1. Using Sales and Operations Planning
  2. Simulate Changes to Demand and Supply

Simulate Changes to Demand and Supply

In Sales and Operations Planning, you can simulate the effects of edits to a plan and analyze the supply changes in the plan output.

You can model supply scenarios to accommodate an increase in demand or see the impact of changes to any of these supply parameters:

  • Resource availability for a planning resource in an organization

  • Supplier capacity available for a supplier item

  • Supplier cost to evaluate changes in purchasing cost

  • Item prices to evaluate changes in revenue

  • Item lead times

  • Safety stock to evaluate changes in projected inventory

  • Sourcing percentages to simulate changes in both purchasing and shipping costs and capacities

  • Usage quantities and effective dates in bill of resources

Simulating Changes to Demand Forecasts

You can make manual adjustments to demand forecasts as part of a collaborative forecasting process. For example, a difference in value between the Sales Forecast and the Consensus Forecast might necessitate an override to the Adjusted Consensus Forecast measure.

Simulating Changes to Resource and Supplier Availability

You can simulate changes in available resource capacity by editing the Resource Availability measure. For example, you can increase resource availability by adding an extra shift.

You can simulate changes in available supplier capacity by editing the Supplier Capacity Available measure. For example, you can increase component item availability for a supplier.

Simulating Changes to Production Levels

You can adjust the production levels in a sales and operations plan to override the initial production plan driven by net demand, existing supplies, and sourcing. You can simulate changes to production quantities to shift production between assembly items that share constrained work center resources in a highly constrained plan or smooth production levels in an unconstrained plan. You can also set production levels for the assembly items manufactured in multiple organizations.

You can load the Production Plan measure data from Supply Planning to the Adjusted Production Plan measure in Sales and Operations Planning and run a plan simulation. Using the Load Measures from Other Plans process, you can copy the tactical production plan data from a supply plan to a sales and operations plan. You can then run a sales and operations plan simulation to update the supply measures such as Production Plan, Resource Requirements, and Projected Available Balance.

A typical Sales and Operations Planning process has a monthly cycle with product family level reviews and a plan horizon that is between 18 and 24 months. A tactical supply plan is detailed with more focus on transactional planning at item, organization, and day levels. You can load measure data from your tactical supply plans to overlay the production plan data into your sales and operations plan and project capacity requirements and inventory levels as part of your Supply Review process. After you make strategic decisions in your sales and operations plan, the approved plan results can be fed into your tactical supply plans as a demand schedule for execution.

For example, a provider of fitness equipment can’t meet surging pandemic demand. Capacity is fully utilized for the coming months for critical resources. Some new products are being launched and delaying their first shipment dates must be avoided as per directives from senior management. Setting the production levels for these new products, ensures new products are manufactured on time even at the expense of further delays in fulfilling orders for mature product lines.

Add the Adjusted Production Plan and Final Production Plan measures to the measure catalog of your sales and operations plan. Then, run your plan with the Refresh with current data option selected before using these measures in tables and graphs. Here’s additional information about the measures:
  • Adjusted Production Plan is an editable measure used to override the initial production plan.
  • Final Production Plan is a calculated measure used as the Disaggregation Basis field for Adjusted Production Plan and, by default, is equal to NVL(Adjusted Production Plan, Production Plan).
  • The Work Orders measure data is treated as firm in your sales and operations plan, whereas production levels can be adjusted below this quantity. The exception Production Less Than Work Orders detects instances where Production Plan is less than Work Orders. Add this exception to the user-defined exception set associated with your plan options.
  • The Production Plan measure in Supply Planning is the total quantity of make orders in a time bucket and is the sum of all make planned orders, work orders, non-standard work orders, and by-product supply. It is equivalent to the Production Plan that is calculated in Sales and Operations Planning.
  • When loading Production Plan measure data from Supply Planning to the Adjusted Production Plan measure in Sales and Operations Planning, the measure data is aggregated in a supply plan before copying it to a sales and operations plan. Both Production Plan and Adjusted Production Plan measures are dimensioned by item, organization, and time.
  • The Production Plan data is aggregated in Supply Planning to the Sales and Operations Planning time level: for example, from daily buckets to monthly time periods before data is copied to the Adjusted Production Plan measure.
  • The Production Plan data is also aggregated in Supply Planning to the Sales and Operations Planning aggregate item level if modeled in the target plan. For example, assembly end items within a catalog are aggregated to the parent category per the Plan Items Hierarchy and Planning Product Level Items settings in the plan options of the sales and operations plan before the data is copied to the Adjusted Production Plan measure.

