Accurately Predict your Procurement or Production Needs with an ERP Forecasting Tool

  • by Jawad Akhtar, Head of SAP Delivery, AbacusConsulting
  • December 9, 2013
Forecasting in SAP ERP is one of the lesser-used planning tools that can help predict your procurement and production requirements effectively. While advanced planning tools such as SAP Advanced Planning & Optimization (APO) can certainly bring greater business process optimization to the company, using this forecasting tool helps a company get a better return on its SAP ERP system.
Learning Objectives

Reading this article, you will learn how to:

  • Evaluate consumption figures that the system automatically keeps updating in real time
  • Enter planned and unplanned consumption figures manually
  • Run forecasts using the different forecasting models available in SAP ERP system
Key Concept

A forecast is a prediction of future requirements based on the past consumption trend in a given period of time. These consumptions can be, for example, a material withdrawal against the production or process order or even cost center. Forecasting in SAP ERP enables you to plan any type of material, be it a raw material, a consumable, or a semi-finished or finished good. Different forecasting models, such as constant and moving averages, help you to accurately predict demand for a product based on historical consumption values.

To demonstrate the forecasting functionality in an SAP ERP system, I enter a few historical figures, select the correct forecasting model, and then run a forecast to come up with a future prediction for quantities of materials. I also point out the specific location in the material master that automatically records past consumption. You can use it to evaluate the consumption pattern and to see how it differs from your forecasting and planning results.

Jawad Akhtar

Jawad Akhtar earned his chemical engineering degree from Missouri University of Science and Technology. He has 17 years of professional experience, of which nine years are in SAP. He has completed eight end-to-end SAP project implementation lifecycles in the areas of PP, QM, MM, PM, and DMS in the steel, automobile, chemical, fertilizer, FMCG, and building products industries. He also has worked as an SAP integration manager and an SAP project manager. He has been proactively involved in a business development and solution architect role for seven years. He is the author of Production Planning and Control with SAP ERP, it's filled with in-depth infomation on discrete, process, and repetitive manufacturing types. His profile on LinkedIn is at http://pk.linkedin.com/in/jawadakhtar. You may follow Jawad on Twitter @jawadahl. Currently, he is associated with AbacusConsulting as Head of SAP Delivery.

See more by this author


Comments

No comments have been submitted on this article. 


Please log in to post a comment.

To learn more about subscription access to premium content, click here.