Forecasting with bills of material (BOM) is an advanced functionality feature available in SAP Advanced Planning and Optimization (SAP APO) Demand Planning (DP). It helps to forecast dependent requirements in DP. The system determines the component parts of finished products through the production process model (PPM) or the production data structure (PDS).

This gives flexibility to planners to not only forecast at the finished good level but also to segregate the forecast for a product at a lower level. This is particularly useful when the same component can be used in more than one product and thus the availability of material components represents a constraint. In DP without a DP bill of material (DP BOM), planners perform planning at the finished good level, but at the end, they cannot see the corresponding demand for the dependent product. DP BOM has been introduced to incorporate this feature in DP.

Business Scenario

Consider an example of an automobile manufacturer that manufactures cars with various models. In this case one of the models of the car is the finished product, but wheel, engine, and head lamps would be the dependent material components. With the use of DP BOM, planners can forecast the demand not only at the finished product level but also the corresponding dependent demands that would be generated for different material components.

Figure 1 shows a sample finished product along with its BOM.

Figure 1

An example showing a finished product along with material components (the numbers in parentheses represent the quantity of material components needed to produce one unit of the finished good — in this example a car)

To configure DP BOM for the scenario shown in Figure 1, you need to complete the following steps:

• Location master
• Product master
• PPM

• Storage bucket profile
• Planning bucket profile
• Master planning object structure (MPOS)
• Planning area
• Create a characteristic value combination (CVC)
• Create time series objects
• Set up a planning book and data view
• Add forecast values

• Release a forecast from DP
• Validate a forecast in the product view

For the example discussed in this article, I have created a location with the name PLANT1 and location type 1001(Plant) in SAP APO. I have created a finished good product with the name CAR-A and dependent component products WHEEL, ENGINE, and HEADLAMP at PLANT1 in SAP APO.

I have also created a PPM with the name PPM_CAR at location PLANT1 in SAP APO via transaction code /SAPAPO/SCC03. Figure 2 is a PPM showing the BOM needed to produce one unit of CAR-A.

Figure 2

PPM screen showing the BOM for a car

Master Planning Object Structure (MPOS)

While creating an MPOS via transaction code /SAPAPO/MSDP_ADMIN, you need to select the Relevant for DP BOM check box. This automatically brings the standard characteristics that are used in DP BOM on the left column (BOM Char. Comb. ID, BOM Prod. Type (I/O), APO Product, and APO PPM/PDS Name) as shown in Figure 3.

Figure 3

MPOS showing mandatory characteristics for DP BOM

Add other characteristics as needed and activate the MPOS by clicking the activate icon on of the top left side of Figure 3.

Create a CVC

While you are creating a CVC via transaction code /SAPAPO/MC62, initially one CVC is created for location (e.g., PLANT1) and product (e.g., CAR-A) as shown in Figure 4. However, BOM and PPM details are still missing. To add the missing details, go back to the previous screen by clicking the back icon as shown in Figure 4.

Figure 4

CVC list without PPM

In the main screen, click the Add BOM Information button as shown in Figure 5.

Figure 5

The Add BOM Information button

In Figure 6, enter the Planning Object Structure (e.g., ZDP_BOM) and Planning Version (000). Select the radio option DP PPMs/PDS and click the execute icon.

Figure 6

Parameters for adding BOM to CVC

In Figure 7, you can see that logs are green and four CVCs were also created. Click the back icon to return to the main screen.

Figure 7

Logs for CVC creation

In the main screen (Figure 8), click the Display Characteristic Combinations button.

Figure 8

Display characteristic combinations

In the output screen shown in Figure 9, you can see now there are four records present (three for input material components and one for the output finished good product). The PPM has been exploded and CVCs were created based on that.

Figure 9

CVC output

Set Up a Planning Book and Data View

A planning book is constructed on the information or a subset of information maintained in the planning area. In the planning book, you select the characteristics and key figures that are required by demand planners to complete their tasks. The planning book determines the outline and layout of the interactive planning screen or book.

To create the planning book, execute transaction /SAPAPO/SDP8B. In the screen that appears (Figure 10), enter the name of the planning book (e.g., ZDPBOM_PB) and click the Create button.

