying Safety Days Supplyin CTMTask 1: Always Consider Safety Days Supply (SDS)Since CTM does not consider things like sequence setup times, you would likethe solver to consider �planning� to build product prior to its actual delivery date.Apply the Safety Days Supply parameter and see what affect it has on your plan.

1. Update the Product Master for T-F##/1000. Set the safety stock method toSZ - Safety Days' Supply from Location Product Master and set theSafety Days Supply to 5 days and save the results.


b) Enter Product T-F## and Location 1000, and select Change.

c) Select the Lot-size tab.

d) Set the Safety Stock Method to SZ - Safety Days' Supply fromLocation Product Master.

e) Select the Quantity and Date Determination tab.

f) Enter a Safety Days Supply of 5 days.

g) Select Save.

h) Select Back.

2. In the Product Master for T-SF1##/1000, Make sure set the safety stockmethod to SZ - Safety Days' Supply from Location Product Master andset the Safety Days Supply to 10 days and save the results.

a) Enter Product T-SF1## and Location 1000, and select Change.

b) Select the Lot-size tab.

c) Set the Safety Stock Method to SZ - Safety Days' Supply fromLocation Product Master.

d) Select the Quantity and Date Determination tab.

e) Enter a Safety Days Supply of 10 days.

f) Select Save.

g) Select Back.




3. In the session with your CTM profile GR##_4, update your profile so itwill Consider Safety Days Supply.

a) Supplies Tab.

b) Select Consider Safety Days Supply.

c) Select Save.

4. In the session with your CTM profile GR##_4, execute a CTM MasterData Check to review if your new settings take place.

a) Edit→ Check CTM Master Data

b) Select Continue.

c) Products→ Product T-F##→ Location 1000

d) Double-click on location 1000, select Safety Stock/Time tab.


6. In a separate session, from the Product View for 000/T-F##/1000 delete anyrequirements that are currently present and Save.

Then create a FC req for - 1 pcs 14 days from today, at 00:00:00 and Save.


a) Select Change.



d) Add your new requirement.

e) Select Save.

7. Execute a CTM planning run, using Profile GR##_4 to delete any existingreceipts for 000/T-F##/1000.

a) Press F8 to execute a planning run.


Answer: A planned order for 1 piece was created, but it was created 5 daysprior to the date it was actually needed.


Answer: Yes, the planned order is arriving 10 days prior to the dependentdemand date.





a) In another session with the CTM Profile GR##_7, and select F8 toExecute a planning run.

11. In the product view for the T-F##/1000, change the FC req. to 5 pcs andSave.

a) In the session with your product view, select Change

b) Change the forecast requirement from -1 to -5 pcs

c) Select Save

12. In the session with your CTM profile GR##_4, change the substitutionprocess so no rules are being used.

This change will make sure the planning run does not allow late demand.



b) In the section labeled Substitution, change the parameter Rules to thevalue Do Not Apply Rules.

c) Select Save.

d) Press F8 to Start Planning Engine.


Answer: Due to the increased requirement, production had to increase.However, for the T-F##/1000, the Safety Days Supply is no longer beingapplied.Note: For independent demand, safety days supply is a soft constraint.Because of lead times on the sub assembly, the CTM engine could no longerapply the safety days supply during scheduling.


Answer: All planned orders have a safety days supply of 10 days in relationto their pegged demand. Review the Pegging Overview if necessary.




Task 2: Considering SDS if PossibleWhile you would like the CTM engine to consider using Safety Days Supply,there are certain situations where this might not be feasible. Check to see if this isa constraint that you can relax from one planning run to the next.


a) In another session with the CTM Profile GR##_7, and select F8 toExecute a planning run.

2. In the session with your CTM profile GR##_4, update the Safety DaysSupply Strategy parameters to Consider if Possible.


a) Select the Supplies tab.

b) In the section labeled Supply control , change the parameter Strategy tothe value Consider if Possible.

c) Select Save.

d) Select the Planning Run tab and select Start Planning Engine.


Answer: The total quantity of 5 pcs was covered during the planning run.In addition, the CTM engine adhered to the 5 days SDS that was applied tothe T-F##.


Answer: The CTM engine partially adhered to the 10 SDS time applied tothe T-SF1##. In this case the system backward scheduled from the FC req onthe T-F## and applied the 5 days of SDS, creating the dependent requirementdates. When the engine scheduled the T-SF1## requirements, it realized itdid not have enough time to use all 10 days of SDS, so it applied what itcould from the forward scheduling results.




5. In the Product Master for T-SF1##/1000, make sure you set the safetystock method to Blank and set the Safety Days Supply to 0 days and savethe results.

a) Enter Product T-SF1## and Location 1000, and select Change.

b) Select the Lot-size tab.

c) Set the Safety Stock Method to Blank.

d) Select the Quantity and Date Determination tab.

e) Enter a Safety Days Supply of 0days.

f) Select Save.

g) Select Back.

6. In the session with your CTM profile GR##_4, update your profile toDeactivate Consider Safety Days Supply.

a) Supplies Tab.

b) Deselect Consider Safety Days Supply.

c) Select Save.



Lesson Summary

You should now be able to:� Identify the different types of inventory control measures� Point out the safety days supply parameters to users� Demonstrate the use of safety days supply and its strategies to control

inventory levels during CTM planning� Describe time-dependent safety days supply


� None


SCM235 Lesson: Safety Stock Planning

Lesson: Safety Stock Planning

Lesson OverviewSafety stock is not considered an independent requirement and therefore is notconsidered during the initial demand prioritization. Safety stock can be a plannedin CTM, but it will be addressed differently compared to how it is considered inPPDS or SNP. In this lesson, you will learn how CTM deals with safety stock.


� Describe safety stock planning options with SCM� Demonstrate two phase safety stock� Demonstrate single phase safety stock

Business ExampleYour business uses safety stock to cover unpredictable demand in order to attaincertain service levels. Since safety stock is not an independent demand, it will notbe considered during the initial demand prioritization step. Investigate how CTMwill address safety stock considering that you are using CTM due to constrainproduction resources and material supplies.

Safety Stock SetupIn CTM planning, you have the choice of various functions for supply control.Supply control in Capable-to-Match (CTM) consists of functions that you can useto construct additional supply, as well as functions that you can use to restrict areceipt�s time in storage.

In a previous lesson, the idea of safety lead times (Safety Days Supply) wasdiscussed. The other option is to use quantity based process rather then time based.

The Safety Stock method determines whether safety stock (by quantity) or safetydays of supply is planned by CTM and where the values will be retrieved from.In order to actually use the corresponding Safety Stock method, additionally setthe flag �Build Up Safety Stock� or �Consider Safety Days Supply� on the tab�Supplies� in the CTM profile.

Note: Safety stock is only considered in make-to-stock environments,and during planning runs, stock levels are aggregated to a daily levelautomatically.



Figure 227: Safety Stock Build - Master Data

For CTM to consider safety stock during a planning run, several parameters needto be in place:

1. Product master must have safety stock method defined (SB/MB)

� (SB) - Define level of safety stock in Product Master� (MB) - Set up planning area for use with CTM

2. Activate Safety Stock Parameters in the CTM profile.

Safety Stock BuildThe aim of this method is to build up additional supply according to the value forsafety stock. However, as of SCM 4.1 two types of safety stock can be used:Virtual, and liveCache. Virtual safety stock has been available since the inceptionof APO, liveCache safety stock has only been available since SCM 4.



Figure 228: Safety Stock Build

In the planning version under PP/DS: The parameter Take Safety Stock IntoAccount, allows a business to specify how they wish to consider safety stockduring planning. If the parameter is left blank Do Not Consider Safety Stock, thenSafety stock will not be considered, regardless of the location product and CTMprofile setting. By choosing option 2 Consider Virtual Safety Stock Elements, theparameters in the location product master and the CTM profile (Safety StockBuild) are relevant. If you choose 3 Consider Safety Stock Requirements in SAPliveCache, the parameter Build Up Safety Stock in the CTM profile is irrelevant.

If the option Virtual Safety Stock is chosen, safety stock will be consideredeither after the initial independent demands are met or considered in a follow-onplanning run.



If the option liveCache Safety Stock is chosen, then the safety stock will beconsidered as normal independent demands, and will be prioritized in the demandlist. In demand prioritization, CTM planning treats safety stock requirementsthat you cause to be generated in the SAP liveCache in exactly the same wayas other requirements.

Note: Virtual Safety is not pegging relevant in regards to alerts and is notGATP relevant. It is also required immediately and could have a negativeimpact based on the Max Lateness settings in the IMG.

LiveCache safety stock is pegging relevant (will generate alerts) but mustbe created via a PPDS Heuristic SAP_PP_018. In this heuristic, youcan post the safety stock requirement to a later date to avoid issues withlateness.

Safety Stock Build OptionsIf your company has chosen to use Virtual Safety Stock, you must define aprocess for how you will handle it in the planning process. Will it be part of theindependent demand planning run, or as a separate run?

If having a separate run for virtual safety stock, you must consider:

� Planning mode: unpegged orders only, do not delete orders� Determine inventory profile for each location product given

receipts/requirements of previous planning run, thereby ignoring backlog(pegging) of requirements

� Create virtual demands with due dates where inventory falls below safetystock level and suitable quantities

� CTM calculates the late and early demand frame for safety stockrequirements. This can be defined specifically for safety stock and over ridethe other CTM parameters.

Safety stock is intended to fulfill unexpected demand in a certain period inoperation. Safety stock planning has been realized in CTM by planning in twosubsequent steps:

� The first run plans as usual �normal� demands like forecast and saves theresult in liveCache.

� The second run builds up safety stock based on the result saved to liveCacheby the first run. Only fulfilled (that is pegged) demand quantity is consideredfor the stock level calculation. Existing supply is initially blocked for safetystock and not available to dependent demands during planning run.

Caution: In the safety stock planning run, the stock level calculation isbased on exact lot size quantities. Therefore surplus stock may be createdwhen other lot-sizing settings are used for the corresponding product



Two Phase Safety Stock Planning

Figure 229: Two Phase Safety Stock Planning

In the example above, Build Up Safety Stock has been activated. In selecting onlythat indicator, both independent demand (forecast and sales orders) and safetystock will be planned in a single run. However, in this situation safety stockwill be given a lower priority than �normal� demand. This is controlled withinthe CTM algorithm when safety stock planning has been activated. In this typeof situation, the CTM engine will plan all the demands in the list, and only thenplan the safety stock demands.

Single Phase Safety Stock PlanningPrior to SCM 5.0 the control parameter SSTOCK_MODE was available toplanners to control single phase planning runs, rather than a two phase processas described previously. As of SCM 5.0, the control parameter was replaced bythe indicators:Do Not Plan Demands, Consider Supply Shortage and Stock isAvailable.



Figure 230: Single Phase Safety Stock Planning

The indicator Do Not Plan Demands is equivalent to the Value1 = X (in SCM4.1 and older systems). This indicator will skip the first planning run (normal)demands, but does perform order selection

In the example above, the parameters Do Not Plan Demands and Consider SupplyShortage have been set. The Do Not Plan Demands indicator specifies that CTMdirectly builds up safety stock without planning demands first.

Consider Supply Shortage: This setting defines how CTM is to build up safetystock for a partially fulfilled demand. If you do not set this indicator, CTM buildsup safety stock for the partial quantity of a demand that can be fulfilled by areceipt. If you set this indicator, CTM builds up safety stock for the entire quantityof a partially fulfilled demand. This indicator is equivalent to control parameterSSTOCK_MODE (Value2 = X, and 1, and 2). This means that total demandquantity is considered, existing supply blocked for safety stock (1 or X), and totaldemand quantity is considered, existing supply available for planning run (2),

By combining both indicators, the system combines them into one virtualrequirement.



Time Phased Safety Stock SetupSafety stock planning can be combined with interval planning to get a form oftime-phased safety stock. This is not recommended except for special scenarios.Especially since there are limitations for time phased safety stock at the componentlevel.

Note: Time dependent safety stock only works with Virtual safety stock(Planning versions setting)

When using safety stock planning, the CTM engine will have to consider oneof three scenarios:

Figure 231: Time Phased Safety Stock

During the planning run as CTM looks at the safety stock it will either beincreasing from one time period to the next or decreasing from one time period tothe next.



Figure 232: Time Phased Safety Stock Parameters

To activate time phased safety stock, you must first set the safety stock method inthe location product master to MB - Safety Stock (Time-Based Maintenance).

Then, you must initialize an SNP planning area like 9ASNP05. The key figuresin planning area 9ASNP02 are no longer used. See note 646738. Whether youuse a custom planning area or 9ASNP05, once you have identified the planningareas you will use to maintain your time phased quantities, you must make the keyfigure available to CTM (IMG→ APO→ Supply Chain Planning→ MultilevelSupply & Demand Matching→ CTM→ Make SNP Key Figures Available. Keyfigure 9ASAFETY has already been defined, however you must assign the keyfigure to the function, which in this case is safety stock.

Now you must prepare the CTM profile for time phased safety stock planning.First identify the planning area you wish to use in the CTM Profile (Settings tab→Technical settings→ Planning).

An additional option is to activate Interval Planning on the Strategies→ SpecialStrategies tabs. In addition, you are required to enter an interval calendar. Thiscan be the same as the CTM Time Stream or it could be a different one. Keep inmind that in interval planning requirements will potentially be aggregated basedon the periods in the calendar.



Time Phased Safety StockThe standard safety stock method can only create supply for safety stock.However, if the safety stock level is decreasing at some point in time, theincreasing surplus inventory cannot be consumed. Surplus inventory fromdecreasing safety stock can be consumed if safety stock is planned in combinationwith independent demand like forecast.

In CTM, this is realized such that independent demand is planned also in thesecond safety stock run. This requires two changes: the first run must be skippedand the second run must consider also shortage (that is unpegged) demand quantity.

Figure 233: Safety Stock Build with Interval Planning

By Activating the Interval Planning option, planners now can use the Build UpSafety Stock parameters with time dependent safety stock.

When performing a two stage run, normal demand will be planned followed bysafety stock for each interval. The interval restricts the demand selection but notthe planning. This means that during the first �normal� run/stage in each interval,can consume supply created in the previous period.

In the figure above:

Step 1: normal demand of 100 is planned in interval 1

Step 2: safety stock demand of 100 is planned in interval 1

Step 3: normal demand of 50 is planned in interval 2

Step 4: safety stock demand of 75 is planned, however due to the decrease in safetystock demand, the system gives back 25 units which can be used in interval 3.

Step 5: normal demand of 100 is planned but due to the decrease in safety stockonly



Figure 234: Safety Stock Build Scenarios

When considering doing safety stock planning, planners will essentially have9 different scenarios to consider. Based on the safety stock method in theproduct master, different planning models can be used. Two phase methodsallocate resources and supplies to normal demand before planning safety stockrequirements. In addition, it will try to build safety stock starting from theplanning start. In situations where safety stock levels are reduced, this can lead toexcess supply as well as all normal demands that are already planned.

Single phase methods combine normal and safety stock requirements and allocateresources and supplies per bucket. These methods will also try to build safetystock starting from the planning end.



Exercise 22: Planning with Safety Stockin CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how Safety Stock is dealt with in the CTM solve.

Business ExampleDue to fluctuations in demand and long lead times, your division has decided tocarry safety stock at the finished goods level. However, CTM is typically usedin situations where demand is greater than supply. Test to see if by using CTM,safety stock can be applied to your supply chain.

Task 1: Two Stage Safety Stock PlanningDemand on your pumps has been volatile of late. Add safety stock to your pumpand execute a CTM run to see how the engine handles this new demand



Then create an FC req for 5 pcs 11 days from today, at 00:00:00 and Save.


3. Update the Product Master for T-F##/1000. Set the safety stock method toSB - Safety Stock from Location Product Master and set the Safety Stockto 5 and save the results.

4. Update your profile GR##_4, so that CTM will acknowledge and buildsafety stock. Deactivate Safety Days supply and save your updates.

5. In your CTM profile, execute a demand simulation, and review the results.Explain.





7. In the CTM Profile, review the demands that were just processed by theCTM engine. Explain the results.

8. Return to the Product View for 000/T-F##/1000 and update the results afterthe CTM Run. What was the result?If necessary review the Pegging Overview.

