Forecast Consumption in ASCP

Forecast consumption is a process in which an estimate of demand is replaced by

actual demand. Forecasts are estimates of demand and sales orders are actual
demand. Each time you create a sales order line, you create actual demand. If the
actual demand is already forecasted, the forecast demand must be decremented by
the sales order quantity to avoid countin the same demand twice. So enablin
forecast consumption ensures that demand is not duplicated when we ive it as
input to a supply plannin process.
In a forecast consumption process the forecast quantities are relieved based on the
schedule shipment date in the sales order line. !he followin e"ample e"plains
forecast consumption process based on scheduled shipment date.
#et$s assume that the forecast %in wee&ly buc&ets' for a roller assembly ()*)+ is as
iven below
#et$s now assume that you receive a sales order %S,-../.' for ()*)+.
S,-../. is for 01 nos. and has a scheduled shipment date of () in 2ee& 3

In case of S,-../. the forecast consumption process will loo& for a forecast entry in
the same wee& as that of the scheduled shipment date and the forecast for that
wee& %23 in this case' will be consumed by the sales order.
So after forecast consumption the new demand statement will be as iven below.
4ac&ward and Forward consumption days
In forecastin process it is quite di5cult to et accurate forecast 6ures on speci6c
days. Instead the total forecast numbers over a span of time tend to be much more
accurate than daily estimates. So it is desired that a sales order consumes forecast
spread over a prede6ned span of time around its scheduled shipment date instead
of consumin only the forecast available on the scheduled shipment date. !his is
enabled by specifyin the bac&ward and forward schedulin days in the forecast
set. %Forecast set is nothin but a roup of multiple forecasts7..for e. 8ou may
de6ne a Forecast Set to hold the forecasts 9(emand estimates of :orth America;
and 9(emand estimates of <est of America;'.
#et$s ta&e above e"ample aain. !he forecast for ()*)+ is
#et$s now assume that the span over which the forecast accuracy is very hih is 3.
days and it is modeled by de6nin
4ac&ward days = ).
Forward days = 0.
!he consumption process for S,-../. starts at its scheduled shipment date %() of
23'. Entire forecast of 1 nos. will et consumed by S,-../.. After consumin 1 nos.
on () of 23 the sales order still has 0. nos. remainin. So the consumption process
now starts oin bac& in daily buc&ets. It oes bac& by ) day. >oin bac& by ) day
ta&es the consumption process into (1 of 20. !he forecast for 20 is 1. It ets
consumed totally. <emainin qty. in the sales order is now )1. Consumption process
oes bac&ward by another day %into (? of 20'. It continues oin bac&wards in
order to consume the forecast till one of the followin is true.
Sales order quantity is completely e"hausted in the consumption process
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#imit set by 4ac&ward (ays settin is reached.
In our e"ample the consumption process can o bac&ward up to () of 2). %). days
bac&wards from SS( of the sales order' in doin so it consumes 1 forecasts of 23
and 20 and 2). Even after oin fully bac&wards there are still ). nos. remainin
the sales order. So now it starts oin forwards from the scheduled shipment date.
It &eeps on oin forward till one of the followin is true
Sales order quantity is completely e"hausted in the consumption process
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#imit set by Forward (ays settin is reached.
In out e"ample the consumption process will o forward in 2? and 21. Forecast of *
nos. in 2? ets fully consumed and 0 nos. will et consumed from the forecast of
21.
!he demand statement now loo&s as iven below7
#et$s now assume that you receive a sales order %S,-../)' for ()*)+.
S,-../) is for )1 nos. and has a scheduled shipment date of (0 in 2ee& ?.
In case of S,-../) the forecast consumptions will also start at its scheduled
shipment date and it will consume from the current quantities available in the
forecast. %Current quantity is the quantity left over in the forecast after consumption
by previous order'.
!he total demand statement now loo&s as iven below
<ole of past due forecasts and shipped sales orders in the
consumption process
In all of the above e"amples we assumed that the plannin process %of which
forecast consumption is a part' was run on () of 2). As we move into the future
period there would be shipment aainst the sales order. S,-../. will et shipped
