Deployment Optimization

Purpose
The deployment optimizer creates a distribution plan for all products
you selected in all selected locations of your supply chain model.
Once production is complete, the system frst checks what product
quantities are actually available at the source locations (locations
where there is stock). The sum of these product quantities is known
as the availabletodeploy (!T") quantity. The system then
determines how the !T" quantity is to be distributed to destination
locations (locations where there is demand). To do this, the
optimizer considers the followin# factors$ % "istribution rules (such
as fair share and push rules) if the available product quantities
e&ceed or fall below the demand. % !ll costs defned in the supply
chain model, such as transportation costs, stora#e costs, and
penalties for nondelivery. % 'onstraints such as transportation
capacity, stora#e capacity, and transportation lot sizes. (ou defne
constraints and distribution rules in the )*+ deployment optimizer
profle. ,n this profle, you can also defne additional parameters for
deployment optimization, such as decomposition methods for
improvin# runtime.
The aim of the deployment optimizer is to fnd the most coste-ective plan from
all feasible plans (plans that
consider all the specifed constraints).
Distribution Rules
Supply Shortage
,f the deployment optimizer detects that the !T" quantity falls below the demand
at the destination locations,
it applies the supply shorta#e rule you defned in the )*+ deployment optimizer
profle. The followin# rules
are available$
% Distribution Based on Lowest Costs
.hen calculatin# the product quantities to be distributed, the
deployment optimizer only considers
the costs defned in the supply chain model and the constraints
specifed in the )*+ deployment
optimizer profle. The calculated distribution plan will be the plan
with the lowest costs.
.ith this option, it is possible that the demand at one location will
not be covered because the
demand at another location can be covered at less cost.
% Fair Share Distribution by Demands
'onfrmed distribution
demand
/00 0 10
"eployment
reservation quantity
for demand at source
location
0 /00 10
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The deployment optimizer>s main ob?ective is to distribute the !T"
quantities evenly, accordin# to
the demands (sales orders and forecasts) at the destination
locations.
.hen distributin# the calculated quantities, the system also
considers the costs defned in the supply
chain model. @or e&ample, if transportation costs are hi#h, the
optimizer can decide not to distribute
the allocated amount directly to a demand location, but rather to
make a detour throu#h another
location. ,f the calculated fair share quantities cannot be distributed
to individual locations due to
identifed constraints, these quantities are distributed to other
destination locations on the basis of
costs.
% Earliest Delivery
.hen used in con?unction with the Fair Share by Demands option,
you can specify that, in fair share
distribution, the deployment optimizer is to completely fulfll the
earliest demands if possible, before
plannin# the fulfllment of later demands. ,f you do not choose this
option, the optimizer will attempt
to distribute the !T" quantities evenly over the demands in various
periods.
Supply Surplus
,f the deployment optimizer detects that the !T" quantity e&ceeds the demand
from the destination locations,
it applies the supply surplus rule you defned in the )*+ deployment optimizer
profle. The followin# rules are
available$
% Distribution Based on Lowest Costs
.hen calculatin# the product quantities to be distributed, the
deployment optimizer only considers
the costs defned in the supply chain model and the constraints
specifed in the )*+ deployment
optimizer profle. Aowever, as a rule, the system does fulfll all
demands at the destination location,
since hi#h nondelivery costs prevent a demand from not bein#
fulflled. The optimizer distributes
e&cess stock to the lowest cost locations. This does not necessarily
have to be a location where there
is demand.
% Push Distribution by Demand
The deployment optimizer>s main ob?ective is to distribute the !T"
quantities evenly, accordin# to
demands at the destination locations. )ince the !T" quantity
e&ceeds the demand quantity, the
calculated percenta#e, in contrast to the fair share situation, is over
/00B (the destination locations
may receive a quantity that e&ceeds their demand).
!s with fair share distribution, when distributin# calculated
quantities, the system also considers the
costs defned in the supply chain model and, if necessary, accepts
detours in the supply chain, if this
means that the total cost can be reduced.
