Managing Territorial Roll-up

The territorial roll-up functionality is directed to businesses where you cannot trust your distribution order demand in the item statistics. This is mainly a problem in industries where you frequently check available quantities in other warehouses or purchase the item. You can set up the items as purchased in most of the warehouses, and you can use the supply model, alternate sourcing, or the advanced sourcing rules to check the availability. You can also set up the items as distributed according to source. However, due to the availability constraints, you may still decide to source from other warehouses. It means that the distribution orders can point anywhere and may not reflect your intended sourcing strategy.

There are two types of roll-up:

The territorial roll-up, that rolls up quantities or number of requests from non-stocked warehouses to the next-stocked level, either according to the 'Co-planning group' settings, or for a distributed item, according to the supplying warehouse.
The dependent roll-up, that rolls up quantities or number of requests from stocked warehouses to the next level, only for distributed items, according to the supplying warehouse in 'Item. Connect Warehouse' (MMS002).

Limitations

The roll-up quantity is used instead of distribution order demand, if the item is a part of the territorial roll-up in 'Item. Open' (MMS001) and the 'Demand type' 10 is specified on the forecast method.

These are exceptions to the described rule:

The forecast consumption works as before, that is, considering the distribution transactions.
Safety stock method 5 does not consider the territorial roll-up quantity, since the number of issues is also included in the calculation.

Any automatic update of the 'Inventory planned' parameter is performed only for the current period. It means that there are no updates for the future or for the past transactions.

About the solution

The territorial roll-up functionality applies when the supplying warehouse can vary depending on which warehouse has any stock. As specified in (MMS002), or the predefined setup in the 'Co-planning groups', the roll-up demand is determined by the supplying warehouse. The users can roll up demand to a single warehouse, regardless of how the demand is supplied. The distributed quantity in the MITSTA table currently reflects the actual distribution instead of the planned distribution.

The 'Inventory planned' parameter indicates whether the item warehouse record is considered stocked or non-stocked.

In the territorial roll-up, users can set up the parameter manually or automatically. The effect of using this parameter is that when an item is considered as non-stocked, it excludes the 'Safety stock', 'Forecast', 'Reorder point', and 'EOQ' from consideration during the MRP or ROP planning method run.

Supported territorial roll-up scenarios

The roll-up is always performed up to the next stocked level or to the top 'Co-planning group'.

In this example all warehouses except the top warehouse are non-stocked, that is, the number of calls and sold quantity should roll-up all the way.
In the next example, two warehouses are stocked, that is, the number of calls and sold quantity should roll up one level to the middle warehouse, but simultaneously, the top-level warehouse should still get a rolled-up quantity or calls from the rightmost warehouse.
In this example one warehouse on each level is stocked and therefore should not be a part of the roll-up.

Supported dependent roll-up scenarios

The roll-up is always performed according to supplying warehouse setting in (MMS002). Dependent roll-up is only applicable for the distributed items.

In this example, only the item in the top-level warehouse is considered stocked, while all the other warehouses are considered non-stocked. Therefore, the number of calls and sold quantities are added from the non-stocked warehouse to the top-level warehouse.
In the next example two warehouses are stocked, that is, the number of calls and sold quantity should roll-up one level to the middle warehouse but since the warehouse at level 2 is stocked and supplied from the top warehouse some dependent quantity or calls are rolled up.
In this example one warehouse on each level is stocked, but since the warehouses to the left are stocked and supplied through (MMS002), some dependent roll-up quantity or calls are introduced.
In this example one warehouse on each level is stocked, but since the middle warehouses are not stocked a mixture of dependent and non-dependent roll-up is saved.
In this example the left warehouse is stocked and directly supplied from the top warehouse, that is, not according to the 'Co-planning group' setup. Therefore, that warehouse rolls up some dependent quantity or calls directly to the top level.

Define Territorial Roll-up setting

On (MMS001/G), the 'Incl in rollup' setting decides if the item should be a part of the territorial roll-up or not.

On (MMS002/E), the 'Inventory plnd' setting decides if an item should be planned as stocked or not-stocked. If the item is planned as not-stocked, these may happen in the system:

Any safety stock is disregarded, that is, considered as 0.
Any reorder point is disregarded, that is, considered as 0.
Forecasts are disregarded, that is, considered as 0.
Economic Order Quantity (EOQ) is disregarded. Instead, lot sizing is based on the minimum order quantity and order multiples.
Any existing stock is considered as surplus stock.

