Supply Model

Using supply models - outline

A supply model is a set of rules for automatically identifying and proposing alternative ways to supply a specific demand from an internal or external customer. The model consists of lines, each line representing a priority level and containing up to three company-defined criteria that in combination with the item quantity trigger the automatic selection of a specific internal or external supplier. M3 Business Engine checks for stock based on the supply model lines, one by one, in the prioritized order. The search ends when the criteria for a specific line result in a matching internal warehouse or supplier.

You can use supply models in these cases:

• For customer orders (COs), when selling items to an internal or external customer
• For work orders (WOs), for example, when selling using a work order to get materials urgently for machine service.

A company can have many supply models to cover all cases depending on the order type or just one supply model. Using several supply models can reduce the complexity of setting up one overall supply model. The company might also want to use a specific supply model for simulations in 'Supply Model. Simulate' (OIS340) or for test purposes.

Example

Suppose that you want M3 Business Engine to check for a warehouse or supplier with the requested item quantity in this order:

1. Check whether the current warehouse has the item in stock in sufficient quantity.

2. Check a warehouse nearby for the item quantity.

3. Check the warehouse functioning as distribution center supplying other warehouses.

4. Check availability at a specific manufacturing unit.

5. Check for an item that could replace the item requested.

6. Check whether the company could purchase the item quantity the regular way within the requested time.

7. If none of the previous steps result in a match, create a rush order for a rush delivery.

In our example, each one of these steps represents a line in a supply model.

Separate procedures depending on type of order

There are two procedures for using supply models:

• As part of the sourcing of each individual order line during order entry (for COs only)
• In a separate program after you have entered the entire order (for COs and WOs).

In the first procedure, M3 Business Engine proposes a supply model that will be used for the CO, but you can also specify the supply model manually. The supply model to use for all order lines is stated in the order header. As part of the CO line entry, M3 Business Engine will display 'Supply Alternative Management. Open' (CTS100), enabling you to review and, if necessary, change the sourcing for that individual line. In the other procedure, M3 Business Engine proposes a supply model and its consequences in 'Supply Model Availability. Display' (CTS200) after the CO is created. The company can combine these alternative procedures and choose one or the other, depending on the order type.

Since the supply-model-based sourcing for WOs is always done in (CTS200) after the order is created, the order type determines which supply model to use. The supply model itself is not stored in the WO header. In (CTS200), you can review the entire order before manually checking availability and sourcing. This order overview is particularly useful when you need to create rush orders, see the Rush Orders and Supply Models section below. (CTS200) offers many function keys and related options to help you source the demand in an optimal way.

Company policy determines whether the user entering the order also does the final availability check and determines sourcing or whether another department does the sourcing in (CTS200).

Automatic proposal of supply model

M3 Business Engine can be set up to select a matching supply model automatically in one of the following two ways, as described in detail in the Setup for Supply Models section:

• The company defines for each order type where to retrieve and propose a supply model, such as from the customer address.
• The company defines combinations of criteria such as specific postal codes and customer numbers in 'Supply Model Selection Table. Open' (CTS030) based on which M3 Business Engine selects a supply model dynamically.

Setup for supply models

Set up your supply models as described in these steps.

Analyze

1. Define and prioritize the types of values to use as search criteria when M3 Business Engine searches for a matching supplier for a specific order line.

   For example, you might want a combination of the customer's postal code and the item group to result in the selection of an alternative warehouse in a region nearby and in the routing of items belonging to a certain item group to another warehouse. The latter can be useful if these items are only stored centrally or are always purchased.

2. Identify the specific values - the exact customer numbers, postal codes, item groups, and so on for M3 Business Engine to check for in order of priority.

3. Decide whether to retrieve the supply model from a fixed source, such as from the customer address, or whether to use a combination of dynamic selection criteria together to trigger the selection of a specific supply model.

Create supply models

1. Create supply models, starting with the header and its basic data in 'Supply Model. Open' (MMS056), panels B and E.

2. In 'Generic Object Control Table. Open' (CMS017/E), which is then automatically displayed, specify the type of values or control objects that will be available to use as search criteria in the final supply model.

