FRP Parameter Optimization Settings
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1 FRP Parameter Optimization Settings Public Wilfried Baumgartner / Hans Georg Kloep, SAP July 6, 2016
2 Legal disclaimer The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions SAP SE or an SAP affiliate company. All rights reserved. Public 2
3 Agenda Lost Consumption Correction Promotion Fallback Scenario Promotions Newly listed products Safety amount calculation for DIF schema Improved exception handling Earlier generation of promotion exception New Exception Forecast exceeded consumption Overview of recent improvements New notes and additional information 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 3
4 Lost Consumption Correction
5 Lost Consumption Correction Promotional values consumption declines to 4 pieces due to out of stock situation in week 8 from Wednesday to Saturday Normally for correction the average weekly consumption of surrounding four weeks will be taken into account. Local mean is: ( ) / 4 = 9 Buy 1 Get 1 promotion in week 7 Correction value for week 8 is consumption + (local mean / number of consumption days per week) * number of days with zero stock 4 + (9 / 6) * 4 = 10 Correction value would be consumption + (local mean / number of consumption days per week) * number of days with zero stock 4 + (15 / 6) * 4 = 14 To mitigate the risk of too high corrected consumption value there is a new customizing setting in place Ignore Periods with Boolean DIFs for Lost Cons.Calc. (forecast profile) to skip promotional weeks from local mean 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 5
6 Lost Consumption Correction Promotional values Enhancement Forecast profile Please see Notes: Description blank: X : All periods are considered for the calculation of a local mean value, regardless of existing Boolean DIFs Periods associated with Boolean DIFs are not considered for the calculation of a local mean value 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 6
7 Lost Consumption Correction - Fallback consumption declines to 4 pieces due to out of stock situation in week 8 Normally for correction the average weekly consumption of two weeks before will be taken into account If these weeks cannot be considered (e.g. Ignore DIF applies) there is a fallback strategy in place: Incomplete weekly goods movement value * number of consumption days in the respective week / number of consumption days in the respective week without a zero stock 4 * 6 / 1 = 24 So corrected consumption value would be 24 and would heavily influence forecast for week 9. To mitigate the risk of too high corrected consumption value there is a new parameter in place: Prepr.ZeroStockCorrect.Fallback.MaxFactor If parameter is set e.g. to 2 the corrected consumption value would be 4 * 2 = SAP SE or an SAP affiliate company. All rights reserved. Public 7
8 Lost Consumption Correction - Fallback Parameter Prepr.ZeroStockCorrect.Fallback.MaxFactor BAdI-controlled /FRE/FRPCONF_PAR Prepr.ZeroStockCorrect.Fallback.MaxFactor Value range Decimal >= 1.0 Default = 7 (Compatibility) Recommended = 2 Please see Note: Description Corrected Consumption for fallback scenario Zero Stock = Consumption* MaxFactor 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 8
9 Promotions
10 Consider promotion for newly listed product So far a promotion (and resulting high consumption figures) could not be considered for newly introduced products. So the forecasting model has a high variance Thus mean forecast and especially max forecast are very high. Newly introduced product starts with promotion in week 1 To mitigate the risk of too high forecast values there is a new DIF customizing setting planned. The promotion can be considered separately for forecasting. This leads to lower mean forecast and far more important to lower max forecast SAP SE or an SAP affiliate company. All rights reserved. Public 10
11 Consider promotion for newly listed product Planned enhancement DIF Identifier Customizing A new setting is planned to define whether or not a DIF occurence of DIF Type Boolean is treated separately SAP SE or an SAP affiliate company. All rights reserved. Public 11
12 Safety Amount Calculation
13 Safety Amount Calculation Consideration of Schemas Enhancement Forecast profile Please see Notes: Consider DIF Schema Priority for Safety Amount Calculation Increase Safety Amount during DIF periods by using the highest prioritized DIF Schema. This means the safety amount will always be as high or higher than the safety amount during the non DIF period. If feature is not active it could be that DIF schema is insignificant and therefore safety amount is not higher. Consider Daily DIF Schema for Safety Amount Calculation The safety amount might be too high in previous releases if a DIF schema was set only for a part of a week. This can be avoided by turning feature on. Then safety amount for DIF schema will be considered only for the days in which the DIF occurrence is valid SAP SE or an SAP affiliate company. All rights reserved. Public 13
