Distribution Requirements Planning (DRP) in SAP APO is described as process that determines what needs to be ordered from suppliers and when. DRP aims to identify procurement needs by analyzing forecast data, current inventory levels, safety stock from inventory optimization, and economic order quantities. It starts by calculating net demand at each location from the lowest level of the Bill of Distribution (BOD) upward, determining what should be procured from suppliers and the timing for it.
This diagram image illustrates the Distribution Requirements Planning (DRP) process in SAP eSPP (embedded Supply Planning) and how it integrates various inputs to generate a procurement proposal. Here’s a detailed breakdown of the diagram;
- DRP Inputs:
- Inventory Planning: This encompasses various factors like safety stock, replenishment indicators, and deployment indicators, including the EOQ (Economic Order Quantity) and its period. These factors feed into the DRP process to determine the levels of stock required at different locations.
- Forecast: Precisely calculated predictions of demand are fed into the DRP process. This forecast serves as one of the primary demand drivers, splitting demand into specific timeframes for better planning.
- Fixed/Confirmed Receipts and Requirements: These include pre-defined and pre-received inventory volumes, which help in understanding the inventory already in the pipeline or locked for certain uses.
- Inventory: Current stock levels are analyzed to assess how much inventory is available to meet demands and where shortages might occur.
- Distribution Requirements Planning Process:
- All these inputs converge into the central DRP block where the actual planning takes place. This encompasses running the DRP algorithms to calculate net demands, factoring in inputs like forecast and inventory.
- A subsequent DRP Run operationalizes these calculations by determining net demands at various levels of the Bill of Distribution (BOD) and moving the expected requirements upwardly through the chain.
- DRP Approval: After running the DRP, the results likely undergo an approval process. This ensures that the calculated procurement needs meet organizational requirements and policies before actual orders are placed.
- DRP Outputs:
- The process culminates in a Procurement Proposal, which details the purchase requisitions needed to meet the calculated demands. The proposal includes the optimal number of units that need to be ordered the delivery schedule lines required for further execution of the demand plan.
This visual representation succinctly encapsulates the complexity of DRP operations by clearly delineating inputs, planning phases, and outputs, facilitating a better understanding of SAP eSPP’s DRP functionality.