Task 2: Single Stage Safety Stock PlanningYou tested the CTM solve with two stage safety stock planning and were notpleased with the way the solver handled the demand separately. Apply singlestage planning and see if the result is any different.


Note: It may be necessary to make sure the deletion mode is setto Plan all orders that are not firm. The setting Order Trees ofselected demands will not delete the planned orders for safety stock,since they will not be selected as demand.

2. Update your profile GR##_4, so that CTM will not perform normal demandprioritization in order to consolidate it with safety stock requirements. Saveyour updates.


4. In a separate session, execute a CTM planning run, using Profile GR##_4.




5. In your CTM profile, review the demand list, and review the results. Explain.Demand tab,

6. Update your profile GR##_4, so that CTM will combine independentdemand and safety stock into one requirement and save your updates.



9. Return to the Product View for 000/T-F##/1000 and update the results afterthe CTM Run. What was the result?If necessary, review the Pegging Overview.

Task 3: Two Phase Time Phased Safety Stock PlanningThe previous attempts at safety stock planning dealt with a static demand. Becauseyour product has seasonality, you want to fluctuate the safety stock levels. Createtime dependent safety stock and explain how CTM can handle this new demandstream.







3. Update the Product Master for T-F##/1000. Set the safety stock method toMB - Safety Stock (Time-Based Maintenance) and remove the SafetyStock value of 5 and save the results.

4. In a separate session, using SNP Planning book 9ASNP_SSP, Data ViewSAFETY, create time dependent safety stock for Planning Version 000,Product T-F## at Location 1000.

Enter the following safety stock values in the appropriate time bucket.

Date QtyCurrent week + 10 1Current week + 11 2Current week + 12 3Current week + 13 4Current week + 14 (end of planning book) 5

Stay in this transaction at the conclusion of this step!

5. In a separate session, update the Product View for the 000/T-F##/1000. As aresult of the time dependent safety stock what do you see?

6. Time dependent safety stock is typically a mid to long term tool. Yourcurrent T-F## simple pump scenario does not currently have SNP masterdata. Therefore, you will tweak a new profile that will allow CTM to usePPDS PPMs which creating SNP PlnOrds.

Using CTM Profile GR##_4 as a template, create a new CTM profileGR##_4SSP - Group ## SStk Plng.

7. Change your new profile GR##_4SSP, so that it does bucket orientedplanning, Creates SNP orders, uses PPDS PPMs, references planning area9ASNP05, order selection GR##_D2, CTM time stream GR##_T2, anddeletion start date of 60 days and Infinite capacity planning.

8. In another session, create a new order deletion profile GR##_7SSP - Group## SStk Order Deletion, by copying your profile GR##_7. Change theorder selection to GR##_D2, and the CTM time stream to GR##_T2. Saveyour profile.




9. In the session with the product view, create a series of new FC reqs for the000/T-F##/1000, according to chart below:

Create demand on a Wednesday if possible.

Date QtyCurrent week + 10 (Wednesday) 1Current week + 11 (Wednesday) 2Current week + 12 (Wednesday) 3Current week + 13 (Wednesday) 4Current week + 14 (Wednesday) 5

Save your results.

10. Execute a master data check and review the T-F## at location 1000 to seeif safety stock is being considered.

11. Execute a demand simulation and review the results. Explain the results.

12. Using your profile GR##_4_SSP, remove the parameters that control thesingle phase safety stock process and execute a CTM planning run.




13. Review the demand prioritization list and explain.

14. Update the session with your Product View, for T-F##/1000. What is theresult?

Task 4: Two Phase, Time Phased Safety StockPlanning with Interval PlanningIn normal two phase planning, the CTM engine runs through all independentdemands first for the entire planning horizon. Then, using those results as astarting point, it plans safety stock thorough the entire horizon. See how usinginterval planning with the two phase approach may alter your results.

1. Update your profile GR##_4SSP so that it will perform interval planningwith the safety stock using the CTM time stream GR##_T2.

2. Execute a CTM planning run with profile GR##_4SSP. Review the demandprioritization results. Explain the results.

Task 5: Singe Phase, Time Phased Safety StockPlanningYou still have issues with the CTM engine planning the safety stock after theindependent demand, whether it is in weekly intervals or the entire horizon. See ifa single phase planning run will give you more desirable results.

1. Update your profile GR##_4SSP. Deactivate interval planning, butallow the CTM engine to consider independent demand and safety stocksimultaneously.




2. Perform a demand simulation. Explain the results.

3. Execute a Planning run with profile GR##_4SSP, and review the demandlist. Explain the results.

4. Execute a planning run using profile GR##_7SSP to delete the receiptsgenerated during your safety stock scenario.

5. Update the Product Master for T-F##/1000. Remove the safety stock methodMB - Safety Stock (Time-Based Maintenance)

6. Update your profile GR##_4 so that safety stock is not longer considered.Save the updated parameters.



Solution 22: Planning with Safety Stockin CTMTask 1: Two Stage Safety Stock PlanningDemand on your pumps has been volatile of late. Add safety stock to your pumpand execute a CTM run to see how the engine handles this new demand



Then create an FC req for 5 pcs 11 days from today, at 00:00:00 and Save.


a) Select Change.




e) Select Save.

3. Update the Product Master for T-F##/1000. Set the safety stock method toSB - Safety Stock from Location Product Master and set the Safety Stockto 5 and save the results.




d) Set the Safety Stock Method to SB - Safety Stock from LocationProduct Master.


f) Enter a Safety Stock of 5.

g) Select Save.

h) Select Back.




4. Update your profile GR##_4, so that CTM will acknowledge and buildsafety stock. Deactivate Safety Days supply and save your updates.

a) Select Supplies Tab.

b) Select Build up Safety Stock indicator.

c) Deselect Consider Safety Days Supply.

d) Select Save.


Answer: The only demand visible is the FC req. for 5 pcs 11 days fromtoday. The 5 pcs of safety stock from the material master is not visible.Because version 000 is using virtual safety stock, safety stock will not beconsidered part of the demand prioritization.



Answer: There were two planning runs executed. The first was for normaldemand (liveCache orders). The second was for safety stock. Note the dateof the safety stock requirement was today.This is was is called Two Phase Safety Stock Planning in CTM.


If necessary review the Pegging Overview.

Answer: Two Planned orders for 5 pcs each were created.By reviewing the pegging overview, you will see the earliest planned orderis pegged to the FC req. The second planned order was only created whenthe resource was available after all independent demands were covered toproduce products to cover the safety stock requirement.




Task 2: Single Stage Safety Stock PlanningYou tested the CTM solve with two stage safety stock planning and were notpleased with the way the solver handled the demand separately. Apply singlestage planning and see if the result is any different.


Note: It may be necessary to make sure the deletion mode is setto Plan all orders that are not firm. The setting Order Trees ofselected demands will not delete the planned orders for safety stock,since they will not be selected as demand.

2. Update your profile GR##_4, so that CTM will not perform normal demandprioritization in order to consolidate it with safety stock requirements. Saveyour updates.


b) Select Do Not Plan Demands indicator.

c) Select Save.


Answer: Currently the FCreq will be planned based on the demandsimulation.

4. In a separate session, execute a CTM planning run, using Profile GR##_4.

a) Select F8 to execute a planning run.

5. In your CTM profile, review the demand list, and review the results. Explain.

Demand tab,

Answer: Only safety stock was considered during the planning run. Theparameter Do not Plan Demands does not allow the CTM engine to considerthe liveCache orders as demand.

6. Update your profile GR##_4, so that CTM will combine independentdemand and safety stock into one requirement and save your updates.


b) Select the Consider Supply Shortage indicator.

c) Select Save.






Answer: Only one planning run was executed this time. If you reviewthe details, both requirements were given the same category SR - Buildup safety stock.Note the safety stock requirement (today's date) has the highest priority.This is was is called Single Phase Safety Stock Planning in CTM.


If necessary, review the Pegging Overview.

Answer: Three planned orders were created.Based on different requirements prioritization, capacity was allocateddifferently. However, pegging still has the earliest planed order pegged tothe FC req. Because safety stock is not considered a liveCache order, CTMcan not peg to it.

Task 3: Two Phase Time Phased Safety Stock PlanningThe previous attempts at safety stock planning dealt with a static demand. Becauseyour product has seasonality, you want to fluctuate the safety stock levels. Createtime dependent safety stock and explain how CTM can handle this new demandstream.




a) Select Change.




e) Select Save.




3. Update the Product Master for T-F##/1000. Set the safety stock method toMB - Safety Stock (Time-Based Maintenance) and remove the SafetyStock value of 5 and save the results.




d) Set the Safety Stock Method to MB - Safety Stock (Time-BasedMaintenance).


f) Delete the Safety Stock value.

g) Select Save.

h) Select Back.

4. In a separate session, using SNP Planning book 9ASNP_SSP, Data ViewSAFETY, create time dependent safety stock for Planning Version 000,Product T-F## at Location 1000.

Enter the following safety stock values in the appropriate time bucket.

Date QtyCurrent week + 10 1Current week + 11 2Current week + 12 3Current week + 13 4Current week + 14 (end of planning book) 5




Stay in this transaction at the conclusion of this step!

a) APO→ Supply Network Planning→ Planning→ Interactive SupplyNetwork Planning (all Books) (/sapapo/SDP94)

b) From the section Planning Book/Data View, locate planning book9ASNP_SSP.

c) Drill in to the planning book and select data view SAFETY - SNPPLAN (SSP).

d) In the top selection window, select Selection window .

e) In the show field select APO Location Product.

f) Restrict the selection by Planning Version 000, and APO ProductT-F##.

g) Select Save and name your selection T-F##, and select Save.

h) Select Adopt.

i) Load T-F##/1000 into the planning table by double-clicking on thecombination in the selection window.

j) Select Change.

k) Enter the values in the table above.

l) Select Save.

5. In a separate session, update the Product View for the 000/T-F##/1000. As aresult of the time dependent safety stock what do you see?

Answer: Starting 11 weeks from now, you see ATP Category SafetyStck.However, the requirements are shown as 1 pc each week. This is depictingthat the safety stock is increasing by one each week. In week 16 it shows areceipt of +5 pcs. This shows that this is no safety stock in week 16 so it isgiving back the 5 pcs of inventory/production you were holding in reserve(hence safety stock).

6. Time dependent safety stock is typically a mid to long term tool. Yourcurrent T-F## simple pump scenario does not currently have SNP masterdata. Therefore, you will tweak a new profile that will allow CTM to usePPDS PPMs which creating SNP PlnOrds.




Using CTM Profile GR##_4 as a template, create a new CTM profileGR##_4SSP - Group ## SStk Plng.

a) From the session with CTM Profile GR##_4, select Copy Profile.

b) Enter GR##_4SSP and select Copy Profile.

c) Enter description GR##_4SSP - Group ## SStk Plng.

d) Select Save.

7. Change your new profile GR##_4SSP, so that it does bucket orientedplanning, Creates SNP orders, uses PPDS PPMs, references planning area9ASNP05, order selection GR##_D2, CTM time stream GR##_T2, anddeletion start date of 60 days and Infinite capacity planning.

a) Select the Planning Scope tab.

b) Update the order selection to GR##_D2, and the CTM time streamto GR##_T2.

c) Select the Strategies→ Planning Strategies tab.

d) Update the deletion start to 60 days.

e) Select the Strategies→ Special Strategies tab, and set CapacityPlanning to Plan All Resources Infinitely.

f) Select Settings→ Basic Settings tab, and set Type of planning toBucket-Oriented Planning, the Order Category to SNP order, andthe Sources of Supply for In-House Production to PPDS Type.

g) Select Settings → Technical Settings and set planning area to9ASNP05.

h) Select Save.

8. In another session, create a new order deletion profile GR##_7SSP - Group## SStk Order Deletion, by copying your profile GR##_7. Change theorder selection to GR##_D2, and the CTM time stream to GR##_T2. Saveyour profile.

a) From the session with CTM Profile GR##_7, select Copy Profile.

b) Enter GR##_7SSP and select Copy Profile.

c) Enter description Group ## SStk Order Deletion.

d) Select the Planning Scope tab.

e) Update the order selection to GR##_D2, and the CTM time streamto GR##_T2.

f) Select Save.




9. In the session with the product view, create a series of new FC reqs for the000/T-F##/1000, according to chart below:

Create demand on a Wednesday if possible.

Date QtyCurrent week + 10 (Wednesday) 1Current week + 11 (Wednesday) 2Current week + 12 (Wednesday) 3Current week + 13 (Wednesday) 4Current week + 14 (Wednesday) 5

Save your results.

10. Execute a master data check and review the T-F## at location 1000 to seeif safety stock is being considered.

a) Edit→ Check CTM Master Data

b) Products→ T-F##→ Location 1000 , Safety Time/Stock tab.

c) Result: The quantities from the SNP planning table are now availableto CTM planning.

11. Execute a demand simulation and review the results. Explain the results.

Answer: 5 demands were considered. Only the ATP categories FA (FC req)were considered. This is because �virtual safety stock� is not relevant toliveCache, and therefore not relevant to the demand prioritization.

12. Using your profile GR##_4_SSP, remove the parameters that control thesingle phase safety stock process and execute a CTM planning run.


b) Deselect Do Not Plan Demands and Consider Supply Shortage.

c) Save your profile.

d) Select F8 to execute a planning run.

13. Review the demand prioritization list and explain.

Answer: There were two planning runs executed. Run 0001 Normal,executed a normal demand prioritization in this case only consideringindependent (FC req) requirements. Run 0002 Safety Stock was a secondplaning run, done after the first, which only safety stock was considered.




14. Update the session with your Product View, for T-F##/1000. What is theresult?

Answer: For every requirement, there is a matching planned order. Note:This planning run was done Infinitely, so there may be resource overloads.If this is a concern, understand �normal � demands will always be plannedfirst then safety stock.

Task 4: Two Phase, Time Phased Safety StockPlanning with Interval PlanningIn normal two phase planning, the CTM engine runs through all independentdemands first for the entire planning horizon. Then, using those results as astarting point, it plans safety stock thorough the entire horizon. See how usinginterval planning with the two phase approach may alter your results.

1. Update your profile GR##_4SSP so that it will perform interval planningwith the safety stock using the CTM time stream GR##_T2.


b) Set the indicator for Interval planning, and enter the calendarGR##_T2.

c) Save your profile.

2. Execute a CTM planning run with profile GR##_4SSP. Review the demandprioritization results. Explain the results.

Answer: In this case, each interval, which is controlled by the calendar isplanned in separate planning runs. At the very least, this will allow CTM toanalyze Independent demand and safety stock, separately, but within eachperiod of time. In this example, it is planning one week at a time throughthe first twelve weeks.




Task 5: Singe Phase, Time Phased Safety StockPlanningYou still have issues with the CTM engine planning the safety stock after theindependent demand, whether it is in weekly intervals or the entire horizon. See ifa single phase planning run will give you more desirable results.

1. Update your profile GR##_4SSP. Deactivate interval planning, butallow the CTM engine to consider independent demand and safety stocksimultaneously.


b) Deselect the indicator for Interval planning.

c) Select the Supplies tab, and select Consider Supply Shortage.

d) Save your profile.

2. Perform a demand simulation. Explain the results.

Answer: No demands were found. The parameter Do Not Plan Demandsinstructs the CTM engine not to select independent demands.

3. Execute a Planning run with profile GR##_4SSP, and review the demandlist. Explain the results.

Answer: Only one planning run was performed, Run 0002 Safety Stock.However, in reviewing the details, you will see it converted the FC reqs toSR requirements and sorted the demands by date.Caution: the draw back here is that you cannot prioritize which demandsget planned first, since they have all been lumped into the same type ofrequirement.

4. Execute a planning run using profile GR##_7SSP to delete the receiptsgenerated during your safety stock scenario.

5. Update the Product Master for T-F##/1000. Remove the safety stock methodMB - Safety Stock (Time-Based Maintenance)




d) Set the Safety Stock Method to �blank�.

e) Select Save.

f) Select Back.




