Public

FRP Parameter Optimization Settings

Wilfried Baumgartner / Hans Georg Kloep, SAP

July 6, 2016
Legal disclaimer

The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the
permission of SAP. This presentation is not subject to your license agreement or any other service or subscription
agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related
presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation
and SAP's strategy and possible future developments, products and or platforms directions and functionality are all
subject to change and may be changed by SAP at any time for any reason without notice. The information in this
document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This
document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied
warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational
purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this
document, except if such damages were caused by SAP´s willful misconduct or gross negligence.

All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 2

Agenda

Lost Consumption Correction

 Promotion
 Fallback Scenario

Promotions
 Newly listed products
 Safety amount calculation for DIF schema

Improved exception handling

 Earlier generation of promotion exception
 New Exception Forecast exceeded consumption

Overview of recent improvements

 New notes and additional information

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 3

Lost Consumption Correction
Lost Consumption Correction – Promotional values
consumption declines to 4 pieces due to out of stock situation in
week 8 from Wednesday to Saturday
Normally for correction the average weekly consumption of surrounding
four weeks will be taken into account.

Local mean is: (9+10+8+9) / 4 = 9

Correction value for week 8 is

consumption +
(local mean / number of consumption days per week) * number of days with zero stock
4 + (9 / 6) * 4 = 10
Buy 1 Get 1
promotion
in week 7 Correction value would be
consumption +
(local mean / number of consumption days per week) *
number of days with zero stock
4 + (15 / 6) * 4 = 14

To mitigate the risk of too high corrected

consumption value there is a new customizing
setting in place
‘Ignore Periods with Boolean DIFs for Lost
Cons.Calc.’ (forecast profile)

to skip promotional weeks from local mean

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 5
Lost Consumption Correction – Promotional values
Enhancement Forecast profile

Please see Notes:

- 2287903
- 2287870

Description
blank: All periods are considered for the calculation of a local mean value, regardless of existing Boolean DIFs
‘X’: Periods associated with Boolean DIFs are not considered for the calculation of a local mean value

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 6

Lost Consumption Correction - Fallback
consumption declines to 4 pieces due to out of stock situation in week 8

Normally for correction the average weekly consumption of two weeks

before will be taken into account

If these weeks cannot be considered (e.g. Ignore DIF applies)

there is a fallback strategy in place:

Incomplete weekly goods movement value * number of

consumption days in the respective week / number of
consumption days in the respective week without a zero stock
4 * 6 / 1 = 24

So corrected consumption value would be 24 and would heavily

influence forecast for week 9.

To mitigate the risk of too high corrected consumption

value there is a new parameter in place:

Prepr.ZeroStockCorrect.Fallback.MaxFactor
If parameter is set e.g. to 2

the corrected consumption value would be 4 * 2 = 8

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 7

Lost Consumption Correction - Fallback
Parameter Prepr.ZeroStockCorrect.Fallback.MaxFactor

BAdI-controlled /FRE/FRPCONF_PAR Please see Note:

 Prepr.ZeroStockCorrect.Fallback.MaxFactor - 1644851
- 1656951
- 1673500
Value range
 Decimal >= 1.0
 Default = 7 (Compatibility)
 Recommended = 2

Description
 Corrected Consumption for fallback scenario Zero Stock = Consumption* MaxFactor

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 8

Promotions
Consider promotion for newly listed product

So far a promotion (and resulting high

consumption figures) could not be considered
for newly introduced products.

So the forecasting model has a high variance

Thus mean forecast and especially

max forecast are very high.

Newly To mitigate the risk of too high forecast values

introduced there is a new DIF customizing setting planned.
product starts
with promotion The promotion can be considered separately for
in week 1 forecasting.

This leads to lower mean forecast and far more

important to lower max forecast.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 10

Consider promotion for newly listed product
Planned enhancement DIF Identifier Customizing

A new setting is planned to define whether or not a DIF occurence of DIF Type ‚Boolean‘ is
treated separately.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 11

Safety Amount Calculation
Safety Amount Calculation – Consideration of Schemas
Enhancement Forecast profile

Please see Notes:

- 2287903
- 2287870

Consider DIF Schema Priority for Safety Amount Calculation

Increase Safety Amount during DIF periods by using the highest prioritized DIF Schema. This means the safety
amount will always be as high or higher than the safety amount during the non DIF period. If feature is not active it
could be that DIF schema is insignificant and therefore safety amount is not higher.
Consider Daily DIF Schema for Safety Amount Calculation
The safety amount might be too high in previous releases if a DIF schema was set only for a part of a week. This
can be avoided by turning feature on. Then safety amount for DIF schema will be considered only for the days in
which the DIF occurrence is valid.
© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 13
Improved Exception Handling
Earlier generation and new forecasting exception
Improved Exception Handling
Planned enhancement of FRP Exception profile

Description
 So far following exceptions were only created on order days
– 218 Effect of (loc.prod. level) DIF in week unknown
Product gets promotion
– 222 Effect of (location level) DIF in week unknown „Flyer“ for the first time
– 830 Effect of (loc.prod. level) DIF in week unknown; factor used
– 832 Effect of (location level) DIF in week unknown; factor used

 Now, these F&R exceptions can be issued also for location products which do not have an order date at the
current FRP planning date. This allows you to react before the next order proposal is created.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 15

Improved Exception Handling
Parameter Excpt.PredWarn.OnlyRaiseOnOrderDates

BAdI-controlled /FRE/FRPCONF_PAR Please see Notes:

 Excpt.PredWarn.OnlyRaiseOnOrderDates - 2093784
- 1673500

Value range
 0/1
 Default = 1 (Compatibility)

Technical integration
 As long as the customizing does not exist the functionality can be used by a BAdI implementation

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 16

Improved Exception Handling
Planned new Exception «Forecast exceeded consumption»
The exception indicates that a weekly
+ 2 = 226 forecast value exceeds the highest
160 * 1.40 = 224 consumption peak threshold. This
threshold is calculated as the highest
consumption peak times the
multiplicative factor f plus the
absolute distance d.

Factor: e.g. 1.40  This means Forecast has to be 40% higher than highest consumption in the past

Absolute distance: e.g. 2  This is to avoid false alerts for ultra slow sellers

For week 8 with a forecast of 289 you will get the new exception

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 17

Improved Exception Handling
Planned enhancement of FRP Exception profile

Description
 Controls which factor is applied to the highest consumption peak before comparing it with the maximum value of
the corrected weekly forecast.
 Controls which offset is added to the highest consumption peak before comparing it with the maximum value of
the corrected weekly forecast.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 18

Further Recent Improvements
Overview and further information
Overview of recent improvements

Announcements of SAP F&R improvements and important corrections

Note 2335048 is used to announce and share information about F&R improvements and recommendations.
The note will be kept updated.
Please check this note regularly for further information!

How to change BAdI-controlled default settings?

Note 1673500 provides you with information about the different types of FRP configuration parameters.
The note provides you with example implementations of the 3 BAdIs which can be used to change
BAdI-controlled default settings.
 Table /FRE/FRPCONF_PAR
 BAdIs:
– FRE/FU_FRP_BADI_002->CHANGE_PARAMETERS
– FRE/FU_FRP_BADI_004->LOCATIONPRODUCT_PARAMETERS
– FRE/FU_FRP_BADI_005->PROFILE_BADI_CONFIG

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 20

Overview of recent improvements

Forecast calculation
 Multiple additive correction DIF
– Note 2229974

Traceability
 Order Balancing
Additional F&R exceptions
– Notes 2094788, 2115338

 Enhancement concept Table /FRE/MATLOC_FRP

Customer-specific data imported from the FRP location environment can be persisted via BAdI at table
/FRE/MATLOC_FRP
Example: Additional calculation details for location products without order proposal
– Note 1990393

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 21

Overview of recent improvements

Contract handling
Contract check is applied on
 Order proposal level at transaction /FRE/RWB (Replenishment Workbench)
 Location level at the FRP run
– Note 2116445

Substitution for Cross-Docking (Retail and F&R)

Cross-Docking scenario is supported for
 Quantity Control ‘SubstArt with Total Quantity’
– Note 2245683

