Use Independent and Total Demand Forecasts for Enhanced Policy and Replenishment Calculations for Multiechelon Replenishment Plans

In a multiechelon replenishment network, some enterprises prefer to use a single holistic plan to generate both the independent and dependent forecast. Based on the echelon, the independent and dependent forecast will be used to generate inventory policy values and replenishment orders.

Use the new Independent Demand plan option and the existing End Item Demand plan option to model your business use case to generate independent and total forecasts for integrated multiechelon replenishment plans. The total forecast, independent plus dependent demand forecast, at source location is used to calculate policy values, but for replenishment order calculations, the independent demand forecast at source location plus the dependent demand coming from destination organizations is used.

These calculations are supported within a single multiechelon replenishment plan.

Steps to Configure a Single Multiechelon Replenishment Plan

Summary of steps to configure a single multiechelon replenishment plan to generate independent and total forecast, calculate policies, and calculate replenishments.

  • Collect transfer orders history along with shipments history.
  • Configure a multiechelon plan:
    • Enable these plan options: Calculate Forecast, Calculate Policies, Calculate Replenishments.
    • In the Demand tab, specify these forecasting profiles:
      • Forecast Shipments to generate total forecast.
      • Forecast Independent Shipments (new) to generate independent forecast.
    • In the Supply tab,  Organizations and Schedules subtab, select these values for your demand measures, or you can use user-defined measures.
      • End Item Demand: Final Shipments Forecast
      • Independent Demand: Final Independent Shipments Forecast

Demand measures

Demand Measures

  • Also, select these values for the corresponding forecast accuracy measures, or you can use user-defined measures:
    • Measure for MAPE: Shipments Forecast MAPE
    • Measure for Intermittent Demand: Shipments Forecast Is Intermittent
    • Measure for Average Interarrival Time: Shipments Forecast Average Interarrival Time

Forecast accuracy measures

Forecast Accuracy Measures

  • Ensure that all new measures required to generate independent forecast are part of your measure catalog. Details are provided under the Tips and Considerations section.

Summary of How Total Forecast and Independent Forecast Are Generated

The following figure summarizes how total forecast and independent forecast are generated:

Summary of how total forecast and independent forecast are generated

Summary of How Total Forecast and Independent Forecast Are Generated

Impact of This Feature on Replenishments and Policy Computation

  • Planning will continue to use Gross Forecast measure for policy computation. The Gross Forecast measure represents total forecast and will continue to be driven by the measure selected under the End Item Demand plan option.
  • Planning will use a new measure called Independent Gross Forecast for replenishments computation. This measure is driven by the measure selected under the Independent Demand plan option. Forecast processing logic will use this new Independent Gross Forecast measure. Independent Gross Forecast will get consumed by the Sales Orders measure, and then the Net Forecast measure will be populated. The logic for computing replenishment recommendations remains the same.
  •  The Independent Demand plan option is enabled for only multiechelon plans with the Calculate Replenishments option enabled.

Steps to Enable

Use the Opt In UI to enable this feature. For instructions, refer to the Optional Uptake of New Features section of this document.

Offering: Supply Chain Planning

Tips And Considerations

If you want to use the Use Independent and Total Demand Forecasts for Enhanced Policy and Replenishment Calculations for Multiechelon Replenishment Plans feature, you must opt into 2 features:

  • The Replenishment Planning feature. If you’ve already opted in to this parent feature, then you don’t have to opt in again.
  • The Use Independent and Total Demand Forecasts for Enhanced Policy and Replenishment Calculations for Multiechelon Replenishment Plans feature.

Other Tips and Considerations:

  • Measures and Forecasting Profiles:
    • Ensure that the measure catalog used in your replenishment plan has all the measures that are introduced under the new Independent Shipments Based Forecasting measure group. Otherwise, independent forecast won't be generated.
    • Ensure that you use the new forecast profile Forecast Independent Shipments for generating independent forecast.
    • For replenishments computation, ensure that you add the new measure Independent Gross Forecast to your measure catalog.
  • Plan Configuration:
    • This feature is supported for only multiechelon-enabled plans.
    • If your business requires you to configure two separate plans, one for policy computation and another for replenishments computation, then you can continue to do so. It’s not required to have a single plan for policy and replenishments computation to use this feature.
  • Validations After Opting in to This New Feature:
    • After you opt in to this feature, check the measures specified under the End Item Demand and Independent Demand plan options. It’s recommended that you validate or change these measures per your business requirement. The End Item Demand plan option should reflect total forecast that you would like to use for policy computation and the Independent Demand plan option should reflect independent forecast that you would like to use for replenishment computation along with the dependent demand propagated by the plan.
  • Supersession Chain Items:
    • If you're forecasting for supersession chain items, then it’s recommended to configure a new forecast profile. You can duplicate Forecast Shipments for Supersession Chain profile and change the forecasting table definition/input/output measure definition to use the Independent Shipments History and Independent Shipments Forecast measures.
  • External Forecast:
    • To support existing plan configurations, if the plan is driven by external forecast, then both the Gross Forecast and Independent Gross Forecast measures will be updated by the external forecast numbers. It’s recommended that you look into your external forecast numbers. You need to drive policy plan by including total demand in the external forecast and drive replenishment computation plan by including only independent demand in the external forecast.
  • Plan Simulation:
    • Note that during multiechelon plan simulation:
      • Change in the Gross Forecast measure won’t change the Net Forecast measure because the Net Forecast measure is driven by the Independent Gross Forecast measure. You can change the Net Forecast measure directly if required.
      • Change in the Adjusted Independent Shipments Forecast measure won’t trigger plan simulation.

Key Resources

  • Recommended related training:
    • Introduction to Replenishment Planning Cloud (update 19D) Readiness Training
    • On Oracle Cloud Customer Connect: Replenishment Planning Training

Access Requirements

Users who are assigned a configured job role that contains these privileges can access this feature:

  • Monitor Replenishment Planning Work Area (MSC_MONITOR_REPLENISHMENT_PLANNING_WORK_AREA_PRIV)
  • Manage Segments (MSC_MANAGE_SEGMENTS_PRIV)

These privileges were available prior to this update.