6. Update your profile GR##_4 so that safety stock is not longer considered.Save the updated parameters.


b) Deselect any and all safety stock parameters.

c) Save.



Lesson Summary

You should now be able to:� Describe safety stock planning options with SCM� Demonstrate two phase safety stock� Demonstrate single phase safety stock


� 646738 - SNP standard planning book for safety stock planning



Lesson: Restricting Early Demand Fulfillment

Lesson OverviewThe main focus of CTM is to create feasible receipts, planning one requirementat a time, and considering resource and material constraints. Up to this point,inventory control has not been a concern. In this lesson, you will learn how toapply several different constraints that will allow the CTM engine to consider howinventory builds can affect your plan.


� Demonstrate how the Order Creation Start parameter can be used to controlinventory build ups

� Demonstrate how the Order Creation Frame parameter can be used to controlinventory build ups

� Demonstrate how pegging can be used to control inventory build ups� Demonstrate how the Maximum Earliness for planned orders can control

inventory build ups

Business ExampleUp to this point, your company has only been concerned with meeting deliverydates. This could have caused some issues with excessive inventory or carryingcosts. Your manager wants you to see if CTM can consider inventory builds ups asa constraint during the planning run and allow a more favorable �feasible� solution.

Restricting Early Demand FulfillmentConsider that CTM is an order-based processing tool. The first step is orderselection, followed by order prioritization, then the planning algorithm and ordercreation. Since demand prioritization is one of the first steps in the process,we must consider that the order in which the system plans is important, andin addition, the consideration of resource and material availability is critical indeveloping a feasible plan.


SCM235 Lesson: Restricting Early Demand Fulfillment

Figure 235: Restricting Early Demand Fulfillment

When using the term feasible, rarely is inventory build a consideration. Typicallywith CTM you are constrained to the point that getting the production completeand on time (prior to requirement) is paramount. However, the consideration ofhaving stock too early is a constraint that can be applied during CTM processing.This constraint can be managed in several ways:

� Order Creation Start� Order Creation Frame� Maximum Earliness� Maximum Pegging Length - MPL

Order Creation StartSo that the system considers unfulfilled demands from the past in a CTM planningrun, you can have the planning start in the past. However, this means that CTMplanning might create orders in the past. To prevent this, you can use a value todetermine as of when CTM planning can create orders within the planning period.



Figure 236: Order Creation Start

To do this, you enter a value in the Order Creation Start field in the CTM profile(Strategies tab). This value can only be entered in whole days. The value refers tothe current date (0:00:00). You can enter positive and negative values. With value1, the system calculates the next day as the earliest time for creating orders. Withvalue 2, the system creates the next but one day as the earliest time, and so on. Ifyou enter 0 or no value at all, the system uses the current date.

The earliest time that the system calculates for creating orders must lie within theplanning period. When the system calculates a time that lies before the planningstart, CTM planning only creates orders as of the planning start. If the calculatedtime lies after the planning end, CTM planning cannot create orders.

Note: This parameter is working days.

Order Creation FrameWithin CTM, a parameter can be defined, which will create a range within which acertain demand has to be fulfilled. In other words, a time frame can be set withinwhich a supply has to be planned to fulfill a certain demand. It is not possible toplan a supply outside this frame to fulfill this certain demand. This is valid forforward and backward scheduling. From a business point of view, this can be usedto fulfill demands as close to their due date as possible to reduce stock level.



The parameter Order Creation Frame (horizon for creating orders), can be used torestrict the processing time for a products across all BOM levels in such a waythat generally, less supply is built up. If you have defined various procurementalternatives with different priorities, CTM planning usually selects the alternativewith the highest priority. However, if you have entered a specific time frame forcreating orders, CTM planning can think that only an alternative with a lowerpriority can cover the requirement in the given time frame. This results in ashorter time frame between the availability date of the receipt and the due date ofthe requirement.

Figure 237: Order Creation Frame

In step one of the figure above, the CTM engine creates the order for the finishedgood, which is affected by resource availability. This causes the engine to createthe receipt earlier then needed. The engine continues to plan through the BOM. Atthe end of the planning, the entire pegging structure is not with the order creationframe. Thus, in step 2, the engine is able to select another source of supply thatcan deliver the receipt on time and within the order creation frame.

Order Creation Frame (Horizon for Creating Orders), is the period before demanddate (in days), in which CTM can create planned orders to cover a requirement.You can enter values between 1 and 999 . The start date of all orders created byCTM planning must lie within the specified time period (demand date minusnumber of calendar days). Remember that the system counts non-workdays asdays.



Figure 238: Order Creation Frame Parameters

The Order Creation Frame can be controlled in the following ways:

1. Global Settings for CTM2. Product Master3. A Demand Specific Value4. BAdI (Demand Prioritization)

The period is valid for all orders created for one demand, independent of theBOM level. Existing receipts or stocks, however, do not have to lie in this period.This includes receipts that CTM planning creates because of the manufacture ofco-products or lot size specifications, and does not consume immediately.

To use the Order Creation Frame you must first activate it globally in the Generalsettings for CTM in customizing: IMG→ APO→ Supply Chain Planning→ Multilevel Supply & Demand Matching→ CTM→ Define Global Valuesand Default Values /SAPAPO/CTMCUST. Once the Restrict Early DemandFulfillment indicator is activated, a global parameter for Order Create Frame andmaximum earliness for Planned Orders can be set.

The Order Creation Frame can also be set in the product master. This will have ahigher priority than the Global settings since it is product specific.

Note: The order creation frame should not be smaller than the totalreplenishment lead time for the product. As the frame or horizon isapplied from the finished good demand to the supply of the raw material.



As depicted in the graphic above, the order creation frame applies to all ordersbeing created during the solve, but does not apply to existing supplies.

The order creation frame can be maintained as a demand specific value. Thiscan be maintained for the CTM rules based planning (ATP) master data at theCTM calculation profile. Alternatively, the BAdI (User Exit) from the demandprioritization can also be used to change demand specific order creation framevalues.

Figure 239: Example of Order Creation Frame

CTM considers resources because of their priorities. As you can see in the toppart of the figure above, CTM might plan an order (dark grey boxes) not asclose as possible to the due date because of the resource priority R1. However ifCTM also checked R2, it would have found a solution which would cause lessinventory level.

Therefore, the order creation frame restricts the possibility of creating orders to acertain period as shown figure (box covering both resources). If CTM does notfind a solution in R1 within the order creation frame, then it checks for R2 andso on. Using this the solution causes less inventory to be found by CTM. UntilAPO 3.1, the value for the frame could only be set on a global basis. As of SCM4.0, it is possible to maintain a value product as location specific. Thus, this isquite useful if the system needs to plan products with different throughput times.In case a product has 3 days throughput time and another one has 25 days, then itis difficult to find an order creation frame appropriate for both products.



Figure 240: Order Creation Frame with Late Demand Fulfillment

In certain cases, by using the order creation frame, the CTM engine may not beable to find a feasible solution. If late demand fulfillment is not allowed, theorder will be bypassed. However, by allowing late demand fulfillment, the enginemay find a feasible solution, which is late, but may be a better alternative thenproducing too early.

Order Creation Frame Control parameterIn Capable-to-Match, planned orders are created on each level of the supplychain. If CTM has to select between different procurement alternatives (PPMs,transportation lanes), the decision is based on the corresponding priorities ofthe PPMs and transportation lanes. In general, CTM uses the alternative withthe highest priority first - if the demand can be fulfilled on-time. In case ofresource constraints or material constraints on the PPM with the highest priority,the availability date of the new planned orders could be much earlier than therequirement date. It would be possible that using an alternative with a lowerpriority would give a better result, that is, a shorter time frame between theavailability date of the supplies and the due date of the demand.

APO 3.0/3.1Using the parameter, you can specify a global value, which restricts the time framefor the creation of new orders for a given demand. All orders for one demandthrough the whole supply chain have to start within this time frame. Exception:existing supplies can be used, even if their availability date lies before the start



of the Order Creation Frame. The Order Creation Frame is a global value thatis applied for each demand separately, that is, the earliest possible start date fororders of demand d is calculated as follows:

Earliest start date = Max { planning start, due date demand d � Order CreationFrame }

Order Creation Frame with Value1 = Number of days

APO 4.0In APO 4.0, it is possible to maintain the Order Creation Frame demand-specific.The search sequence for Late Demand Frame is as follows:

� Global value in the CTM customizing which is valid for all demands� Value from the calculation profile of an ATP rule can overwrite the global

value� User should be able to change this value demand-specific in a user exit

It is also possible that the availability date of existing supplies is taken into accountwhen the Order Creation Frame is applied. This is not the default behavior and hasto be triggered by a specific parameter. The Order Creation Frame can then beused to model a kind of shelf life functionality.

Order Creation Frame with Value1 = X (=> Existing supplies can always be used)

Order Creation Frame with Value1 = S (=> Existing supplies can be used if theiravailability date lies inside the Order Creation Frame)

Maximum Pegging Length (MPL)The Maximum Pegging Length constraint is used to minimize the risk of holdingstock for high value products by minimizing the time between orders. By usingthe functionality of maximum pegging length, it is possible to restrict the timespan between a demand element and a supply element created during the CTMplanning run.



Figure 241: Maximum Pegging Length

The overall goal is to minimize stock and therefore costs by restricting the timebetween supply and demand elements. The function is also helpful if the valueof products is negatively affected by long stock keeping times. This can occurin case of very short product life cycles like CPUs in the High Tech industryfor example. If the pegging length constraint cannot be fulfilled, the demandremains unsatisfied.

Note: MPL is can be applied on a multilevel basis



Figure 242: Parameters for Maximum Pegging Length

The maximum pegging length can be maintained product-specifically andtime-phased. If we have time-phased values, then the date/time of the (dependent)demand determines which value should be used. If no value exists for a demand,then there is no restriction regarding the maximum pegging length. The timephased values are retrieved form an SNP key figure. A constant value for themax. earliness can be maintained in the product location master at tab Demand→Pegging tab, max. earliness of a receipt field.

Within the CTM profile, in the Supplies tab, it is necessary to activate the Max.earliness for a particular planning run by choosing a value from the productmaster or SNP key figure.



For the SNP key figures to be used, the following steps apply:

1. Key figure created in SCM/BW to support time dependent values2. Make copy of 9ASNP05 planning area, and add new key figure to planning

area3. Initialize planning area for planning version to be used in CTM4. Define key figure to be used in CTM and assign it to the maximum earliness

key function5. Identify in CTM profile, which planning area will be used for these time

dependent parameters.6. Input time dependent parameters in planning area via SNP planning book

Note: Prior to SCM 4.0, control parameter MPL was used in the CTMprofile:

MPL = 0→ NO MPL constraint

MPL = -1→ MPL of 0 applied

To check the model setup and the customizing settings, the CTM master datachecker can be used.

Caution: Depending on the scenario, the new function can beperformance intensive because of having less possible solutions due tothe new constraint. The run time is impacted because it is more probablethat alternative solution possibilities need to be considered, or that a latedemand handling takes place.

When using the MPL constraint with backward scheduling in CTM, the ordersare created as close to the demand date as possible. However, due to capacityor calendar constraints, if the sub assembly order cannot be scheduled close tothe finished product order start date, then the finished product order will also berescheduled to consider the maximum earliness at the subassembly level.

The MPL constraint is applied on the availability dates of the order. The orderstart date can be before the MPL constraint.

Note: MPL is applied for both production and transport orders.

Caution: Once MPL is activated, it is activated for all products.Therefore, planners must be aware of the values maintained in the productmaster for each material that will be in the master data selection.

MPL Control ParameterMPL is applied only to the availability date of the production / transport, that is, tothe output node only. MPL is not applied to the input nodes. By default, MaximumEarliness (MPL) is applied for newly created orders only. For existing supplies,



stock, and excess supplies created during the planning run, an MPL value can beenabled by using the CTM planning parameter CtmActiveMaxPeggingLengthwith Value1 = 1 in the CTM profile.

Maximum Earliness for Planned OrdersUnlike MPL, Maximum earliness for planned orders is only applied to the firstproduction level only, and does not apply to stock transfer orders.

Figure 243: Maximum Earliness for Planned Orders

You can use the Maximum Earliness function to restrict the time frame betweenindividual receipts and requirements for a location product, and to prevent thesystem building up too much supply. The system must only generate a receiptto cover a requirement when the availability date for this receipt falls within aspecific time frame before the requirements date. However, the system can useexisting receipts to cover the requirement.

In the figure above, while the demand may be at the distribution center, the timeinvolved for the stock transfer is included in this duration.



Figure 244: Parameters Maximum Earliness for Planned Orders

The parameter for Maximum Earliness for Planned orders is maintained in theGlobal Settings for CTM (/SAPAPO/CTMCUST) located in the IMG. Using thiscustomizing setting, you can set a specific range. This range determines with itsstart date the earliest day of product availability. CTM must always schedulethe first planned order (for the finished good, NOT the transport order!) fromthe first BOM level within the specified time period before the demand date.Planned orders for the first BOM level can therefore never be scheduled beforethe specified time period. Planned orders on lower BOM levels can be scheduledbefore this time period.

In addition to the global settings, users can maintain a product-specific parameterusing ATP rules and the calculation profile. This will be explained in more detailin another lesson. In addition, demand-specific values can be maintained in theUSEREXIT during demand prioritization.



Exercise 23: Restricting Early DemandFulfillment

Exercise ObjectivesAfter completing this exercise, you will be able to:� Demonstrate how you can control how early CTM delivers a supply for a

requirement

Business ExampleYou have noticed that during several CTM planning runs, some supplies havebeen delivered too early. This has caused a surge in inventory and carrying costs.Your manager wants you to investigate if CTM has the ability to control howearly supplies are delivered.

Task 1: Applying the Order Creation StartYou have certain situation where you want to prevent capacity from beingconsumed too early or production being executed too early. See if using the OrderCreation Start parameter can affect your planning results in a positive manner.



Then create an FC req for - 5 pcs 6 weeks from today, at 00:00:00 and Save.


3. Update your CTM profile GR##_4, so that it performs forward schedulingand activate rule SCM235_1 for use with all demands.




4. Review the results in the Product View for 00/T-F##/1000. Explain theresults.

5. Review the results in the Product View for 00/T-SF1##/1000. Explain theresults.

6. In a separate session, execute a CTM planning run, using profile GR##_7 todelete any existing receipts for 000/T-F##/1000.

7. In your CTM Profile GR##_4, update the planning strategies so that theCTM engine will postpone order creation by 15 days.

Save the results and execute a planning run.


Task 2: Applying the Order Creation Frame1. In a separate session, execute a CTM planning run, using profile GR##_7 to

delete any existing receipts for 000/T-F##/1000.

2. In the session with the product view for 000/T-F##/1000, increase yourFC requirement to -10 pcs.

3. In your CTM Profile GR##_4, update the planning strategies so that theCTM engine will postpone order creation by 1 day and set the schedulingdirection to Backwards.







6. Update your product master so that the CTM engine will not create suppliesmore than 14 days earlier than needed.

7. Execute a CTM planning run using your profile GR##_4.

Ensure that no ATP Rules are being used.

8. Update the results in the product view for 000/T-F##/100 and explain theresults.

9. Review the details of the T-SF1##/1000. You will notice the first plannedorder starts at the beginning of the 14 day �horizon� the Order CreationFrame parameter initiated. A second planned order has a start date wherethe first planned order left off and continues up to two and a half days priorto the requirement date. The remaining two and a half days would still beneeded to produce the T-F##/1000.

10. Update your product master by removing the order creation frame. Savethe update.


Task 3: Using Maximum Pegging Length to ControlEarliness at the Product Level1. We will use the requirement of 10 pcs from the previous exercise. Note

the requirement date. From the CTM profile GR##_4, execute a CTMMaster Data Check. From the results of this check, maintain your resourceWT-CTM##_1000_001, so that a period of down time exists a week beforethe requirement on the T-F##/1000.





3. Review the planning results in the Product View.

4. In a separate session, execute a CTM planning run using profile GR##_7 todelete any existing receipts for 000/T-F##/1000.

