Service level planning is an increasingly important and prevalent method of managing supply chain planning. We cover this topic in two posts on our service parts planning blog.
http://spplan.wordpress.com/2008/04/05/service-level-planning/
http://spplan.wordpress.com/2008/04/23/service-level-planning-vs-execution/
Up until very recently, SCM did not perform service level planning, at least not explicitly. However, with the 7.0 release that changed. Here is where we have located functionality related to service level planning.
SAP SCM
Implicit Methods
- Capable to Match (CTM) can prioritize requests such that some customers get inventory allocated vs. lower priority customers.
- In Production Planning and Detailed Scheduling (PP/DS), reservations can be defined on the capacity of resources and they can be made on the basis of profitability and service level agreements.
- In SNC, a service fill analysis component is now part of the supplier delivery performance rating
- In Forecast and Replenishment (F&R) the forecast ad estimated safety amounts are based upon both the forecast error and the safety stock.
- In F&R periods with expected similar patterns can be combined, and separate service levels can be assigned to each ABC classification.
- In F&R demand influencing factors (DIFs) which are the primary mechanism of forecasting in the module, service level profiles can be setup for the DIFs.
- Safety stock can be set by service level in the product location master.
Explicit Methods
- In Service Parts Planning (SPP), target service levels can be set at the location or product location level. As of 7.0, targets can be set depending upon whether the location is an entry, intermediate parent or child location. - Of the major methods in SCM, this is the closest to meeting actual service level planning, however strangely it is not strongly proposed by SAP, even though the functionality brings them closer to being on par with the traditional service parts planning leaders. Secondly, there is a strong trend in companies to move towards service level planning. SPP is one of the few areas that actually does it in an explicit manner.
