Boyum - SAP Integration to Reserve Inventory
SAP has the functionality to allocate inventory to specific sales orders when the items are batch or serial controlled. This Boyum add-on provides the means to reserve non-batch or serial controlled inventory. In many instances inventory availability is subject to shortages. This Boyum ‘add-on’ provides the capability to ‘reserve’ inventory for specific sales orders. For instance, you may have 1,000 on hand of an item and 6 open sales orders that require a total quantity of 1,500. You want to allocate this inventory in some manner to keep the bulk of your customers happy, or at least your critical customers.
Definition of 'Available To Sell'
Available to sell for our purposes is:
The on hand in a specific warehouse less the quantity in a ‘return request’ document that is being sent to another warehouse from this same warehouse. The ‘return request’ is treated as an in-transit inventory transfer.
For example, part A has 250 on hand in warehouse ‘10’ and a ‘return request’ of this same part for 80 pieces is being sent to warehouse ‘20’. The net available on hand for part A in warehouse 10 is 250 – 80 = 170 ‘available to sell’.
Do not confuse this definition with the SAP 'Available' on hand as shown in the inventory tab on the item master screen.
When to Reserve?
A major consideration is how often should inventory be reserved. The choices are:• As orders are entered the inventory is reserved• Periodically, a user runs processes to reserve the inventory. i.e. a process could be run at noon and again at the end of the day to reserve inventory – either ‘automated’ reservations or manually assigned reservations.
Inventory Reserve Setups by Warehouse
Limiting Use of 'Reserve Inventory'
This Boyum add-on provides the means to ‘reserve’ inventory for specific item – orders. There are considerations for items subject to ‘reservations’. 1. Some items do not require inventory to be reserved. The levels of inventory available for this item are rarely less than the sum of the open order quantities so there is no need to change SAP procedures to include ‘reserve on hand’. The other consideration for these items is that they may be able to be quickly brought into stock, so reserving the current on hand is not necessary.
2. There are items that require inventory to be reserved, but the inventory is ‘reserved’ on a first come – first served basis. The Boyum functions to address this level of ‘reservation’ is ‘automatic’ in that the user runs a process periodically to ‘reserve’ inventory on an item-by item-basis.3. Items with chronic shortages require a person to make the decision as to which customer orders are assigned the available on hand of these items. This requires manual intervention by a staff member.
4. Batch and serial controlled inventory items are not handled using this add-on unless you want to reserve inventory ignoring the batch or serial numbers. Use standard SAP functions for those items where the batch and serial number allocations are of paramount importance.
NOTE: This add-on is designed to handle the case where your company has multiple warehouses, and works for a single warehouse as well.
Practical Implementation Options
In practice, how would your company use this Boyum functionality?
Here are two basic options on a conceptual level - with the assumption being that you have several thousand SKUs:
1. Only 30 – 40 parts are routinely subject to shortages. You would want to ‘flag’ these 30 – 40 parts and manage the allocation of on hand as new orders are received from customers. A ‘setup’ function is required to identify the 30 – 40 parts. You would add or remove parts from this list as shortages emerge or fade.2. You want to manage all items with inventory reservations by sales order. In this instance, there is a ‘general’ setup for all items, but no specific items need to be identified for inventory reservations.
There is a general setup table ‘Reserve Inventory Setup’ which must be set up with one record per warehouse using inventory reserves. This ‘setup’ table defines the types of inventory reservations in use and the timing of the processing of reserved inventory for each warehouse. Each warehouse manager defines these options - so they can differ by warehouse.
Sort Hierarchy – when inventory is automatically reserved by an algorithm there are 2 hierarchies used to sort the data: use the sales order due date; and use the ‘Customer Priority’ code as the primary sort sequence with the order due date as the secondary sort sequence.
How to Reserve InventoryAll - this means that all inventory items are subject to being reserved. Specific items could be designated as 'Manually Reserved' whereas others could be 'auto' reserved.
Only Items Identified - this means the user must identify all of the items which will be reserved. All other items will not be reserved. This is a typical setting when trying to manage chronic shortages. Note: while identifiying items to be reserved some of these can be designated as 'Manual Reserve' - meaning the user will apply the reserve quantities on an order by order basis.
