A television set package is comprised of a television and a television stand. Although these components are not assembled together, a customer placing an order would expect the television and the stand to arrive together. The television and the stand are stocked separately in the warehouse. When a customer places an order for 10 television packages, the sales order would recognize that the order is really for 10 television sets and 10 stands. When the available-to-promise (ATP) check happens on the sales order, it should make sure that 10 of each are available. If only six televisions and seven television stands are available, then it should recognize the relationship and confirm only six of each in the sales order.

I’ll explain the necessary configuration settings in R/3 and APO 4.0 and the required master data setup to make this work. I’ll provide a product allocations scenario as an example, and then show how to use the functionality when you run backorder processing.

An Example Scenario

Consider a package consisting of one of component A and five of component B. When a sales order is created for two units of the package, it should explode into two units of component A and 10 units of component B. When a sales order is placed for the package, it should explode into the different components in the bill of materials (BOM) defined for the package. Further, the system should invoke the correlation functionality when the ATP check is done for the sales order.

Configuration Settings in R/3

To prepare R/3 for use of the correlation profile, take these three steps:

Step 1. Define the item category.

Step 2. Assign the item category group for the package.

Step 3. Assign the item category group for the components.

Step 1. Define the item category. Configure the item category derived for the material package in the sales order to allow the delivery group correlation of the components of the BOM and the BOM explosion. Use transaction SPRO and follow menu path SAP Reference IMG>Sales and Distribution>Sales>Sales Documents> Sales Document Item>Define Item Categories. This brings up a screen entitled Maintain Item categories overview. On this screen highlight the item category — I have defined and configured ZPHD for my example. Click on the lens icon to bring up the details of this item category. This takes you to the screen in Figure 1. I’m focusing only on the section (circled) that is relevant to this article, Bill of Material/Configuration.

Figure 1

Define the item category

The Structure scope defines how the system processes the BOM in a sales order involving this item category. It defines whether you can configure the material. For non-configurable materials, it defines whether and to what level you explode the BOM. I chose the value A, which means explode the single-level BOM. Figure 2 displays the other possible values.

Figure 2

Values for the Structure scope

I specified the Application as SD01, corresponding to Sales and Distribution (SD). This enables automatic determination of the correct BOM alternative for different organizational areas, in this case for SD.

I chose the value A for Create Delivery Group. A stands for creating a delivery group with correlated schedule lines. The other possible values are blank, which means no delivery group, or X, which means that only a delivery date is created for the delivery group. The Manual Alternative option means that if you have multiple BOMs for the material, you can select an alternative manually.

Next I’ll explain how to ensure that the system automatically picks up item category ZPHD in the sales order for the package material.

Step 2. Assign the item category group for the package. Do this by ensuring that the item category group that is assigned to the package material in the material master has the default item category ZPHD for the document type that the system uses for creating the sales order. Figure 3 shows that the Item category group ZCPK is assigned to the material package in the Sales: sales org. 2 view of the material master.

Figure 3

Assign the item category in the material master

Therefore, for Item category group ZCPK and for the document type used to create a sales order, the system should pick up item category ZPHD automatically in the sales order. Set this up via transaction SPRO and follow menu path SAP Reference IMG>Sales and Distribution>Sales>Sales Documents>Sales Document Item>Assign Item Categories. Figure 4 shows that for the document type ZOR (SaTy) and item category ZCPK (ItCGr), item category usage is blank. The system then chooses the default item category (DfltC), which is ZPHD.

Figure 4

Assign the item category to the item category group

Step 3. Assign the item category group for the components. The item category assignment also should ensure that the system picks up the correct item category for the components. Do this by linking the higher level category (ZPHD) to the default item category (ZPCM) for the components, as shown in Figure 5, again through the same transaction as in step 2. Note that the item category group for the component is NORM (Figure 6). Follow step 2 in the material master to accomplish this.