14 Improved Exception Handling Earlier generation and new forecasting exception
15 Improved Exception Handling Planned enhancement of FRP Exception profile Description So far following exceptions were only created on order days 218 Effect of (loc.prod. level) DIF in week unknown 222 Effect of (location level) DIF in week unknown 830 Effect of (loc.prod. level) DIF in week unknown; factor used 832 Effect of (location level) DIF in week unknown; factor used Product gets promotion Flyer for the first time Now, these F&R exceptions can be issued also for location products which do not have an order date at the current FRP planning date. This allows you to react before the next order proposal is created SAP SE or an SAP affiliate company. All rights reserved. Public 15
16 Improved Exception Handling Parameter Excpt.PredWarn.OnlyRaiseOnOrderDates BAdI-controlled /FRE/FRPCONF_PAR Excpt.PredWarn.OnlyRaiseOnOrderDates Please see Notes: Value range 0/1 Default = 1 (Compatibility) Technical integration As long as the customizing does not exist the functionality can be used by a BAdI implementation 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 16
17 Improved Exception Handling Planned new Exception «Forecast exceeded consumption» 160 * 1.40 = = 226 The exception indicates that a weekly forecast value exceeds the highest consumption peak threshold. This threshold is calculated as the highest consumption peak times the multiplicative factor f plus the absolute distance d. Factor: e.g This means Forecast has to be 40% higher than highest consumption in the past Absolute distance: e.g. 2 This is to avoid false alerts for ultra slow sellers For week 8 with a forecast of 289 you will get the new exception 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 17
18 Improved Exception Handling Planned enhancement of FRP Exception profile Description Controls which factor is applied to the highest consumption peak before comparing it with the maximum value of the corrected weekly forecast. Controls which offset is added to the highest consumption peak before comparing it with the maximum value of the corrected weekly forecast SAP SE or an SAP affiliate company. All rights reserved. Public 18
19 Further Recent Improvements Overview and further information
20 Overview of recent improvements Announcements of SAP F&R improvements and important corrections Note is used to announce and share information about F&R improvements and recommendations. The note will be kept updated. Please check this note regularly for further information! How to change BAdI-controlled default settings? Note provides you with information about the different types of FRP configuration parameters. The note provides you with example implementations of the 3 BAdIs which can be used to change BAdI-controlled default settings. Table /FRE/FRPCONF_PAR BAdIs: FRE/FU_FRP_BADI_002->CHANGE_PARAMETERS FRE/FU_FRP_BADI_004->LOCATIONPRODUCT_PARAMETERS FRE/FU_FRP_BADI_005->PROFILE_BADI_CONFIG 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 20
21 Overview of recent improvements Forecast calculation Multiple additive correction DIF Note Traceability Order Balancing Additional F&R exceptions Notes , Enhancement concept Table /FRE/MATLOC_FRP Customer-specific data imported from the FRP location environment can be persisted via BAdI at table /FRE/MATLOC_FRP Example: Additional calculation details for location products without order proposal Note SAP SE or an SAP affiliate company. All rights reserved. Public 21
22 Overview of recent improvements Contract handling Contract check is applied on Order proposal level at transaction /FRE/RWB (Replenishment Workbench) Location level at the FRP run Note Substitution for Cross-Docking (Retail and F&R) Cross-Docking scenario is supported for Quantity Control SubstArt with Total Quantity Note SAP SE or an SAP affiliate company. All rights reserved. Public 22
23 Thank you Contact information: Wilfried Baumgartner Senior Analytics Specialist Hans-Georg Kloep Product Owner (IMS) Development Architect
24 Appendix
25 Multiple additive correction DIF Consideration of e.g. Weather Forecast as additive forecast correction DIF customizing Multiple definition of Additive Forecast Correction is supported Same Rule for overlapping is required 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 25
26 Traceability 1 Order Balancing additional F&R exceptions 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 26
27 Traceability 2 SAP Enhancement concept Table /FRE/MATLOC_FRP BAdI: Evaluation of FRP Inbound Files (/FRE/FU_FRP_BADI015 ) A BAdI for the FRP inbound is provided in addition to support the customer-specific storage of data from the FRP data environment in /FRE/MATLOC_FRP. Example: Missing calculation details for products without order proposal the net demands for products which were not ordered for any reason could be enhanced 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 27