   For a list of available control objects, see below. You can define up to ten combinations of up to three control objects each. The sequence number you assign each combination represents the order of priority for that specific combination. Each combination will represent a line in the final supply model. M3 Business Engine will search for warehouses or suppliers in the order indicated by the sequence number until it finds a match.

   Note: Give the most detailed combinations a higher priority (that is, a lower sequence number) and assign the more general ones a lower priority (a higher sequence number). For example, a combination of customer (OKCUNO) and postal code (OKPONO) should have a higher priority than a line with just country (OKCSCD) as control object. Since it is time consuming to change the priority of a given combination of control objects afterwards, leave gaps in the sequence numbers so that you can add priorities in arrears without having to change the existing ones. You can start by defining control objects on the third line and assigning to it sequence number 3, and then adding the next priority on the fifth line with sequence number 5.

Create supply model lines

1. Create the supply model lines in 'Supply Model. Open Lines' (MMS059/B).

   Each line in the supply model defines where to order a certain item quantity from, depending on factors such as how the item is usually acquired (the supply source). If the supply model line states that the item is a purchased one, M3 Business Engine will create a purchase order based on a specific PO type, for example, one reserved for rush orders. The supply model line can also define a replacement item.

2. To define a line, press Enter in (MMS059/B) to display the available priorities to work with next to the 'Priority' field.

   Each priority corresponds to a combination of control objects in (CMS017/E). For each priority, different fields are open, depending on the control objects selected. For example, the control object for item group (MMITGR) in line 4 in (CMS017) results to a field for entering a specific item group as selection criterion with priority 4 in (MMS059/B).

3. Select a priority and specify a numeric ID for the supply model line representing a sourcing alternative, then click Create.

   Note: Make sure to specify a sourcing alternative ID in (MMS059/B) that corresponds to the order you want M3 Business Engine to follow when searching for a sourcing alternative, since the priorities are always checked by this numeric ID. That is, the priorities for sourcing alternative ID 01 will be checked before the priorities for alternative ID 02.

4. On the E panel, define how to proceed with this combination of values.

   For a description of the available fields, see Define Supply Model. Note that the option to have a CO line automatically created based on a supply model - activated by selecting the 'Auto option' check box in 'Supply Model. Open Lines' (MMS059/E) does not apply for orders that are sourced manually in 'Supply Model Availability. Display' (CTS200).

Define dynamic selection of supply models

1. Start 'Available Object Ctrl Parameters. Open' (CMS016/B) and select 'Supply Model Selection' (program CTS030) to display 'Generic Object Control Table. Open' (CMS017/B).

2. Select Create. On the E panel, specify the type of order for which the subsequent settings will apply: COs (order category 311) or WOs (order category 611).

3. Specify the control objects per priority. Press Enter.

   Note: The control objects available as dynamic selection criteria differ from the ones available for the supply model lines.

   The 'Supply Model Selection Table. Open' (CTS030/B) for the selected order category is displayed. As with the supply model lines in (MMS059/B), the digits next to the 'Priority' field indicate which priority levels contain control objects in (CMS017). Each control object selected there corresponds to a separate field in (CTS030).

4. On (CTS030/B), specify the required values, then click Create. On the E panel, select the supply model to use for this combination of values. Click Next to return to the B panel and continue with the remaining priorities in the same way.

   As with the supply model lines in 'Supply Model. Open Lines' (MMS059/B), the digits next to the 'Priority' field indicate which priority levels contain control objects in (CMS017). Each control object selected there corresponds to a separate field in (CTS030).

Activate supply model logic for COs

1. Start 'CO Type. Update Field Selection' (OIS014/E) and make the following selections for each applicable CO type:

   • To activate the use of supply models for individual CO lines during order entry, select to display the 'Supply model' field.
   • To use (CTS200) to perform sourcing after entry of the entire order, select the 'Validate CTP' check box next to the 'Supply model' field. This will block the entry of a supply model in the CO header and no sourcing can be performed during order entry. The CO will also be tagged for a later alternate sourcing check.
     Note: If you clear this check box, (CTS100) will be used to carry out the sourcing per order line as part of the order entry and based on the supply model entered in the CO header.