5. Update the product master for the T-F##/1000, by changing the maximumearliness of receipt to 72 hours.

6. In the session with your CTM Profile GR##_4, activate the MaximumEarliness so that it looks to the product master.

Save your changes, exit and return to allow master data updates (productmaster).


7. Update the Product View for the T-F##/1000. Explain the results



Solution 23: Restricting Early DemandFulfillmentTask 1: Applying the Order Creation StartYou have certain situation where you want to prevent capacity from beingconsumed too early or production being executed too early. See if using the OrderCreation Start parameter can affect your planning results in a positive manner.



Then create an FC req for - 5 pcs 6 weeks from today, at 00:00:00 and Save.


a) Select Change.




e) Select Save.

3. Update your CTM profile GR##_4, so that it performs forward schedulingand activate rule SCM235_1 for use with all demands.


b) Set the Scheduling parameters to Forward Scheduling.

c) Set the parameter Planning mode to Replan all Orders.

d) Select the Special Strategies tab.

e) Set the Rules parameter to Use Specified Rule With All Demandsand set the rule to SCM235_1.

f) Save.

g) Press F8 to execute a planning run.


Answer: Due to forward scheduling, a planned order was created almost amonth prior to the actual requirement date.





Answer: Due to forward scheduling, a planned order was created from thefirst working day from today.


7. In your CTM Profile GR##_4, update the planning strategies so that theCTM engine will postpone order creation by 15 days.



Answer: Due to forward scheduling, and a order creation start of 15 days,the system did not begin planning until 15 days from today, and then forwardscheduled. The order creation start can prevent production from beingscheduled too early.Caution: This setting applies to all demands being evaluated in a planningrun.

Task 2: Applying the Order Creation Frame1. In a separate session, execute a CTM planning run, using profile GR##_7 to

delete any existing receipts for 000/T-F##/1000.

2. In the session with the product view for 000/T-F##/1000, increase yourFC requirement to -10 pcs.

3. In your CTM Profile GR##_4, update the planning strategies so that theCTM engine will postpone order creation by 1 day and set the schedulingdirection to Backwards.



Answer: Because of backwards scheduling, the planned order is arriving onthe desired day.


6. Update your product master so that the CTM engine will not create suppliesmore than 14 days earlier than needed.

a) In the SNP 2 tab, set the Order Creation Frame to 14 days.

b) Select Save.Continued on next page



7. Execute a CTM planning run using your profile GR##_4.

Ensure that no ATP Rules are being used.

8. Update the results in the product view for 000/T-F##/100 and explain theresults.

Answer: By setting the order creation frame in the product master, yourestricted the duration of the order tree to 14 days (10 work days). For 10 pcsof the T-F##, it will take 10 days of production and an additional 10 daysto make the 10 pcs of the T-SF1## for a total of 20 work days. The ordercreation frame uses calendar days.After realizing there was not enough capacity on WT-CTM##_1000_001and WT-CTM1##_1000_001, the CTM engine figured that with the 14 days,it could produce 5 pcs of the T-SF1## and 5 pcs of the T-F##, before runningout of capacity.The CTM engine then planned the remaining 5 pcs on theWT-CTMA##_1000_001 and WT-CTM1##_1000_001, but quicklyrealized it did not have the capacity to produce all 5 pcs. As a result of thisunsuccessful attempt, binary splitting kicked in. This time there was enoughcapacity on the WT-CTMA##_1000_001 and WT-CTM1##_1000_001, toproduce only 2.5 pieces before time ran out. Note, late demand was notactive in this scenario.Note, the setting in the product master overrides any global parameters.

9. Review the details of the T-SF1##/1000. You will notice the first plannedorder starts at the beginning of the 14 day �horizon� the Order CreationFrame parameter initiated. A second planned order has a start date wherethe first planned order left off and continues up to two and a half days priorto the requirement date. The remaining two and a half days would still beneeded to produce the T-F##/1000.

10. Update your product master by removing the order creation frame. Savethe update.

a) In the SNP 2 tab, remove the Order Creation Frame.

b) Select Save.





Task 3: Using Maximum Pegging Length to ControlEarliness at the Product Level1. We will use the requirement of 10 pcs from the previous exercise. Note

the requirement date. From the CTM profile GR##_4, execute a CTMMaster Data Check. From the results of this check, maintain your resourceWT-CTM##_1000_001, so that a period of down time exists a week beforethe requirement on the T-F##/1000.

a) Edit→ CTM Master Data Check

b) Resource→ Resource WT-CTM##_1000_001

c) Using the context menu, select Resource Maintenance.

d) Select the Downtimes tab.

e) Enter a valid from date that is seven days prior to the requirement and avalid to date, a day prior to the requirement and a time of 15:00.

f) Select Planned Down Time and Save.


3. Review the planning results in the Product View.

Answer: The result is an early planned order being scheduled on theWT-CTM##_1000_001 resource. Since this resource is unavailable in thetime period leading up to the FC req, the engine still selects the highestpriority source supply, even though it is delivering it early.

4. In a separate session, execute a CTM planning run using profile GR##_7 todelete any existing receipts for 000/T-F##/1000.

5. Update the product master for the T-F##/1000, by changing the maximumearliness of receipt to 72 hours.

a) Select the Demand→ Pegging tab.

b) Change the maximum earliness of receipt to 72:00.

c) Save your update.

6. In the session with your CTM Profile GR##_4, activate the MaximumEarliness so that it looks to the product master.

Save your changes, exit and return to allow master data updates (productmaster).






b) Set the Maximum Earliness to Use Value From Product Master.

c) Select Save.

d) Select Back.

e) Return to the profile and select Start Planning Engine.

7. Update the Product View for the T-F##/1000. Explain the results

Answer: Since updating the product master to only allow supplies within a72 hour window and activating the maximum earliness in the CTM profile,resource WT-CTM##_1000_001 is no longer feasible since it would deliverproduction too early.If you review the details of the new planned order you will see that resourceWT-CTMA##_1000_001 was used, which allows the production to finishwithin the 72 hour window.



Lesson Summary

You should now be able to:� Demonstrate how the Order Creation Start parameter can be used to control



inventory build ups


� 1073004 - CTM : Maximum earliness of supply elements


SCM235 Lesson: Push Deployment with Supply Distribution

Lesson: Push Deployment with Supply Distribution

Lesson OverviewUntil this time, CTM has been working typically from the top of the supply chainto the bottom. In this lesson, we will look at how supply distribution could be usedto �push� excess product up through the supply chain.


� Explain the purpose of supply distribution in conjunction with CTM� Demonstrate supply distribution� Demonstrate supply distribution with lot sizes

Business ExampleDuring the course of planning in APO, your manufacturing locations havecompiled stores of finished goods. In hopes of preventing shortage, your managerwants to you to move surplus inventory to the distribution centers. You currentlydo not have the deployment functionality active in APO, therefore, your managerwas to see if Supply Distribution can handle this task.

Supply DistributionAs discussed, CTM is an order-based planning tool that is typically used whenplanners need a constraint based tool to develop a feasible plan. Typically withCTM, most planners expect to have some type of delays or shortages. Unlessplanners use parameters like Maximum Earliness or Order Creation frame, CTMis typically not concerned with inventory levels.

However, in some situations, due to lot sizes, minimum production runs, or batchsizes, excessive supplies can be built up at production facilities. Due to storageconstraints, this often calls for planners to �push� inventory up through the supplychain, even when there are no requirements.



Figure 245: Supply Distribution Scenario

In the figure above, we have two distribution centers, 2400 and 2500, whichare supplied by production facility 1000. Location 2400 has a forecast of 100pcs required on December 12th and Location 2500 has a forecast of 150 pcs onDecember 19th. After the initial CTM planning run, stock transfers are created foreach location for the exact amount of the forecast. However, due to productionconsiderations, location 1000 must make a minimum of 200 units each time itperforms a production run. Therefore, as a result of the initial CTM run, twoplanned orders are created for 200 pcs, one for each stock transfer requirement.This obviously leads to a surplus.



Figure 246: Supply Distribution Parameters

As of SCM 5.1, you can make settings for supply distribution within the CTMprofile on the Supply Distribution tab page. If you want the system to performsupply distribution directly after a planning run, select the corresponding checkbox. If you want to perform supply distribution separately, choose the StartSupply Distribution button.

Supply distribution could be executed separately via the transaction/SAPAPO/CTM10. This program could be run in the foreground or be used tocreate a variant an run in the background as a scheduled job. In addition, priorto SCM 5.1, planners could execute a variant of the Supply Distribution, withinthe profile, in the Strategies→ Special Strategies tab.

The supply distribution functionality in CTM selects all receipts and stocks thatare not linked to a demand by a pegging relationship. If the partial quantity ofa receipt or stock is already linked to a demand by a pegging relationship, theremaining quantity that is not linked is unrestricted-use. The supply distributionthen creates stock transfers for the unrestricted-use quantity. Supply distributiongroups together the receipts or stocks of the same location product with the sameavailability date, and handles them as a single receipt or stock. However, supplydistribution does not change the original orders. When creating stock transfers, thesystem does not execute aggregation again.



Supply distribution only uses transportation lanes. For transfer to thecorresponding locations, supply distribution evaluates the outbound quotaarrangements. If there are several transportation lanes for the source locationproduct, supply distribution creates the corresponding stock transfers according tothe specified quota arrangements for each summarized receipt.

Caution: For transportation lanes of type subcontracting, the systemcannot execute supply distribution.

Supply distribution works on a single level. If, for example, you first want totransfer unrestricted-use receipts or supplies to one location, and then to anotherlocation, you must call the supply distribution several times.

The supply distribution uses the shipping calendar, transportation calendar, andreceiving calendar, as well as transportation and handling resources. Starting onthe availability date of the receipts or stocks, supply distribution executes forwardscheduling. The system creates the stock transfers on the earliest possible date inthe availability period of the corresponding receipt or stock.

Figure 247: Supply Distribution Solution

Based on the example above, now that surplus supplies exist, the planner willexecute a supply distribution run. This will take into account outbound quotaarrangements that must be maintained in APO. In this case, a quota arrangementexits, and has a split of 40% going to location 2400 and 60% going to location2500. As a result of the supply distribution, on December 12th because of the 100



pieces surplus, two stock transfers will be created for 40 pieces going location 2400and 60 pcs going to location 2500, and this based on the 40/60 split of the quotaarrangement. Then, on December 19th, due to a surplus of 50 pieces, two morestock transfers are created, 20 pieces for location 2400 and 30 pieces for location2500. No surplus inventory exists at the bottom of the supply chain only the top.

Supply Distribution Applying Fixed Lot SizesIn some circumstances, planners may want to use fixed lot sizes in thetransportation of their products. This can pose a problem for supply distribution.

Figure 248: Supply Distribution Solution Applying Fixed Lot Sizes

Following the same example as before, we have two surplus receipts, 100 pieceson December 12th, and 50 pieces on December 19th. If we were to apply a fixedlot size of 15 pieces to the supply distribution scenario, the results change. Withthe first surplus of 100 pieces, six transfers are created for 15 pieces each with 2(30) going to location 2400 and four (60) going to location 2500. This still leavesa surplus of 10 pieces. For the second surplus, 50 pieces, the engine creates threetransfers for 15 pieces, one going to 2400 and 2 going to 2500, leaving a surplusof 5 pieces. A total surplus of 15 pieces now exists.



Supply Distribution Allowing Multiple DistributionThe quota arrangement allocation process works differently in CTM than in otherapplications. Therefore, when invoking lot size procedures like, fixed lot sizing,this can cause issues with the calculation and ultimately lead to surpluses in thesupply chain.

Within the Supply Distribution functionality, planners can activate a tool calledMultiple Distribution. If you set this indicator, the system assigns surplusquantities of a receipt or stock, that can arise due to lot sizes, for example, to thenext receipt or stock.

Figure 249: Supply Distribution with Multiple Distribution

In the previous example with fixed lot sizes, due to a fixed lot size of 15 pieces,the supply distribution run left 10 pieces of the first planned order and 5 pieces ofthe second planned order. Based on the initial solve, the engine cannot combinethe two surpluses to make another shipment.

By activating the Multiple Distribution, the engine will roll the 10 piece surplusfrom the first planned order into the second planned order giving a total surplus of15 pcs. Now, the engine has enough stock to meet the fixed lot size. Therefore, athird stock transfer for 15 pieces will be created for location 2500 due to it hasthe higher requirement of 60%.



Lesson Summary

You should now be able to:� Explain the purpose of supply distribution in conjunction with CTM� Demonstrate supply distribution� Demonstrate supply distribution with lot sizes


� None


Unit Summary SCM235

Unit SummaryYou should now be able to:� Identify the different types of inventory control measures� Point out the safety days supply parameters to users� Demonstrate the use of safety days supply and its strategies to control

inventory levels during CTM planning� Describe time-dependent safety days supply� Describe safety stock planning options with SCM� Demonstrate two phase safety stock� Demonstrate single phase safety stock� Demonstrate how the Order Creation Start parameter can be used to control



inventory build ups� Explain the purpose of supply distribution in conjunction with CTM� Demonstrate supply distribution� Demonstrate supply distribution with lot sizes



Test Your Knowledge



Answers


Unit 11CTM Advanced Planning Methods

Unit OverviewDiscontinuation and product substitution are common practice in many companiesand industries. In this unit, you will explore using product interchangeability tomanage discontinuing components and two different methods to handle productsubstitutes.


� Configure CTM for rule-based planning� Use a rule-based ATP substitution in a CTM planning run� Create an interchangeability group for supersession� Create an interchangeability group for Form, Fit, and Function classes� Execute the CTM planning run with interchangeability

Unit ContentsLesson: Rules Based Substitution in CTM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .690

Exercise 24: Using Rule-Based substitution .. . . . . . . . . . . . . . . . . . . . . . . . . . .701Lesson: Product Interchangeability in CTM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .710

Exercise 25: Product Interchangeability in CTM ... . . . . . . . . . . . . . . . . . . . .721


Unit 11: CTM Advanced Planning Methods SCM235

Lesson: Rules Based Substitution in CTM

Lesson OverviewIn this lesson, we will look at how the CTM functionality can be enhanced byusing the Global ATP rule-based availability check. Since both CTM and GATPare essentially rule-based methods, there are many integration points between thetwo. This lesson investigates these integration points.

The detail of rule-based GATP configuration is covered thoroughly in the courseSCM670 and will not be covered here. We will just make use of the finished rulein the CTM run.


� Configure CTM for rule-based planning� Use a rule-based ATP substitution in a CTM planning run

Business ExampleTo provide your customer with the highest on time delivery possible, youcan substitute products. This substitution may be customer-specific ordemand-specific, depending on your business process and priorities. In thislesson, we will look at this integration point with Global ATP and use GATP rulesin our CTM planning run. Building the GATP rules will not be covered here asit is part of the GATP course.

Rules Based PlanningThere are four different options available in the CTM profile to control thetriggering of the rules:

1. Do not apply rules2. Find and use rule according to demand3. Use first found rule for all demands4. Use specified rule for all demands


SCM235 Lesson: Rules Based Substitution in CTM

Figure 250: Product Substitution

Using the settings �Find and use rule according to demand� and �Use first foundrule for all demands� in the CTM profile, the rules are selected depending of theproperties of demands. To make use of these CTM profile settings, the followingmaster data must be maintained:

� Determination of rule strategy, in CTM customizing under Make Settings forRule-Based Planning

� The condition technique in GATP� Integrated rule maintenance in Master Data� Rule Determination in Rule Maintenance



Figure 251: Rule Evaluation

It is also possible to apply a CTM profile-dependent rule. A CTMprofile-dependent rule can be specified by setting the rule application to �Usespecified rule for all demands� and specifying a rule. In this case, only IntegratedRule Maintenance needs to be maintained.

Determination of Rule StrategyThe setting is different from normal ATP when using CTM.

This setting triggers the search for a rule strategy. Three different activationparameters have to be set in customizing.

� Technical scenario: Definition of a communication form between involvedsystems of the rules based planning.

� Business transaction: Definition of involved business objects, for example,sales orders, forecasts, or dependent demand.

� Action type: Definition of which manipulation techniques (change, create,copy) use the rule.



