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Quantity Distribution

Andreas_Krause
Advisor
Advisor
2 weeks ago

Hello there! 

If you're new to the world of SAP S/4HANA Cloud, Public Edition and Bill of Materials (BOM), one concept that may sound a bit complex initially, but could be tremendously beneficial to your business, is Equal Quantity Distribution. Though it might seem like a mouthful at first, understanding this principle could be the key to unlocking greater efficiency and potential in your production process. 

What is Equal Quantity Distribution? 

Imagine you're planning to host a big party. You have a list (your BOM) of all the ingredients you need for your menu. Now, would it make sense to buy all of your supplies weeks in advance? Probably not. Some ingredients are perishable, others might only be needed at the time of cooking. So, you plan your shopping trips, distributing your purchases over time. 

Similarly, Equal Quantity Distribution can be seen as a "smart shopping" strategy for your production process. In the context of dependent requirements and BOM, Equal Quantity Distribution is a method of scheduling the procurement or production of materials exactly when it's required during the production cycle. The demand is equally dispersed along with your chosen timeline or specific stages of your production process. 

But not only production processes can benefit from Equal Quantity Distribution, also the Product Availability Check (PAC) can incorporate it when determining on which date and in which quantity a requirement (for example, a sales order item) can be fulfilled. 

What does this mean for the supply and demand? 

In a production order the demand for the components is on start date of the operation. With quantity distribution, these demands are distributed across the production runtime. Similarly, the whole supply that is created with the production order is planned at the end of the order. Following diagram depicts this: 

Without_QD.png

Equal Quantity Distribution changes this by distributing supply and demand, like depicted in following diagram: 

With_QD.png

 How can businesses benefit from equal quantity distribution?

  1. Optimized Production Process: Equally distributing the quantity of materials required at each stage ensures a smoother, more streamlined production process. It avoids bottlenecks or unnecessary delays due to waiting for materials to arrive or be produced. 
  2. Reduced Inventory Costs: By planning and managing your materials to be available just when needed, you effectively reduce storage and handling costs. This is because you won't need to hold excess inventory for extended periods. 
  3. Enhanced Quality Control: With the right quantity provisioned when needed, there's a lower risk of errors in production. Hence, overall product quality is likely to improve. 
  4. Greater Customer Satisfaction: Efficient production often leads to timely order fulfillment, which can significantly boost customer satisfaction and loyalty. 
  5. Support for JIT Production: Equal Quantity Distribution aligns well with Just-In-Time (JIT) production, a methodology aimed at reducing waste and enhancing productivity by receiving goods only as they are needed. 

How to set it up? 

The equal distribution function is available in discrete manufacturing, process manufacturing and repetitive manufacturing. You can set it basically at two places: 

  1. On header level of the production version material level or, 
  2. at component level in the bill of material (BOM) 

In addition the Equal Quantity Distribution can be set to be respected in the Available-to-Promise (ATP) by setting it in the Scope of Check. Let us have a look to a simple example in the system:

VideoScreenshot.png

 

Conclusion 

The principle of Equal Quantity Distribution in SAP S/4HANA Cloud, Public Edition can significantly improve your production process, especially when working with continuous component feed. It can also improve your order fulfillment as supplies can be considered earlier than only at the end of production.  

Implementing Equal Quantity Distribution might require a shift in mindset, but the payoffs could be substantial - from reduced inventory costs to improved product quality and customer satisfaction. 

So don't shy away from exploring this concept further.  

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