Figure 10

Create the planning book

In Figure 11, enter the planning book name (e.g., Planning Book – DP BOM), select the planning area on which planning book will be based (e.g., ZDPBOM_PA), and click the Continue button. You can also select different check boxes, such as Promotion and Univariate Forecast, depending on your business requirements.

Figure 11

The initial screen for creating a planning book

In the next screen (Figure 12), assign the key figure from the Planning Area section to the Planning Book section. In this screen, you move the Forecast and Dependent Demands key figures from the Planning Area section to the Planning Book section by selecting the key figures and clicking the add icon.

Figure 12

Assign a key figure to the Planning Book

Now both the key figures are assigned to the Planning Book section as shown in Figure 13. Click the Continue button.

Figure 13

Click the Continue button to assign the key figures to the Planning Book section

In the next screen (Figure 14), assign the characteristic from the Planning Area to the Planning Book. Move the characteristics from the Planning Area to the Planning Book section by clicking the add icon.

Figure 14

Assign characteristics to the Planning Book section

Now the characteristics are assigned to the Planning Book section as shown in Figure 15. Click the Continue button.

Figure 15

Click the Continue button to assign characteristics to the Planning Book section

In the next screen (Figure 16), enter the name of the Data View (e.g., ZDPBOM_DV) and a description in the Data View Descr. field (e.g., DP BOM – DATA VIEW). Enter names in the TB Profile ID – Future and TB Profile ID – Past fields (e.g., Z24MNTH). Also in order to create two separate grids in the planning book give the Table 1 name as, for example, INDEPENDENT DEMAND, and Table 2 the name of DEPENDENT DEMAND. Click the Continue button.

Figure 16

Data View

In the next screen (Figure 17), assign the key figure from the Planning Book section to the Data View
section. In this screen, you move the Forecast key figure from the Planning Book section to the Data View section by selecting the key figure and clicking the add icon. Note: This is the Main Grid section, so I am just transferring the Forecast key figure.

Figure 17

Assign the key figure to the Data View – Main Grid

Now the key figure Forecast is assigned to the data view in the Main Grid as shown in Figure 18. Click the Continue button.

Figure 18

Click the Continue button to assign the key figure Forecast to the Data View in the Main Grid

In the next screen, assign the other key figure Dependent Demands from the Planning Book to the Data View. Note this is the Addit. Grid section. Select the Dependent Demands key figure and click the add icon highlighted in yellow in Figure 19.

Figure 19

Assign the key figure to the data view – Addit. Grid

Now the key figure is assigned to the data view in the Addit. Grid as shown in Figure 20. Click the Complete button.

Figure 20

Click the Complete button to assign the key figure to the Data View in the Addit. Grid

A pop-up screen displays a message that asks for confirmation to complete the planning book or data view creation process (Figure 21). Click the Yes button.

Figure 21

Pop-up screen to show the complete planning book or data view

This completes the process of creating the planning book or data view.

Add Forecast Values

To see the new planning book or data view that you just created and to forecast values against them, execute transaction code /SAPAPO/SDP94. In the screen that appears (Figure 22), select the Planning Book/Data View created (e.g., ZDPBOM_PB/ZDPBOM_DV) and double-click it.

Figure 22

Select the Planning Book/Data View

In the right side of the next screen (Figure 23), you can view the planning book or data view. Also it will be divided in two grids – top one for Independent Demand and bottom one for Dependent Demand. Currently, it is empty as no values have been entered.

Figure 23

Planning Book/Data View

To load the characteristics, click the selection icon shown in Figure 24.

Figure 24

Planning Book selection option

In the pop-up screen that appears (Figure 25), click the Show field and select APO Product from the list of options. In the field beside APO Product select a parameter (e.g., CAR-A). Click the Continue button. (Note: The APO Planning Version = 000 is automatically populated).

Figure 25

Loading selections

The APO Product is now loaded (Figure 26). Select it and double-click the row to load it in the planning book on right side of the screen.

