Some Mystery Author Inside of Accenture Writes a Great Technical Paper on DP and SNP Setup

January 4, 2012

Background I have poked some holes in Accenture white papers in the past that were very generic and soft of glossy sales brochures. This is a problem because there is a lot of this type of commercial material on the web, that does not do much more than serve as a calling card for the [...]

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Days Supply Macro Walk Through

December 21, 2011

Background Macros are stored development objects that populate key figures in the planning book. They are very important on DP and SNP projects. When standard macros are used, this is simply the development repository. When a pre-existing macro is created (it is often easier to adjust a pre-existing macro rather than start from scratch), or [...]

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Running the Optimizer for a Single Location Versus the Sub-Problem

December 20, 2011

Background One very interesting question is whether the SNP optimizer should be run interactively. Companies that migrate to cost optimization do so most frequently from MRP or from supply planning heuristics. However both of these methods can be run interactively, without negatively affecting the rest of the product locations. However, cost optimization works differently. The [...]

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Diagnosing the Reasons for Over Ordering with the SNP Cost Optimizer

December 19, 2011

Background One generally thinks of supply planning inaccuracy in terms of both equally distributing over and under ordering .However, on several occasions I have witnessed SNP both under and over-order. This is most common when either the CTM or the cost optimizer is used. Its rare for much in the way of comprehensive diagnostics to [...]

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Using Heuristic First Solution

November 11, 2011

Background The SNP optimizer has a selection called the Heuristic First Solution. How it Works Optimization is usually presented as mathematically pure. However, the truth is that optimization often requires a lot of help in order to solve problems. One form of help is called decomposition, which is the dimension under which the problem is [...]

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How Soft Constraints Work with Soft Constraints Days’ Supply and Safety Stock Penalty Costs

November 5, 2011

Background The topic of the use of days’ supply in a cost optimizer like the SNP optimizer is an interesting one. We begin by looking at what SAP has to say on this topic. You can also use safety stock for static days’ supply planning with the SNP optimizer. When using static days’ supply planning, [...]

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Use of the Rounding Value Versus the Lot Size

November 4, 2011

Background The way these two fields control the procurement is fairly simple but important to know. The Minimum Lot Size is used to essentially make SNP wait until enough requirements have been gathered before an order is placed. This prevents material being shipped in uneconomic quantities. The Rounding Value essentially does the opposite, it round [...]

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Incremental Optimization and Pre-Existing Orders as Fixed Constraints

October 15, 2011

Background As with CTM, the SNP Optimizer can be run in net change mode. This allows the fixing that occurred in the previous optimization run to be maintained. This is well described in the quote below: “Incremental optimization defines how to deal with results from previous planning runs. If the Do not delete any orders indicator is [...]

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Using an External System to Check Optimization Results

October 12, 2011

Background I recently worked on a project where the company was concerned as to whether the costs that it had placed into its cost optimizer were correct. It turns out that it had setup its costs, and then changed its costs over time primarily based upon the output of the system. The company wanted to [...]

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SNP Optimizer Sub Problem Division and Decomposition

October 12, 2011

Background In finding a way to segregate the problem, cost optimizers are typically programmed to process material supply network by material supply network. This is called “decomposition,” which means to “decompose” the problem as described below: Decomposition in computer science, also known as factoring, refers to the process by which a complex problem or system [...]

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