11g Release 5 (11.1.5)
Part Number E20386-05
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Oracle® Fusion
Applications Order Orchestration Implementation Guide 11g Release 5 (11.1.5) Part Number E20386-05 |
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This chapter contains the following:
ATP Rules, Allocation Rules, and Sourcing Rules: How They Work Together
Manage Planning Allocation Rules
You create available-to-promise (ATP) rules and allocation rules to define how the items on fulfillment lines are promised by the order promising engine. ATP rules and allocation rules enable you to govern the behavior of the order promising engine. You can configure different types of rules and assign them in various ways to items and organizations to enable you to get different behavior for different items. You create sourcing rules, and assign the sourcing rules to assignment sets, to define your supply sources and supply chains used when order promising conducts a supply chain availability search.
Oracle Fusion Global Order Promising provides an order promising engine with flexible promising process logic that you can direct per your business requirements though your definition of ATP rules. For example, constrained and high value items can be promised using supply chain availability search, while low value items can be promised by assuming infinite supply. The following are key points regarding ATP rules:
ATP rules define order promising behavior by enabling you to specify:
The promising mode to be used by the order promising engine to determine how supply availability is considered
The supply and demand source types to be considered during promising
The usage of advanced promising features, such as capable to promise and profitable to promise
ATP rules can be assigned flexibly to items, item organization, organization, or categories.
By assigning different ATP rules to different items, fulfillment lines for various items can be promised in various ways.
Allocation rules enable you to specify portions of supply by demand classes to ensure high service levels for specific demand classes. For example, 80 percent of supplies can be allocated to satisfy high priority demand classes. Allocation rules are applicable only when promising results are being determined through a supply chain availability search. If order promising is using a lead-time-based ATP rule or an infinite-availability-based ATP rule to determine promising results, allocation rules will not be considered.
If order promising is applying an ATP rule in supply chain availability search mode, an allocation rule may be applied if the following are true:
The fulfillment line being promised has specified a demand class.
The demand class has been specified in an allocation rule that is applicable to the item being promised.
The ATP rule being applied has been defined to respect allocation constraints.
When order promising is conducting a supply chain availability search, sourcing rules and the assignment sets that the sourcing rules are contained within provide the details of the supply chain to search. You may have many different manufacturing and distribution locations that can supply the same product. Sourcing rules determine the acceptable fulfillment locations to be considered. The order promising supply chain availability search results determine the best location, based on the product and order request date, from the locations specified in the sourcing rules.
The promising mode of an available-to-promise (ATP) rule determines which set of attributes order promising logic evaluates when determining ATP results. When you create an ATP rule, the first thing that you must specify is which of the three promising modes is applicable to the ATP rule.
These are the three promising modes:
Supply chain availability search
Lead time based
Infinite availability based
You create ATP rules in infinite availability mode most often for assigning to items that are not constrained in supply and are of low value. Here are the key points of the infinite availability based mode:
The item is promised on the requested date irrespective of availability.
No availability search is performed.
Calendars are respected during promising.
The order promising engine does not generate any pegging.
Transit time constraints are respected; therefore, requests within transit lead times are promised after accounting for the transit lead time.
No other attributes are associated with the infinite availability mode of promising.
You create ATP rules in lead time promising mode most often for assigning to items that are always assembled or built on demand. This mode is typically used for items that can be procured or produced with a reliable lead time. Here are the key points of the lead time based mode:
Orders are promised after a specified lead time, as promise dates are always offset from the requested date by the specified lead time.
No supply availability search is performed.
Lead time can be specified in multiple ways.
The order promising engine does not generate any pegging.
Calendars and transit time constraints are respected.
When you create ATP rules in lead time promising mode, you select one of the following four lead timesto be used:
Total lead time
Cumulative manufacturing lead time
Cumulative total lead time
User-defined lead time
You create ATP rules in supply chain availability search mode for assigning to items for which you want promising results determined by a search for available product supply. The supply chain availability search promising mode provides complex and highly configurable promising functionality that enables you to configure how the search will be conducted. Here are the key points of the supply chain availability search mode:
The search mode is a comprehensive and highly customizable mode of promising.
Detailed availability search is performed across supply chain depending on the options that you select when you create the rule.
Pegging information is generated by the engine.
Lead times, calendars, capacities, transport modes, and supply chain network are considered during promising.
When you create ATP rules in supply chain availability search mode, you specify many additional attributes including these:
Whether to search components and resources
Whether to enable a profitable-to-promise search
Whether to respect allocation constraints
Which types of supply and demand to consider
What lead time to use for the infinite availability fence
How many days to consider for past-due demand and past-due supply
You assign available-to-promise (ATP) rules to specific items, organizations, or item categories, or to combinations of specific items and organizations. When order promising is determining which ATP rule to use for the item being promised, there may be multiple rules that are applicable, but only one rule will be applied. For example, there may one ATP rule assigned to the item category of the item being promised, and another ATP rule assigned specifically to the item that is being promised. When there are multiple rules applicable to the item being promised, a hierarchical precedence is used to determine which rule will apply.