Figure 26

Load the characteristics to the Planning Book

In the right side of the next screen, the values are loaded. Because no values have been entered, all the cells are blank (empty) as shown in Figure 27. Also at the top you can see the associated Location (PLANT1) and APO PPM (CAR_PPM).

Figure 27

Data loaded to the Planning Book

Now forecast values are entered at finished product level (CAR) for three months (e.g., 100, 200, and 300) as shown in Figure 28. Click the save icon.

Figure 28

Forecast values saved in the Planning Book

Now to see the dependent demands click the display dependent objects icon highlighted in Figure 29 and select APO Component from the menu of options.

Figure 29

Select APO Component

Now dependent components are loaded as shown in Figure 30. To see dependent demands for Engine, select and double-click the corresponding row.

Figure 30

Engine data loaded

In the right side, you can see that dependent demand section is populated with demand values for Engine as shown in Figure 31. Since there was one-to-one ratio between Car and Engine, demand quantity is same as that of the finished good (car).

Figure 31

Dependent demands for engine

Similarly, you can load demands for the headlamp by selecting the product and double-clicking as shown in Figure 32.

Figure 32

Headlamp data loaded

The dependent demand loaded for the headlamp component is shown in Figure 33. (Here the ratio was 1:2, so the dependent demand is twice the ratio of the finished good demand.)

Figure 33

Dependent demands for headlamps

Similarly for wheels it was loaded and since here the ratio is 1:4, the dependent demand is four times the finished good demand as shown in Figure 34.

Figure 34

Dependent demands for wheels

Release the Dependent Demand

After the forecast values are entered, you need to release the forecast from DP to supply network planning (SNP) or production planning-detailed scheduling (PP/DS). It then can be used for medium- to short-term planning and converting the forecast requirements to planned orders.

Release a Forecast from DP

To release the forecast, execute transaction code /SAPAPO/MC90. In the next screen (Figure 35), enter the Data Source parameters: Planning Area – ZDPBOM_PA, Planning Version – 000, Key Figure – 9ADFCST [Forecast/Independent Demand Key Figure]), Target parameters (e.g., Planning Version – 000, Category – FA, which stands for Forecast), Horizon for which forecast data would be released (e.g., October – December 2015), Planning Buckets Profile (e.g., Z24MNTH), and Object Selectn (e.g., Product – Car-A, Location – PLANT1). After you enter all the parameters, click the execute icon at top of screen.

Figure 35

Release the forecast from DP

The next screen (Figure 36) displays the result logs. The logs indicate that the release is successful.

Figure 36

Forecast release logs

To see the released forecast, execute transaction code /SAPAPO/RRP3 (Product View). In the screen that appears (Figure 37) enter the parameters (e.g., Planning Version – 000, Product – Car–A, and Location – PLANT1). Press Enter.

Figure 37

Go to the Product View

The next screen displays the forecast data as shown in Figure 38. Here you can see that the same forecast volume is present for three months, which was entered in planning book for CAR-A as shown in Figure 28.

Figure 38

Product View output for CAR-A

Similarly, you can see that forecast volumes for dependent component products (e.g., ENGINE, HEADLAMP, and WHEEL). Demand was released on the finished product level to SNP where the dependent demand is calculated based on PPM. Figure 39 shows the forecast volumes for dependent component products for ENGINE.

Figure 39

Product View output for ENGINE

Figure 40 shows the forecast volumes for dependent component products for HEADLAMP.

Figure 40

Product View output for HEADLAMP

Figure 41 shows the forecast volumes for dependent component products for WHEEL.

Figure 41

Product View output for WHEEL

Alok Jaiswal

Alok Jaiswal is a consultant at Infosys Limited.

He has more than six years of experience in IT and ERP consulting and in supply chain management (SCM). He has worked on various SAP Advanced Planning and Optimization (APO) modules such as Demand Planning (DP), Production Planning/Detailed Scheduling (PP/DS), Supply Network Planning (SNP), and Core Interface (CIF) at various stages of the project life cycle.

He is also an APICS-certified CSCP (Certified Supply Chain Planner) consultant, with exposure in functional areas of demand planning, lean management, value stream mapping, and inventory management across manufacturing, healthcare, and textile sectors.

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