Simulating Changes to Bill of Resources

Within a plan, you can edit usage quantities and effective dates for an Organization, Assembly Item, and component or resource combination in the bill of resources. If you copy to a simulation set after making edits to a bill of resources in the plan, select all of the bill of resources rows to copy for the Organization and Assembly Item combination.

You can edit a bill of resources for an Organization and Assembly Item combination in a simulation set. If you used the file-based data import (FBDI) template, you must first add all of the rows for the bill of resource to the simulation set from the Plan Inputs work area.

Within a simulation set, you can also add records to simulate adding a new component to a bill of resources for engineering or design reasons. You can reference a simulation set for a plan in Plan Options.

You must run a plan with the Refresh with current data option to overlay bill of resources changes made in or copied to a simulation set. Before you run the plan, associate the simulation set to the plan in Plan Options.

You can also run the Create Bills of Resources scheduled process to automatically create bills of resources. You would then use the Aggregate Bill of Resources table to modify the bills of resources in the designated output simulation set. The following example illustrates using the effective date ranges to model different resource quantities to ramp up a new resource:

ORG

Assembly

Resource

Resource Quantity

Effective Start Date

Effective End Date

M1

AS301

R4

0.375

12/02/2021

01/31/2022

M1

AS301

R4

0.25

02/01/2022

12/31/2023

You can add new and modified records in the Aggregate Bill of Resources table to another simulation set for future reuse.

Simulating Changes to Item Price, Item Cost, and Lead Time

You can simulate changes in item price by editing the Adjusted Price measure in a table and rerun the plan. For example, you can evaluate the potential revenue coming from a price increase before changing the actual price. You can also edit the Selling Price in a simulation set in the Items table to overlay in a plan.

You can edit the Standard Cost in the Items table in a plan. You can also edit the Standard Cost in a simulation set in the Items table to overlay in a plan. You can also edit the Adjusted Supplier Cost measure in a table, such as the Supplier Plan by Month table.

You can edit Preprocessing Lead Time, Processing Lead Time, and Postprocessing Lead Time in a simulation set in the Items table to overlay in a plan. Next, run the plan to evaluate lead time changes.

Simulating Changes to Safety Stock

You can override item safety stock levels by editing the Adjusted Safety Stock measure in a table and then rerun the plan to simulate the changes. For example, you can determine the impact on Carrying Cost measure changes that would arise due to changes in inventory levels represented by the Projected Available Balance measure.

You can also use the Load Measures from Other Plans task to copy tactical safety stock data from a supply plan or a demand and supply plan to a sales and operations plan. After you run the Load Measures from Other Plans process, you can then run a sales and operations plan simulation to update supply measures such as Production Plan, Purchases, and Projected Available Balance. For example, you can copy safety stock measure data at the item and organization level in the Material Plan to the Adjusted Safety Stock measure for simulation and analysis at the product family level in the Aggregate Build Plan.

On the Load Measures from Other Plans page:

  • In the Source Measure field, select the Safety Stock measure.

  • In the Target Measure field, select the Adjusted Safety Stock measure.

Note: Selecting the Create new combinations check box doesn't insert new item and organization combinations from the source plan into the target plan. Instead, the planning process inserts new demand combinations from the source plan that don't already exist in the target plan.

Use the Orchestrate Load Measures scheduled process to load measures one time or on a repetitive schedule. You can also configure a job set that contains the Orchestrate Load Measures process job followed by the Batch Run Plan job to sequence and automate these two planning processes.

Simulating Changes to Sourcing Allocation Percentage

Use the preconfigured Sourcing Allocation table for simulating changes to sourcing rule allocation percentages modeled by the Sourcing Allocation Percentage measure.

Simulating Supply Scenarios: Procedures

To simulate supply scenarios in a plan, do the following:

  1. Save data changes in your plan and then select the Run Plan action.

  2. In the Run Plan dialog box, do the following:

    1. In the Data Refresh Options section, select Do not refresh with current data.

    2. In the Scope Options section, select Plan supply.

    3. In the Supply Plan Run Options section, select Interactive.

  3. Click OK to run the plan.

  4. Run the plan.

To simulate supply scenarios in a simulation set, do the following:

  1. Save data changes in your simulation set.

  2. Associate the simulation set to a plan in Plan Options and then select the Save and Run action.

  3. In the Run Plan dialog box, do the following:

    1. In the Data Refresh Options section, select Refresh with current data.

    2. In the Supply Plan Run Options section, select Batch.

  4. Click OK to run the plan.

  5. Run the plan.