Figure 252: Determination of Rule Strategy

It is possible to maintain these settings separately for sales orders, forecasts,and dependent requirements. Each activation combination may lead to differentstrategies. For each strategy, different rules can be assigned. It is also possible tomaintain a separate activation combination for the default rule, which is executedby the setting in the CTM Profile, Use First Rule for all Demands.

Condition technique and Rule determinationThe rule determination process is activated by the parameters of the rule strategydetermination. The data set is used to find a rule based on the characteristics of thebusiness object (for, example, sales order, forecasts, dependent requirements).

The settings for condition technique and rule determination are not CTM-specific.For more details, refer to GATP documentation or Course SCM670.

Definition of RulesThe rule itself is also not CTM-specific, but consider the following CTM specificpoints:

� In general, a rule can be marked as either inclusive or exclusive. For theentire CTM process, exactly one inclusive and an arbitrary number ofexclusive rules can be specified per demand. Inclusive and exclusive onlyapplies for the substitution procedures (not for the demand dependentconstraints).

� The resulting substitutions are all inclusive substitutions without the union ofall exclusive substitutions.

� Demand dependent constraints may be given in the inclusive rule only.



Definition of Rule DetailsA rule contains substitutions, the calculation profile, and the rule control.Additional CTM-specific constraints are available in the calculation profile.

CTM supports the following types of substitutions:

� Location substitution� Product substitution� Product Location combination substitution� CTM does not support PPM substitution

However, location substitutions are not recommended because CTM already triesto check all transportation alternatives by using existing transportation lanes in thesupply chain network. Since GATP is not restricted by the transportation lanesin the supply chain network, a location substitution may be created when thereis no transportation lane between the two locations. The resulting substitutionorders from one location to another would be created (creating more alternativesthan available by the supply chain). The situation may arise that for a materialflow from one location to another, a substitution order will be created, but thetransportation order cannot be created without a transportation lane and the resultcould not be executed as planned. Such a scenario is not recommended with CTM,as the increasing complexity does not contribute to the quality of the result.

Figure 253: Location Substitution in Rule-Based Planning

As an example, assume we would have two destination locations A and B, andthree source locations 1, 2 and 3. The above figure shows possible alternativeswhich could be maintained using transportation lanes or rules. As you can see,



the rule has one more alternative or combination which is 1→ B. Using rules, aCTM run could schedule a substitution order from location 1 to location B, eventhough a transportation lane does not exist for this location combination; it willnot be possible to carry out the transport.

It is recommended to use product or product-location combination substitutions.Therefore, the only substitutions that make sense are product substitutions becauseeven product location substitutions can create an undesirable result of a locationsubstitution.

Calculation ProfilesThe calculation profile contains a CTM-specific tab. Using the calculation profile,you can define the demand-dependent constraints like late demand fulfillment,early demand fulfillment, shortage, and pegging type.

Figure 254: Calculation Profile

Substitution OrdersCTM only considers substitutions from available supply. No production ofsubstituted products is considered.



Figure 255: Substitution Orders

Whenever a substitution is performed by CTM, this is reflected in the transactiondata result by creating a substitution order. Substitution orders have an differentATP category type.

Substitution orders do not support:

� Calendar� Lead Time� Lot Sizes

For substitution order creation CTM considers:

� CTM planning horizon� Order creation start� Order creation frame� Production horizon� Substitution validity

Substitutions inside the substitution procedures are sorted by the field cost factor.CTM uses this field as a priority. These priorities are used to set the order of thesubstitutions, regardless of the possible rule usage setting in the CTM profile.

The substitution order in APO is a business object that does not exist in R/3. Anysubstitution order will have no pendent in R/3.



Down BinningDown binning is a common practice in the high tech industries. It can be used tosubstitute CPUs/processors. The co-products are normally processors of a higherquality (different speed). If a demand exists for the main output product whichcannot be fulfilled, then it is more efficient to try to fulfill the demand also with ahigher quality product (co-product) rather than triggering a new production forthe complete quantity of the main output product. Only if the demand cannot besatisfied by a higher quality product (co-product), will production take place forthe complete quantity.

A down binning scenario is defined basically by two things:

� Co-products need be modeled as output components in a PPM or PDS� Rules need to be modeled containing substitutions to substitute the main

output product by the co-products

If these two prerequisites are fulfilled, CTM automatically applies the downbinning functionality. There is no way to switch it off or to ignore it.

Figure 256: Down Binning

For example, in our down-binning scenario, the co-products are considered to beof different quality than the main output. Assume the output components of aPPM/plan are maintained as follows:

� main product output 50%� co-product A output 30%� co-product B output 20%



In this case, for a demand of 1000 pieces, a production order of 500 pieces ofthe main product would be scheduled. The remaining 500 pieces are co-productoutput which is also used to fulfill the demand. Co-products will only be used tofulfill the demand for the main output, if there are substitutions defined in a rulebetween the main output and (some) co-product outputs.

The general search strategy in a down binning scenario is:

1. Look for available supply for the main output2. Look for available substitution supply3. Start production for the main output4. Look for produced supply for the main output from the previous step5. Look for produced substitution supply for the co-products from two steps

previous

Production triggered by a partially fulfilled demand considers only the remainingquantity of the demand for down binning. Shown in the figure above, a demandof 1000 is partially fulfilled by 500 of the required product and by 300 ofa substituting product from available supply. This means only 200 are leftfor production. Therefore, a production of 100 is triggered according to themaintained percentages of the output products.

CTM will create a planned order, transport order, or purchase requisition forthe substituted product. For the product that is substituting, CTM will takeinto account all kinds of AVAILABLE supplies like planned orders, stock,stock transfers, purchase requisitions, and so on, but will not create anyproduction/transport/purchase requisition/orders.

It is possible to maintain a main product output of �0�. This can be set eitherin an SNP or PP/DS PPM, but only in the time phased parameter maintenance.Thus, a main output product demand would trigger a production but the actualoutput would only be co-products. Therefore, only the co-product supplies can beused for the down-binning step, there is no quantity available for the main outputproduct. This scenario is technically possible, but should be carefully evaluated.In this way, down binning can be used to simulate the production of substituteproducts instead of the main output product.

Rules Validity PeriodsThe validity period for a substitution specifies the period in which a substitutionorder (with its input and output node) can be created. The necessary availablesupply to perform a substitution may exist before the beginning of thesubstitution�s validity period. This is the same behavior for late demand fulfillmentbut in general, the usage of validity period is different in on-time and late demandfulfillment scenarios.



Figure 257: Validity of Rules

CTM would process according the chosen strategy, the standard would be

1. Check Stock for original product2. Check Stock for substitution product3. Produce original product

The substitutions are processed different depending on backward or forwardscheduling.

Backward scheduling - Substitutions are internally sorted by:

1. Priority ascending2. Validity end date descending

Forward scheduling - Substitutions are internally sorted:

1. Priority ascending2. Validity start date ascending





Exercise 24: Using Rule-Basedsubstitution

Exercise ObjectivesAfter completing this exercise, you will be able to:� Configure CTM for rule-based planning� Use a rule-based ATP substitution in a CTM planning run.

Business ExampleA sales order demand for product T-F2## can be substituted with T-F3##, and aforecast demand for product T-F2## can be substituted with T-F4##. You need toconfigure CTM planning and execute the CTM planning run to accomplish this.

Task 1: CTM Integration with Rules Based ATPCheck the configuration of CTM to make sure it is set up for Rules Based ATPplanning.

1. Check the customizing in CTM to see what parameters are necessary tointegrate with rule-based ATP to activate substitutions:

2. Fill out the table with the relevant customizing settings:




Default Value for Determination of Rule StrategyTechnical Operation TypeBus. Transaction

Action TypeDetermination of Rule Strategy......for Demand OrdersTechnical Operation TypeBus. TransactionAction Type...for Sales OrdersTechnical Operation TypeBus. TransactionAction Type...for Dependent RequirementsTechnical Operation TypeBus. TransactionAction Type

Task 2: Product Substitution with Using Rules BasedATPChange your CTM profile GR##_1 to use rules according to the demand type.Save the Profile.

1. Change your CTM profile GR##_1 to Find and Use Rule According toDemand on the Special Strategies tab and execute planning.

2. Execute a CTM planning run using profile GR##_5 to delete any existingreceipts.

3. In the product view for 000/T-F2##/1000, delete any remaining FCreqs.Save the updates.

4. In the product view for 000/T-F2##/2400, delete any existing FCreqs.

Create a new requirement for -175 pcs four weeks from today and save.




5. In profile GR##_1, execute the master data checker. Are any new materialsincluded?

6. Review the condition record for �Demand Orders� in condition type CTFfor your material T-F2##.

7. What Rule was used to support your substitutions?

8. Review the details of the product substitution for Rule CTM_FCST.

9. What product is supposed to be substituted for T-F2##?

10. Using profile GR##_1, execute a planning run.

11. Review the product view for 000/T-F2##/2400. What is the result of yourCTM run?

Task 3: More RBA Techniques (Optional/TimePermitting)Examine other options with CTM and the Rules Based ATP solutions.

1. Change your profile GR##_1 so that it uses the first rule found for alldemands.




2. In Profile GR##_1, execute the master data checker. Are any new materialsincluded?

3. Review the condition record for �Demand Orders� in condition type CTMfor you material T-F2##.


5. Review the details of the product substitution for Rule TF2##_1000.






Solution 24: Using Rule-BasedsubstitutionTask 1: CTM Integration with Rules Based ATPCheck the configuration of CTM to make sure it is set up for Rules Based ATPplanning.

1. Check the customizing in CTM to see what parameters are necessary tointegrate with rule-based ATP to activate substitutions:

a) Use the menu path IMG→ APO→ Supply Chain Planning→Multilevel Supply and Demand Matching (SDM)→ Capable-To-Match(CTM)→ Make Settings for Rule-Based Planning

2. Fill out the table with the relevant customizing settings:

Default Value for Determination of Rule StrategyTechnical Operation Type CMBus. Transaction CTMAction Type CMDetermination of Rule Strategy......for Demand OrdersTechnical Operation Type CMBus. Transaction CTFAction Type CM...for Sales OrdersTechnical Operation Type CMBus. Transaction CTSAction Type CM...for Dependent RequirementsTechnical Operation Type CMBus. Transaction CTDAction Type CM




Task 2: Product Substitution with Using Rules BasedATPChange your CTM profile GR##_1 to use rules according to the demand type.Save the Profile.

1. Change your CTM profile GR##_1 to Find and Use Rule According toDemand on the Special Strategies tab and execute planning.


b) Set the parameter Rules to Find and Use Rule According To Demand.

c) Select Save.

2. Execute a CTM planning run using profile GR##_5 to delete any existingreceipts.

3. In the product view for 000/T-F2##/1000, delete any remaining FCreqs.Save the updates.


Create a new requirement for -175 pcs four weeks from today and save.

5. In profile GR##_1, execute the master data checker. Are any new materialsincluded?

Answer: Materials T-F3## and T-F4## are now included in the CTM run.

6. Review the condition record for �Demand Orders� in condition type CTFfor your material T-F2##.

a) Menu Path: APO→ Master Data→ Rule Maintenance→ DisplayRule Determination

b) Enter condition type CTF.

c) Enter product number T-F2##.

d) Select Execute.


Answer: Rule CTM_FCST

8. Review the details of the product substitution for Rule CTM_FCST.

a) APO→ Master Data→ Rule Maintenance→ Integrated RuleMaintenance

b) Scroll until you find the Rule CTM_FCST and double-click on it.

c) Drill into the Product Substitution Procedure CTM_FCST.





Answer: Product T-F4##. the rule control in rule CTM_FCST only worksfrom the material in the CTM profile then down the list.




Answer: The CTM run had to plan -175 pcs of an FCreq. The engine firstused the 75 pcs of stock of T-F2##. Then, using the RBA parameters,it created a substitute order for -100 pcs on the T-F4##. (Drill into theSubst.ord) Since RBA is only allowed to search for available receipts, itchanged the substitution order to 50 pcs because that was all that wasavailable for the T-F4##.Then, the CTM engine went back to T-F2## at location 2400 and begansource determination.

Task 3: More RBA Techniques (Optional/TimePermitting)Examine other options with CTM and the Rules Based ATP solutions.

1. Change your profile GR##_1 so that it uses the first rule found for alldemands.

a) Select Strategies→ Special Strategies tab.

b) Set the parameter Rules to Use First Rule Found For All Demands.

c) Select Save.

2. In Profile GR##_1, execute the master data checker. Are any new materialsincluded?

Answer: Materials T-F3## and T-F4## are now included in the CTM run.However, only T-F4## was used in the previous solution.

3. Review the condition record for �Demand Orders� in condition type CTMfor you material T-F2##.

a) Menu Path: APO→ Master Data→ Rule Maintenance→ DisplayRule Determination

b) Enter condition type CTF.

c) Enter product number T-F2##.

d) Select Execute.





Answer: Rule TF2##_1000.

5. Review the details of the product substitution for Rule TF2##_1000.

a) APO→ Master Data→ Rule Maintenance→ Integrated RuleMaintenance

b) Scroll until you find the Rule TF2##_1000 and double-click on it.

c) Drill into the Product Substitution Procedure TF2##_1000.


Answer: First product T-F3##, then product T-F4##.




Answer: The CTM run had to plan -175 pcs of an FCreq. The engine firstused the 75 pcs of stock of T-F2##. Then, using the RBA parameters, itcreated a substitute order for -100 pcs on the T-F3##. Since RBA is onlyallowed to search for available receipts, it changed the substitution order to50 pcs since that was all that was available for the T-F3##.Still missing 50 pcs, the CTM engine followed the RBA parameters andcreated a substitution order for the T-F4##. This time, it found enough tocover the entire -175 pcs FCreq. In this situation, there is no need for sourcedetermination so it will not be engaged.



Lesson Summary

You should now be able to:� Configure CTM for rule-based planning� Use a rule-based ATP substitution in a CTM planning run


� None



Lesson: Product Interchangeability in CTM

Lesson OverviewAs an alternative to using rule-based planning, interchangeability can be used tosubstitute products. In this lesson, we will look at the functionality of supersessionchains and Form, Fit, and Function Classes. Although interchangeability data iseasier to maintain than rule-based planning data, it does have some limitations.


� Create an interchangeability group for supersession� Create an interchangeability group for Form, Fit, and Function classes� Execute the CTM planning run with interchangeability

Business ExampleThe component T-B4## is being replaced by T-APO-400 on the first day of themonth after next month. You want to be sure that the stock of T-B4## is usedup as much as possible before the switch, but if it is not used up in 1 monththen the switch must be made regardless. Also, the products T-B3##, 102-300,and 107-300 are all equivalent products that can be used interchangeably basedon availability. You want CTM to use the available components automaticallywhen planning your pump.

Interchangeability in CTMCapable-to-Match (CTM) supports the product interchangeability types SimpleDiscontinuation of Products and Form-Fit-Function Classes (FFF Classes).

Simple DiscontinuationIn Capable-to-Match planning (CTM), you can plan the simple discontinuation ofa product. With simple discontinuation, a product is only valid until a certain date- the discontinuation date. After the discontinuation date, the successor product isvalid. To fulfill product demands that lie after the discontinuation date, CTM mustprocure the successor product.


SCM235 Lesson: Product Interchangeability in CTM

Figure 258: Product Interchangeability

If it allows the use-up strategy, CTM can also use the excess supplies and receiptsof the product, to fulfill product demands after the discontinuation date. However,CTM cannot use excess products to fulfill demands for the successor product. Inother words, CTM does not support Full Interchangeability but only ForwardInterchangeability.

Caution: As CTM plans an individual demand for the entire BOM, CTMcannot guarantee that product supplies are used up completely. This isparticularly important when you plan a product with a fixed lot size.

CTM uses product interchangeability in all planning segments except theforecast segment. In the subcontracting scenario, CTM does not use productinterchangeability.



PrerequisitesA product interchangeability group with a supersession chain must exist and mustbe assigned to the supply chain model that is specified in the CTM profile. Theproduct interchangeability group has the following restrictions:

� The supersession chain may not contain any assemblies.� A product can only be contained in one supersession chain.� The base unit of measure must be the same for all products in a supersession

chain.� A supersession chain may not contain any configurable products.� You must either activate interchangeability in the master data selection or

specifically select the predecessor product in your master data selection.

