Optimize Inventory Using Product Interchangeability in SAP APO SNP

  • by Alok Jaiswal, Consultant, Infosys Limited
  • December 28, 2015
Learn how to carry out product interchangeability in SAP Advanced Planning and Optimization (SAP APO) Supply Network Planning (SNP) when one product needs to be replaced with another from a particular date or when you need to plan a set of interchangeable products with the same technical properties.
Learning Objectives

By reading this article, you will learn about:

  • Interchangeability scenarios: product interchangeability and Form-Fit-Function (FFF) classes
  • The business scenario used
  • Master data objects needed in Supply Network Planning (SNP) to use product interchangeability
  • Prerequisites for using product interchangeability in SNP
  • Configuration of interchangeability group master data (supersession chain with different use-up strategies – Yes, No, and Restricted)
  • Carrying out of a heuristic run in SNP for each strategy and result interpretation
  • Carrying out a heuristic run in SNP for FFF classes and result interpretation
  • Configuration of interchangeability group master data – FFF classes
  • Configuration to carry out product interchangeability in Capable-to-Match (CTM) and the SNP Optimizer
Key Concept

There are two major interchangeability scenarios: product interchangeability and Form-Fit-Function (FFF) classes. In product interchangeability, one product is replaced by another based on different use-up strategies, whereas in FFF, you have several fully interchangeable products. Both scenarios are used according to different business requirements. Product interchangeability options supported by SNP are product discontinuation/forward interchangeable, supersession chain/fully interchangeable, and FFF classes/fully interchangeable.

SAP Advanced Planning and Optimization (SAP APO) Supply Network Planning (SNP) has two major interchangeability scenarios – product interchangeability and Form-Fit-Function (FFF) classes. In product interchangeability, one product is replaced by another based on different use-up strategies, whereas in FFF, you have several fully interchangeable products.

Both scenarios are used according to different business requirements. Product interchangeability options supported by SNP are product discontinuation/forward interchangeable, supersession chain/fully interchangeable, and FFF classes/fully interchangeable.

Note
As explained in my article “Combine Product Interchangeability with Iterative Rules-Based Availability to Deliver the Right Quantity to Customers,” in various business scenarios a business may need to replace one product with another—for example, an old product needs to be replaced with a technically superior product. Also there could be scenarios in which you have a set of products that are similar to each other technically and can be substituted between themselves.

Overview of Interchangeability Scenarios

In this section I provide you with an overview of product interchangeability and FFF classes.

Product interchangeability is a process in which one product is replaced by another product from a specific date. It can be further divided into two categories as shown in Figure 1. Forward interchangeability occurs when a product can be replaced in only one direction—for example, Product X can be replaced by Y and not vice-versa. On the other hand, in full interchangeability one product can be replaced by another and vice-versa.

With FFF classes you have set of products that are technically similar (form, fit, and function). All the products within a FFF class would be interchangeable with each other and one of the products within the class would be the leading product. This is explained in detail in a later section of the article. 


Figure 1
Product interchangeability

Alok Jaiswal

Alok Jaiswal is a consultant at Infosys Limited.

He has more than six years of experience in IT and ERP consulting and in supply chain management (SCM). He has worked on various SAP Advanced Planning and Optimization (APO) modules such as Demand Planning (DP), Production Planning/Detailed Scheduling (PP/DS), Supply Network Planning (SNP), and Core Interface (CIF) at various stages of the project life cycle.

He is also an APICS-certified CSCP (Certified Supply Chain Planner) consultant, with exposure in functional areas of demand planning, lean management, value stream mapping, and inventory management across manufacturing, healthcare, and textile sectors.


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