SAP S/4HANA aATP Supply creation-Based Confirmation (SBC) Series Part 1 – Functional Overview

Intro

In this series I would like to give you an overview starting from basic level gradually developing to advanced level about how the previously released Supply creation-Based Confirmation in S/4HANA aATP is built, how it works, how you can setup, and in what use cases this can be put into service. For optimal reading/searching experience I split the series into 4 parts:

This series is based on the SAP S/4HANA 2022 FPS1 release. This is available since February 2023, but I will also point out in the blog the differences between FPS0 and FPS1 as well, in case this would be useful for you.

As mentioned in the S/4HANA aATP 2022 released highlights Blog Post by my fellow colleague Sujeet Acharya Supply creation-Based Confirmation (SBC) is delivered in the 2022 release of S/4HANA On-Premise and Private Cloud as part of advanced Available-to-Promise (aATP). It is not part of the Public Cloud edition, because the underlying functionality requires SAP S/4HANA Manufacturing for planning and scheduling (aka embedded / ePPDS) which is only available in On-Premise and Private Cloud editions.

To use SBC, you need both the aATP and ePP/DS licenses.

Functional overview of SBC

Supply creation-Based Confirmation is the successor for the APO-gATP based Capable-To-Promise (CTP) scenarios. The SBC functionality covers the requirements mainly from Mill and Mining, IM&C, Packaging and Paper industries. High-Tech and various Manufacturing companies can find it useful as well, accordingly the solution is available cross-industry (not industry specific) and there is no business switch/addon required to activate it. It is delivered with the standard S/4HANA solution.

Short version: SBC allows during the ATP check to create supply elements for a multilevel BOM – with scheduling and reserving capacities on the resources – to immediately cover the sales order requirements, in case there is not enough supply available in the system.

Supply demand-based Capability Check (SCC)

To start understanding how SBC works, best is to look at the “Key Concepts in Supply Creation-Based Confirmation”.

 

Key Concepts in Supply Creation-Based Confirmation

With S/4HANA 2022 we introduced a new basic method in aATP, called Supply Demand-Based Capability Check (SCC – left bottom in the picture). This includes:

  1. A chosen availability check type:
    • PAC (Product Availability Check) is the timeseries-based supply demand matching algorithm in S/4HANA
    • PPAC (Production Planning-based Availability Check) is a simple supply demand matching algorithm in PP/DS, a.k.a “net requirements calculation”
    • Sidenote: there is also a third availability check type IBPAC (IBP Response Planning-Based Availability Check) but this cannot be used with Supply Creation, which is why it is not covered by this blog.

  2. Supply creation, to trigger PP/DS for creating supply elements to cover the open demands after a PAC or PPAC:
    • In case of PAC, supply creation is optional
    • In case of PPAC, supply creation is mandatory

Technically, SCC is executed instead of PAC, after Sales PAL and before Capacity PAL. This ensures, that the results of the sales constraints are checked by SCC (PAC or PPAC), and the same way, the results of SCC are checked by Capacity PAL, applying further capacity constraints, like in this example below:

 

SCC with Sales and Capacity PAL

Product Availability Check (PAC) with Supply Creation

PAC is one of the availability check types that can be chosen for SBC. PAC is the timeseries-based supply-demand matching algorithm in S/4 aATP, based on the scope of check (more info here). With supply creation executed after PAC, SAP offers now the added capability to also create supply in PP/DS if PAC cannot confirm the full quantity of the request. The process looks like this:

 

PAC with Supply Creation

ATP executes PAC and determines the missing quantity for the request. This missing quantity is sent to PP/DS for Capacity and Scheduling Simulation. PP/DS creates temporary supply elements (like planned orders and purchase requisitions) to reserve capacities for the full BOM, multilevel. After that when you save the sales order, the temporary elements are converted to real supply elements in PP/DS.

Production Planning-Based Availability Check (PPAC) with Supply Creation

PPAC is the other type of availability check, that can be chosen for SBC. PPAC uses the net requirements calculation algorithm in PP/DS to execute the supply-demand matching and find uncovered demands, after which supply creation will create the missing supply elements to cover the demands immediately. The process is similar to PAC with supply creation:

 

PPAC with Supply Creation

ATP does not execute any availability check, but calls into PP/DS to execute a net requirements calculation and also do the capacity and scheduling simulation for the uncovered demands. Everything else is same as in case of PAC.

