Saturday, December 27, 2008

From Water Distribution to Product Allocation

The water distribution control system is quite similar to gATP product allocation. What is available in vanilla PAL is something like the open loop control system.

A common development in PAL implementations is to use sales forecast to create the allocation plan. By frequently updating the allocation plan, PAL will become a feedback controller.

The key piece of technology to have a good control system is the controller. In this case the controller is the logic that calculates the bucket capacities from the sales forecast and user defined constraints. It is a bit amazing that SAP APO, probably the most advanced supply chain planning system, left this key piece of technology out of the software. It is up to the people doing the implementation to build the controller. And that is something hard interesting to do.

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