This  blog is intended to describe the parameters of the IBP Supply Heuristic with focus on the heuristic type “Infinite without shortages”.

Allowed Quota Deviation

Here you can relax the heuristic a little bit with the intention to tolerate any irregular quota definitions in the Location Source. The tolerance interval is nevertheless restricted by SAP to a value between 0 and 0.1, meaning it allows a sum of quotas 100% +/- 10%.

If the sum of quotas for a Location Source is greater than 100%, the heuristic will (considering the tolerance) tend to fulfil more than the existing customer demand or net demand. Vice versa, if the sum of quotas for a Location Source is less than 100%, the heuristic will (considering the tolerance) tend to fulfil less than the existing customer demand or net demand. In following scenario we ship product Z1_IBP_100 to location Z1_1720 from two locations, Z1_1710 and Z1_6210.

We change now the sourcing ratio in a way to test the quota tolerance:

The heuristic fails then as expected, denoting inconsistent quota arrangements in the application log details.

We adjust therefore the tolerance:

The heuristic runs then successfully and creates a little over-supply in the first two time buckets:

If you have to face the business case that quotas for sourcing are to be fine-tuned this way this feature will of cause support you.

Check Quotas

The flag for Check Quotas is aimed to support temporarily for an initial phase in an implementation project. In case, the quotas imported from an external system such as S4/HANA are not yet properly maintained, you can successfully run the heuristic nevertheless by unchecking this flag.

The quota check activated you have additionally the choice to stop the heuristic with an error when detecting a quota inconsistency or denote a warning in the application log. The risk when deactivating the quota check is always that the heuristic might consider too much or too less demand dependent on the sum of quotas per Location Source.

Include Zeros in Quota Check

If you activate this parameter, the algorithm regards a total quota of zero percent as inconsistent (as defined by the quota condition) and issues a warning, error, or no message according to how you have configured the Check Quotas parameter. If you do not activate this parameter, the algorithm ignores quotas of zero percent.

Normalize Quotas

Likewise the Check Quotas flag, Normalize Quotas is per SAP’s recommendation to be used for the initial setup phase in implementation projects only. You will have two options:

Equally distributed quotas: the existing quotas are ignored by the heuristic and the quotas will be re-arranged in equal proportions according to the number of Location Source records pointing to the same Location Product.

Proportionally distributed quotas: based on the existing quotas the newly assigned “normalized” quotas are assigned proportionally. Example: if a customer product has two alternative customer sources of supply with quotas of 40% and 20%, then the quotas are set to 66.67% and to 33.33%.

The normalized quotas do exist only during runtime of the heuristic and are not stored in the database.

The Exclude Zeros During Quota Normalization flag additionally controls whether “0” quotas are considered during normalization.

Source of Supply Validity

The flag Source of Supply Validity controls whether the master data attributes CINVALID, PINVALID, and TINVALID are considered by the heuristic.

Initialize Lead-Time Horizon of Transports

This parameter is important for the key figures Transport Supply (TRANSPORTDS) and Transport Receipts (TRANSPORT). If you have a transportation lead time between two locations greater than one planning time bucket (week or month for example) it may occur that you have Transport Receipts which have a start date already in the past.

Common heuristic behaviour is that all output key figure within the planning horizon are initialized and re-planned, except for the Transport Supply and Transport Receipts key figures, which can’t be re-planned within the transportation lead time for above reason.

If you want the initialization nevertheless (reason could be that you import stock transport orders within this lead time from S4/HANA anyhow), you can activate this checkbox.

Initialize Lead-Time Horizon of Customer Receipts

Likewise the parameter Initialize Lead-Time Horizon of Transports this parameter applies for the key figures Customer Supply (CONSTRAINEDDEMANDDS) and Customer Receipts (CONSTRAINEDDEMAND).

Balance Receipts

Specifies whether the planning algorithm balances receipts during planning.

If a user has defined adjusted or minimum key figures that constrain the receipts for one or more sources of supply, the algorithm may create a supply plan with over-supply or insufficient supply. Although this situation cannot always be avoided, the algorithm can try to improve the supply plan by balancing receipts between all relevant sources of supply, regardless of type. They do this by increasing or decreasing receipts from sources of supply that aren’t affected by adjusted or minimum key figure values. During receipts balancing, the algorithms try to stay as close as possible to any specified quotas, but overrule them if necessary.

Following example:

Customer Z1_12100001 (“Paris”) can source product Z1_IBP-200 (“Pesto Special”) from two DCs, Z1_1720 (“Seattle”) and Z1_3710 (“Rotterdam”). The sourcing ratio indicates sourcing only from Seattle:

We maintain now some fixed quantities in the key figure Customer Supply Adjusted for the DC which has “0” quota:

After running the heuristic with flagged Balance Receipts indicator, we observe as expected that the quantity in Seattle has been reduced (“balanced”) to the benefit of the adjusted, fixed quantities in Rotterdam, where then the Dependent Customer Demand increased accordingly:

Value for Infinite Coverage

This field populates the Coverage key figure (COVERAGE) with an infinite value (default 999999.999999) in case the Projected Stock covers more than the Dependent Demand of all future periods within the planning horizon.

Carry Over Negative Projected Stock

In situations, where the downstream Supply exceeds the available Receipts, Projected Stock will go negative. In standard behaviour the heuristic will use “0” in period t+1 if period t is negative, thus ignoring the issue in previous period. By activating the parameter Carry Over Negative Projected Stock, the heuristic will “carry over” the missing quantity from period t to period t+1 and adds it to the receipts in t+1.

The scenario is useful when delayed supply is not considered as lost demand but can be shifted to next time bucket.

In below scenario we applied an value in key figure “Adjusted Production Receipts” in week 11 which caused a negative projected stock:

After running the heuristic with the activated parameter, the “Production Receipts” in week 12 have increased accordingly to compensate the shortage in previous period: