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Question: What is the purpose of the Minimum Range of Coverage in the Coverage Profile for Safety Stock derivation in the MRP run for Safety Stock generation?
Answer: In SAP, the minimum field in a Range of Coverage Profile defines the minimum number of days that available stock must cover expected requirements, triggering replenishment when inventory falls below this threshold. It calculates the minimum dynamic safety stock (ADR or Average Daily Requirement x Minimum Coverage in Days
), ensuring stock availability against demand fluctuations. It is important to note that the Range of Coverage Profile uses demand-driven (dynamic) safety
stock, rather than a fixed quantity, allowing for flexible inventory levels based on fluctuating demand. AND this is similar in principle to the new concepts of DDMRP (Demand Driven MRP) in S/4HANA.
Range of Coverage Profile was introduced in R/3 and still available for use in S/4HANA.
Note that you can directly/manually assign the Target Safety Stock + Minimum Safety Stock in the MRP2 data view for each material, without using the Range of Coverage Profile to derive the Target and Minimum Safety Stock. The advantage of using the Range of Coverage Profile is that it will used Demand data to calculate them BUT for raw material may not have PIR as Demand data, therefore most practices manually enter the Target Safety Stock + Minimum Safety Stock in the MRP2 data view.
Minimum vs. Target vs. Maximum:• Minimum (Min): Triggers procurement when stock is too low.
• Target (Tgt): The desired stock level for reordering.
• Maximum (Max): Defines when excess stock exists.
However, specifically in S/4HANA, the procurement proposal is calculated to replenish the stock up to the Target Stock Level (calculated using the Target Range of Coverage), not just the minimum level, to ensure enough buffer for future demand.
Minimum = 2, hence the Minimum Safety Stock is 2 x 50pcs = 100pcsTarget = 5, hence the Target Safety Stock is 5 x 50pc = 250pcsMaximum = 7, hence the Maximum Safety Stock is 7 x 50c = 350pc
Case 1: If the Stock is now 50pcs (below the 2 days minimum of 100pcs), the system will replenish up to 250pcs, hence the procurement proposal will be 200pcs based the Target Safety Stock.Case 2: If there is a Lot Size adjustment due to Lot Sizing Rule of expecting and adjustment of the procurement qty must be higher than 200pc, then the Maximum allowed in this case will be 300pcs (as current stock 50 + 300pc = 350 = Maximum Safety Stock).
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Question: Dealing with "Static" parameters for Planning.
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Answer: As we know that "Garbage in is Garbage out", MRP calculation is always based on the accuracy of the INPUT data. Therefore whether data in and not limited to the following:
the BOMthe Routing Cycle TimeThe MRP1,2,3,4 data view in the Material MasterOther parameters of Planning HorizonsPO delivery datePO confirmation requirementPIR etc etc
• Do we evaluate these parameters in certain regulated intervals to ensure its accuracy• Are there any tools or transaction code that assist in recommending the right parameters and offer option to update the various master data
• Unfortunately SAP do not provide all the tools (transactions) for evaluating the actuals and use it to update the Master data.• For example one of good example of a tool is, transaction code WPDTC for Planned Delivery Time Calculation; see below.• Even if SAP do not provide such tools, then it is up to "us" to device methodologies the evaluate actual performance and update the "actuals" to the various master data to ensure the accuracy of INPUT to the MRP Calculation.
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Question: Notes on WPDTC transaction code for Planned Delivery Time Calculation.
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Answer: Transaction code WPDTC is used to calculate the actual planned delivery time by analyzing historical data, comparing order dates, and goods receipts. This function, is used to update vendor-specific master data (ie: Purchasing Info Record) based on actual, rather than assumed, delivery performance.
- Calculation of Average Lead Time: It calculates the average time between the PO date and the Goods Receipt (GR) date to determine a more accurate, data-driven planned delivery time.
- Mass Update Master Data: Users can select calculated results and directly update the planned delivery time in the Purchasing Info Record, Material Master, or Vendor master data.
- Performance Evaluation: It provides a report to analyze the deviation between the current planned delivery time and actual delivery performance.
- Flexibility in Calculation: The report can handle specific criteria, such as selecting by plant, vendor, or material, and allows for weighting partial deliveries.
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Question: Industrial Engineering Cycle Time vs the Actual Time.
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Answer: Industrial engineering (IE) standard times in production routings often differ from actual production times because standards represent the theoretical time for an "average" operator under ideal conditions, whereas actual production is subject to real-world variability, human factors, and systemic inefficiencies.