When assigning an ATP rule, you select an assignment basis for the assignment. The four choices for assignment basis are item category, item, organization, and item and organization combined.
When there are multiple ATP rules applicable to the item being promised, order promising uses a hierarchical precedence of least granular assignment basis to most granular assignment basis to determine which rule to apply. Order promising applies the rule with the most granular assignment basis. The following lists the four choices for assignment basis in order of least granular to most granular:
Item category
Item
Organization
Item and organization
When applying an available-to-promise (ATP) rule in the infinite-availability-based promising mode, order promising bypasses supply consideration and determines the promise date from the requested date. Because supply is assumed to be infinite for all days, a request is always promised on the requested date, except in cases where transit lead times are violated.
Which constraints order promising must respect when determining the promise date is determined by the type of requested date: requested arrival date or requested ship date.
Order promising assumes infinite availability on all days, so no supply and demand matching is done for infinite promising. However, order promising must still respect certain constraints for the organization when determining the promise date from the requested date.
If the requested date is the requested arrival date, order promising must still respect calendar constraints and transit lead time constraints.
If the requested date is the requested ship date, order promising must still respect calendar constraints.
In the lead-time-based promising mode, the promised date is delayed from the requested date based on the lead time defined in the available-to-promise (ATP) rule being applied for the item being promised.
The following two settings affect the promising results for lead-time-based promising:
Lead time to be considered
Type of requested date
The lead time to be considered is defined in the ATP rule being applied.
The type of requested date is defined in the fulfillment line being promised. The requested date is one of the following two types:
Ship Date
Arrival Date
The calculations used to determine the promising results depend on the type of requested date:
The requested date is the ship date.
Order promising applies the lead time offset defined in the ATP rule and schedules a promise on the requested date plus lead time offset after inflating the calendar date to account for any holidays. Order promising will not check whether there is availability of the item because even if there is availability of the item, the availability must be ignored.
The requested date is the arrival date.
Order promising first derives the requested ship date by applying a transit time offset to determine the requested ship date. To determine the offset, the default carrier, shipping mode, and service level associated between the ship-from date and the ship-to date is considered. To derive the promised ship date, order promising then applies the lead time defined in the ATP rule to the derived requested ship date. Then to calculate the promised arrival date, order promising applies the transit time for the specified or default ship method . When determining dates, order promising accounts for any calendar constraints.
In the lead-time-based promising mode, the promised date will always be delayed from the requested date based on the lead time defined in the available-to-promise (ATP) rule being applied.
When you create an ATP rule in the lead time based promising mode, you specify which one of the following four lead times is considered when the rule is applied:
Total lead time
Cumulative manufacturing lead time
Cumulative total lead time
User-defined lead time
The goal of the supply chain availability search is always to find the available-to-promise (ATP) result that minimizes the lateness of the fulfillment line. The options considered by specific supply chain availability search are determined by a number of settings. The results of the search are affected by which options are considered and by what factors must be evaluated when the options are considered.
The behavior of the supply availability search is primarily determined by the following four factors:
Constraints specified on the fulfillment line, such as the specification of a ship-from warehouse and whether splits are allowed
Attribute settings for the ATP rule that is being applied
The supply chain defined by the assignment set in use and the sourcing rules that it contains
Allocation constraints from an applicable allocation rule
Additional settings determine what additional options the supply chain availability search can consider. The following must be true for the supply chain availability search to consider capable-to-make when determining promising availability:
The item is built from components, and the ATP rule has been enabled to search for components and resources.
Inventory is maintained at the component level.
Modeling of bills-of-material and routings have been collected into the order orchestration and planning data repository from the applicable fulfillment systems.
If the fulfillment line has many constraints specified, such as substitutions not allowed, the nature of the alternative options generated by the supply chain availability search changes. In the most constrained case, when a ship-from warehouse is specified and substitution and splits are not allowed, promising options are generated from only the specified ship-from warehouse for the specified item, possibly by considering different shipping methods that deliver the item to the customer site.
The fewer constraints specified on the fulfillment line, the more possibilities the supply chain availability search can consider. For example, if a ship-from warehouse is not specified, and splits and item substitutions are allowed, the supply chain availability search looks for the best possible ways of promising the fulfillment line by looking across all warehouses specified in the applicable sourcing rules and by considering splitting by date, or substituting items, or both. Order promising determines a default availability option as well as availability options that represent the best possible availability from each warehouse.