Figure 5

Link ZPHD with the default item category for the components, ZPCM

Figure 6

Assign the item category group for the components

The package itself is a “logical” entity; in reality, it just corresponds to one of component 1 and five of component 2. Therefore, it is not stocked in the warehouse as a physical entity. You should specify the header schedule line category as not relevant for delivery because only the components are delivered.

Do this via transaction SPRO and follow menu path SAP Reference IMG>Sales and Distribution>Sales>Sales Documents>Schedule Lines>Define Schedule Line categories. This brings up the Maintain Schedule Line Categories overview screen. Highlight the schedule line category ZT (configured for my example) and double-click to bring up the screen in Figure 7. As you can see, the relevant check box for delivery indicator (Item rel.f.dlv.) highlighted is not selected because you do not stock and deliver the package.

Figure 7

Maintain the schedule line categories for the header

The schedule line category that the system automatically proposes for the package header is ZT, as shown in Figure 8. Set this up via transaction SPRO and follow menu path SAP Reference IMG>Sales and Distribution>Sales>Sales Documents>Schedule Lines>Assign Schedule Line categories.

Figure 8

Assign the schedule line category for the package header

Master Data Setup in R/3

Now that I have reviewed the important configuration settings in R/3, I’ll go on to the required master data setup in R/3 to make the functionality work.

The BOM is defined for the product package as one of COMPONENT1 and five of COMPONENT2 (Figure 9).

Figure 9

Material BOM for the package

While I will not go into great detail about how to define the BOM, you do need to make some relevant settings. Make COMPONENT1 and COMPONENT2 relevant for sales so that the components are picked up when the BOM explosion occurs after a sales order is created for the package. Figure 10 shows the highlighted field Relevant to Sales with the value of X.

Figure 10

Make the component relevant for sales

Other Data Setup

Note that in addition to the settings in R/3, you should activate the integration models for the sales order and ATP check so that APO performs the ATP check. That process is beyond the scope of this article.

Configuration Settings in APO

Now let’s look at the configuration settings for the correlation profile in APO that determine how the availability check is performed. Access the settings via transaction SPRO and follow menu path SAP Reference IMG>Advanced Planning and Optimization>Global Available to Promise (Global ATP)>General Settings>Maintain correlation Profile. It brings up the screen in Figure 11. SAP defines two standard correlation profiles, called BOM and STD.

Figure 11

Correlation Profile in APO

The system automatically uses the Profile (shortened for Correlation Profile) called BOM when the BOM is used in the sales document and when the delivery group correlation is defined for the item category used for the material corresponding to the package. The system uses the STD correlation when the different line items in the sales order are linked by using the same delivery group.

The CorrTy (shortened for Correlation Type) defines whether the confirmations for the different line items in the sales order are linked only by the dates or whether they are also linked by the quantity of the different line items in the sales order. Notice that the CorrTy values are different between BOM and STD, the former using both quantity and date correlation, the latter using just the date correlation.

The next field, Corr: Confirm. Mode (shortened for Correlation: Confirmation Mode), defines how the system handles partial confirmation for the different line items. The standard setting is D for BOM, which means that if there are partial confirmations for the different line items, the system reduces to the minimum of the confirmations possible for the different line items. However, if one line item has a zero confirmation, then the system ignores the quantity correlation and carries out the correlation based on dates.

Another option that can be pertinent to my example is E, which means if the confirmation on one component turns out to be zero, then the system correlates this zero confirmation and reduces the confirmations for all line items in the sales order to zero. Notice that the standard setting for STD is to keep the confirmed quantities of the different line items. The basic idea is not to link between the confirmed quantities as in a BOM but to ship the different line items on the same date.

The third field, AdjMod, stands for the Adjustment Mode for Dependent Requirements. This is used in the context of a multilevel ATP check and is not within the scope of this article.