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 22

Thank you Contact information:

Wilfried Baumgartner Hans-Georg Kloep

Product Owner (IMS)
Senior Analytics Specialist Development Architect

wilfried.baumgartner@sap.com hans-georg.kloep@sap.com
Appendix
Multiple additive correction DIF

Consideration of e.g. ‘Weather Forecast’ as additive forecast correction

DIF customizing

 Multiple definition of Additive Forecast

Correction is supported
 Same ‘Rule for overlapping’ is required

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 25

Traceability 1

Order Balancing – additional F&R exceptions

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 26

Traceability 2

SAP Enhancement concept Table /FRE/MATLOC_FRP

BAdI: Evaluation of FRP Inbound Files (/FRE/FU_FRP_BADI015 )

A BAdI for the FRP inbound is provided in addition to support the customer-specific storage of data from
the FRP data environment in /FRE/MATLOC_FRP.
Example: Missing calculation details for products without order proposal  the net demands for products
which were not ordered for any reason could be enhanced

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 27

Contract Handling

OP based contract check

 Logic of the check not changed

 Logic applied on OP level at /FRE/RWB
 Logic applied on location level at FRP
 Logic applied on item level /FRE/PWB

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 28

Substitution for Cross-Docking

Consideration of Qty Ctrl ‘SubstArt with Total Quantity’

Customizing: Article Substitution - Application-Specific Control

 Maintenance w/o assortment

 Substitution relationships
‒ Follow-Up Article
‒ Replacement Article
 Quantity control
‒ ‘SubstArt with Total Quantity’ only

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 29

Forecast Calculation: DIF Schema

While time periods with selected demand influences a specific safety amount has to be calculated:
 Periods with occurrences of certain DIF: DIF Schema
A DIF Schema is linked to one or several DIFs (e.g. promotion, calendar event).
 Periods with high season sales: High Season Schema
High Season Schema will be detected by the system automatically.
Separate target service levels can be defined in Service Level Profile for every DIF Schema and the
High Season Schema (optionally by ABC classification and by selling class).
Per time period a Schema is valid and for regular periods specific variances will be calculated.
Use of DIF Schema and High Season Schema can be switched on/off in Forecasting Profile.
Examples:
 High season sales during limited period of the year (sun blocker, snow shovel,…)
 High availability for promotion periods required
 One time a year sales (special Christmas or Easter products)

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 30

Forecast Calculation: DIF Schema

Without DIF Schema:

No different variance
is determined.
Safety
Amount
No different service
level can be defined.

Safety amount for

promotion periods
and for periods
without promotions
are the same.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 31

Forecast Calculation: DIF Schema

With DIF Schema:

Different variance is
determined.
Service Level
90%
Different service level
can be defined. Service Level
60%
Safety amount for
promotion periods
and for periods
without promotions
are different.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 32

Forecast Calculation: DIF Schema

With High Season

Service Level = 90%
Schema:
Different variance is
determined.
Service Level =
60%
Different service level
can be defined.
Service Level for
seasonal peaks are
higher and will be
detected by the
system automatically.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 33

Forecast Calculation: DIF Schema

Known problems with safety amount calculation:

 Because while a promotion out-of-stock situations have to be avoided a much higher service level is defined for
relevant DIF Schema (e.g. 95% vs 70%).
However the variance while promotional time periods in the past was not significantly different to the variance in
the non-promotional time periods. Therefore a specific safety amount calculation will be skipped and the regular
service level will be considered.
 Instead of higher safety amount while promotion time period regular safety amount is used.
 Same problem can appear, having specific service level for High Season Schema.
 Several DIF Identifier are assigned to a DIF Schema. For every DIF Identifier exact one week has been
observed (e.g. DIF A one week with 10, DIF B one week with 20, DIF C one week with 40).
A much higher service level for DIF Schema is defined (e.g. 95% vs 70%).
The variance calculation is done separately per DIF Identifier. The determined variances per DIF Identifier
afterwards are summed up. Because every DIF Identifier only has been observed once for one week the
variance per DIF Identifier is zero: The variance for the DIF Schema is zero.
 Instead of higher safety amount while promotion time period no safety amount is considered, even if we have
a safety amount for non-promotional time periods!