Unless the constraints on the fulfillment line restrict it from doing so, the supply chain availability search always considers the supply for the item at other warehouses, also known as transfer capable-to-promise, and the supply for the item at suppliers, also known as buy capable-to-promise. If the ATP rule being applied has enabled the consideration of components and resources, the supply chain availability search considers the availability of the components and resources consumed during manufacturing, also known as make capable-to-promise, For example, if the settings enable a capable-to-promise search, and an end item is made of two components, C1 and C2, which are assembled on a resource R1, if supply is available for the components, but not for the end time, the fulfillment line is promised by using the available supply of the components and by considering the resource availability.
If the Profitable to Promise attribute is enabled for the ATP rule being applied, the supply chain availability search overrides sourcing priorities to respect the least-cost source that it can promise from. The costs considered when determining the most optimal location to source the promise from are the following:
Standard cost at internal organizations
Standard cost at supplier locations
Cost of internal transfers between organizations
Cost of transit from supplier to internal organizations
Cost of transit from ship-from locations to customer sites by shipping method
In the case of make capable-to-promise, the following costs are also considered:
The cost associated with resource consumption defined as cost per unit of resource consumed
The cost of the components required to make the end item
An item is being requested on a fulfillment line with the following quantity and date:
Requested Quantity: 60 units
Requested Date: 05-Feb-2011
Two warehouses, M1 and M2, both have 100 units of the requested item available, and the customer would receive the item on 05-Feb-2011 from both warehouses. M1 is the preferred warehouse per the applicable sourcing rule, but the ATP rule being applied has the Profitable to Promise attribute enabled. The availability search considers the cost of the item at each warehouse:
M1 standard cost: $20 per unit
M2 standard cost: $10 per unit
In this example, the ATP search overrides the warehouse with the higher priority in the sourcing rule. The promising result is 60 units from warehouse M2 to arrive at the client with no delay.
When creating an available-to-promise (ATP) rule in supply chain availability search mode, you define promising attributes to influence how order promising will determine fulfillment options and fulfillment option priority when applying the ATP rule to determine order promising results. You define whether order promising will search components and resources to find promising options that include making the item. You define whether order promising will include profitable to promise to determine which fulfillment option to use. You also define whether the ATP rule will override applicable allocation rules.
To define the promising attributes, you enable or disable the following attributes for each ATP rule that you create in the supply chain availability search mode:
Search components and resources
Enable profitable to promise search
Respect allocation constraints
Select the Search components and resources check box to enable order promising to consider whether the end item can be made using its component and resources if an item is not available at a requested location. When order promising is applying an ATP rule with search components and resources enabled, order promising can determine promising results by looking into the availability of the components and resources required to make the item being promised. In make-to-order environments, inventory is often not available for the ordered item, so it is necessary for order promising to look at components and resources to promise the order. Order promising respects all relevant calendars, lead times, and capacities when searching components and resources.
Select the Enable profitable to promise search check box to enable order promising to use the lowest total fulfillment cost option as the final factor for determining which fulfillment option to choose. Order promising always gives highest priority to demand satisfaction so that an order is never delayed for the sake of using a lower cost option. However, when order promising is applying an ATP rule with the profitable to promise search attribute enabled, if order promising finds more than one fulfillment option for the same fulfillment date, order promising determines the fulfillment cost, and sourcing priority may be overridden if the source with the lower cost has a lower priority. When determining cost, order promising considers the standard cost of an item at an internal organization or order promising considers the supplier costs, transfer costs, rolled up costs in the case of manufacturing, and delivery costs to the customer.
Select the Respect allocation constraints check box to direct order promising to apply allocation constraints defined by any allocation rules applicable to the item being ordered. If you do not select the Respect allocation constraints check box, order promising will disregard allocation constraints when applying the ATP rule.
You define the infinite availability time fence to specify the horizon after which supply is considered to be infinite. Order promising considers any demand that falls beyond this time fence as available. When a promise is made at the infinite time fence, no real supplies are consumed.
Order promising assumes infinite supply availability after the time period defined by the infinite availability fence. For requested dates after the time fence, order promising promises on the requested date without checking availability. If the requested date is beyond the infinite time fence, no real supplies are used for promising. For requested dates within the infinite availability time fence, order promising conducts a supply chain availability search.
You specify a user-defined number of days for a user-defined infinite availability time fence, or select from one following three lead times to define a lead time based infinite availability time fence:
Total lead time
Cumulative manufacturing lead time
Cumulative total lead time
Tip
You should define an infinite availability time fence. If you do not define an infinite availability time fence, order promising uses a horizon of a year which incurs a large increase in the memory used by the order promising engine.
You define past-due supply and past-due demand to limit the past-due supply and past-due demand considered when order promising determines promising results.