2. Select where to retrieve the supply model to be proposed by default based on this CO type:

   Value	Description
   [Field left blank]	No supply model is proposed.
   *CUS	A supply model is retrieved from the customer in 'Customer. Open' (CRS610/G) or, for division-specific customers, from (MFS610/F).
   *SYS	M3 Business Engine searches for a supply model in the following tables in this order: 1) customer address; 2) customer; 3) order type.
   *ADR	A supply model is retrieved from the customer address in (OIS002/E).
   *SEL	M3 Business Engine selects a matching supply model based on the selection table in 'Supply Model Selection Table. Open' (CTS030).
   [Company-selected supply model]	M3 Business Engine proposes the supply model you manually enter in this field in (OIS014/E).

   Note: If the company selects to source order lines in (CTS200), you can cancel the standard availability-to-promise (ATP) check during order entry. Do this by clearing the 'Availability check' field for this CO type on 'CO Type. Open' (OIS010/H).

Activate Supply Model Logic for WOs

1. Start 'Work Order Type. Open' (MOS120/G) and select where to retrieve the supply model from by default for WOs based on this WO type:

   Value	Description
   [Field left blank]	Supply model functionality is not enabled.
   [Company-selected supply model]	M3 Business Engine proposes the supply model you manually enter here.
   *CUS	A supply model is retrieved from the customer in 'Customer. Open' (CRS610/G) or, for division-specific customers, from (MFS610/F).
   *SYS	M3 Business Engine searches for a supply model in the following tables in this order: 1) customer address; 2) customer; 3) order type.
   *ADR	A supply model is retrieved from the customer address in (OIS002/E).
   *SEL	M3 Business Engine selects a matching supply model based on the selection table in 'Supply Model Selection Table. Open' (CTS030).

   M3 Business Engine searches for the customer by first checking the combination of item and serial number in 'Equipment. Open' (MMS240/G), then based on the order reference on the work order.

Update tables with supply models

Depending on your selections in the previous step, update the applicable customers and customer addresses with a supply model.

Rush orders and supply models

Sourcing is a critical step for rush orders, which are purchase orders (POs) that must be fulfilled urgently with less than normal lead time. For example, due to a machine breakdown spare parts might be needed immediately or items are needed urgently for servicing a machine and none of the division's internal warehouses have these spare parts in stock. In the former case, a rush order is based on a CO for the customer, in the latter a WO. Typically, rush orders are only used if other sourcing alternatives have failed. When you create a rush order, make sure that the selected supplier can deliver promptly and that the company is willing to pay the extra costs of such a speedy delivery.

When a demand for an item occurs, M3 Business Engine automatically checks the on-hand balance of the company's internal warehouses based on a supply model. If no stock is available, a rush order is initiated to get prompt delivery from the supplier. Usually, you place such rush orders at the warehouse that functions as the distribution center and from which items are distributed to the selling warehouse.

A rush order in M3 Business Engine is a PO based on a purchase order type with the '375 Rush order' check box selected in 'PO Type. Open' (PPS095/H). The supply lead time for rush orders is automatically set to one day plus transportation time, which means that a delivery can be made the following day from the supplier. Any transportation lead time will be added to the lead time for this one-day supply.

For the availability check, proposed sourcing and automatic generation of a PO (rush order or not), M3 Business Engine uses the supply model selected for the CO or WO during order entry, as described above. You perform the sourcing itself in 'Supply Model Availability. Display' (CTS200), as described below.

Working with supply sourcing in (CTS200)

When you create a CO based on a CO type with the 'Validate CTP' check box selected in (OIS014/E) or a WO based on a WO type with a supply model selected in (MOS120/G), the order is automatically assigned a 'flag' (VCTP = 1). This flag enables you to filter the orders in 'Work Order. Open' (MOS100) and 'Customer Order. Open Toolbox' (OIS300) to source.