28 Contract Handling OP based contract check Logic of the check not changed Logic applied on OP level at /FRE/RWB Logic applied on location level at FRP Logic applied on item level /FRE/PWB 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 28
29 Substitution for Cross-Docking Consideration of Qty Ctrl SubstArt with Total Quantity Customizing: Article Substitution - Application-Specific Control Maintenance w/o assortment Substitution relationships Follow-Up Article Replacement Article Quantity control SubstArt with Total Quantity only 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 29
30 Forecast Calculation: DIF Schema While time periods with selected demand influences a specific safety amount has to be calculated: Periods with occurrences of certain DIF: DIF Schema A DIF Schema is linked to one or several DIFs (e.g. promotion, calendar event). Periods with high season sales: High Season Schema High Season Schema will be detected by the system automatically. Separate target service levels can be defined in Service Level Profile for every DIF Schema and the High Season Schema (optionally by ABC classification and by selling class). Per time period a Schema is valid and for regular periods specific variances will be calculated. Use of DIF Schema and High Season Schema can be switched on/off in Forecasting Profile. Examples: High season sales during limited period of the year (sun blocker, snow shovel, ) High availability for promotion periods required One time a year sales (special Christmas or Easter products) 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 30
31 Forecast Calculation: DIF Schema Without DIF Schema: No different variance is determined. No different service level can be defined. Safety Amount Safety amount for promotion periods and for periods without promotions are the same SAP SE or an SAP affiliate company. All rights reserved. Public 31
32 Forecast Calculation: DIF Schema With DIF Schema: Different variance is determined. Different service level can be defined. Safety amount for promotion periods and for periods without promotions are different. Service Level 90% Service Level 60% 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 32
33 Forecast Calculation: DIF Schema With High Season Schema: Different variance is determined. Different service level can be defined. Service Level for seasonal peaks are higher and will be detected by the system automatically. Service Level = 60% Service Level = 90% 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 33
34 Forecast Calculation: DIF Schema Known problems with safety amount calculation: Because while a promotion out-of-stock situations have to be avoided a much higher service level is defined for relevant DIF Schema (e.g. 95% vs 70%). However the variance while promotional time periods in the past was not significantly different to the variance in the non-promotional time periods. Therefore a specific safety amount calculation will be skipped and the regular service level will be considered. Instead of higher safety amount while promotion time period regular safety amount is used. Same problem can appear, having specific service level for High Season Schema. Several DIF Identifier are assigned to a DIF Schema. For every DIF Identifier exact one week has been observed (e.g. DIF A one week with 10, DIF B one week with 20, DIF C one week with 40). A much higher service level for DIF Schema is defined (e.g. 95% vs 70%). The variance calculation is done separately per DIF Identifier. The determined variances per DIF Identifier afterwards are summed up. Because every DIF Identifier only has been observed once for one week the variance per DIF Identifier is zero: The variance for the DIF Schema is zero. Instead of higher safety amount while promotion time period no safety amount is considered, even if we have a safety amount for non-promotional time periods! 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 34
35 Forecast Calculation: DIF Schema Known problems with safety amount calculation: A promotion ends at the beginning of a week. The relevant DIF Identifier is assigned to a DIF Schema for which a much higher service level is defined. Finally we have a much higher safety amount for non-promotional time periods compared to promotional time periods. However the higher safety amount is considered for the complete week, even if the promotion has been ended at the beginning of the week. Example: Safety amount per day while promotion is 5 units, but regularly it is 1 units only. Week start is Monday. We have 7 sales days/week. The promotion ends on Monday (inclusive). The promotion specific safety amount will be considered not only for Monday (+4 units), but for the complete week (7 times +4 units). Finally we will have 24 units too much! Of course the promotional effect only is considered for the promotion period (in our example for Monday only). But this is not valid for the specific safety amount! Probably too high stock after the end of a promotion SAP SE or an SAP affiliate company. All rights reserved. Public 35
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