Past-due demand is a demand with a scheduled date earlier than the current date. Most past-due demands need to be considered and accounted for as they are expected to ship in the future. However, you may have a number of days of past-due beyond which you no longer consider the demand valid. You specify the number of days of past-due for past-due demand to be included when order promising determines promising results. Order promising does not consider any past-due demand due before the number of days you specify. If you do not specify a value for past-due demand considered, all past-due demand will be considered.
Past-due supply is a supply, usually in the form of a purchase order, for which the expected date is earlier than the current date. Most past-due supplies need to be considered as the expectation of supply is still considered valid. You specify the number of days of past-due supply to be included when order promising determines promising results. Order promising does not consider any past-due supply expected before the number of days you specify. If you do not specify a value for past-due supply considered, all past-due supply will be considered.
To ensure that short term supply is preserved for orders within the short term, define an available-to-promise (ATP) time fence. By defining an ATP time fence, you prevent scenarios where longer term orders that come in first are pegged against existing supply, delaying the promise for orders that come in for the short term.
Supply searches for the period within the ATP time fence look for existing supply before looking through the supply chain for item availability. In other words, the supply search looks for on-hand supply before looking for capable-to-promise supply.
Supply searches for dates outside of the ATP time fence look for capable-to-promise supply before looking for existing supply availability.
You specify a user-defined number of days for the ATP time fence, or select from one following three lead times to define a lead time based ATP time fence:
Total lead time
Cumulative manufacturing lead time
Cumulative total lead time
You use allocation rules to control how supply is allocated among various classes of demand. If allocation rules are not defined, order promising promises on a first-come-first-serve basis. If orders for a lower priority customer come in first, the lower priority customers could consume scarce supply. If you have defined an allocation rule for a demand class, the allocation amount serves as the upper allocation constraint for that demand class for items the allocation rule has been assigned to.
You specify how supply is allocated using one of the following three specification types:
Number: Fixed quantity is allocated to a demand class.
Percentage: Percentage of total supply is allocated to a demand class.
Ratio: Relative ratios between the various demand classes are used to divide up the total available supply within a week.
You determine how to allocate your supply among various classes of demand using one of the three specification types. For each fulfillment line with a demand class specified for which there is an applicable allocation rule, order promising applies the allocation rule when assessing the quantity requested against the quantity available. Orders are promised up to the allocation defined for the demand class.
Here is an example scenario.
Allocation Rule: 20 percent to low priority customers, 80 percent to high priority customers.
Supply: 100 on 19-Oct-2011, 100 on 26-Oct-2011
The following table is an example order with two fulfillment lines.
|
Fulfillment Line Number |
Requested Item |
Requested Date |
Requested Quantity |
Demand Class |
|---|---|---|---|---|
|
1 |
WM101 |
19-Oct-2011 |
30 |
Low Priority Customer |
|
2 |
WM101 |
19-Oct-2011 |
30 |
High Priority Customer |
Results:
Fulfillment Line 1: Delayed by 7 days since there is insufficient supply to allocate until additional supply is received on 26-Oct-2011.
Fulfillment Line 2: No delay since there is sufficient supply for the requested date.
You assign allocation rules to specific items, specific organizations, specific item categories, or combinations of specific items and organizations. When the Order Promising process is determining whether an allocation rule applies to the item being promised, the process may determine that multiple rules are applicable. However, only one rule will be applied. For example, there may one rule assigned to the item category of the item being promised, and another rule assigned to the item that is being promised. When there are multiple rules applicable to the item being promised, a hierarchical precedence is used to determine which rule will apply.
When assigning an allocation rule, you select an assignment basis for the assignment. The four choices for assignment basis are item category, item, organization, and item and organization combined.
When there are multiple allocation rules applicable to the item being promised, order promising uses a hierarchical precedence of least granular assignment basis to most granular assignment basis to determine which rule to apply. Order promising applies the rule with the most granular assignment basis. The following lists the four choices for assignment basis in order of least granular to most granular:
Item Category
Item
Organization
Item and organization
Allocation targets can be defined using a specification type of number, percentage, or ratio. The following examples illustrate the use of each of these specification types.
When you define allocation using the number specification type, you are specifying a fixed quantity to be allocated to the demand class. For example, if you want to allocate 500 units for a high priority demand class, you create an allocation rule using the number specification type with an allocation target of 500 for the high priority demand class.
When you define allocation using the percentage specification type, you are specifying a percentage of overall item supply to be allocated to a demand class. For example, if you create an allocation rule using the percentage specification type with an allocation target of 20 for the low priority demand class, if total supply is 1000, up to 200 units may be promised for the low priority demand class.
When you define allocation using the ratio specification type, you are specifying that a relative ratio between the demand classes is used to divide up the total available supply within week. For example, if you create an allocation rule using the ratio specification type with a three to one ratio between high priority demands and low priority demands, and the total supply is 2000 units, the high priority demand class is allocated 1500 units, and the low priority demand class is allocated 500 units for the week.
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