Note: The safety stock, reorder points, and forecasts can still be calculated in, for example, 'Safety Stock/Reorder Point. Calculate' (MMS615), but they are not used. This is because the figures should be ready if the item suddenly is planned as stocked.

The 'Inventory planned' parameter can be automatically calculated in the territorial roll-up functionality or set manually. It can have four values:

_ - Not used, and therefore, no roll-up is performed.
10 - Item is planned as not-stocked.
20 - Item is qualified according to the 'Add to stock' rules in 'Settings – Inventory Planning' (RPS810), but is waiting for the aging days to pass. When the aging time has passed, a new check is made against the 'Add to stock' rules. If the item is still qualified, it gets status 30, if not, it goes back to status 10.
30 - Item is planned as stocked.

When you set up the item warehouse status to 50, the 'Inventory planned' parameter is always set to 10, that is, not-stocked.

You cannot manually set the 'Inventory planned' parameter to 20. If you try, the system automatically changes it to 10.

When the 'Inventory planned' parameter is automatically changed, that is, from 10 to 30, the opposite, all rolled-up periods for the item are rolled-up again. This ensures that the total quantity at the higher level remains accurate.

On (MMS002/H), 'Surpl stock tp' is a new parameter that defines the type of surplus stock that exists. This parameter is set automatically when 'Inventory planned'=10 or 20 and there is an available quantity.

Available quantity = stock + on order - reserved in (MMS002).

This parameter can have three values:

_ - No surplus.
10 - Temporary stock, that is, the item and the on hand balance are planned as not-stocked ('Inventory planned'=10 or 20).
20 - Exhaust, that is, the item is planned as not-stocked ('Inventory planned'=10 or 20) and there is an available quantity. This situation occurs when the status on the item is changed to 50, or if a scheduled receipt is added to the material plan.

The idea is that Surplus type 10 takes priority for disposal of surplus type 20, as items with surplus type 20 are likely planned as stocked before being reclassified as non-stocked.

The 'Co-Planning group. Open' (MWS008) or 'Co-Planning Group Details. Open' (MWS009) have these co-planning types:

1=Planning (Work center) used in the inventory leveling and in the surplus return.
2=Statistical group used in the territorial roll-up.

To make the territorial roll-up functionality work correctly, it is important that the low-level codes are calculated. You can do it with function key F14 in (MWS008). The low-level codes control in which order the roll-up should be performed.

To avoid rolling up, according to co-planning groups, you can add all your warehouses into one co-planning group. This results in a roll-up of your distributed items according to the supplying warehouse in (MMS002), that is, according to the distribution low-level codes only.

Ensure that your 'Co-planning group' setting follows your item warehouse settings. For example, rolling up from warehouse 001 to 002 and simultaneously having an item in warehouse 002, which is usually supplied by 001, can disrupt your figures.

In 'Settings - Inventory Planning' (RPS810/B), you can define the 'Add to stock' and 'Remove from stock' rules. On the B panel, you can select different objects from MITMAS and MITBAL to specify which rules to apply.

This is a program that you set up with the ordinary logic in 'Available Object Ctrl Parameters. Open' (CMS016) or 'Generic Object Control Table. Open' (CMS017).

You can select three objects and ten priorities.

You can set up your limits, when an item should be added or removed from the stock on the E panel, that is, automatically update the 'Inventory planned' parameter.

The logic is based on the cost for the item, which means that, if the cost is less or equal to the defined value, the rule on the left hand is used. If the cost is greater than the defined value, the rule on the right hand is used.

For the 'Add to stock' rule, if the number of requests in MITSTA, during the specified number of periods is greater or equal to the specified number of requests, the item is qualified according to the 'Add to stock' rule.

For the 'Remove from stock' rule, if the number of requests in MITSTA, during the specified number of periods is less than the specified number of requests, the item is qualified according to the 'Remove from stock' rule.

'Territorial Rollup. Open' (RPS920/E) starts the territorial roll-up logic.

The 'Upd Inv Planned' parameter controls whether the 'Inventory planned' value in MMS002 is automatically updated. In this case, you can perform a roll-up without changing the 'Inventory planned' parameter.

The 'Regenerate' parameter deletes and recreates all existing roll-up data for all periods, according to the item selection. Use this function only when roll-up figures are incorrect or when initiating the territorial roll-up process.

Note: You should not submit several (RPS920) runs in parallel, as this can cause erroneous roll-up figures.