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 34

Forecast Calculation: DIF Schema

Known problems with safety amount calculation:

 A promotion ends at the beginning of a week. The relevant DIF Identifier is assigned to a DIF Schema for which
a much higher service level is defined. Finally we have a much higher safety amount for non-promotional time
periods compared to promotional time periods.
However the higher safety amount is considered for the complete week, even if the promotion has been ended
at the beginning of the week.

Example: Safety amount per day while promotion is 5 units, but regularly it is 1 units only.
Week start is Monday. We have 7 sales days/week. The promotion ends on Monday (inclusive).
The promotion specific safety amount will be considered not only for Monday (+4 units), but for the complete
week (7 times +4 units). Finally we will have 24 units too much!

Of course the promotional effect only is considered for the promotion period (in our example for Monday only).
But this is not valid for the specific safety amount!
 Probably too high stock after the end of a promotion.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 35

© 2016 SAP SE oder ein SAP-Konzernunternehmen.
Alle Rechte vorbehalten.

Weitergabe und Vervielfältigung dieser Publikation oder von Teilen daraus sind, zu welchem Zweck und in welcher Form auch immer, ohne die ausdrückliche schriftliche
Genehmigung durch SAP SE oder ein SAP-Konzernunternehmen nicht gestattet.

SAP und andere in diesem Dokument erwähnte Produkte und Dienstleistungen von SAP sowie die dazugehörigen Logos sind Marken oder eingetragene Marken der
SAP SE (oder von einem SAP-Konzernunternehmen) in Deutschland und verschiedenen anderen Ländern weltweit.
Weitere Hinweise und Informationen zum Markenrecht finden Sie unter http://global.sap.com/corporate-de/legal/copyright/index.epx.

Die von SAP SE oder deren Vertriebsfirmen angebotenen Softwareprodukte können Softwarekomponenten auch anderer Softwarehersteller enthalten.

Produkte können länderspezifische Unterschiede aufweisen.

Die vorliegenden Unterlagen werden von der SAP SE oder einem SAP-Konzernunternehmen bereitgestellt und dienen ausschließlich zu Informationszwecken.
Die SAP SE oder ihre Konzernunternehmen übernehmen keinerlei Haftung oder Gewährleistung für Fehler oder Unvollständigkeiten in dieser Publikation.
Die SAP SE oder ein SAP-Konzernunternehmen steht lediglich für Produkte und Dienstleistungen nach der Maßgabe ein, die in der Vereinbarung über die jeweiligen
Produkte und Dienstleistungen ausdrücklich geregelt ist. Keine der hierin enthaltenen Informationen ist als zusätzliche Garantie zu interpretieren.

Insbesondere sind die SAP SE oder ihre Konzernunternehmen in keiner Weise verpflichtet, in dieser Publikation oder einer zugehörigen Präsentation dargestellte
Geschäftsabläufe zu verfolgen oder hierin wiedergegebene Funktionen zu entwickeln oder zu veröffentlichen. Diese Publikation oder eine zugehörige Präsentation,
die Strategie und etwaige künftige Entwicklungen, Produkte und/oder Plattformen der SAP SE oder ihrer Konzernunternehmen können von der SAP SE oder ihren
Konzernunternehmen jederzeit und ohne Angabe von Gründen unangekündigt geändert werden.
Die in dieser Publikation enthaltenen Informationen stellen keine Zusage, kein Versprechen und keine rechtliche Verpflichtung zur Lieferung von Material, Code oder
Funktionen dar. Sämtliche vorausschauenden Aussagen unterliegen unterschiedlichen Risiken und Unsicherheiten, durch die die tatsächlichen Ergebnisse von den
Erwartungen abweichen können. Die vorausschauenden Aussagen geben die Sicht zu dem Zeitpunkt wieder, zu dem sie getätigt wurden. Dem Leser wird empfohlen,
diesen Aussagen kein übertriebenes Vertrauen zu schenken und sich bei Kaufentscheidungen nicht auf sie zu stützen.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 36