Excess inventory issue in Deployment

Question

Hello Everyone,
We are currently implementing Deployment optimizer for our client and we are now stuck up with a Excess inventory issue.
The issue is Deployment Optimizer is deploying the Deployment Purch Reqs in proportional to the demand when we have ATD stock less than the Demand at the DC's, but when we have excess inventory as ATD stock its not following the Demand proportions of the DC's.
Has anyone ever faced this issue in the past, If so then please let me know how did you resolve the issue.
We are currently using SCM 5.0 version and ECC 6.0.
Best Regards,
Chandrakanth Tatavarthi
Consultant-Supply Chain Planning,
Member-SCN Focus group,
Hotline:+ 917-475-5664,
Mobile:[phone].

Answer 1

Hi Chandrakanth,
For surplus ATD stocks than the demands situation, we have 3 possible rules to be set in the SNP deployment profile, which system considers in deployment optimizer run. We define costs and constraints inside the SNP deployment optimization profile and the SNP cost profile.
1.   Distribution Based on Lowest Costs
2. Push Distribution by Demand
3.  Earliest Delivery
Please check if these setting are maintained appropriately.
The objective of the deployment optimizer is to determine distribution plan with overall  lowest costs.  In your situation, we can conclude that, system keeps excess inventories instead of deploying the same, because it finds  overall costs lower, in keeping rather than deploying.
The deployment optimizer considers the following costs defined in the supply chain model:
u2022        Storage and transportation costs
u2022        Costs for increasing storage, transportation and handling capacity
u2022        Safety stock penalty
u2022        Late delivery penalty
u2022        Non-delivery penalty
Please review these costs. For example if you increase the storage costs, then, system will
Deploy more ( as keeping stocks will cost more).
  I do not know  your SCM 5.0 system current Service pack
If it lower than SP 15, then please check if the note 1266418( Deployment Optimizer : Incorrect fair share results) is applicable.
In summary , you will have to check the SNP deployment optimization profile and the SNP cost profile settings. With the given costs, try to interpret the deployment results.
I hope this helps you.
Regards
Datta
Edited by: Datta  Kadam on Apr 7, 2010 7:19 PM