Figure 259: Using Interchangeability in CTM

The supersession chain must be assigned to the locations at which you want toplan substitutions.

The Use Discontinuation option must be set in the CTM planning profile, underStrategies, on the Special Strategies tab page in the Product Interchangeabilityfield.



Features of InterchangeabilityCTM supports linear supersession chains with products that are linked bysubstitution relationships of type Interchangeable Forwards. If two productsare linked with a substitution relationship of type Fully Interchangeable, CTMprocesses the products as if they are only interchangeable forwards.

CTM evaluates the following entries that you made in the supersession chain:

� Product� Successor product� Valid-from date� Use-up strategy� Use-up date

CTM displays the three use-up strategies of the supersession chain with twosubstitution strategies:

� Use-up strategy, unrestricted use-up time is possible, corresponds with thesubstitution strategy 1

� Use-up strategy, use-up is not allowed, corresponds with substitution strategy2.

� CTM represents the use-up strategy, Use-up until use-up date possible, withsubstitution strategy 1 and substitution strategy 2. You can recognize thisfrom the overview of the CTM master data check; two entries appear for onelocation product. One entry uses substitution strategy 1 and specifies thetime period in which using-up is allowed. The other entry uses substitutionstrategy 2 and specifies the time period after the use-up date in whichusing-up is no longer allowed.



The Planning ProcessWhen CTM uses product interchangeability, the system executes the search forreceipts and supplies in the scheduling direction determined in the CTM profile.The result of the search also depends on the demand date, substitution strategy,and validity period of the corresponding substitution strategy.

� Backward scheduling and demand date within the validity period:

The system executes the search within the validity period. The search onlythen takes place before the validity period with substitution strategy 1.

� Backward scheduling and demand date before the validity period

The system executes the search before the validity period. If a primarydemand is concerned and late demand fulfillment is allowed, the search willtake place within the validity period, if necessary.

� Forward scheduling and demand date within the validity period:

The search only takes place before the validity period with substitutionstrategy 1, and then within the validity period. The system executes thesearch within the validity period with substitution strategy 2.

� Forward scheduling and demand date before the validity period:

The search is executed before the validity period. If a primary demand isconcerned and late demand fulfillment is allowed, the system executesanother search within the validity period, if necessary.

The system only creates a new receipt element within the validity period as areceipt from a product substitution order, while taking the use-up strategy intoaccount.



Figure 260: Discontinuation Examples

To represent substituting a product with the successor product, CTM creates aproduct substitution order. CTM considers the safety days supply for the product,but does not schedule a safety days supply for the corresponding dependentdemand of the successor product. The dependent demand of the successor productuses the maximum earliness value from the discontinuation product.

In the CTM planning order selection, the usual selection criteria are valid forsubstitution orders. CTM planning does not delete substitution orders, which areno longer valid, that the system creates within the production horizon.

If you are working with an SAP R/3 System in an integrated scenario, you mustnot enter location products for which dependent demands can be created fromstock transfers in the supersession chains, since CTM planning already checks allof these sources.

The ATP check does not adjust the substitution orders. If the substitution orderslie in the production horizon, CTM planning does not delete them. In a planningscenario with an ATP check, a PP/DS planning run must be executed to ensurethat the system deletes these substitution orders.



Form, Fit, and Function Classes (FFF)By using FFF classes, CTM can use receipts and supplies from interchangeableproducts as a substitute to fulfill a demand that cannot be fulfilled by the receiptsand supplies of the product entered. If CTM cannot fulfill the demand by usingthe interchangeable product either, it creates a demand for the interchangeableproduct that is defined as leading product.

Figure 261: Fit, Form, and Function Classes

Caution: For CTM to procure the leading product, it must be included inthe master data selection.

Prerequisites for FFF Class in CTM� You have created an interchangeability group of type FFF Class and have

assigned it to the supply chain model you use for CTM planning.� You have selected Use FFF Classes or Use Discontinuation and FFF Classes

in the CTM profile.� If advice codes are valid for the demand, they do not prohibit product

substitution. CTM only considers advice codes if you transfer stock transportrequisitions, stock transport orders, or maintenance orders with advice codeinformation from SAP ECC Enterprise Extension Defense Forces & PublicSecurity to SAP SCM.



Figure 262: FFF Classes in Master Data Selection

Search Strategy with FFF ClassesCTM carries out a search strategy for each location product. That means CTMspecifies the sequence in which CTM planning should consume receipts andsupplies and create new orders. If you want CTM to take the FFF classes youdefined into account, it tries to fulfill the demand with existing receipts andsupplies of the substitute products. Only after this does source determination forthe leading product take place.



Figure 263: FFF Strategies

For example, you have defined an FFF subset with products A, B, and C, in whichproduct C is the leading product. You use a search strategy with three supplycategories in the CTM profile such as the following:

Sequence Supply Category1 Category 012 Category 023 **(Source Determination)4 Category 03

CTM tries to fulfill a demand for product B and the resulting search strategy isCTM is:

Sequence Supply Category System Response0 Category 00 Receipts and supplies for

product B of standardcategory 00

1 Category 01 Consume receipts andsupplies for product B ofcategory 01

2 Category 02 Consume receipts andsupplies for product B ofcategory 02



3a *** Consume receipts andsupplies for product A ofstandard category 00 aswell as of category 01,02, and 03

3b *** Consume receipts andsupplies for product Cof standard category 00as well as of category 01and 02

3c *** Carry out sourcedetermination(production) for leadingproduct C (no newproduct replacementusing products A and B)

4a Category 03 Consume receipts andsupplies for product C ofcategory 03

4b Category 03 Consume receipts andsupplies for product B ofcategory 03

Product Substitution for Stock Transport RequisitionsBackorder processing currently supports product substitution for stock transportorders, but not for stock transport requisitions. However, you can set up theCTM planning run in such a way that CTM creates the corresponding productsubstitution orders so that the ATP check can then confirm the demands of thestock transport requisitions against these product substitution orders.

The Enable Prod. Substit. for Stk Transp. Requisition in ATP indicator hasthe following effects on CTM�s procedure during product substitution for stocktransport orders and stock transport requisitions:

� CTM generates fixed pegging relationships between stock transportrequisitions and product substitution orders, independent of the settingsin the CTM profile.

� For stock transport orders, CTM considers the product substitutions butdoes not create any product substitution orders. Backorder processing canthen carry out a rules-based ATP with product substitution at a later time, toconfirm the demands of the stock transport orders.



After the CTM planning run, carry out backorder processing with productsubstitution for stock transport orders. If you check for fixed pegging relationshipsin the ATP check, stock transport requisitions can then be confirmed if they werecovered by another product due to a product substitution order. However, theinformation regarding the substituted product cannot be viewed later on if theorders are transported to the ERP system since substitution orders do not existin ERP.



Exercise 25: Product Interchangeabilityin CTM

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create interchangeability groups� Create Form, Fit, and Function classes� Use supersession and FFF classes in CTM

Business ExampleProduct T-B4## is being replaced by product T-APO-400, beginning the first dayof the month after next month. You do not want to leave dead stock of T-B4##unless the stock is not used up by the end of the month.

Task 1: Planning Component Discontinuation withSupersession ChainsYour component T-B4## has just undergone re-engineering and has improvedspecifications. Your product manager wants to institute a change as soon aspossible. Fortunately, she has given you some time to phase out the old part.Use the supersession chain functionality in product interchangeability to makethis happen.

1. Execute a CTM planning run using profile GR##_5 to delete any existingreceipts created in a previous exercise.


3. Create a supersession group of group type Supersession Chain, calledCTM##, with description GR## CTM Supersession. It needs to beRelevant for Planning and ATP. Assign it to location 1000. ProductT-B4## should be replaced by T-APO-400 beginning two weeks from today.If all the stock has not been used up in four weeks, it is obsolete stock andyou can only use T-APO-400.

4. Assign your interchangeability group to model 000.

Task 2: Activate Product InterchangeabilityActivate your supersession chain in the Master Data Selection and your CTMprofile.

1. Using your CTM profile GR##_1, first, deactivate any RBA rules, thenexecute a Master Data Check. Were any new materials included?




2. Was the T-APO-400 included in your model now?

3. From your profile GR##_1, activate product interchangeability in yourmaster data selection PUMP_##.

4. Activate Supersession chains in your CTM profile GR##_1.

5. Use the master data checker from your profile GR##_1 to see if productT-APO-400 is going to be used in your CTM solution.

6. In the product view for 000/T-F2##/1000, create 2 FCreqs:

-30 pcs 3 weeks from today at 00:00:00 hour


7. Using Profile GR##_1, execute a planing run.




8. Check the results of the planning run to be sure the proper substitution wasmade. First check the Evaluations. Select F9

9. Check the results of the planning run to be sure the proper substitution wasmade. Use the Supply Chain Viewer. Press F9.

10. Review the results in the product view for 000/T-B4##/1000.

11. Review the results in the product view for 000/T-F2##/1000.

12. Check the results of the planning run to be sure the proper substitution wasmade. First check the Evaluations, , and finally the Product View. Whichproduct was substituted for T-B4##?

Task 3: Setting up FFF ClassesDue to purchasing requirements, you have three different part numbers for theshaft that is required to manufacture your T-F2## pumps. In the previous task,you used supersession chains to phase a product out that was being discontinued.In this section, you want to use Form, Fit, and Function classes to manage a truecomponent substitution process.

1. Create an FFF class, group CTMFFF_## for products, T-B3##, 102-300,and T-APO-300.




2. Assign your FFF class CTMFFF_## to model 000.

3. For FFF to work in CTM, subsets are required. Generate a subset at location1000 for you FFF class CTMFFF_##, and make T-B3## the lead product.

Task 4: Product Substitution Using FFF classesActivate FFF Classes in your master data selection and your CTM Profile.

1. In your profile GR##_1, execute the master data check to see if your FFFClass is in play.

2. What materials are to be included in the CTM run?

3. Return to your CTM profile GR##_1, and execute a planning run.

4. Check the results of the planning run to be sure the proper substitution wasmade. Review the Evaluations (F9). Specifically, review the order creationdetails.

5. Review the results using the supply chain viewer for Version 000, ProductT-F2##, Location 2400 and click Enter.

6. Review the results in the product view for 000/T-B3#3/1000.



Solution 25: Product Interchangeability inCTMTask 1: Planning Component Discontinuation withSupersession ChainsYour component T-B4## has just undergone re-engineering and has improvedspecifications. Your product manager wants to institute a change as soon aspossible. Fortunately, she has given you some time to phase out the old part.Use the supersession chain functionality in product interchangeability to makethis happen.

1. Execute a CTM planning run using profile GR##_5 to delete any existingreceipts created in a previous exercise.


3. Create a supersession group of group type Supersession Chain, calledCTM##, with description GR## CTM Supersession. It needs to beRelevant for Planning and ATP. Assign it to location 1000. Product




T-B4## should be replaced by T-APO-400 beginning two weeks from today.If all the stock has not been used up in four weeks, it is obsolete stock andyou can only use T-APO-400.

a) Menu path Advanced Planning and Optimization→ Master Data→ Application-Specific Master Data→ Product and LocationInterchangeability→ Maintain Interchangeability Group

b) Select Create.

c) Enter Group type Supersession Chain.

d) Enter Group CTM##, with description GR## CTM Supersession.

e) Select Relevant for parameter Relevant for Planning and ATP.

f) Select the Location tab and select Append Row.

g) Enter Location 1000.

h) On the Details tab, select Append Row.

i) Enter Predecessor Product T-B4##, with factor 1 to be replaced bySuccessor Product T-APO-400, with factor 1.

j) Enter a valid from date of four weeks from today.

k) Set the Direction to Forward.

l) Set the parameter Use up to Restricted use with a date of seven weeksfrom today.

m) Select Release.

n) Select Save.

4. Assign your interchangeability group to model 000.

a) Select Model Assignment.

b) Drag model 000 and drop it onto Interchangeability Group CTM_##.

c) Select Save.




Task 2: Activate Product InterchangeabilityActivate your supersession chain in the Master Data Selection and your CTMprofile.

1. Using your CTM profile GR##_1, first, deactivate any RBA rules, thenexecute a Master Data Check. Were any new materials included?


b) Set the Rule parameter to Do Not Apply Rules.

c) Select Save.

d) Edit→ Check CTM Master Data.

2. Was the T-APO-400 included in your model now?

Answer: No it was not!

3. From your profile GR##_1, activate product interchangeability in yourmaster data selection PUMP_##.

a) Menu path Edit→ Master Data Selection.

b) Enter your master data profile name PUMP_## and load it by hittingEnter.

c) Set the Product Interchangeability parameter to Use Discontinuationand FFF classes.

Caution: If you do not make this setting, then you mustspecifically include the predecessor product in your masterdata selection. It will not automatically be included in thedependent data selection.

d) Select Save.

4. Activate Supersession chains in your CTM profile GR##_1.

a) Select Strategies→ Special Strategies

b) Set the Product Interchangeability parameter to Use Discontinuationand FFF classes.

c) Select Save.




5. Use the master data checker from your profile GR##_1 to see if productT-APO-400 is going to be used in your CTM solution.

a) Load your profile and select Edit→ Check CTM Master Data from thetop menu. Leave all data objects selected and click Continue.

b) A new folder appears for Product Interchangeability. Expand ProductInterchangeability, double-click on Supersession Chains. You shouldsee two entries on the right. Use strategy 1 from the valid date to therestricted use up date, and then strategy 2 from the restricted use update into the future.

6. In the product view for 000/T-F2##/1000, create 2 FCreqs:



7. Using Profile GR##_1, execute a planing run.

8. Check the results of the planning run to be sure the proper substitution wasmade. First check the Evaluations. Select F9

Answer: On the Planning Run tab click the Evaluations button. Drill downon Create Orders and double click on Quantitative Results. You should see atleast 1 substitution order was created.

9. Check the results of the planning run to be sure the proper substitution wasmade. Use the Supply Chain Viewer. Press F9.

Answer: Be sure to enter Version 000, Product T-F2##, Location 2400 andclick Enter. If you double-click on any demand on the left, you should see asubstitution that was made at the component level at location 1000.You should see that T-APO - 400 was substituted for T-B4##.

10. Review the results in the product view for 000/T-B4##/1000.

Answer: Be sure to enter Version 000, Product T-B4##, Location 1000and click Enter.You should see SubRcpt orders in the list of transactions. A double-click onany of these will show the details.

11. Review the results in the product view for 000/T-F2##/1000.

Answer: Select the sales order demand and click the Context button. Youwill see the Substitution Order in the Pegging Structure.

12. Check the results of the planning run to be sure the proper substitution wasmade. First check the Evaluations, , and finally the Product View. Whichproduct was substituted for T-B4##?




Task 3: Setting up FFF ClassesDue to purchasing requirements, you have three different part numbers for theshaft that is required to manufacture your T-F2## pumps. In the previous task,you used supersession chains to phase a product out that was being discontinued.In this section, you want to use Form, Fit, and Function classes to manage a truecomponent substitution process.

1. Create an FFF class, group CTMFFF_## for products, T-B3##, 102-300,and T-APO-300.

a) Menu path Advanced Planning and Optimization→ Master Data→ Application-Specific Master Data → Product and LocationInterchangeability→ Maintain Interchangeability Group

b) Select Create.

c) Select Group type FFF class.

d) Enter Group CTMFFF_##, with Description GR## CTM FFF Class.

e) Set the Relevant for parameter to Relevant for Planning and ATP.

f) On the Details tab, select Append Row three times.

g) Enter products T-B3##, 102-300, and T-APO-300. Release, and assignyour interchangeability to model 000.

2. Assign your FFF class CTMFFF_## to model 000.

a) While in Display mode, Select Model Assignment.

b) Select Model 000 and drop it onto Interchangeability GroupCTMFFF_##.

c) Select Save.

3. For FFF to work in CTM, subsets are required. Generate a subset at location1000 for you FFF class CTMFFF_##, and make T-B3## the lead product.

a) In the details section of your FFF group select FFF subsets andselect FFF subsets.

b) Select Generate FFF subset.

c) Enter FFF class CTMFFF_##.

d) Enter Location 1000.

e) Select Execute.