% Earliest Delivery
.hen used in con?unction with the option Push Distribution by
Demand, you can specify that, in
push distribution, the deployment optimizer is to distribute all
available !T" quantities to
destination locations at the earliest demand time. ,f you do not
choose this option, the optimizer will
attempt to distribute the !T" quantities evenly over the demands in
various periods.
Consideration o Costs
The deployment optimizer considers the followin# costs defned in the supply
chain model$
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% )tora#e and transportation costs
% 'osts for increasin# stora#e, transportation and handlin# capacity
% )afety stock penalty
% 8ate delivery penalty
% *ondelivery penalty
(ou use the )*+ cost profle to set the relative importance of di-erent cost types.
Consideration o Constraints
The optimizer considers that a plan is feasible when it satisfes all the supply
chain model constraints that you
set in the )*+ deployment optimizer profle. ! feasible solution mi#ht involve due
date or safety stock
constraint violations. "ue dates and safety stocks are soft constraints (constraints
to which you assi#n
violation costs). The optimizer only proposes a plan that will violate soft
constraints if, accordin# to the costs
specifed in the system, it is the most coste-ective plan.
The optimizer uses the linear pro#rammin# method to take account of all
plannin#problemrelated factors
simultaneously within one optimal solution. !s more constraints are activated, the
optimization problem
becomes more comple&, which usually increases the time required to solve the
problem. !s a rule, you should
run optimization as a back#round ?ob.
The optimizer makes a distinction between continuous linear optimization
problems and discrete optimization
problems.
Linear Optimization
(ou can choose one of the three followin# methods from the )*+ deployment
optimizer profle to solve
continuous linear deployment optimization problems$
% +rimal simple& method
% "ual simple& method
% ,nterior point method
!ll three methods arrive at an optimal solution. Cuntime could be the main
inDuencin# factor when decidin#
which of these methods to use. Aowever, there is no #eneral rule for selectin# the
best method for a #iven
problem (apart from to test each method individually). ! #ood way of assessin#
the application is to do a
benchmarkin# based on a test scenario. This is because the optimal choice of
method depends more on the
structure of the supply chain and less on the input data. Therefore, in a productive
environment, daily
benchmarkin# is not necessary.
Dis!rete Optimization
! problem is not continuous (and is therefore discrete) for the deployment
optimizer when the model contains$
% "iscrete (inte#er value) lot sizes for transportation
% "iscrete means of transport
% <inimum lot size for transportation
% +iecewise linear cost functions for transportation
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% )tora#e, transportation and handlin# capacity
,f you want the optimizer to consider any of the above constraints, you must use
one of the discrete
optimization methods from the )*+ deployment optimizer profle.
The piecewise linear cost function that you can defne in master data makes a
distinction between the conve&
cost function (cost per unit increases for hi#her volumesE for modelin# overtime or
ni#ht shifts for instance)
and the concave cost function (cost per unit decreases for hi#her volumesE for
modelin# frei#ht rates for
instance).
'onve& cost functions do not complicate the plannin# problem and can be solved
eFciently. Aowever, they
can also be modeled usin# alternative modes without usin# piecewise linear cost
functions.
,n contrast, concave piecewise linear cost functions cannot be solved by an 8+
solver but only by usin#
discretization methods (mi&ed inte#er linear pro#rammin#). ,f piecewise linear
functions are modeled but the
optimizer is run without discretization or the discretization horizon is smaller than
the plannin# horizon, the
optimizer takes into account the linear cost function defned in addition to the
piecewise linear cost function.
The discrete optimization method cannot be used with strict
prioritization (see below).
Gsin# the discrete optimization method can si#nifcantly increase
runtime requirements. *ote that
)upply *etwork +lannin# is a mediumterm plannin# function and its
focus should not be on solvin#
inte#er problems (that is, usin# the discrete optimization method).
De!omposition
The primary focus of decomposition is on reducin# the runtime and memory
requirements of optimization.
"ecomposition may also represent the only way for the deployment optimizer to
fnd a feasible solution in the
event of lar#e discrete problems.
