Demand Management

SA P PP
 Agenda: Demand Management
Overview of Demand Management
Types of Requirements
 Planned independent requirements
 Customer requirements

Planning strategy
Planning Strategy Customization
Methods of Production
 Make to stock
 Make to order

Make to Stock versus Make to Order

 Overview - Demand Management
 The function of Demand Management is to determine
requirement quantities and delivery dates for finished products
assemblies. Customer requirements are created in sales order
management.
 Demand Management is the link between top level requirements
planning (eg: SOP, Material forecasting) with the Material
requirement planning (MPS/MRP)
 Types of Requirements
 Planned Independent Requirements are sometimes synonymous
with a forecast. They are the planned demands that a company
believes will be required in the future. A procurement plan can
then be put together to assure product is available when the
actual demand is received.
 Planned Independent requirements may come from the following
sources:
 The sales plan or the production plan from SOP
 A material forecast
 Manual entry
 Another program plan
 Customer Independent Requirements can be input into demand
management in place of sales orders. For planning purposes they
are treated just like a sales order.
 Planning Strategy
 To create the demand program, you must define the Planning
Strategy for a product.
 Planning strategies represent the methods of production for
planning and manufacturing or procuring a product.
 Planning strategy is represented by two digit number in SAP like
etc.
 Maintained in MRP 3 view in Material Master
 Planning strategies represent the business procedures for the
planning of production quantities and dates. A wide range of
production planning strategies are available in the SAP system.
 make-to-order production
 make-to-stock production
Planning Strategies
Planning Strategy - Customizing
 Types of Production - Make to Stock
 Make-to-stock production means we build general stock in anticipation of
customer demand. We ship the customer order from our stock of finished
goods.
 If strategies are used for make-to-stock production, production takes place
without sales orders already having to be present for the material
concerned. If sales orders are received, these orders can be met by
warehouse stock so that reduced delivery times can be realized.
 The make-to-stock production strategies plan production
 or procurement using planned independent requirements, which can be
created from sales or forecast figures. Sales orders are met by the
warehouse stock.
 Make-to-stock production strategies are used in industries in which demand
and sales fluctuate but where production is to be kept at the same capacity.
 Fluctuations in demand and sales are balanced using warehouse stock.
 Different strategies in make to stock
Make-to-Stock Make-to-stock production/net reqmts ping 10
Strategies Make-to-stock production/gross requirements ping 11
Production by lot size 30
Planning with final assembly 40
Planning at assembly level 70
Planning at phantom assembly level 59
 Types of Production - Make to Order
 Make to order is a scenario where we won't maintain stocks of that
material and when customer order comes against that order we
manufacture or procure the material and supply against that customer
sales order or for that particular sales order.
 When working with the strategies for make-to-order production, sales
order is the only pegged requirement.
 Sales order or customer order is the trigger for production.
 The net requirements calculation is carried out individually for every sales
order.
 Stock cannot be swapped back and forth between sales orders.
 The procurement elements, that is the planned orders are created with
reference to the sales order and are managed in the individual customer
segment.
 This direct reference to the sales order also remains in the production
order.
 Different strategies in make to order
Strategies for Make-to-order production 20
production based
on sales order Planning without final assembly 50/52

Subassembly planning without final assembly 74

Planning with planning material 60

Thank you