Using CTM With No Customer or Order Priorities - Brightwork Research & Analysis

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Executive Summary

Why would a company use CTM with no priorities?
Using CTM as a convenient way to convert demand rationally.
Does CTM explode the BOM?

Introduction

After spending most of my time on Capable to Match projects where prioritization functionality was highly emphasized, it was disarming to recently come upon a company using Capable to Match with no priorities at all. (since initially writing this article, I have come across several more.) This article will describe how CTM can be used as a supply planning tool when priorities are not set up in the system.

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Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.

This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem.
Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. As you are reading this article, consider how rare this is. The vast majority of information on the Internet on SAP is provided by SAP, which is filled with false claims and sleazy consulting companies and SAP consultants who will tell any lie for personal benefit. Furthermore, SAP pays off all IT analysts -- who have the same concern for accuracy as SAP. Not one of these entities will disclose their pro-SAP financial bias to their readers.

The Background on CTM Priorities

As is covered in this article, too much manipulation of customer priorities can stall Capable to Match projects. However, interestingly, priorities are not completely necessary to get value from Capable to Match. In terms of fully understanding both supply and demand priorities that can be set, this quotation is illustrative:

Demand priorities can be chosen arbitrarily, popular examples are prioritization according order date, product groups, customer etc.. Whenever the algorithm has to choose between sourcing alternatives pre-set priorities and quotas are used. These priorities and quotas are defined on the transportation lane and PPM. – Real Optimization with SAP APO

A Convenient Way to Convert Demand Rationally

The settings in the CTM Profile show functionality which can be leveraged that is unrelated to priorities. One can perform backward and forward scheduling, a selection that can be set within the profile. However, CTM does other things that are not evident or can be selected from the profile. These include:

Scheduling orders around overcapacity resources
Converting demand into planned orders
Ordering in quantities consistent with the settings on the Product Location Master

Exploding the BOM with CTM?

One thing CTM does not do, which is sometimes confused with doing, is exploding the BOM. There are two things to keep in mind on this point. For companies that do not place much of their dependent demand into APO (the more common method), the BOM cannot be exploded in APO in any case. However, for those companies that choose to plan all their APO materials, CTM is still not exploding the BOM. The functionality where dependent demand order dates are moved following their lead-times when their independent material is changed is not CTM’s function. It is a function of the inherent order scheduling in SNP and PP/DS. This can be demonstrated by entering a finished good and then changing the planned order date. If the dependent demand materials are checked, they will be found to be moved without any procedure (CTM or otherwise) run on APO.

Conclusion

CTM can add value even if no priorities are used. Without priorities, CTM becomes a convenient tool to convert demand, constrain planned orders vs. resources, round-up order quantities to match lot sizing settings, and both backward and forward schedules. As described in this article, Capable to Match must be considered a much more nuanced tool, capable of a variety of prioritization configurations.