Category Archives: GATP

GATP Product Availability Check

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Product Availability Check Description

The book Supply Chain Management with SAP APO has a very good description of the product availability check, which goes on to describe how pegging connects order objects at different levels. This is an explanation which is often left out of most evaluations of pegging. Here is the quote:

The most obvious method of ATP is the product check, where the requirements are balanced with the receipts. This calculation is performed using time buckets of one day in the ATP time series live cache where all orders of a location product are stored with their quantities and their order category. These time series are displayed with the transaction category. These time series are displayed with the transaction /SAPAPO/AC05, whereas transaction /SAPAPO/AC03 already applies the scope of check (described in the following paragraphs) and filters the customized categories.


Product Postponement in SCM

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What Is It?

The concept of product posponement is a poweful one in terms of providing companies with the maximum flexibility to service customer needs at the lowest cost. Broadly stated, product postponement is the deferment of actions that make restrict a product’s market, until a demand had been communicated through the supply chain for that specific item. One of the masters of product postponement is Dell Computer, which for most of its existance primarily used a build to stock system to stay flexible and better manage its inventory. Dell challengedthe conventional wisdom at the time that consumers absolutely had to be able to get their computer that day. Now Dell’s postponement strategy is copied by most the vendors that allow for the configuration of computers over the web. Bnet has a several good articles on postponement. The quote below is from one of them.

Postponement allows a company to be flexible in developing different versions of the product as needed, to meet changing customer needs, and to differentiate a product or to modify a demand function. For example, Benetton’s innovative postponement strategy allows product customization to be economically maximized. In the clothing industry, traditionally the yarn is first dyed and then knitted into garments, which is a lengthy process; Benetton first knits garments using bleached yarn and postpones dyeing until a latter step of production.17 Before postponement was used, there were always too many garments in colors customers did not want, whereas colors in demand were always sold out. The new strategy allows Benetton to be extremely responsive to rapid changes in customer demand for different colors in clothing. It also permits higher customer service levels. Benetton’s market-oriented supply chain management is illustrated through the ability to adapt internal processes to create superior customer value based on information about customer demand generated at the store level. – http://findarticles.com/p/articles/mi_qa3705/is_200001/ai_n8889247/pg_3/?tag=content;col1

Here are some areas witn in SAP SCM where postponement is expressed:

PPDS

Build to order – schedules production in response to an actual order. Orders can come from CRM, SD or from GATP – becomes Capable to Promise when GATP is connected to PPDS.

http://www.scmfocus.com/sapplanning/2008/01/05/ctp-capable-to-promise/

EWM Valued Added Services

Value added services, which include things like light assembly, allow companies to keep products in a less configured state, closer to the final demand — and to configure the final item from subcomponents, and to even perform packaging in the warehouse. The results in less inventory needing to be maintained for a given demand, and for less obsolete inventory to be build up.

SNC

Although not explicitly stated as posponement, SNC can allow suppliers to pospone the shipment of material — and therefore the manufacture of material, until it is actually required by their customers. This is enabled through supplier collaboration in SNC by the simple fact that SNC allows he supplier to know their customer’s inventory levels.

Greatest Industry Opportunity for Postponement

This is extremely obvious. The industry taking the least advantage of product posponement is the automotive industry. The very fact that the automotive industry in the US spent so much time, effort and resources attempting to move towards JIT inventory management, without once addressing the easiest area of automotive inventory to address; the inventory sitting on lots due to a lack of postponement, demonstrates how completely restricted the thinking is in this industry. As with computers when Dell changed the industry, the concept again is that the consumer must be able to drive away in a car that day, is a false paradigm. A future car company — someone young and flexible like Tesla in California, will develop the build to order car company. This company will have a few test models at a small retail outlet to test drive, but will carry no inventory at the dealer. This car company will have a much lower inventory cost structure than the rest of the industry which follows an antiquated distribution model and will be able to adust production flexibly to meed demand. Of course first off, this company must stay away from creating an aniquated dealer network in the first place. Dealers are a powerful lobby and have made it illegal to buy a new car from anyone but a dealer. In California they attempted to pass legislation making it illegal for anyone but a dealer to work on a car.