"ecomposition is a De&ible tool for the user to balance the tradeo- between
optimization quality and required
runtime. .hen runtime is unrestricted, the optimizer usually provides a better
(optimal) solution without
decompositionE however, when a f&ed runtime has been specifed, usin#
decomposition could assist the
optimizer to fnd a better or, in fact, feasible solution.
The decomposition methods available for the deployment optimizer are detailed
below. The time, product, and
internal deployment decomposition methods can be used in con?unction with the
linear and discrete
optimization methods. ,t is only advisable to use resource decomposition in
con?unction with discrete
optimization.
% "ime de!omposition speeds up the solution process by dividin#
the source problem into a series
of partial problems. These subproblems are then solved in
sequence.
% Produ!t de!omposition speeds up the solution process by
formin# product #roups. The
complete model solves one product #roup at a time accordin# to the
window size chosen. The rule of
thumb is as follows$ The smaller the window size, the less time it will
take to fnd a solution, but the
lar#er the window size, the better the quality of the solution found.
% Resour!e de!omposition speeds up the solution process by
analyzin# the material Dow and
basic optimizer decisions about transportation and stora#e
determine a resource sequence. The
optimizer can then create subproblems for the individual resources,
which are solved in sequence.
The optimizer makes decisions in every subproblem that cause the
resource to be loaded.
,t is particularly advisable to use resource decomposition if the
resources are always loaded in a
similar sequence. Cesource decomposition does not reduce memory
requirements. ,f you would like
to reduce memory requirements, you could use time decomposition
alon#side this decomposition
method. Cesource decomposition cannot be used in con?unction with
product decomposition or strict
prioritization.
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% #nternal deployment de!omposition can speed up the solution
process by dividin# the
optimization problem into the smallest partial problems possible.
These partial problems are then
solved sequentially. ,t is particularly advisable to use this
decomposition method if the supply chain
model has a particular problem structure. @or e&ample, is the model
does not contain capacitiy
restrictions, the products can be distributed independently in
deployment, which can help reduce
runtime.
(ou can also use the )*+ priority profle to defne priorities for product and
resource decomposition, that is,
you can chan#e the sequence in which the optimizer #roups and plans products
and resources in partial
problems. @or more information, see the )*+ +riority +rofle section in
"ecomposition ()*+ optimizer
documentation).
Prioritization
The deployment optimizer can di-erentiate between the priority of sales orders
and forecast demand. .ith
strict prioritization, sales orders always have priority /, the corrected demand
forecast priority 1, and the
demand forecast priority H. .ithin every priority class, the system uses all
available cost information to
determine the fnal solution. ,f you are usin# costbased prioritization, the
optimizer uses penalty cost
information from the product master data (on the SNP1 tab pa#e) to determine
the optimal solution.
Other Considerations
% The deployment optimization run results do not include pe##in#
orders back to the ori#inal
individual requirements because requirements are bucketed.
% The deployment optimizer considers the entire capacity and the
entire alternative capacity that is
#lobally available (at all locations).
% ,n the event of a capacity overload, the deployment optimizer,
dependin# on the system settin#s,
either does not provide a solution or increases the capacity based
on a penalty cost calculation.
% The deployment optimizer considers the shelf life of a product in a
restricted way (see the
information about the )*+ optimizer in stock plannin#, which is also
applicable to the deployment
optimizer).
% The deployment optimizer considers the three followin#
deployment horizons$ +ull deployment
horizon, push deployment horizon, and )*+ checkin# horizon. (ou
defne these in the deployment
optimizer profle.
See also$
@or more information, see the )*+ optimizer documentation that is, to a lar#e
e&tent, the same as the
deployment optimizer documentation (see for e&ample, !pplication I&amples for
the )*+ Optimizer).
)ee also$
"eployment Optimizer +rofles
Cunnin# "eployment Optimization
Deployment Optimizer Pro%les
&se
The followin# table describes the profles used by the deployment optimizer. To
access each profle
individually, choose )upply *etwork +lannin# J Invironment J 'urrent )ettin#s J
+rofles from the )!+
Iasy !ccess screen. (ou can also defne the profles in the 'ustomizin# for Supply
Network Planning (SNP).