By selecting a related option in 'Customer Order. Open' (OIS100), (MOS100) and (OIS300), you can directly access (CTS200). There, the B panel displays all non-supplied order lines per order. This includes all order lines whose order quantity is not allocated, not pre-allocated and not order-initiated (and therefore lacks an order reference number).

Order line display in (CTS200)

There are several views available in (CTS200/B) that enable you to review the order lines from various perspectives:

The available-to-promise (ATP) value displayed excludes the supplied order quantity, thus differing from the ATP calculation for order lines sourced in (CTS100).

In the list view with order lines, the first two columns provide you with demand information:

• In the first column, an asterisk (*) indicates that the alternate supplier has an error message or warning message.
• In the second column, an 'A' indicates that aliases exist, 'CR' that the item is conditionally replaced, and 'R' that the item has been replaced by another item.

The last columns in the list view provide you with supply information instead, displaying the alternate supplier proposed by the supply model and the related data.

Panel header and its filters in (CTS200)

The panel header in (CTS200/B) displays order information from the WO header or the CO header such as facility, order type used, order number, customer, and the supply model proposed. For WOs, the start date and the finish date are displayed. For COs, these dates are the same and refer to the requested delivery date in the CO header.

You can filter information in these ways:

• Filter order lines by acquisition code. For example, to display only order lines with a proposed alternative - that is, a sourcing alternative (a supplier, a distribution alternative or a manufacturing alternative with a matching item quantity) corresponding to a supply model line in (MMS059/B). For purchase, select acquisition code 2-'Purchase'. Any other alternatives for the filtered order lines are still in view to enable you to change sourcing, if needed.
• Filter order lines by 'Auto option' to display sourcing alternatives with a proposed quantity and for which the supply model line proposed has the 'Auto option' check box selected in (MMS059/F). This helps you decide whether to regard such sourcing alternatives as always valid, thus reducing the need to review them.
• Use the 'Shortage only' field to display order lines with or without stock alternatives. This can be useful if you prefer to work with manual allocations or pre-allocations before deciding how to source the remaining quantities.
• Select the 'Collapse' check box to display only alternate suppliers with a proposed quantity, making the order lines easier to overview. You can also expand or collapse the view manually, line by line, by using related options 17='Expand' and 18='Collapse'.
• Use the 'Delayed days' field to display the biggest gap between a requested date and a proposed confirmed date, expressed in calendar days. This function gives an indication of the extent to which you must reschedule the order, based on the assumption that everything will be delivered on time according to your sourcing.

Manual changes possible in (CTS200)

The main purpose of using 'Supply Model Availability. Display' (CTS200) is to make and execute decisions manually. Once you have decided how to process an order line, you have a large number of function keys and related options available for the sourcing. In the panel header, you can change the supply model with an immediate recalculation of the availability. For example, you might want to use a specific supply model for surrounding warehouses and another to expand the search for a matching warehouse that is more distantly located. In the list view with order lines, you can manually change the quantity for an order line to check the consequences of these changes. For example, you might want to reconsider the effects of using one or several specific sourcing alternatives. M3 Business Engine immediately updates the view to reflect the results of these changes when you press Enter.

Function keys and their use in (CTS200)

These function keys are available:

Related options and their use in (CTS200)

Some functions performed by the previously listed function keys are also available as related options at order line level.

