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Everything You wanted to Know about Attribute Based Planning

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Attribute-Based Planning

Why do we need Attribute Based Planning? Attributes are properties specific to an object. In a supply chain, like anything else, everything that you deal with has attributes.  Some examples of supply chain objects with Attributes are:

  • Customers: priorities, size, repeat business potential, …
  • Products, raw materials, and WIP: speed, texture, grade, quality, taste, shade, color, size, …
  • Equipment: Precision, Maintenance, cost, speed, output quality, …
  • Suppliers: qualification, quality, service level, cost, …
  • Processes: Customer approved, Output quality, yield, …
  • Regions: Labor laws, stability, price, legal requirements, import/export restrictions, transportation, weather

We can keep adding more objects such as tools, cost restrictions, packaging skill levels, and storage temperatures.
Such Attributes are required in order to plan and peg products to the right order. Unlike what is commonly believed, Attributes are not just for the finished goods! Attributes appear at every stage of sourcing, making and delivery. For example, one needs to use a specific qualified supplier, process and product specifications for an end customer. In the absence of Attributes, to perform the above task, most supply chain vendors create every single combination of the bill of materials to ensure the right product is made for each demand item. The problem with this approach is that even if you have 20 different attributes (In reality there are many more when you consider the entire supply chain), the number of combinations of SKU’s and bills of materials will be in the order of 20! which is around 2.5 quadrillion! Now you know, why some systems run so slowly even if they use In-Memory computation. So, in order to partially avoid this, what they do is that they can only limit attributes to the finished goods; and pegging is done after the plans are made rather than during the planning runs.

With Attribute Based Planning (ABP) capability, a generic product (BOM) is defined and then all the attributes are attached to the generic BOM, based on the specifics of end item demand dynamically. This reduces the complexity of the model and memory requirement by orders of magnitude and keeps the SKUs to the minimum.

One other very important use of Attributes is that, as the structure of your supply chain changes (e.g. acquisition of new companies, new products, new customers, or new suppliers), system users can simply add or delete attributes as needed. The system would then automatically take into account the new attributes into its search strategy every time it runs. In other words, Attributes take the role of dynamic constraints that can be added or removed, by the users, as the business changes.

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