Order Entry and Correlation Profile

Here is a look at the sales order created for five units of the package (Figure 12). The two components are not entered manually, but are automatically created in the sales order. COMPONENT1 and COMPONENT2 are also on the product allocation and the ATP check is performed using a combination of product availability and allocation check. The sales order respects the quantities as defined in the BOM. When an order is created for five of the package, the sales order automatically creates five of COMPONENT1 and 25 of COMPONENT2 by exploding the BOM of the package. Note also that the two components are linked to the higher level item package by the field HgLvlt. It displays the value of 10, which corresponds to the sales order line item of 10 that has the material package.

Figure 12

Order entry and invoking correlation

The icon highlighted in a circle with the arrow corresponds to the APO delivery group correlation. The requested date on the line items is 06/13/2006.

When you click on the highlighted APO delivery group correlation icon, the system brings up the APO Availability Check – Result Overview screen (Figure 13). It shows the confirmation situation based on the availability check. The system shows a confirmation quantity of 1 for COMPONENT1 and 5 for COMPONENT2.

Figure 13

APO availability check

Since the two components are allocated, the confirmations are limited to their allocation as well as the product availability check. Figure 14 shows a view of the allocation situation. The allocation for COMPONENT1 and COMPONENT2 is 10 and 6, respectively.

Figure 14

Display of the allocation plan for components

Figure 15 is a view of the product availability overview for COMPONENT1. It shows a quantity of 4 available. For the second component, Figure 16 shows an availability of 6.

Figure 15

Product availability overview of COMPONENT1

Figure 16

Product availability overview of COMPONENT2

Result of ATP check without correlation: The system could have confirmed four and six, respectively, without taking into account the correlation between the components 1 and 2.

Result of ATP check with correlation: However, because of the correlation, the system confirms one and five for the quantity in the BOM with a common material availability date of 06/13/2006 so that the materials are shipped together on the same date. The result shows how the correlation profile has worked to ensure consistency in the confirmation between the two components of the BOM with respect to both confirmation quantities and confirmation dates.

While the above shows how the correlation function works in a manual ATP check in a sales order, in most companies backorder processing would run at frequent intervals (often nightly) to ensure that the confirmations on the open orders in the system are current and aligned with the organizational priorities to meet the customer demands. This requires that you account for the correlation function in backorder processing as well.

Correlation in Backorder Processing

For correlation to be considered in backorder processing, you need to check the correlation group fields on the variant that you use to run the backorder processing (Figure 17). Access it via menu path Global ATP>Backorder Processing>Backorder Processing in the Background or transaction /SAPAPO/BOP. Click on the check box called Correlation to ensure that the correlation calculation is done when backorder processing runs. If a sales order has multiple line items and only one product is selected based on the filter type, the other products are automatically included in the backorder processing.

Figure 17

Include the correlation check in backorder processing

However, the ATP check is not done for the other items that are now included in the backorder processing unless you check the check box corresponding to Check Correltn Group.

I recommend you include the order number and the correlation group in the Sort profile (SORT) used in the backorder processing run. This ensures that all the items of the same order are considered together (and if they are correlated, the correlated line items are taken together) and checked for correlation. As a result of the ATP check and the order confirmations, the system can release the quantities that are not used to other sales documents, thereby making the ATP check more efficient.

Define the sort via transaction SPRO and follow menu path SAP Reference IMG>Advanced Planning and Optimization> Global Available to Promise (Global ATP)>Tools>Maintain Sort Profile. Define a new SORT criterion that includes the Order Number and the Correlation Group (Figure 18).

Figure 18

Maintain the Sort profile

Limitations of the Correlation Functionality

The correlation functionality has some limitations. If the components of the sales order are partially delivered, then the system no longer uses the BOM correlation profile. The standard SAP logic then uses the STD correlation, which means that the quantity correlation is not respected. The system just uses the date correlation. To make the system use the BOM correlation, select the user exit for the ATP check. If the Fixed quantity indicator is set on the schedule line for any of the items belonging to the correlation group, the correlation functionality again is not taken into account. Depending on your current APO, R/3, and Support Package versions, you might find SAP notes that are applicable to ensure the correct correlation functionality.