Task 4: Product Substitution Using FFF classesActivate FFF Classes in your master data selection and your CTM Profile.

1. In your profile GR##_1, execute the master data check to see if your FFFClass is in play.

a) Load your profile and select Edit→ Check CTM Master Data fromthe top menu.

b) Expand Product Interchangeability, expand FFF Classes, expand yourFFF class CTMFFF_##, and double-click on the Subset.

2. What materials are to be included in the CTM run?

Answer: T-B3##, 102-300 and T-APO-300

3. Return to your CTM profile GR##_1, and execute a planning run.

4. Check the results of the planning run to be sure the proper substitution wasmade. Review the Evaluations (F9). Specifically, review the order creationdetails.

Answer: Drill down on Create Orders and double-click on QuantitativeResults.You should see at least 1 substitution order was created.

5. Review the results using the supply chain viewer for Version 000, ProductT-F2##, Location 2400 and click Enter.

Answer: If you double-click on any demand on the left you should see asubstitution that was made at the component level at location 1000. Youshould see that T-APO -300 or 102-300 was substituted for T-B3##.

6. Review the results in the product view for 000/T-B3#3/1000.

Answer: You should see SubRcpt orders in the list of transactions. Adouble-click on any of these will show the details.Select the sales order demand and click the Context button. You will see theSubstitution Order in the Pegging Structure.If you check the Product View for T-APO-300 and 102-300 by changing theproduct number and clicking enter, you will see ReqSub orders which is theother end of the substitution order.



Lesson Summary

You should now be able to:� Create an interchangeability group for supersession� Create an interchangeability group for Form, Fit, and Function classes� Execute the CTM planning run with interchangeability


Unit Summary SCM235

Unit SummaryYou should now be able to:� Configure CTM for rule-based planning� Use a rule-based ATP substitution in a CTM planning run� Create an interchangeability group for supersession� Create an interchangeability group for Form, Fit, and Function classes� Execute the CTM planning run with interchangeability



Test Your Knowledge



Answers


Unit 12Appendix (Self Study)

Unit OverviewIn this unit, we will discuss some of the more advanced topics that might onlyapply to a small percentage of situations. Many of these topics many need moretime with self study or follow up instruction due to integration with other areas ofAPO like Global Available to Promise.


� Explain the concept of subcontracting� Explain planning strategies in API� Explain the concept of Planning With Final Assembly� Explain the concept of Planning at the Assembly Level� Explain and demonstrate Make-to-Order (MTO)� Demonstrate Planning Without Final Assembly in CTM� Create a consumption group� Release a forecast with descriptive characteristics� Execute CTM to prioritize by descriptive characteristics

Unit ContentsLesson: Subcontracting in CTM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .736Lesson: Planning Strategies in CTM .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .744Lesson: Descriptive Characteristics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .757

Exercise 26: Descriptive Characteristics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .761


Unit 12: Appendix (Self Study) SCM235

Lesson: Subcontracting in CTM

Lesson OverviewUp to this point, you have been dealing with manufacturing scenarios foryour company owned locations. Now, you will look at how CTM deals withsubcontracting scenarios.


� Explain the concept of subcontracting

Business ExampleCertain products that your division sells are manufactured by vendors.However, in many cases, you have to plan the resupply of these materials andyou have to supply components to these vendors so they can complete themanufacturing process. You need to assess if CTM can handle the planning ofthese subcontracting processes.

Concept of SubcontractingSubcontracting is when part of the production is done by an external serviceprovider (subcontractor). There are several different scenarios that can involvesubcontracting.

� Finished products manufactured by suppliers� Sub-Assemblies manufactured by suppliers� In-process service provided by supplier (for example, heat treating)� ...

For subcontracting to be modeled in APO, at some point, parts are typicallyprovided to the subcontractor by a plant. The subcontractor produces thefinished/semi-finished goods at their site using the parts provided and sendsthe finished goods back to the plant. For the APO process, all parts are ownedby the plant during the whole process. The price in the info record or contractcorresponds to the price of the service, not the material.

Subcontracting is special because it is service procurement in combination withmaterial flow; planning must take into account the situation at the vendors site,because it is a mix of external procurement and manufacturing.


SCM235 Lesson: Subcontracting in CTM

Subcontracting in CTMFor sub contracting to work in CTM, there are several prerequisites that mustbe met:

� Subcontracting Info Record must be transferred to APO.

Subcontracting PDS/PPM must be created in APO (via CIF).

� Product Masters for Subcontracting parts must exist at Vendor Location(Via CIF)

� Transportation Lane from Plant to Vendor (optional)

One consideration you must have is that, at some point, the stock must clearthrough a plant in ECC for financial considerations. Since subcontracting is apurchasing process in ECC, you must be aware that the process is extremelydifferent in APO. With this being the case, there are several scenarios that canplay out in APO.

Single Level SubcontractingWhile the concept of subcontracting is similar between ECC and APO, theapproach they take will be very different. APO does not require identifyingownership like ECC, but is more concerned about where the inventory is located.In this regard, APO will allow more master data, and thus allow a more detailedscheduling than what is done in ECC.



Figure 264: Single Level Subcontracting

The figure above depicts a single level subcontracting process.

Step 1 requires an independent requirement to initiate the planing process. In thiscase, a forecast requirement of 100 pcs is applied at the plant.

Step 2: As a result of the CTM run, and as a result of the shortage at the plant dueto the forecast requirement, CTM will create a purchase requisition. This is due tothe procurement type F - External Procurement in the product master. Becauseyou plan to subcontract this material, a subcontracting external procurementrelationship needs to exist. This will have been created by transferring the inforecord over from ECC via the CIF. In addition, when transferring the info recordfrom ECC, the CIF created a transportation lane between the plant being thedestination location and the vendor being the source location.

Step 3: After the purchase requisition is created, this now generates dependentdemand at the vendor. By transferring a subcontracting PDS/PPM, productmasters were created. This allows more detailed planning in APO. Because it isa subcontracting scenario, a planned order is immediately created in the vendorlocation for the same amount. It will also have the same order number as thepurchase requisition to show they are linked in a 1:1 assignment of transport orderand planned order, and a fixed pegging in between, transport input-bomid =planned order guid, planned order ordkey-output_fixed = true.



In ECC, the components are stored on the purchase requisition or the purchaseorder itself. There is no separate planned order (PR: EBAN-RSNUM, PO:EKET-RSNUM). The components of the corresponding APO planned orderare mapped to the components of the PR/PO in ECC. In ECC, during MRPor in MD04, the components first use up the subcontractor stock. The rest isMRP-relevant in the plant.

Note: Single level planning requires the use of ECC to plan the resupplyof the component to the vendor. This is because APO cannot funnel thedemand back to the plant to resupply.

Two Tier SubcontractingSince Vendors exist in APO as planning locations, it is possible to plan theproduction at the subcontractor, and the supply of the component to thesubcontractor. This additional level of planning requires a transportation laneto exist where the plan is the source location and the vendor is the destinationlocation. If using the PPM scenario, this lane needs to be created manually. Ifusing the PDS scenario, the subcontracting PDS will create the lane from theplant to the vendor.

Figure 265: Two Tier Subcontracting

The graphic above depicts a two tier subcontracting process.





Step 3: After the purchase requisition is created, this now generates dependentdemand at the vendor. By transferring a subcontracting PDS/PPM, productmasters were created. This allows more detailed planning in APO. Because it isa subcontracting scenario, a planned order is immediately created in the vendorlocation for the same amount. It will also have the same order number as thepurchase requisition to show they are linked in a 1:1 assignment of transport orderand planned order, and a fixed pegging in between, transport input-bomid =planned order guid, planned order ordkey-output_fixed = true

Step 4: After the PDS/PPM has been exploded, and dependent requirementscreated, CTM will use the procurement type F - External Procurement in theproduct master for the component that is required for the subcontractor. In thissituation, the CTM identifies that a transportation lane exists, from the plant tothe vendor. The CTM engine creates a stock transfer request with plant being thesource of supply.

Step 5: At the plant, the stock transfer reservation will cause the plant to resupplythe vendor. At the plant, the procurement type E- In-House Procurement in theproduct master causes a planned order to be created. This will then be plannedsimilarly to other in-house procured items.

Multilevel SubcontractingIt is possible to model level subcontracting where the component of asubcontracted assembly is also subcontracted. The procurement type of thecomponent should be F (External procurement) and the PPM should exist for thecomponent at the subcontractor location. A transport lane should exist betweenthe subcontractor and plant and again from plant to subcontractor. Such a cyclictransport is not rejected by the CTM engine in case of a subcontractor lane.

The subcontractor production for the component cannot be changed in theinteractive planning table/product view as the procurement type is F.



Figure 266: Multilevel Subcontracting

The figure above depicts a multilevel subcontracting process, where not only isyour finished product produced by a subcontractor, but one of the assemblies ofthe first subcontractor is also subcontracted.






Step 4: After the PDS/PPM has been exploded, and dependent requirements orsubcontracting requirements created, CTM will use the procurement type F -External Procurement in the product master for the component that is required forthe subcontractor. In this situation, the CTM identifies that a transportation laneexists, from the plant to the vendor. The CTM engine creates a stock transferrequest with plant being the source of supply.

Step 5: At the plant, the stock transfer reservation will cause the plant to resupplythe vendor. At the plant, the procurement type F - External Procurement in theproduct master causes a purchase requisition to be created. Because you planto subcontract this material, a subcontracting external procurement relationshipneeds to exist. This will have been created by transferring the info record overfrom ECC via the CIF. In addition, when transferring the info record from ECC,the CIF created a transportation lane between the plant being the destinationlocation and the vendor being the source location.




Lesson Summary

You should now be able to:� Explain the concept of subcontracting



Lesson: Planning Strategies in CTM

Lesson OverviewUp to this point in using CTM, you have assumed it would be used in a puremake-to-stock environment. In this lesson, you will see how CTM addressesdifferent business situations based on different demand scenarios.


� Explain planning strategies in API� Explain the concept of Planning With Final Assembly� Explain the concept of Planning at the Assembly Level� Explain and demonstrate Make-to-Order (MTO)� Demonstrate Planning Without Final Assembly in CTM

Business ExampleYour company has many different types of demand scenarios. Your manager wantsto know if CTM can handle both make-to-stock scenarios and make-to-ordersituations.

Introduction to Planning StrategiesA multitude of possibilities is available for planning for production with the helpof planned independent requirements. The different mode of action of plannedindependent requirements is controlled by the so-called planning strategy. Severaldifferent generic categories of strategies exist in the SAP Environment:

� Make-to-Stock:

� Unrestricted Stock: With finished goods, production, and procurementinitiated by a forecast or demand plan. Designed to have unrestrictedstock available prior to actual demand

� Sub-Assembly Planning:

� Production and procurement for semi-finished goods or raw material,initiated by forecast or demand plan rather than dependent demand viaBOM. Designed to have unrestricted stock prior to actual demand.

� Make-to-Order:

� Applied to finished goods for which business does not want stockavailable prior to demand. Production and procurement are initiatedby actual demand (sales order). Stock is �Customer Specific� salesorder stock.


SCM235 Lesson: Planning Strategies in CTM

If strategies are used for make-to-stock production, production usually takes place,without sales orders already having to be present for the material concerned. Ifsales orders are then received, these can be met by warehouse stock, so thatshorter delivery times can be realized. Moreover, in make-to-stock production, itis possible to realize as consistent a production process as possible, independent ofcurrent demand.

Make-to-stock production can also be executed for assemblies. In this case, thefinished products themselves are not produced to stock; rather the necessaryassemblies are procured. A sales order for a finished product can then usually befulfilled quickly, as it is only final assembly that has to be executed since theassemblies already exist. This situation is often used when semi-finished goodsor raw materials are used in the manufacturing of several other products, and theforecast for the finished products is too erratic to use for planning at lower levelsdue to long lead times.

Make-to-Order, or Sales-order based production does not deal with planningin its actual sense; rather a product is procured for an existing sales order.Make-to-order production is often used in connection with subassembly planningfor components, to keep delivery times as short as possible. This type of processcreates a process similar to fixed pegging, where the supply is directly related toonly one requirement.

Figure 267: Make-to-Stock Planning Strategies

Using make-to-stock production strategies, production or procurement is plannedusing planned independent requirements that arise from the forecast of salesexpected in the future. These can come from ECC via the CIF or via APODemand Planning.



According to the choice of strategy, sales orders can affect requirements, consume(replace) planned independent requirements, or have no effect on plannedindependent requirements. In make-to-stock production, sales orders are usuallyfulfilled by warehouse stock. The number used to indicate strategies in ECCand APO is usually different, because an APO strategy can contain more thanone ECC strategy.

Make-to-stock production strategies are used, for example, in situations wheredemand and sales fluctuate but where production may be kept at full capacity.Fluctuations in demand and sales are smoothed by warehouse stock. Planningcan also take place at assembly level. This makes sense, for example, when anassembly, that is to be used in different finished products, has to be procured beforethe demands (sales orders) for these finished products exist. Planning at assemblylevel is realized in APO, by using the strategy planning with final assembly andsetting the subassembly planning indicator additionally in the APO product master(corresponds to strategy 70 using the mixed MRP indicator 1 in ECC).

Planning with Final Assembly (40/20)In planning with final assembly (ECC strategy 40, APO strategy 20), a flexible orfast reaction to customer demand is prominent, whereby simultaneously strivingfor a leveled production plan.

Figure 268: Planning with Final Assembly (40/20)

In planning with final assembly, sales orders affect requirements and consume(replace) planned independent requirements. The procurement and productionof all components and assemblies including their final assembly is triggered byplanned independent requirements before sales orders arrive. You plan the planned



independent requirements for the finished product in demand management. Thiscould lead to purchase requisitions/orders for raw materials, planned/productionorders for semi-finished and finished goods, and ultimately stock based on thetimeliness of the actual sales order.

Incoming sales orders consume or replace these planned independent requirements.If customer requirements exceed planned independent requirements, the systemautomatically creates a planned order for the unplanned quantity in the next MRPrun. (Sales orders thus affect requirements). You can check availability froma sales order using the ATP logic. The consumption of planned independentrequirements by customer requirements depends on the settings defined for theconsumption mode and the consumption periods.

Once a sales order is actually delivered, the stock will be reduced, the sales orderremoved from the plan, and the forecast will finally be deleted. This deletionof the PIRs is referred to as reduction.

Planning at the Assembly LevelPlanning at assembly level (ECC strategy 70) can be used when an assureddemand forecast can be given for certain assembly groups sooner than for theindividual finished products, in which the assembly group is needed.

Note: The CIF does not support the transfer of this strategy automatically.It is believed the consumption logic for subassemblies should be differentthan those of finished products. Therefore, users will have to configure aseparate strategy in APO and append the CIF to link the ECC strategy tothe APO strategy. See SAP note 711107.

Figure 269: Planning at the Assembly Level (70/??)



In this planning strategy, the planned independent requirements for an assemblyare planned separately. They are created at assembly level and they trigger theproduction of the assembly. If sales orders for the finished products arrive,planned orders (or production orders) are created for the finished product and theBOM is exploded, that is, dependent requirements (or reservations) are createdfor the assembly. These consume the planned independent requirements ofthe assembly. If large sales order quantities at finished product level cause thedependent requirements or reservations to exceed the planning requirements ofthe assembly, an additional planned order is created for the assembly in the nextplanning run. Secondary requirements thus fully affect requirements.

ECC strategy 70 must be entered in the strategy group of the material masterand the mixed-MRP indicator for subassembly planning must be set. (In PO thiscorresponds to a custom strategy in connection with the subassembly planningindicator).

Planning Strategy DetailsIn ECC, the planning strategy is broken up in to two segments. The planning pieceas to how MRP will deal with PIRs, and the order fulfillment piece, MTO or MTSand financial controls on the process.

APO has broken it into separate pieces. The planning strategy controls how thesystem deals with PIRs and the Check Mode that instructs the system how todeal with sales orders.

Figure 270: APO Planning strategies



The APO planning strategy is broken down into four components:

� ATP Category - that the PIR is going to represent. Typically customersonly use one.

