Managing Closed Loop Forecasting

This document explains the process flow in closed loop forecasting, which is where M3 Business Engine (M3 BE) and M3 Demand Planner (M3 DMP) interact.

M3 DMP is used to perform cyclic forecasting in a collaborative environment. A sales forecast and/or sales budget is created in M3 BE, imported into M3 DMP (where it is further processed), and then exported back to M3 BE.

Outcome

The process results in a daily gross sales forecast that has been consolidated and implemented in the material plan.

The dataset file is updated when data is exported back to M3 BE from M3 DMP. In M3 DMP, the user chooses to export all values or only new and changed data.

If the dataset is transferred to item forecasts in the forecasting (FOR) component group, the forecasting file (MITAFO) is updated. If the dataset is transferred to a master demand schedule (MDS) version, the MITMDS file is updated.

The sales forecast is used to drive the material requirements planning (MRP) or distribution requirements planning (DRP) to create order proposals.

Before you start

Follow These Steps

  1. Enable Closed Loop Forecasting

    In order for the closed loop forecasting to work, there are some conditions that must be met. At least one active dataset must be available and contain specific combinations of transaction types and accumulator fields.

  2. Producing M3 BE Sales Forecast

    Once you have created the datasets and sales budget versions that should be used, you can produce the dataset forecast to be transferred to M3 DMP.

    You generate a sales forecast in 'Sales Forecast. Generate in Dataset' (OSS440). Before the sales forecast is generated, you can display and manually update the sales statistics in 'Sales Stats/Budget. Display' (OSS415). You can also manually update the sales budget in 'Sales Budget. Enter Values' (OSS421).

  3. Import Sales Forecast to M3 DMP

    This activity is run from M3 DMP.

    The forecast administrator logs on to M3 BE from M3 DMP. Then the first step is to select the company from which the data should be imported.

    Using the 'Select' transaction in (OSS401MI) returns the datasets available for the selected company. Selected active datasets with keys, accumulators and sales budget versions are imported to the M3 DMP server and can be split into multiple M3 DMP datasets. A maximum of 30 columns in a dataset file can be imported; that is, six dataset keys and 24 accumulators.

    Example: Input to M3 DMP from M3 BE

    Type Value Description
    Key field UCITNO Item nuM3 BEr
      UCWHLO Warehouse
    Combination of accumulator fields and transaction types UCIVQT,32 The sales history
      UCIVQT,33budget 1 The actual total sales budget
      UCDEMA,34 The logistical demand
      UCIVQT,33budget 2 The actual manual forecast adjustments
  4. Perform Demand Planning

    This activity is run from M3 DMP.

    M3 DMP uses the following information in the dataset:

    • The order entry statistics, which are retrieved from the 'Ordered quantity' (UCORQT) accumulator in combination with transaction type 31 (sales statistics). Using this combination of accumulator field and transaction type is optional.
    • The sales history, which is retrieved from the 'Invoiced quantity' (UCIVQT) accumulator and/or 'Sales amount' (UCSAAM) fields in combination with transaction type 32 (sales statistics). Using this combination of accumulator field(s) and transaction type is optional.
    • The sales budget, which is retrieved from the 'Invoiced quantity' accumulator (UCIVQT), 'Ordered quantity' (UCORQT) and/or 'Sales amount' (UCSAAM) fields in combination with transaction type 33 (sales budget). Using this combination of accumulator field(s) and transaction type is mandatory. One or two sales budget versions can be connected to the dataset. One sales budget will contain the total forecast. If sales forecasting is used, then the other sales budget version will contain the manual adjustments on top of the statistical forecast.If you use accumulator UCSAAM, the budget must be supplemented before it can be transferred to the forecasting (FOR) component group.
    • The logistical demand based on requested delivery date from order entry or sales statistics. The demand is retrieved from the Demand (UCDEMA) accumulator field in combination with transaction type 34. Using this combination of accumulator field and transaction type is optional. However, accumulator UCDEMA is mandatory if you want to use sales forecasting.

    The demand planning in M3 DMP consists of the following steps:

    • Preparing the forecast cycle
    • Performing distributed forecasting
    • Consolidating the demand plan proposal.

    Forecast values are created and manipulated using a collaborative approach with a distributed workflow. This is further described in the documentation for M3 Demand Planner.

    As a result of the collaborative demand planning, a new total is calculated as the sum of the current statistical forecast and the current delta, which contains previous changes to the total. The updated changes to the original total are saved in a sales budget in M3 DMP called Delta.

  5. Export Forecast to M3 BE Dataset

    This activity is run from M3 DMP.

    The result of the demand planning is a gross forecast per period, which is expressed as a new total in M3 DMP. The total is exported to M3 BE to a sales budget version (transaction type 33) and the 'Invoiced quantity' (UCIVQT) and/or 'Sales amount' (UCSAAM) accumulator field(s). If sales forecasting is used, the manual adjustments are exported in a second budget version.

    Export of data to M3 BE is similar to import. (OSS401MI) and transaction 'SndBudgets' updates the dataset file with the data that are exported from M3 DMP.

    Example: Output from M3 DMP to M3 BE

    Type Value Description
    Key field UCITNO Item nuM3 BEr
      UCWHLO Warehouse
    Combination of accumulator fields and transaction types UCIVQT, 32 The sales history
      UCIVQT,33 budget 1 The updated total sales budget.
      UCIVQT,33 budget 2 The updated manual forecast adjustments
  6. Implementing Sales Forecast in Material Planning

    The output from M3 DMP is a gross forecast per period saved in a sales budget version. All budget values in the updated sales budget can be activated in forecasts per item in the forecasting (FOR) component group or the master demand schedule (MDS). You do this in 'Manual Forecast. Update from Sales Budget' (FCS425).

    The forecast is broken down to the daily level when implementing it in the material plan. The forecast and/or MDS version is updated with the sales budget values. In order for this to work, the dataset must include item number, forecast family or planning entity as a key, otherwise you will need to first use a distribution template. The same applies to warehouse. In 'Manual Forecast. Update fr Sales Budget' (FCS425), you must specify the warehouse if you have not used warehouse or planning entity as key fields in the dataset.

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