Validating understanding on when to use DP-BOM vis a vis SNP-BOM

[srinivas_krishnamoorthy]

I thought I had got this right, however while going through a certain design session I was not able to reconcile my understanding.

We have both SNP and DP. It is possible to do BOM explosion in SNP and DP. My understanding was typically Sales BOMs are mapped in DP where components could have their own independent forecast, which when released to SNP can accomodate the requirements of consumption logic. So a Sales Order at component level can potentially consume this Independent Forecast. So there is no issue about independent Forecast.

However it looks it is equivalent to do BOM explosion in DP and SNP to derive the dependent demand. The dependent demand in DP can be released to dependent demand in SNP. Or BOM explosion in SNP can take care of getting this dependent demand in SNP. It sounds equivalent. So what exactly is the relative advantage of doing BOM explosion in SNP or DP. We are well set from a reporting perspective and planners can view a sum of dependent and independent demand in a location. They do not need DP for that.

[Former Member · Accepted solution]

HI

Good question and one that I will try and put my thoughts over on.

When you look at it in a purely technical way then it seems that they can give the same levels of functionality, however I think the reason lies in specific companies requirements. If we have a DP BoM then we can adjust the demands as we see fit prior to releasing to SNP, so effectively both the Main item and it's dependant items can have their demands amended independant of each other if required. E.g. The initial requirements for the sub-components may come from the BoM explosion, but in a certain industry their can also be demand for these items that do not come from manufacturing (e.g. spares demand).

Also it may be an industry that has a constraint on a particular component or product group and would like to view the total demand against a constrained number (total component supply) for multiple demands, Take the electronics industry, they may have multiple finished products that all use the same PCB and this is in limited worldwide supply, so they want to see the total demands of the finished (saleable) product as well as checking this does not exceed their supply capabilities. Then the final demands can be adjusted accordingly prior to releasin to SNP.

Another option is whereby the client requires only the compoennt level demand to be considered as part of SNP planning but has market information on the finished product. An example may be a third-party sub-component manufacturer that has Forecast information from his end customers of their finished products. So a DP BoM would be a useful tool to take the Customer Forecast and generate the component (i.e. the manufacturers) demand. Only the component demand would then be released to SNP.

They are three ways to use DP BoM that I can think of, there may be more but hopefully it helps you to understand how the DP BoM can be used differently to and SNP BoM. Hope teh examples are clear and help somewhat!

Regards

Ian

[srinivas_krishnamoorthy · Accepted solution]

Appreciate your answers Ian. Maybe its just me, however none of the examples are overwhelming in favor of DP-BoM.

the first one -->"If we have a DP BoM then we can adjust the demands as we see fit prior to releasing to SNP". Not sure if you are referring to some kind of S&OP where one would want to see the sum of dependent and independent demands. This information is already used in SNP planning while doing supply planning using independent forecast and SNP-BoM-exploded dependent demand. BW reports on SNP planning area backup also give this picture that both demand and supply planners have access to.

second example --> its almost sounding like the first one, where there is a need to see the total demand before SNP release.

third example --> am not able to figure out how a DP BOM will be more useful than SNP BOM.

This is almost making me conclude that probably DP BOM makes sense only when SNP is not implemented. Or, in an organization where DP and SNP are done by completely different user communities. DP user community (that does not have access to SNP) may be curious to know what is the total demand. So a DP BOM helps them do this without going through security to get SNP access.

Again, i appreciate your thoughts and feel free to chime in more.

[Former Member · Accepted solution]

Okay I'll add a few more thoughts, has to be better than trying to work out why my safety stock isn't calculating properly

I agree that it is useful to companies that do not require a full SNP solution as well, maybe as they only want the demand to be released back to R/3 or another external system.

Also a DP BoM does not require as much master data creating for it to work, for example you do not have to have a resource or resource consumption adding, just the input and output components.

Also you made a valid point that where different functions exist in a business it is sometimes useful to give them totally differing solutions so that the release from DP to SNP is the handover point of responsibility.

Another thought, maybe it also has a historic reason behind it. Remember the good old days if APO 3.0 when you had different transactions for DP and SNP whereby /sapapo/sdp94 was used for DP planning books and /sapapo/snp94 was used for SNP. Maybe the design is also a reflection of that segregagtion. Not sure if this part is true but just something that popped into my head when writing about separate functions.

Anyway back to Safety stocks ,-)

Regards

Ian

[Former Member · Accepted solution]

Hi Srinivas,

Appreciate if you can go through this link

http://help.sap.com/saphelp_scm50/helpdata/en/8f/9d6937089c2556e10000009b38f889/frameset.htm

It helped me.

Regards

Kumar

[somnath_manna · Accepted solution]

Srinivas,

I concur with Ian thoughts. DP-BOM is a quick and dirty way of doing a dependent demand calculation in DP. Assuming you do not run SNP then DP-BOM allows you to do complete demand forecast generation - independent and automatically dependent.

Then running PPDS heuristic will do further planning for both the header and component products of the DP-BOM.

I had put some thoughts around this last year in answer to [this|] thread. Can't think of anything better now - timr to shut down for the weekend.

Somnath

[srinivas_krishnamoorthy · Accepted solution]

Thanks guys. I have gone through the thread and the SAP documentation. I understand these concepts.

I am looking for a technical answer actually since I generically understand what the functionalities do. I want to understand how the requirement strategy and forecast consumption logic actually inter-play into this. Does the final outcome differ (DPBOM vs SNPBOM) based on requirement strategy setup at Header and component level ? How does consumption of dependent demand actually take place based on these factors?