In various business scenarios – especially in the Make-to-Order (MTO) process environment – there is the requirement to model demand planning quantities for the critical parts in the lower levels of the bills of material (e.g. semi-finished goods, purchased components). In SAP’s preceding supply chain planning tool SAP APO there are several commonly known options to match this specific business requirement, e.g.:

  • Generating so-called Demand Planning Bill of Materials (DP BOM) either directly from the available SAP ERP master data via the Core Interface (CIF) or generate the DP Production Data Structure (DP PDS) in APO from the SNP or PP/DS PDS
  • In case, you still need to forecast on finished good level but do not want the planned demands take immediate effect on the finished good planning, there is the possibility to apply the strategy “Planning without final assembly”; it will prevent the system from creating production orders for the finished good level until you have a precise customer demand (sales order) for it, while you can continue to operate further on the semi-finished or component level.
  • You may use Aggregated Planning in APO SNP with ERP Planning Products, thus planning in APO with hierarchies.

In SAP’s new supply chain planning tool SAP IBP (IBP Integrated Business Planning) the above-mentioned options are however not available in SAP Standard yet. Instead, there is – based on a proposal from SAP (SAP note 2586250) – a work-around feasible which fully matches the specific business requirements. So, let us first outline the business requirements a little further before we get into the details of the solution approach.

Business Requirements

The starting point is the common scenario where the supply plan is not solely determined by the customer demands alone, but by the availability of materials upstream. Especially, when you are taking advantage of configurable material, aggregated planning on product families or planning products.

In a make-to-stock (MTS) environment the usual way is to collect the planned independent requirements / forecasts across regions or sales divisions for a finished good, map them to a delivering plant or warehouse and then perform a net requirement calculation top-down.

With configurable material (ERP Material Type KMAT) in a make-to-order (MTO), configure-to-order (CTO) or engineer-to-order (ETO) scenario this is normally not possible for various reasons:

  1. The KMAT material usually represents a specific product family. The numerous material characteristics are only evaluated in the customer demands and attached production orders.
  2. If you are using Variant Configuration in a very strict way you would need to define a few KMAT material as the header product.
  3. For configuration purposes you as well use a Maximum Bill of Materials which includes all possible components; the requested components are selected then by the characteristic values chosen during sales order entry.

Altogether, it makes it hard to create a reliable forecast for the product family when you are not sure about the precise occurrence and details of historic sales orders and component consumption. The requirement is nevertheless to forecast a Make-to-Order product with characteristics specificities.

General Solution Approach

There are in fact two possible ways to model above requirement in SAP IBP.

  1. The first one, the “traditional” approach, simply uses the available standard master data structures for supply planning (Production Source Header, Production Source Item) to derive the relevant dependent demands.
  2. The second one calculates the dependent demands for components by applying kind of quotations (sometimes referred to as “Attach Rates”) to the single components according to historic specifications.

While the first approach can be implemented with the standard master data types in IBP, the second approach needs some special configuration in IBP upfront to make it happen. In this article we focus on the second approach.

Configuration in SAP IBP

The solution is built upon two new master data types, HEADER PRODUCT and PRODUCT, while the HEADER PRODUCT is referenced to PRODUCT to minimize master data maintenance efforts.

The Attach Rate or BOM ratio information is modelled in a new compound master data type as an attribute as key figure.

The definition of the BOMRATIO is in below example time-independent and calculated as an average:

Additional planning levels are required to facilitate DP BOM Planning. The planning level Location / Product / Customer / Period is the central level for calculation of the Dependent Demand key figure.

Key figure “Dependent Demand” itself is the result from multiplying the Independent Demand with the BOMRATIO factor:

The planning level Location / Header Product / Product / Period / no attributes is used to create later the attribute transformation for the Product. The transformation for the product is intended to enable display of the header and the component product in one column.

Planning level Location / Product / Customer / Period / 2 is technically required to ensure a correct calculation of the total demand key figure:

Configuration in SAP ERP or S4/HANA

For providing the BOMRATIO to IBP a report needs to be developed in the ERP system to e.g. generate a table with information on header product, component, and BOMRATIO (including a time dependency is in general possible). Input for the report are the historic sales orders for the KMAT product and the choice of components evoked by the evaluation during the variant configuration. The table then is going to be replicated via the Cloud Platform Integration (CPI) to the target master data type in IBP.

Alternatively, the BOMRATIOs can be imported via flat file integration in the Data Integration App.

Planning with the BOMRATIO

The scenario enables you to plan demand on the aggregated product level, alias KMAT. Thus, you can take full advantage of the statistical forecasting models available in SAP IBP for Demand. Any independent demand planned there will immediately generate the correlating dependent demands for the critical components.

In the next planning step you can then decide whether you continue to plan with the component demands in Supply or S&OP or just transfer the demands as forecast or purchase requisitions to the ERP system

Pros and Cons of Modelling Planning Bill of Materials in SAP IBP

The solution has for sure some up- and downsides.

+Configuration on the SAP IBP side uses standard configuration elements only.
High performance
Transparent planning results  
  You will need to provide some development for the data feed of the BOMRATIO in the ERP system
As you plan on the KMAT level with statistical forecasting, a sales history is beneficial.
Transferring forecast within the make-to-stock planning segment to an ERP scenario in the make-to-order planning segment may run into issues with regards to forecast consumption.


Please refer to SAP note 2586250 for further configuration details and possible restrictions.