For more on how dealers hold back the automotive industry see this post.

http://www.scmfocus.com/servicepartsplanning/2009/05/19/automotive-dealers-mostly-useles/


Subcontracting in SNP and GATP vs. Amazon.com

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How it Works in SCM

Ordinarily we keep our discussions centered on SAP SCM. However, in this post we thought it would be interesting to compare SAP’s approach to getting data from subcontractors to what is the most successful company we know of in managing subcontractors and in performing supply demand matching. This company is Amazon.com.

SAP SCM and Subcontracting

In SAP, subcontractor agreements are brought into SCM through either the CIF and SAP ERP or through SAP SNC, where they are put to use in both SNP – which allocates batched requirements to them, and GATP – which allocates real time requirements to them. This is explained in greater detail in this post.

http://www.scmfocus.com/sapplanning/2008/09/16/subcontracting-in-scm-and-snc/

We thought it would be interesting to compare how Amazon.com does it because we have recently been considering how Amazon.com can serve as a model for other companies that would like to be in the business of matching supply and demand for other companies that do not have the IT expertise, but are good at fulfillment operations. We went to Amazon’s website to see how they accept on hand balances. They seem to provide three ways to add balances. These include:

  1. Use the Add a Product feature on Seller Central to create one product at a time
  2. Use the Seller Desktop, which is a free, easy-to-use desktop application that can be used to manage and upload inventory one product at a time or in bulk.
  3. Use inventory files to create multiple products simultaneously

The first method is for low volume sellers and is not all that interesting to us. However, the second and third method seem to be good for large sellers. Here is the actual URL where you can download the software.

http://webstore.amazon.com/WebStore-Knowledge Center/productinventorymanagementsellerdesktop.htm

As for the file setup, this URL shows the different ways they can accept flat files.

http://simply-amazon.com/content/DecidingHowTo_Integrate.htm

There is nothing new here, XML, Excel and so on.

Conclusion

The main point here is that Amazon shows that integrating subcontractor inventory on hand balances should not be all that difficult. Flat files or XML, or the Seller Desktop can be used to bring in on hand from large and small sellers alike.


Availability Checking vs. GATP

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GATP Value Add

One questions which arises is how GATP is better than normal availaility checking in SAP ERP. In order to help understand the difference this list below has been compiled.

  • GATP offers many more alternatives than does SAP ERP with regards to availability checking
  • GATP offers much more subtitution capability than SAP ERP availability checking. This means that customers have a higher likelyhood of being satisfied with product, for a lower investment in inventory and productive capacity.
  • GATP offers better performance than availability checking in SAP EPR as it uses the liveCache memory system.
  • Different levels of hierarchy can be checked. SAP ERP availability checking offers top level product checking, but GATP – if Multi-Level ATP is selected offers the ability to check availability at the component level.
  • GATP offers the ability to perform a global multi location check. (alternative location and product)

There are other differences, but this is a good starting point to determine if a GATP project is a strong opportunity at your company. If the list above is all highly desired, then the next step is to check on the likelihood of getting funding for a GATP project.

Availability Checking

Availability checking is performed in SAP SD and is different from GATP in several important ways:

  • Availability checking provides a more simple response to a request than GATP.
  • GATP looks out across many different plant to attempt to fulfill a demand.

GATP is covered in detail in this post.

http://www.scmfocus.com/sapplanning/2008/01/05/gatp/

Outside of GATP, availability checking also occurs in EWM.

Availability Checking Synopsis

  • Plant level
  • Storage location level
    • Checking rule (Contains several checking rules. The combination of checking group and checking rule determines the scope of the availability check for each business operations.)

  • Checking group
  • Scope of check

Scope of Check

  • Stocks (Safety stock, stock in transfer, Blocked stock, Restricted use stock, Subcontracted stock, Inspection stock)
  • Receipts or issue elements (POs, PRs, Dependent requirements, Reservations, Sales orders, Delivery notes, Shipping notifications, Dependent reservations, Call requirements, Production orders, Planned orders)