PPDS dynamic pegging

[Former Member]

Hi,

I am trying to understand the value of using dynamic pegging. What is the use of dynamic pegging if the pegging is only temporary and would be changed next time planning run is taken ? Fixed pegging seems more tangible as in the relationship will always remain. But how can dynamic pegging be put to good use ?

Thanks

[Former Member · Accepted solution]

Hi GS,

Pegging basically describes the attachment of supply nodes to demand nodes within the order live cache. So Orders have a supply node in one pegging area for their output and demand nodes for their dependent demands in other pegging areas. The

supply nodes and the demand nodes of one pegging area are connected by pegging.

Now it is important to understand that this pegging relationship can be based on different Pegging Strategy as LIFO , FIFO etc based on the type of business.e.g. products with shelf life, perishables etc the FIFO strategy usage is must.

In case of Dynamic Pegging pegging is calculated online in the live cache, the pegging arcs change with the insertion of another demand or supply node.To avoid this dynamic change of the pegging it is possible to fix the pegging arcs (Fixed pegging), which fixes the receipt elements for the production planning heuristics and thus has severe implications for production planning.

Hence Now if we see in totality with strategy used as per business requirement, it is not recommended to use fix pegging. While dynamic pegging arcs do not cross by definition, fix pegging can lead to rather confusing dependencies. Hence in cases when your demand changes still the order element of reassignment to the earlier demand still remains pegged to older demands whereas the order which is to be produced later is pegged to earlier demand which could affect your production planning.

Also in case you use ATP checks , then also you can see the implications.

That is why the recommended option is dynamic pegging in many od the business cases and hence has a value.

Let me know if it helps

Regards

Gaurav Mathur

[Former Member]

HI

Dynamic pegging is generally used in case of make to stock scenario whilst fixed pegging is used in case of made to order scenario. Incase of make to stock scenario, you would generally produce against a forecast and sell against the stock as when you receive a confirmed order. Hence in such cases, fixed pegging is not required.

Typical example would be an automobile industry where automiobiles are assembled on the basis of a forecast as against in a highly specialised industries like aeroplane, parts are assembled only when are firm order is received. So in that case you would use fixed pegging.

Another scenario that I can think of is incase of capacity constraints. If you have capacity constraints, you would prefer to use fixed pegging whilst incase there is free supply dynamic pegging can be used.

At the end of the day, it really depends upon the business scenario that is required to be mapped.

Further information can also be read on the following link

http://help.sap.com/saphelp_scm2007/helpdata/en/5e/c97a40cf6bcd62e10000000a155106/frameset.htm

I hope it helps.

Rgds, Sandeep