Specification for Extensions of S&OP on HANA on

Multi-Level BOMs
May 15th, 2013

1. Introduction
Multi-level BOM (Bill-Of-Material) refers to the capability of modeling multi-level
production processes. Such processes contain the production of components. If, for
instance, finished product P is assembled out of component X and X itself is
produced by consuming component Y, then this describes two levels of production. It
does not matter whether the two production processes occur in one common or in
two different locations. So, even if P is produced in plant A and X is produced in plant
B and transported to plant A this still is called a multi-level production process.
The number of levels is arbitrary, i.e. not limited.
Multi-level BOMs allow to model such multi-level processes in S&OP on HANA via
the production sources. Production sources contain BOM information as well as
information about routings (relevant resources, resource consumption rates, etc.).
We therefore, in the sequel, talk about multi-level production sources, instead.

2. Data Model for a Multi-Level Production Source

Production sources are defined via tables <prefix>SOURCEPRODUCTION (table 1)
and <prefix>PRODUCTIONSOURCEITM (table 2 below). The following example
illustrates how to model the example given in section 1. In the first table the two
products P and X are specified as output products in the two corresponding
production sources S1 and S2.
SOURCEID

PRDID

LOCID

SOURCETYPE

S1
S2

P
X

L1
L1

P
P

OUTPUTCOEFFICIENT
1.0
1.0

Table 1: Table SOURCEPRODUCTION (not all attributes depicted)

In the second table the source items are to be specified which are the input products
X and Y.
SOURCEID

SOURCEITEMID

PRDID

S1

X
Page 1

COMPONENTCOEFFICIENT
1.0

S2

2.0

Table 2: Table PRODUCTIONSOURCEITM (not all attributes depicted)

A component, like for instance components X or Y, in the example above, can be

modeled as components of several different production sources. So, X and / or Y can
be components of a production source S3 defining an output product Q.

3. Planning
The planning algorithms of S&OP on HANA consider each production step in a multilevel process in an identical way, meaning that there are no specific considerations
for a multi-level compared to a single level model. The net demands of the
components (input products) of the first (highest level) process are propagated as
dependent demands to succeeding (lower level) production steps. Lot size
parameters are respected individually for each production step as defined by the
corresponding production source.
There are no differences concerning the multi-level production sources between the
S&OP heuristic and the optimizer.

4. Production and Transportation

It will be possible to satisfy a net demand (at an own location) partially by a
production process and by a transport whereas a quota suggest in which fraction the
net demand should be produced and which remaining net demand should be
transported from another location. This quota is respected by the S&OP heuristic
whereas the optimizer computes the cost-optimal supply independently from the predefined quota. This functionality is not directly related with multi-level production
sources, however, it can be seen in this context and we there added this section into
this specification.
A user can use the quota (which is time dependent) in order to evaluate a make-orbuy decision. To do so, he first should set the quota for the production sourcing rule
equal to 100% and the quota of the alternative transportation sourcing rule to 0%,
then to compute a plan. Before a second run he would have to exchange the quota
values and re-compute.

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