Timing of Reserve
Inventory can be reserved as the sales orders are entered or users can periodically run processes (manual or automatic) to reserve inventory.
Include Batch / Serial Items - SAP has functions to allow the user to manage inventory allocations for batch and serial controlled items. You can still utilize this application to handle batch and serial controlled items, but by default they are not managed and you need to specifically state your intent manager batch and serial controlled items
Boyum Functions
User Defined Tables
Use standard SAP functionality to create the user defined tables. Then use the SAP function to create the User Defined Object' for Reserve Items' - screen shown throughout.IPT Creates Buttons on UDO
Use the Item Placement Tool to create buttons on the UDO for 'Reserve Items'.Clear Reserves Actions
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The gallery shows the B1 Validation to initiate the 'Clear Reserves' process and all of the associated Universal Functions accessed by clicking the Clear Reserves button.Show List Actions
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The Show List button is initiated using a B1 Validation and this calls a Universal Function that produces a SQL report.Auto Reserve Button
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Report Reserves Button
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Apply Manual Button
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Reserve Item Form
These screens detail the checks on the Reserve Item UDO form not related to the buttons.Warehouse Setup
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Scenarios Based on Setup
Option 1
‘How to reserve inventory’ will be set to Only Items Identified - meaning there must be a list of items to manage. ‘Timing of Reserves’ will be set to ‘Periodic Processing' and can be run at the discretion of the user..png)
Within this option, some items can be flagged as 'Manually Reserved'. Those would require user intervention to be reserved..png)
Option 2
‘How to reserve inventory’ will be set to Only Items Identified - meaning there must be a list of items to manage. ‘Timing of Reserves’ will be set to ‘Order by Order' - meaning the reserve quantities are allocated as the sales orders are entered.
Within this option, some items can be flagged as 'Manually Reserved'. Those would require user intervention to be reserved.
Option 3
‘How to reserve inventory’ will be set to 'All'- there does not need to be a list of items to manage. ‘Timing of Reserves’ will be set to Periodic - meaning the reserve quantities are allocated when the user runs a process.
Some items are 'excluded' from 'All' items and managed manually.
Option 4
‘How to reserve inventory’ will be set to 'All'- there does not need to be a list of items to manage. ‘Timing of Reserves’ will be set to ‘Order by Order' - meaning the reserve quantities are allocated as the sales orders are entered.
Some items are 'excluded' from 'All' items and managed manually..png)
Reserve Process Functions
Show List Button
The information on the Reserve Items screen is displayed in the sequence it was entered. The 'Show list' displays the information in either item sequence or item group, item sequence.
Auto Reserve Button
This button is used to automatically calculate the reserve quantity for those inventory items that are not ‘Manually’ assigned. It is 'active' when the timing of reserving inventory is set to 'Periodic', but NOT when set to 'Order by Order'. The user is prompted to select a report by Item or Sales Order. The resulting report versions are shown. The actual processing of the reserve application takes place and then the report (by item or sales order) is presented to the user. Note: the reserve quantities are applied based on the setup function ‘Sort Hierarchy’.
Report Reserves
This button provides the means to display the report of the items / orders with reserved quantities. It is basically the same report(s) as the 'Auto Reserves' result except it does not apply any reserves,. It simply reports reserves. The user is asked whether to display this report in item sequence of sales order sequence. The resulting report versions are shown.Apply Manual Button
This option provides the means to manually apply reserve quantities. When it is pressed the system displays the items that are manually controlled. To apply a quantity, enter the quantity in the applicable ‘row’ in the ‘Reserved Qty this Order’ column and click on the ‘Post’ check box. When you click on the ‘Close’ button the update of the reserved quantities will be applied. Note: if 'All' items is the current option selection then all items would display. If you have thousands of items on sales orders, click the 'X' at the top of the screen to do nothing. Otherwise, click the 'Close' button to update the reserves assigned - it goes through each line item on order.
When using the 'Apply Manual' option, the user is presented with every item (in this screen = 1 item), all instances of open orders for this item. The user enters the quantity to 'reserve' for each order and then clicks the 'Close' button to apply these reserve quantities.
