Use Shelf-Life Planning to Lower Stockouts For Inventory With Expiration Dates

  • by Dmitriy Mindich, Senior Associate, PricewaterhouseCoopers, LLC
  • March 11, 2011
Most inventories used in the supply network planning run have expiration dates. You can use information relative to inventory expiration dates and future demand needs to reduce future stock-outs via additional replenishment orders. Although shelf-life propagation and associated alerts are fully described in SAP’s standard documentation, you can also incorporate shelf-life information into your standard planning run, thus automating and simplifying the job of a supply planner.
Key Concept
The shelf-life requirement is an important element in most supply chain planning processes in the food and beverage and life sciences industries. Historically, the SAP standard solution addressed shelf-life concerns either in the production planning via SAP Advanced Planning & Optimization (SAP APO) Production Planning and Detailed Scheduling or SAP Supply Network Planning (SNP) optimization algorithms. Now SAP has introduced new functionality to address shelf-life requirements in the most widely used master planning (SAP APO SNP heuristics) module.

New functionality released in SAP Advanced Planning & Optimization (SAP APO) 5.1 enables companies to consider expiration of inventory with limited shelf life and plan for such situations. Specifically, the functionality addresses shelf-life configuration in the distribution aspect of a supply chain. New enhancements help companies reduce waste and stock-outs across their networks. Although the standard functionality is somewhat limited, the additional configuration enhancements I describe can improve your existing supply chain planning solution.

SAP’s standard functionality states that planning applications do not consider shelf-life data. However, new key figures defined in the SAP SCM 5.1 release of SAP APO Supply Network Planning (SNP) and additional enhancements to standard SNP macros allow you to incorporate shelf-life information inside your standard SNP heuristics run. 

In this article, I describe:

  • The benefits of incorporating shelf-life information into a supply plan
  • The configuration steps required to enable shelf-life functionality in an SAP system and the details of master and transactional data setup in SAP ERP Central Component (SAP ECC) and SAP SCM environments
  • The standard functionality provided by SAP SCM 5.1
  • Several enhancements that you can use to incorporate shelf-life information into a supply plan

Dmitriy Mindich

Dmitriy Mindich, APICS CSCP, is a senior associate at PricewaterhouseCoopers LLP. He has extensive SAP experience and specializes in SAP SCM areas of SAP APO Demand Planning and SAP APO Supply Network Planning, as well as integration with external systems using the SAP NetWeaver Process Integration platform.

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