@or more information, see the ,mplementation Kuide (,<K) or the feldlevel help
(@/ help).
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Running Deployment Optimization
&se
!fter production plannin# is complete and the system knows what is actually to be
produced (this information
is stored automatically in live'ache), the deployment optimization run #enerates
deployment stock transfers.
(ou can run deployment optimization in the back#round and in interactive )upply
*etwork +lannin#.
Prere'uisites
Pro%le &se in Deployment Run
)*+ deployment
optimizer profle
,n this profle, you choose which optimization method you want to use
durin# the optimization run (linear optimization or discrete optimization)
and which constraints you want the system to take into account.
!lthou#h almost identical to the )*+ optimizer profle, this profle only
contains parameters that are relevant for the deployment optimizer. ,t
also contains a tab pa#e where you can defne deploymentspecifc
parameters (distribution rules and deployment horizons).
)*+ cost profle ,n this profle, you assi#n a wei#htin# to di-erent cost elements in
the
ob?ective function (thus determinin# how the costs relate to one another).
.e recommend that you only chan#e the standard settin#s for test
purposes when modelin#. To avoid undesired sidee-ects, you should
not chan#e the default settin# of /.0 in the production system if possible.
This settin# corresponds to the costs entered in cost maintenance.
)*+ lot size profle
(transportation lanes)
,n this profle, you defne minimum and ma&imum lot sizes for the
shipment. (ou then specify this profle for one specifc product in the
Produt!Spei" #eans of $ransport section of the transportation lane.
(ou can thus defne minimum and ma&imum transportation lot sizes for
specifc products.
,f you wish to make shipments in inte#er multiples of a transportation lot
size only, you can also defne the transportation lot size as a roundin#
value in this profle.
To enable the deployment optimizer to take into account the minimum lot
sizes and roundin# values defned, you have to choose the discrete
optimization method in the )*+ deployment optimizer profle.
)*+ optimization bound
profle
,f you want to perform a new plannin# run after a deployment optimizer
plannin# run, you use this profle to improve plannin# stability by
restrictin# possible decision variable deviations from the previous
optimization plan. @or e&ample, you can permit smaller deviations at the
start of the plannin# horizon and then increase these towards the end of
the horizon to avoid too many lastminute plannin# chan#es.
(our new plan does not have to be based on the directly precedin#
optimization run, you can also choose earlier runs.
)*+ plannin# profle ,n this profle, you can make basic settin#s for the various
)*+ plannin#
procedures, such as heuristic, optimizer, deployment heuristic,
deployment optimizer, and Transport 8oad :uilder (T8:).
The )*+ plannin# profle that you activate in the )*+ 'ustomizin# under
#aintain %lobal SNP Settings applies #lobally for all )*+ plannin#
procedures. @or some plannin# procedures, you can overwrite the
settin#s of the active profle by enterin# another )*+ plannin# profle
durin# e&ecution of plannin# in the back#round.
+arallel processin#
profle (ou use this profle to defne how back#round ?obs are divided in parallel
processes. (ou can specify the number of concurrent parallel processes,
the number of ob?ects per processin# block, and the server #roup. ,n
each case, you defne the profle for one specifc application function,
such as the deployment optimizer.
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% (ou have maintained cate#ory #roups in 'ustomizin# for )upply
*etwork +lannin# (<aintain
'ate#ory Kroups). (ou then have to assi#n these cate#ory #roups to
a location in the location master
data (the )*+ tab pa#e). ("efault settin#s$ !T" receipts !T,, all
cate#ories that describe demandE
!T" issues !TC, all cate#ories that describe supply.)
% <aster "ata )etup for the "eployment Optimizer
% (ou have maintained the relevant deployment optimizer profles
% (ou have run the )*+ heuristic, )*+ optimizer, supply and demand
propa#ation, or 'apableto
<atch ('T<)
Pro!edure
"o Run Deployment Optimization in the Ba!(ground$
@rom the )!+ !+O Iasy !ccess menu, choose )upply *etwork
+lannin# J +lannin# J
)upply *etwork +lannin# in the :ack#round J "eployment
Optimization.
