R12 Advanced Supply Chain Planning ASCP Supply Chain Bidirectional Alternate Sourcing or Circular Sourcing Situation and Strategic Network Optimization SNO
Material should be transferred between Org M1 and Org M2 so as to balance any excess inventory at either organization.
USUALLY, M1 and M2 obtain material from Organization S1 - where it is made - BUT, for some reason S1 is running out of capacity.
So, ASCP needs to check if quantity is available in M1 and plan a Transfer to M2, since M2 cannot get it from S1,
and vice versa if M1 needs material and cannot get it from S1.
In a Constrained Plan, you could set up Sourcing Rules for M1 with Rank1 Transfer From S1, Rank2 Transfer from M2.
Similarly for M2, Rank1 S1, Rank2 M1. Will that work, or could it cause unnecessary demand by M1 on M2 and vice versa?
The idea is to oblige M1 and M2 to help each other out if they can, without creating demand that they cannot accommodate.
Does anyone have a suggested approach on how to set this up so that the system is smart enough to do this automagically?
Answer
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ASCP will not handle circular sourcing unless you are using a DRP plan type which can do inventory rebalancing. But ASCP/DRP plan
types are not what you would want here.
So I would consider handling it in a couple of ways:
1) Do not plan for this situation, rather handle it manually. As you said “USUALLY” S1 would supply, so plan for the usual case.
Manual process is good for exceptions.
2) Run a plan with a sourcing rule that works in one direction only (M2 -> M1). You can then run another plan with a sourcing
rule in the opposite direction. Then compare the results
3) Just a general note and something to keep in mind - if circular sourcing is a true requirement for the customer - then perhaps
a consideration could be using ASCP with SNO to refine the sourcing matrix. SNO can support circular sourcing relationships
and pass the decisions on to ASCP for tactical planning purposes. The idea would be to let SNO resolve the relationship then
pass the sourcing assignment set into ASCP without the circular relationship.
Basically, If implemented in an integrated manner with ASCP, the sourcing decisions made in SNO can be reflected in the ASCP assignment
sets, which should remove the overlapping circular sourcing rules when sent into ASCP. Meaning, SNO can resolve the inventory balancing
questions at a higher level and your resulting plan would be what Danny mentions in bullet point 2, but time phased. The assignment
sets sent back to ASCP would not reflect the circular sourcing relationship as it would be disabled when and if the other shipping
direction kicks in. SNO wouldn’t circular source in the same period, so you’d see time phase assignment sets.
Material should be transferred between Org M1 and Org M2 so as to balance any excess inventory at either organization.
USUALLY, M1 and M2 obtain material from Organization S1 - where it is made - BUT, for some reason S1 is running out of capacity.
So, ASCP needs to check if quantity is available in M1 and plan a Transfer to M2, since M2 cannot get it from S1,
and vice versa if M1 needs material and cannot get it from S1.
In a Constrained Plan, you could set up Sourcing Rules for M1 with Rank1 Transfer From S1, Rank2 Transfer from M2.
Similarly for M2, Rank1 S1, Rank2 M1. Will that work, or could it cause unnecessary demand by M1 on M2 and vice versa?
The idea is to oblige M1 and M2 to help each other out if they can, without creating demand that they cannot accommodate.
Does anyone have a suggested approach on how to set this up so that the system is smart enough to do this automagically?
Answer
------
ASCP will not handle circular sourcing unless you are using a DRP plan type which can do inventory rebalancing. But ASCP/DRP plan
types are not what you would want here.
So I would consider handling it in a couple of ways:
1) Do not plan for this situation, rather handle it manually. As you said “USUALLY” S1 would supply, so plan for the usual case.
Manual process is good for exceptions.
2) Run a plan with a sourcing rule that works in one direction only (M2 -> M1). You can then run another plan with a sourcing
rule in the opposite direction. Then compare the results
3) Just a general note and something to keep in mind - if circular sourcing is a true requirement for the customer - then perhaps
a consideration could be using ASCP with SNO to refine the sourcing matrix. SNO can support circular sourcing relationships
and pass the decisions on to ASCP for tactical planning purposes. The idea would be to let SNO resolve the relationship then
pass the sourcing assignment set into ASCP without the circular relationship.
Basically, If implemented in an integrated manner with ASCP, the sourcing decisions made in SNO can be reflected in the ASCP assignment
sets, which should remove the overlapping circular sourcing rules when sent into ASCP. Meaning, SNO can resolve the inventory balancing
questions at a higher level and your resulting plan would be what Danny mentions in bullet point 2, but time phased. The assignment
sets sent back to ASCP would not reflect the circular sourcing relationship as it would be disabled when and if the other shipping
direction kicks in. SNO wouldn’t circular source in the same period, so you’d see time phase assignment sets.
If you have a loop, check out:
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