Limitations and recommendations

In the regular, automated sourcing per CO line, the sourcing is done in (CTS100) before the CO line is actually created. As a result, the CO line can be split according to the setup of the supply model used. M3 Business Engine automatically adjusts the CO line to any subsequent changes, for example, new CO lines are created if you change a warehouse. However, when you use 'Supply Model Availability. Display' (CTS200), the CO lines or WO lines have already been created. This results in these limitations:

• You execute all decisions manually in (CTS200).
• You cannot change the warehouse on the order line. For example, if the CO line has warehouse 100 but the alternate supplier according to the supply model indicates that the item be purchased to warehouse 200 (with direct delivery to the customer without involving warehouse 100), this alternative is listed as invalid in (CTS200) and the quantity cannot be changed.
• There is no automatic support for partial deliveries, that is, when there is a split between different ATP dates. You must validate all changes manually to check any proposed split dates and to reschedule the CO or WO manually to match the dates; there will still only be one CO or WO line placed at one specific date in (CTS200).
• When a supply model causes a replacement of the item, the new item is displayed in (CTS200) but the quantity cannot be changed. That is because the old item is still in the order line. You must change the item manually in (OIS101) or 'Customer Order. Change Lines' (OIS260).

These are additional tips to remember:

• If you change the sourcing for an order line in (CTS200), this affects the ATP for the following order lines with the same item. Thus, we recommend that you process order lines from the top down and create the supply orders accordingly to prevent a misleading ATP.
• M3 Business Engine only takes into consideration settings for backorders and partial deliveries for the alternate suppliers involved when you finally execute your changes, not when you change values manually in the (CTS200) views.
• M3 Business Engine does not automatically reschedule a supply chain generated through (CTS200) if you afterwards reschedule, for example, the purchase order. If you reschedule the top level of the supply chain - that is, the CO or the WO - the supply chain generated through (CTS200) is also rescheduled.

Entry of additional order information

Function key F18='Additional info' opens 'Additional Order Information' (ATS200), where you can add your own comments on a specific order using one or more information groups. When you create or select a line in (ATS200), 'Attribute Value. Connect To' (ATS101) is automatically displayed for you to specify or view the information. Although parts of the functionality for attribute models have been reused to create this program, it has no connection to the regular functionality for managing attributes. Thus, no item number is displayed in (ATS101) and the order category indicated is a composite of the letter C, standing for 'CTP', followed by the first and last digit of the order category. 'C31', for example, represents 'CTP' and order category '311' (CO). Consequently, if you use order category as an object in 'Attribute Matrix. Open' (ATS020) and in 'Attribute Matrix. Enter Default Values' (ATS030), specify the order category using the very same syntax.

• Attribute IDs are created.
• Default values and allowed values are defined (although no check whether the values added are valid will be made).
• An attribute model with lines is created.
• Information groups are defined in 'Information Group. Open' (ATS060). An information group functions solely as an ID that contains an attribute model. This attribute model is used in (ATS200) for information purposes only.
• Default information groups are defined per order type (311 = CO; 251 = PO, and 601 = WO); and partner (a customer, a supplier, or a facility) in 'Default Info Group. Open' (ATS061) and linked to an information group. There, you can also select the 'Include order-initiated' check box to include order-initiated orders as part of the automatic generation of information groups. Then, orders at a lower level will generate its own information group. Since there is no inheritance logic for the information group attributes, attribute values on top level will not be inherited to lower levels. If you do not select this check box, M3 Business Engine uses the information group on the top level for the entire supply chain.

The last prerequisite eliminates the need to manually connect an information group to the order. M3 Business Engine will then link the information group automatically to the order and initialize the attributes with their respective default values according to the attribute settings. If a default information group exists in (ATS061), it will be connected to the order in these situations:

• The WO proposal or PO proposal is released.
• A CO, WO or PO is created.
• A CO or PO is copied.

Control objects for supply models

The control objects available depend on whether they are used for supply model lines in (MMS059) or are used in (CTS030) as combinations of dynamic search criteria to which to connect specific supply models. In the former case, the field group containing the control objects is CRSPM in 'Field Group. Display Permitted Fields' (CRS109). In the latter, the field group is CRSPS ('Supply model selection').

These control objects are available in the CRSPS field group 'Supply model selection':

Selection table for automatic proposal of supply model through (CTS030)

Since the previous solution for using supply models for COs has been reused to include WOs, these control objects have been partially re-interpreted to match WO terminology.

WO control objects for supply model lines