Introduction to Shelf-Life Planning within SAP IBP Response & Supply Planning

Shelf Life of a product is the period for which it can be stored and consumed while ensuring quality and regulatory requirements are met. The shelf life of perishable food items, such as fresh fruits and vegetables, maybe only be a few days, while processed foods, such as canned or frozen foods, may have a shelf-life of several months or even years.

Similarly, pharmaceuticals and medical devices may have varying shelf-life lives depending on their formulation and storage requirements.

Therefore, Shelf-Life Planning is essential to any product development and manufacturing process. It ensures that products are safe, high-quality, and meet regulatory requirements throughout their shelf life. However, Shelf-Life Planning can be complex, and manufacturers may face several challenges in implementing an effective shelf-life plan. Product variability or variations in raw materials, packaging, processing, and storage conditions all impact the shelf-life of products. Meeting regulatory requirements, conducting expensive shelf-life testing, and navigating complex supply chains for such products pose several challenges for manufacturers.

What is Shelf-Life Planning in Response & Supply Planning?

Shelf-Life Planning was introduced as part of IBP release 2211 within the scope of Response & Supply planning. The pre-requisite to implement this functionality is to have a planning area based on SAP7F (Order-Based Planning Based on Flexible Master Data) and RTI integration enabled.

The functionality helps companies/industries to deal with perishable products such as Pharmaceuticals, Foods & Beverages, and Chemicals to name a few.

Some of the reasons why this is considered a critical feature are:

• Cost Savings & Minimizing Waste: Using FEFO (First Expiry First Out), companies can efficiently manage their inventory by automatically shipping the batches closer to their expiration date, thus reducing obsolete inventory and excess production.
• Regulatory Compliance: Many industries are highly regulated and require companies to manage the shelf life of their products, as some of the goods can only be shipped with a predefined amount of shelf life remaining.

Key Features of Shelf-Life Planning

1. Finite Heuristic, within Supply & Deployment Planning Engines, has been enhanced to match the minimum remaining shelf-life requirements (MRSL) of customer demand with a set expiration date of receipt/supply elements, thereby reducing the risk of scrap/wastages.
2. Shelf-Life planning within IBP Response & Supply follows FEFO (First Expire, First Out) approach. In case of multiple supply, elements are available, the system picks the one set to expire at the earliest.
3. With the Planning Run Profile (PRP) closely integrated with Finite Heuristic, demand streams for a customer can be prioritized and matched with competing batch stock. For instance, stock getting expired earliest is matched with a sales order demand instead of a forecast. The goal is to match the least remaining shelf-life supply with prioritized demand.
4. If a Shelf-Life requirement of a demand cannot be met, the system generates a gating factor record, ‘Projected Stock – Shelf Life,’ which can be shared with the supply planner for further analysis.
5. Apps like Intelligent Visibility can efficiently handle alerts generated for demands with shelf-life requirements enabled.

Process Flow

Here’s a detailed process flow of the solution

Master Data

1) Product: This MDT has been enhanced to include 2 attributes: ‘Shelf-Life Planning Active’ and ‘Minimum Remaining Shelf Life

2) Location Product: This MDT has also been enhanced to include both shelf-life-related attributes as mentioned in Product MDT.

3) Transportation Lanes: RTI generates Transportation Lane based on Purchase Info Record and copies its value into this MDT, including the Remaining Shelf-Life information.

4) Production Data Structures: RTI generates PDS in IBP based on the Production version (combination of BOM and Master Recipe / Routing). Attribute of the PDS ‘Shelf Life of Planned Production’ gets populated based on MRSL maintained in S/4 material master.

Transaction Data

1) Forecast: As shown below, there is a forecast requirement of 5 PC on 01.04.2023. MRSL requirement of this forecast is determined as 120 (Picked from S/4 material master). This means the supply element (existing one or new one generated) should have expiration date of at least 30.07.2023 (01.04.2023 + 120 days) or later.

2) Sales Order: As shown below, there is a Sales Order of qty 10 PC with material availability date (MAD) as 17.04.2023. MRSL requirement of this sales order is determined as 44 days (This is calculated as a difference between SLED of batch [31.05.2023] assigned and MAD [17.04.2023]). This means the supply element (existing one or new one generated) should have expiration date of at least 31.05.2023 (17.04.2023 + 44 days) or later to meet this sales order requirement.

3) Stock: RTI allows to integrate batch stock from S/4 to IBP. Similar, to other master data elements, it requires to generate & activate integration model for stocks.

Supply Planning Run based on Finite Heuristic

With this data setup in place, as the next step performed the supply planning run based on Finite Heuristic planning engine.

Planning Results - Assessment

• System has generated 2 planned orders of 5 PC. For both cases/scenarios - In addition to the requirement date and quantity, system also considers the shelf-life requirement of the demand elements and generate the receipt/supply elements with expiration date greater than or equal to the corresponding MRSL.
• First planned order “T1163082” is pegged to the forecast demand “F1163073”. Similarly, the second planned order “T1163084” is pegged to the Sales Order demand “2457”.
• Remaining 5 PC of Sales Order demand is met with the stock of “BATCH2” as the MRSL of Sales Order (31.05.2023) < Expiration date of batch stock “BATCH2” (29.06.2023)

• At the upstream, System has generated 2 Purchase Requisitions of 5 PC. Note: As of current IBP release, Shelf-Life requirement doesn’t propagate at the component level, and this is why system doesn’t show MRSL against Planned Order components. This is planned as an enhancement in future release.
• The PRs generated have expiration dates calculated as GR date + Shelf Life of Transportation for component material.
  

Planning Results – Synced between IBP and S/4 systems.

To publish the planning results from IBP to S/4, we need to run the job in IBP based on the template ‘Real-Time Integration (Outbound)’.

Similarly, after integration PRs for “Raw material” are also synched both between IBP and S/4 as shown below:

Scenario Summary

Shelf-Life Planning is a critical aspect of any business that deals with perishable goods, and SAP IBP Response & Supply Planning provides an efficient solution for this process. With the help of ArchLynk's domain expertise and by leveraging SAP IBP's advanced capabilities, including real-time data analytics, predictive modeling, and scenario planning, businesses can optimize their inventory management and reduce waste, leading to increased profitability and customer satisfaction. ArchLynk's deep understanding of SAP IBP and their commitment to providing excellent customer service make them an ideal partner for any business looking to improve their shelf-life planning processes. To learn more Speak to an Expert.