• Unaccounted Downtime: Routing times often ignore unplanned equipment failures, breakdowns, or tool changes that occur on the shop floor.• Variability in Operator Performance: Standards are set for an "average" operator. In reality, skill levels vary, and an inexperienced operator or operator fatigue can significantly increase the actual time.• Over-Idealized Conditions: Time studies often assume the ideal, optimized environment, while actual production involves imperfect conditions, such as poor ergonomics or inefficient workstations.• Outdated Standards: If the process has been improved or if tools/machinery have evolved, old standard times become inaccurate. So, it goes back to how often IE re-evaluate the appropriate cycle times and update to the Routing.• Batching and Queue Time: Actual production involves waiting for batches to complete at previous stations. These "wait-for-batch" times can account for 90% or more of total manufacturing cycle time.
• IE and Planning : When Industrial Engineering (IE) works in a silo and fails to communicate with Production Planning, it creates a fundamental disconnect between engineered capability (how things should run) and production execution (how things are running).
Thoughts:
• To get Actual Production time isn't an easy task as it requires correct Actual Production Start Time and then Actual Production Finish Time for each operation; It is not an easy task (or "impossible") to dictate a requirement for Production to provide this result as the entry of confirmation times can be partial plus many other factors like wait for qc, etc etc making collection of actuals production times to be compared with the IE cycle times not an easy task from the standpoint of SAP data entry.
• Nevertheless, in order that IE deriving a balanced Cycle Time without being "TOO OPTIMISTIC" and "TOO MUCH BUFFER", IE should not work in isolation (in Silo), it must work both Production department and the Planning department OR communicate for a balanced Cycle Time input to SAP.
• To ensure "REALISTIC" Cycle-Times, some Organizations will place the IE as part of the Production department but reorganization is only part of the solution; it fundamentally only require people to work together.
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Question: Spreadsheet or No-Spreadsheet but SAP does not provide row and column view of Planning data and SAP system not flexible to make quick changes to master data for a one-off or case to enable more "effective planning", then what.
Answer: The perception of spreadsheets as "king" stems from their familiarity, low cost, and flexibility, but they are increasingly viewed as a "shadow system" that introduces risk and inefficiency as businesses grow.
• As the spreadsheet is "so FLEXIBLE" that it does not provide as a single source of truth to planning.
• Denying the use of spreadsheet many ways isn't always possible because ERP system do not provide the spreadsheet like presentation and "flexibility" making it cumbersome to work efficiently and coupled with data in the ERP system cannot be adjusted easily for planning purpose.
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Question: What is DDMRP?
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- Driver: Traditional MRP is push-based (forecast-driven), while DDMRP is pull-based (demand-driven).
- Inventory: Traditional MRP often leads to overstocks and shortages, whereas DDMRP reduces total inventory (30-45% reduction) and improves service levels (97-100% on-time).
- Response: DDMRP reduces lead times by up to 80% and reduces the need for "firefighting" or expedited shipping.
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Question: Advanced Back-Order Processing.
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Answer: One of the functionality introduce as part of the aATP (Advanced Availability to Promise) development in S/4HANA is the Advanced BOP (or Advanced Back-Order Processing), Advanced Backorder Processing (BOP) in SAP S/4HANA (aATP) enables organizations to efficiently manage and reprioritize pending customer orders during supply shortages, ensuring critical, high-priority, or "winner" orders are fulfilled first. It utilizes batch processing to automatically reevaluate, filter, and reallocate stock across complex supply chains based on preconfigured strategies like Win, Gain, Redistribute, Fill, and Lose.
See the following link to the Fiori Apps for Advanced BOP in the Fiori Library
Configure BOP Variant (App ID F2160)Configure BP Segment (App ID F2158)Schedule BOP Run (App ID F2665)Monitor BOP Run (App ID F2159)
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Question: Alignment and reacting to changes via FIORI tools.
Answer: MM, SD, QM, PM, PS provide several "Overview" FIORI App tools that combine multiple transaction data into one APP. For example, in MM, the "Procurement Overview" Fiori App ID F1990 comes with the ability to set "Area of Responsibility" so that the responsible person for groups of vendor (and other criterias) and SAVE as different FIORI App variants to allow immediate analysis of Problems, for example:
• Contracts that are Expiring which require review• PRs without vendor• PR with vendor but waiting to be converted to PO• PO with delivery date already outstanding• etc
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