� PIR Segment - What type of PIRs is the system going to plan with� Assignment Mode - Do you allow customer requirements to consume PIRs?� Category Group - What types of �actual � requirements will consume/replace

PIRs

The ATP category used by default in the system is FA. Other categories can beused.

PIR segments are standard and are controlled by SAP. ' 0 ', is linked to strategies10 and 20, which indicate Make-to-stock (unrestricted stock) will be used duringplaning. ' 1 ', is linked to 30 and 40 or make to order techniques, ' 2 ' is only usedin custom strategies if customers want to model processes in ECC like Strategy 52.

The Assignment mode determines whether consumption can take place againstPIRs and to a degree determine MTS versus MTO. This must work in conjunctionwith the check mode configuration which is linked to customer requirementstypes in ECC.

The category group is defined in configuration. This controls at a very detailedlevel, what types of ATP categories can consume/replace PIRs.

Make-to-Order

Figure 271: Make-to-Order Planning Strategies

When working with the strategies for make-to-order production, the sales order isthe pegged requirement. Each requirement is meant to be planned independentlyof stock and other receipts. To set the make-to-order production strategy (SAP R/3



strategy 20), it is not necessary to make an entry in the proposed strategy of theAPO product master. In contrast to ECC, SAP APO proposed strategies pertain toplanned independent requirements only. Sales orders cannot be entered in APO;they bring their settings with them from ECC via the CIF.

To understand better how planning strategies work and why make-to-order is dealtwith differently than make-to-stock, you need to consider several key planningterms:

� Pegging Area

� Unique key that identifies a Node. Pegging is possible between thesame peg areas.

� PegArea = MatID + LocID + VersionID + Planning Segment Type+ AccountID

� Planning Segment Type

� ' 0 ' - Net Requirements Planning or Single-Item Planning (NetSegment)

� ' 1 ' - Planning without Final Assembly, with Individual Rqmts� ' 2 ' - Planning without Final Assembly, without Individual Rqmts

� AccountID

� Sales Order number in MTO

Planning without Final AssemblyPlanning without final assembly is a combined Make-to-Stock and Make-to-Orderprocess. First, forecast requirements from ECC/Demand Planning are used to planfor the sub assemblies and components only.

Forecast Orders for Finished product are created in the Planning Segment (1). Thefirst order pegged to the forecast should always be the planned order (and NOTTransport !). It is restricted to single BOM level. All the lower level componentorders are created in the Make-to-Stock segment (0). Both SNP/PPDS orderstypes supported by CTM, but only PPDS orders can be transferred to EEC. SafetyStock requirements are created in Make-to-Stock segment (0).

Figure 272: Planning without Final Assembly with CTM



Since Planning without Final Assembly is an MTO technique, there are somelimitations that must be considered.

If using in a Time Continuous (PPDS) environment where you are going to bedoing true order based planning, these requirements will be considered andplanned for as normal. Since they are MTO planned independent requirements,the planned orders that CTM will generate will not be able to be converted inproduction orders since MTO requires a sales order to work properly.

In the SNP bucket environment (Interval Planning), the demands will be selectedby the CTM engine but will not be considered during planning since MTO andaggregated planning does not make sense.

Figure 273: Planning without Final Assembly Process

The graphic above depicts the normal process that is broken down into more detail.

Step 1: Demand plans are released from APO-DP to the order based liveCache.Depending on the ATP Category in the Proposed Strategy in the location productmaster, an order will be created in liveCache with the appropriate order category.

Step 2: After CTM runs, only planned orders will be created. These orders cannotbe converted in to production orders via APO. Now, a sales order is created inECC and transferred to APO via the CIF integration. The planning segment is nowconsidered '0', however a new pegging area is created (account ID), since the salesorder is an MTO object which essentially forces CTM to plan the requirementtotally independent of all other receipts.



Step 3: After the CTM run, new planned orders are created relative to the newpegging areas due to the sales orders. These orders are in planning segment '0' sothey can be converted to production orders. However, due to the pegging area, thisplanned order cannot be shared with any other pegging area.

Step 4: Once the conversion indicator is set, the CIF will transfer the details toECC to complete the conversion to a production/process order.

Figure 274: CTM Results using Planning without Final Assembly Process

In the figure above, you are seeing the result of the CTM result for Planningwithout Final Assembly. Via the product view, you can see that the planned ordersfor the PIRs have the Plng w/o Final Assembly. This prevents order conversion.As depicted in the bottom screen shot, the system gives an error if a planned orderof that type is converted to a production/process order.

Make to Order in Bucket PlanningThe concept of Make-to-Order is that the inventory and production will bemanaged on an order by order basis. As you have learned, CTM deals withdemand on an order by order basis. However, CTM was originally designed for aMake-to-Stock environment.

When dealing with a CTM profile that is set up to deal with PPDS or timecontinuous demand, CTM can handle both pure make-to-order 'blank', andPlanning without Final Assembly - 30 (PWoFA)



Figure 275: Make-to-Order in CTM

As indicated by the figure above, CTM can handle both MTS and MTO scenarios.However, when applying MTO in a CTM profile that intends to do BucketPlanning, this can cause problems. This is due to the nature of MTO, that eachorder is supposed to be handled separately since the order has special informationsuch as the customer. By aggregating the demand use loose this information, thusyou move to more of a MTS environment.

As delivered, CTM will not plan MTO requirements in a Bucket Profile. However,by applying the control parameter BUCKET_MAKE_TO_ORDER in the CTMprofile, and assigning a value X to Vaule1, CTM will planned against MTO andPWoFA requirements.



Figure 276: Make-to-Order at Lower BOM Levels in CTM

When applying an MTO process, this is typically done at the finished productlevel. Planners can decide if they wish the concept of pegging areas and planningsegments to continue to cascade through the BOM. In the location product master,the field Possible Individual Customer Requirements allows the dependentdemand to inherit the characteristics of the parent's proposed strategy. Therefore,planners can be selective about whether they want semi-finished products and rawmaterials to be MTO or PWoFA techniques.



Figure 277: MTO in Bucket Profiles

While applying the control parameter, BUCKET_MAKE_TO_ORDER, to theCTM bucket profile, you will be able to see the results through order based toolslike the product view. However, tools like the SNP Planning books are notdesigned to view MTO supplies or demands.

Note: By implementing SAP notes 443593, 771643, and 1064957, it ispossible to see MTO and PWoFA supply and demands in customer SNPPlanning books.



Lesson Summary

You should now be able to:� Explain planning strategies in API� Explain the concept of Planning With Final Assembly� Explain the concept of Planning at the Assembly Level� Explain and demonstrate Make-to-Order (MTO)� Demonstrate Planning Without Final Assembly in CTM


� 443953 Interactive SNP: Displaying Make-to-Order Production� 711107 - Transfer strategy group 70 to SAP APO without manual changes� 771643 Display MTO production and/or forecast without final assembly� 996299 - Bucket-oriented planning and make-to-order� 1064957 Capacity view can not support MTO orders


SCM235 Lesson: Descriptive Characteristics

Lesson: Descriptive Characteristics

Lesson OverviewThere are times when it is necessary to prioritize demands by attributes thatcannot be modeled in other ways. For example, you may need to prioritizedemands by customer, but it is not practical to model each and every customeras a location in SCM. Descriptive characteristics are a way to do that. We canattach characteristics to the demand in addition to product and location. Thesecharacteristics then become available to be used for prioritizing demands. Thisenables you to accomplish your goal without the large quantity of master datawhich other methods require.


� Create a consumption group� Release a forecast with descriptive characteristics� Execute CTM to prioritize by descriptive characteristics

Business ExampleIn your business, it is necessary to prioritize by customer. However, to model eachcustomer as a location in SCM is not practical. Your company will use descriptivecharacteristics to model the customer demand and to prioritize the demand.

In addition, you have a situation where T-B3##, T-APO-300, and 102-300 are allequivalent components and can be used interchangeably. Instead of making theswitch manually, you want CTM to automatically make the substitution basedon product availability.

Creating Descriptive CharacteristicsPlanned independent requirements are normally released for product and locationcombinations from Demand Planning in SCM DP. For example, if you create yourdemand plan at product level, the quantities are disaggregated to location leveland created for all valid locations by releasing planned independent requirements.For prioritization in CTM or PP/DS, it often helps to generate more detailedindependent requirements. This is not relevant for SNP, as SNP only plans on aproduction location level.



Figure 278: Planning With Descriptive Characteristics

You can, however, create planned independent requirements according to sold-toparties, for example, using descriptive characteristics. If you release a demandplan with descriptive characteristics, the system creates independent requirementsfor selected values or all values of the descriptive characteristic. For example,if you are planning demand at customer level and have requirements for 20customers, the system creates 20 independent requirements for each period inDemand Planning. The system does not create just one independent requirement,as would be the case if descriptive characteristics were not involved.



Figure 279: Releasing With Descriptive Characteristics

Sales orders are compared with the independent requirements on acharacteristic-specific basis. If the incoming order quantity exceeds the plannedindependent requirement for one customer, more is produced for this customer butthe planned independent requirements for the other customers do not change. Anexample of a descriptive characteristic would be customer priority. If you definecustomer priority as a descriptive characteristic and find insufficient resources tomeet customer requirements, materials would be produced first for higher prioritycustomers and then for lower priority customers.

You set descriptive characteristics using consumption groups in SAP SCM DPCustomizing, where you assign fields from the ATP field catalog of the salesorders to Demand Planning characteristics. You save these consumption groups tothe product master and use them when releasing the demand plan.

CTM Planning Using Descriptive CharacteristicsDescriptive characteristics provide additional ways of prioritizing plannedindependent requirements in a flexible manner. For example, you can use plannedindependent requirements to avoid modeling sold-to parties as locations.



Figure 280: Planning with Descriptive Characteristics in CTM

Planned orders are linked (pegged) to the original requirement. Descriptivecharacteristics are not assigned to planned orders, because they are assigned toplanned independent requirements; however, this data is still available for thesales orders with consumption.

� The feasible plans that observe constraints can be transferred back toDemand Planning on a characteristic-specific basis.

� You can use descriptive characteristics to consume planned independentrequirements on a customer-specific basis even for make-to-stock strategies.



Exercise 26: Descriptive Characteristics

Exercise ObjectivesAfter completing this exercise, you will be able to:� Release the forecast with descriptive characteristics� View descriptive characteristics in order-based LiveCache� Explain the consumption of customer-specific forecast quantities

Business ExampleNow that you have created a consumption group to assign descriptivecharacteristics to your forecast, you will need to use that consumption group inthe release of the forecast to complete the process. To test this procedure, youwill release the forecast interactively.

Task:Release the forecast interactively for selected products and customers withdescriptive characteristics, Customer and Sales Org. Check the results of therelease and test the consumption by customer-specific orders.

1. Add consumption group SALES_CUST to the product master for T-F3## atall locations using mass maintenance.

2. Release the forecast using consumption group SALES_CUST. Release theDemand Plan key figure from your planning area SALES to version 000 ofthe LiveCache for T-F3## using Variant RELEASE DC.

3. After the release is complete, check order-based liveCache using the ProductView for T-F3## at location 1000 for the descriptive characteristics.

4. Now, change your CTM profile GR##_1 by adding Customer to the demandprioritization. Which customer will be given top priority? Execute yourCTM profile.

5. Now, check the results of the planning run. Two demands on the same dateshould have been prioritized by customer number according to the SpecialSort.



Solution 26: Descriptive CharacteristicsTask:Release the forecast interactively for selected products and customers withdescriptive characteristics, Customer and Sales Org. Check the results of therelease and test the consumption by customer-specific orders.

1. Add consumption group SALES_CUST to the product master for T-F3## atall locations using mass maintenance.

a) Use the SCM menu path Advanced Planning and Optimization→Master Data→ General Master Data Functions→ Mass Maintenanceor transaction code MASSD.

b) Load the Product Variant CONS_GRP.

c) Change the product number to your product number by replacing ##with your group number and click Select.

d) Click Change with Display.

e) On the Location-Dependent Data tab, set Consumption Group to Set aFixed Value and enter consumption group SALES_CUST.

Click the Make Changes button and Save .




2. Release the forecast using consumption group SALES_CUST. Release theDemand Plan key figure from your planning area SALES to version 000 ofthe LiveCache for T-F3## using Variant RELEASE DC.

a) The menu path is: Advanced Planning and Optimization→ DemandPlanning→ Planning→ Release→ Release Demand Planning toSupply Network Planning.

b) Load the variant RELEASE DC to release your forecast withDescriptive Characteristics.

c) Be sure the entries match the following data and click Execute.

Field Name ValuePlanning Area SALES

Planning version 000

Key Figure FINFOR

TargetPlanning Version 000

Category Leave blank

HorizonFrom date Current date

To date Three months fromtoday

PeriodicityDaily Buckets ProfileObject select.Product T-F3##

ExtendedConsumption Group SALES_CUST

All orders Select




3. After the release is complete, check order-based liveCache using the ProductView for T-F3## at location 1000 for the descriptive characteristics.

a) Use the menu path Advance Planning and Optimization→ ProductionPlanning→ Interactive Production Planning→ Product View

b) Enter version 000, product T-F3##, location 1000 and clickExecute.

c) Select one of the FC req line items and click the characteristicsicon.

4. Now, change your CTM profile GR##_1 by adding Customer to the demandprioritization. Which customer will be given top priority? Execute yourCTM profile.

a) Use the menu path Advanced Planning and Optimization→ MultilevelSupply and Demand Matching→ Capable-To Match (CTM)

b) In your CTM profile, GR##_1, on the Demands tab, add KUNNR orCustomer to the Prioritization Sequence with Special Sorting selected.

c) Click the Display Special Sorting button. Here, you can see the sortsequence for customers which prioritizes 0000001321 as the toppriority.

d) On the Planning Run tab execute your profile.

5. Now, check the results of the planning run. Two demands on the same dateshould have been prioritized by customer number according to the SpecialSort.

a) Click the Product View button, enter Version, 000, Product T-F3##,Location 1000, and click enter.

b) Locate a date that has multiple demands and be sure the planned orderswere prioritized them by the customer sort.



Lesson Summary

You should now be able to:� Create a consumption group� Release a forecast with descriptive characteristics� Execute CTM to prioritize by descriptive characteristics


� None


Unit Summary SCM235

Unit SummaryYou should now be able to:� Explain the concept of subcontracting� Explain planning strategies in API� Explain the concept of Planning With Final Assembly� Explain the concept of Planning at the Assembly Level� Explain and demonstrate Make-to-Order (MTO)� Demonstrate Planning Without Final Assembly in CTM� Create a consumption group� Release a forecast with descriptive characteristics� Execute CTM to prioritize by descriptive characteristics



Test Your Knowledge



Answers


SCM235 Course Summary

Course SummaryYou should now be able to:

� Setup and Define a CTM Scenario� Identify and use different planning strategies to support planning with supply

constraints� Setup and execute demand prioritization and supply categorization� Apply Advanced planning techniques via the CTM profile settings� Execute a CTM scenario using Product Interchangeability� Execute a CTM scenario using GATP� Demonstrate Aggregate Planning with CTM� Apply CTM and Descriptive Characteristics to a supply constrained scenario� Show how Supply distribution can be applied a prioritized scenario. planning

from the bottom up


Course Summary SCM235


IndexCCapable-to-Match, 11CTM, 11DDemand Planning, 758Deployment Optimization, 15Descriptive characteristics,759

EExplanation Profile, 239OOLTP, 15Online TransactionProcessing, 15

Pplanned independentrequirements, 757

planned orders, 760Planning

Regenerative, 322Qquota base quantity, 507quota-allocated quantity, 507SSelection Window, 175SNP, 15Supply Chain Viewer, 243Supply Network Planning, 15TTLB, 15TP/VS, 15Transport Load Builder, 15Transportation Planning, 15VVendor-Managed Inventory,15, 17

VMI, 15


Index SCM235


FeedbackSAP AG has made every effort in the preparation of this course to ensure theaccuracy and completeness of the materials. If you have any corrections orsuggestions for improvement, please record them in the appropriate place in thecourse evaluation.