Differences between PPAC and PAC with Supply Creation

As customers have to choose between PAC and PPAC, let’s clarify what are the differences between the two, and in which use cases should be used the one or the other. Here is a list of the main functions, where you can already see some differences:

 

Similarities and differences between PAC and PPAC with Supply Creation

Production scenarios

PPAC: Supports both Make-To-Order (MTO) and Make-To-Stock (MTS) scenarios.

PAC: Supports both MTO and MTS, with one restriction: fixed pegging. This means that PAC can still be used for MTS, but in case fixed pegging is required and has to be taken into account during the availability check, PPAC is the better choice. PAC will ignore fixed pegging relationships created in PP/DS and confirm against the timeseries without taking fixed pegging into account.

Supported ATP features

PPAC: Supports both Sales and Capacity Product Allocation features.

PAC: Supports both Sales and Capacity Product Allocation features, as well as Back Order Processing (BOP) with some restrictions: only the Product Availability Check is executed without Supply Creation.

Supported PP/DS features

PPAC: Supports multilevel and finite supply planning, based on time-continuous or bucket-oriented capacities, alternative sources of supply, recreation of supply elements in case of MTO, MRP areas of type storage location, Characteristics-Dependent Planning (CDP) and Block Planning.

Moreover, it also supports redistribution of supply elements and fixed pegging (these are not supported in case of PAC).

PAC: Supports multilevel and finite supply planning, based on time-continuous or bucket-oriented capacities, alternative sources of supply, recreation of supply elements in case of MTO, MRP areas of type storage location, Characteristics-Dependent Planning (CDP) and Block Planning.

Restrictions: PAC at characteristic level is not supported, which limits the usage of CDP.

Which to use when?

If the use case is rather simple or it is more important to update the sales order confirmations on a regular basis with Backorder Processing (BOP), PAC should be chosen.

For all other cases, PPAC offers more functionality on the planning side, supporting fixed pegging, redistribution, characteristics-dependent planning and block planning. PPAC should be used in case characteristics are required to match the stock, and in case fixed pegging is important for MTS to keep the relationships between sales order and planned order.

For simple use cases I suggest using PAC, for more complex ones, where characteristics are involved, PPAC is the right choice.

What’s new in FPS1 compared to FPS0

The initial 2022 FPS0 delivery – released in October 2022 – covers the basic functions for SBC. In the 2022 FPS1 release (released in February 2023) further functions have been added:

  • Support of Characteristics-Dependent Planning (CDP) in PP/DS
  • Support Block Planning in PP/DS

These two functions are really important for most of the use cases in the target industries. SBC brings a lot of value to those industries, where characteristics in the planning are important and is the driving force. To allow these customers’ transition to S/4HANA, we downported these functions to 2022 FPS1, so you do not have to wait until the 2023 FPS0 release (October 2023).

Such a more complex example with characteristics will be discussed in Part 4 of the blog series.

Outro

I hope you enjoyed reading, in the next part of the series I will show you how to setup SBC. Stay tuned and see you next time!

Useful links

If something is not covered in this blog, there is good chance that it is covered by the SBC SAP Help Documentation: link

2 Comments
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Author's profile photo Pravin Mandgaonkar
Pravin Mandgaonkar

Thanks Andras for detailed blog on PAC Vs PPAC!

We are struggling with this topic in ongoing S/4HANA 2022 implementation, where we have use case to consider PPDS fixed pegging between requirement and receipt across material flow(BOM level) during availability check. Our existing APO – GATP feature supports fixed pegging during product avail check but S/4HANA AATP does not as per SAP. If I understand correctly from your blog, PPAC you highlighted here supports fixed pegging during availability check (MTO and MTS) is that correct? If not is there any additional development (in case required) possible to influence the PPAC check to consider fixed pegging?

Appreciate your expert comment!

Regards,

Pravin Mandgaonkar

Pravin

Author's profile photo Andras Kovacs

Andras Kovacs

Blog Post Author

Hi Pravin,

you are correct, I suggest using PPAC in case you need fixed pegging functionality, there is no additional development required for that to work. Details are best to read in the online documentation for fixed pegging.

Regards, András