Inter the plannin# book and data view.
Inter an )*+ plannin# profle that you defned in the 'ustomizin#.
This contains basis settin#s for
the )*+ plannin# procedures. ,f you do not specify a profle, the
system uses the default profle
activated in the 'ustomizin#.
Inter a parallel processin# profle that you defned in the
'ustomizin# for )*+. This determines
how the back#round ?obs are divided into parallel processes.
Inter a selection profle in which you stored your selections in
interactive )upply *etwork +lannin#
or manually select plannin# data. .hen selectin# this data
manually, enter the plannin# version,
level ,", product (or ran#e of products), and the location (or ran#e of
locations) that you want to
plan.
)pecify the start and end date that you want the system to consider
for plannin#. This entry is
optional. ,f you do not enter a start and end date, the system uses
the plannin# buckets profle that
was specifed in the data view.
Inter the )*+ deployment optimizer profle to be used for
deployment optimizer calculations.
To defne a deployment optimizer profle, choose )upply *etwork
+lannin# J Invironment J
'urrent )ettin#s J +rofles J "efne )*+ "eployment Optimizer
+rofles.
)pecify the cost profle that you want to be used for deployment
optimizer calculations. To
maintain a cost profle, choose )upply *etwork +lannin# J
Invironment J 'urrent )ettin#s J
+rofles J "efne )*+ 'ost +rofles.
,f required, specify the optimization bound profle that you want to
use for the deployment
optimizer calculations. To maintain an optimization bound profle,
choose )upply *etwork +lannin#
J Invironment J 'urrent )ettin#s J +rofles J "efne )*+
Optimization :ound +rofles. ,n the
accompanyin# feld, you can still specify or choose a previously
e&ecuted optimization run that you
want the profle specifed in the Optimization :ound +rofle feld to
reference.
'hoose I&ecute.
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"o Run Deployment Optimization in #ntera!tive Supply
)etwor( Planning$
@rom the )!+ Iasy !ccess screen, choose )upply *etwork +lannin#
J +lannin# J ,nteractive
)upply *etwork +lannin#.
'hoose "eployment Optimizer. The "eployment Optimizer window
appears.
The pushbutton for accessin# the deployment optimizer is displayed
on the interactive desktop
automatically if you are usin# the standard )*+ plannin# book
)*+=3. Aowever, if you create your
own plannin# books and wish to use the deployment optimizer in
interactive plannin#, you must
specify that you want this pushbutton to be displayed. (ou do this in
the "esi#n mode of the
interactive plannin# desktop.
On the Optimization tab pa#e in the "eployment Optimizer window,
you can choose one of your
predefned deployment optimizer profles, cost profles, and
optimization bound profles. :y
choosin# the icons , , and , you branch to the maintenance screens
for the deployment
optimizer profles, cost profles, and optimization bound profles to
make chan#es to e&istin#
profles, for e&ample.
'hoose to start the optimization run.
The current solution resultin# costs determined by the optimizer are
displayed in the 'urrent
)olution area of the Optimization tab pa#e. The individual steps of
the optimization process are
displayed in the Status area durin# the optimization run and
information about intermediary solutions
is displayed in the )olution Cun area. ,n addition to this, messa#es
about the current optimization run
are displayed in the <essa#es area.
(ou can also display the products that were selected for this
optimization run by choosin# .
'hoose to branch to the )upply *etwork +lannin#$ Optimizer lo# fle
screen. @rom there, you can
decide which type5form of lo# to display (the messa#e lo#, input lo#,
or results in a te&t fle for
e&ample.)
'hoose the )olutions tab pa#e to view information about the
previous optimization runs. ,f you
select a solution in the ri#hthand screen area, the data
correspondin# to that solution appears in the
lefthand area.
'hoose the <essa#es tab pa#e to view messa#es about the
previous optimization runs. ,f you select
an optimization run in the lefthand screen area, the messa#es
correspondin# to that optimization run
appear in the ri#hthand area.