out on () of 23 and So-../) will et shipped out on (0 of 2?.
#et$s now assume that the current day is (0 of 23. 4y default the plannin process
drops o@ past due forecasts and does not collect closed %shipped out' order lines.
4ecause of this the forecast statement on (0 of 23 starts loo&in as iven below
!his results in incorrect total demand statement. !he forecast of 2? and 21 earlier
ot consumed by * nos. and 0 nos. respectively by S,-../.. As S,-../. is a closed
sales order and hence is dropped by the plannin process bein run on (0 of 23
these quantities are now available for consumption for S,-../).
!o avoid this we need to collect past due forecasts and closed sales orders also
durin data collection process and thus ma&e them available for forecast
consumption process which is e"ecuted when the supply chain plan is launched.
If we set up the application %throuh ASCP pro6les and A<P parameters in source
instance oraniBation' in such a way that it collects past due forecast for )) days
and closed sales orders for )) days from the date of plan run the total demand
statement after forecast consumption by ASCP on (0 of 23 will be once aain as
desired.
Setups involved
Followin setups are involved to enable forecast consumption in ASCP.
Setups Involved
). (e6ne forecast control attribute for items forecasted.
0. (e6ne consumption enabled forecast sets in the source instance
3. (e6ne bac&ward and forward days for forecast sets
?. (e6ne outlier percentae for forecast sets
1. Collect data and specify forecast sets to be used in the demand schedule
in the 9,raniBations; tab of plan options.
C. Enable 9Include Sales ,rders; chec& bo".
/. Chec& 9consume by forecast buc&et; if you want to allow only those S,s
fallin in a forecast buc&et to consume forecast of that forecast buc&et.
*. Ensure that #aunch Snapshot is set to 8es while launchin the supply
chain plan as forecast consumption in ASCP happens durin the snapshot
phase.
<elated pro6le options
). ASCD Consume forecast within demand time fence % 8es76rst consume
and then drop, :o776rst drop and then consume beyond (!F'
0. ASCD Consume forecast with no demand class % 8es7 will ensure that
forecast that are not associated with a demand class will also et
consumed'
3. ASCD Sales ,rders ,@set (ays % Esed to decide the e"tent of closed sales
order lines that ASCP will collect and use in the forecast consumption
process'
Approach to decide collection time-spans for past due forecasts
and closed orders
,ption )
!he above scheme of thins will wor& e@ectively if the forecast accuracy levels are
hih %close to +.F or more' over the span covered by %4ac&ward G forward' days7
i.e. 3. in our case. Hiher levels of accuracy mean there is minimal possibility of
havin unconsumed forecasts in this time span. So no need to loo& too much in past
to 6nd out unconsumed forecast7hence the abovementioned span for collectin old
forecasts would be su5cient.
4y collectin shipments as old as 9forward consumption days; we ensure that the
claims on current wee&$s forecasts by all possible sales orders are visible to ASCP.
Since the collection time span for old forecast is more than time span for S,s by
9bac&ward consumption days; we ensure that all possible forecasts from which the
oldest shipment can consume quantities are visible to the consumption process.
Current 2ee&
%(ay of plan run'
Shipment Collection
Span = Forward
consumption days
Shipment Collection Span =
Forward consumption days
,ption 0
If the level of forecast accuracy is not hih in the time span covered by %4ac&ward G
Forward' days then
A' 2e can suest update of bac&ward and forward days in such a manner that
forecast accuracies are hih over this time span. ,nce this is done 7,ption ) can
be followed to decide collection time spans for old forecasts and shipments.
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4' !he collection time span for both old forecast and sales orders need to be set
equal to 9forecast revision frequency;. %If it is once in 3 months it needs to be set to
3 months'. !his is because low levels of accuracy mean sini6cant e"istence of
unconsumed forecast and typically unconsumed past due forecasts are carried
forward to current periods. In such cases hiher the collection times span the better
it is. As a thumb rule it is &ept equal to the 9forecast updation frequency;
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C' In spite low levels of accuracy if the policy is not to carry past unconsumed
forecasts to current plannin buc&et7then aain ,ption ) can be followed.