How to derive those Consumption-based planning value?

[Former Member]

Dear all,

I have few questions, hopefully you all know it from your project implementation experience.

To setup consumption-based planning (CMP), the Reorder Point value, and Safety Stock value need to be given or come out from the business users. However, do you know how to come out of the following individual value?

The following values are important for defining the reorder point:

1 - Safety stock --> How?

2 - Average consumption --> How?

3 - Replenishment lead time --> How?

The following values are important for defining the safety stock:

1 - Past consumption values (historical data) or future requirements --> How?

2 - Vendor/production delivery timelines --> How?

3 - Service level to be achieved --> How?

4 - Forecast error, that is, the deviation from the expected requirements --> How?

thanks a lot.

Tuffy

[Former Member · Accepted solution]

Dear Tuffy,

Consumption based planning ( CBP )

Maintain MRP type - VB

Maintain re-order point Value - 100

Apart from this maintain other MMR settings

Now run MRP if the value falls below re-order pont ( i.e 100 )

System creates an PR

Regards

Madhu

[Former Member · Accepted solution]

Hi Kumar and others,

My question is how to come out with those value? will the business know? If they don't know, how to explain to them?

Thanks

[Former Member · Accepted solution]

Hi,

The material planner should know those. If they do not know, then you can open an excel sheet, take a sample material with existing values which your client can provide you with & arrive at the values which you mention in the initial posting.

The explanation part can be done once you prepare the excel sheet. The computation is quite straight forward for materials whose consumption patterns is predictable.

So you can split up your work with materials with predictable pattern & another with relatively unpredictable patterns, this will help you in arriving at the values faster.

Regards,

Vivek

[Former Member · Accepted solution]

Dear tuffy,

Added to above experts replies

Yes Business should give the initial values to go-ahead

Regards

Madhu

[Former Member]

Tuffy,

To expand a bit on Vivek's reply, most senior planners will understand these terms. If the business planners don't know what values to use for these parameters, the whole process is explained in detail in SAP online help. They should study this documentation so that when they go live they will not be surprised by the results.

CBP Forecast parameters

http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c2726b454011d182b40000e829fbfe/frameset.htm

formulae overview

http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c279c6454011d182b40000e829fbfe/frameset.htm

Regards,

DB49