Result
!fter the deployment optimization run, the system automatically converts )*+
stock transfers into deployment
stock transfers, which are used for transportation plannin# in the Transport 8oad
:uilder (T8:).
SNP: Pull Deployment Horizon (in Days)
Specifies the period of time over which the deployment optimizer takes into account the planned
distribution demand. The horizon starts from today's date.
Use
If you set the Use Horizons from Product Master indicator, the deployment optimizer considers the value
you defined for this horizon in the location product master (on the SNP2 tab pae! as lon as the value
is > 0.
Example
Situation at the start of the month"
The pull deployment horizon is #$ days lon.
%lanned distribution demand e&ists for the #'th and ('th of the month.
)esults"
*eployment only takes into account distribution demand that has been confirmed for the demand
planned on the #'th of the month.
SNP: Push Deployment Horizon (in Days)
Specifies the period of time over which the deployment optimizer takes into account receipts that were
defined in the ATD Receipt cateory roup in location master data. The horizon starts from today's date.
The optimizer takes into account stock on hand from the entire plannin period, independently of any
horizons that have been defined.
Dependenies
If you set the Use Horizons from Product Master indicator, the deployment optimizer considers the value
you defined for this horizon in the location product master (on the SNP 2 tab pae! as lon as the value
is > 0.
Example
Situation"
Start of the month
The push deployment horizon is #$ days lon
%roduction is confirmed on day #'
%roduction is confirmed on day ('
Stock that can be used without restrictions and cateories for confirmed production are
contained in the +T* )eceipt cateory roup
)esults"
*urin its deployment calculations, the system takes into account the production that is confirmed for
day #'.
SNP: !he"in# Horizon in Days
Use
The S,% checkin horizon is used in deployment to calculate the -uantity available for distribution to the
demand locations (available.to.deploy (+T*! -uantity!. It limits the -uantity that is available within the
push deployment horizon.
If you specify an S,% checkin horizon, deployment calculates the +T* -uantity for a period within the
S,% checkin horizon by addin the +T* receipts for the current period and the past periods and
subtractin all +T* issues within the S,% checkin horizon.
If you do not specify an S,% checkin horizon, or the period in -uestion lies outside the S,% checkin
horizon, deployment adds the +T* receipts of the current period and the past periods and subtracts the
+T* issues for these periods.
*eployment takes only +T* receipts and issues within the push deployment horizon into account.
Dependenies
/ou can define the S,% checkin horizon for the deployment optimizer both in the location product
master (on the SNP2 tab pae! and in the S,% deployment optimizer profile (on the Deployment
Parameters tab pae!. If you want the deployment optimizer to take into account the value defined in the
location product master, you have to enter a value there of > 0 and set the Horizons from Product
Master/ Profile indicator in the deployment optimizer profile. If you do not do this, the system uses the
value you defined in the deployment optimizer profile.
Example
The followin e&ample illustrates the advantaes of an S,% checkin horizon"
Period $%D &uantity $%D issue
# #''' '
( #''' '
0 $'' $''
If you have not specifed an S,% checkin horizon, deployment can distribute the entire available
-uantity of #''' pieces in the first period. 1owever, this would lead to a shortae of $'' pieces in the
third period. 2ith a sufficiently lare S,% checkin horizon, the available -uantity would already be
reduced in the first period by the issue of $'' pieces from the third period. This would prevent a
shortae resultin from deployment distributin e&cessive -uantities in the first two periods.
The followin e&ample illustrates the disadvantaes of an S,% checkin horizon"
Period ' (
+T* receipt" #'' #''
+T* issue" ' #''
+T* -uantity with checkin horizon" ' #''
+T* -uantity without checkin horizon" #'' #''
%lanned distribution demand" #'' '
*eployment can only distribute a minimum of the available -uantity within the S,% checkin horizon.
This can result in deployment not confirmin an SNP sto" trans)er at the earliest possible point in
time. The planned distribution demand could not be confirmed by deployment until the second period
althouh a sufficient +T* -uantity was already available in the first period.