SAP S/4HANA Product Allocation Process

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Dear SAP Friends,

Welcome to another interesting topic, Product Allocation

In this blog, I would like to share process steps involved in Product Allocation

If you would like to know first what exactly product allocation is, Hear is a high-level overview

Competitive order processing that aims to deliver the required quantity to the customer at the requested time
demands precise planning and control mechanisms. Unpredictable problems, such as breakdowns in
production or increased demand, can lead to critical situations in order processing and must be brought under
control before they arise.

Product allocations provide this sort of control and enable your company to avoid these critical situations in
demand and procurement. Equal allocation of products in short supply must be possible, as must speedy
reaction to bottlenecks and changing market situations.

Depending on the period, you can allocate products for specific customers or regions. Using product
allocations in situations in which a product is in short supply, you can avoid allocating the entire available
quantity to the first customer, which either delays the confirmation of subsequent sales orders or makes
confirmation impossible.

Source SAP Library:- Product Allocation

Now let’s see how to activate Product Allocation

The system I used to execute PAL is S/4HANA 1909 FPS01

Once Activated PAL in SPRO rest everything needs to be done in Fiori there is no GUI transactions for PAL

Below are 5 Applications required to execute PAL

 1. Open Configure Product Allocation App

Click Create
Maintain Required Fields as per business requirement

Based on the requirement we can select both Sales orders and Stock Transfer Orders as well

Once General Information has maintained Click Characteristics and maintain

We can select characteristics based on the business requirement from the available list, if the available list is
not compatible with the business we can add more characteristics via “Manage Characteristic Catalogs” app
 
Once maintained General Information & Characteristics save

2. Open Manage Product Allocation Planning Data App

Click on Go to see previously created Allocation

Click on edit and then Add option to add characteristics which we have selected previously
In the Selection Range, we can select as per requirement

In allocation planning Data maintain Characteristic values and planning figures

The graph will be generated as per the values maintained in planning its Planned and available Quantity

Once all data maintained Save

3. Now Open Manage Product Allocation Sequences App

Click on Create

In General, Information Tab maintain Required Fields

Backward consumption & Forward Consumption data need to be given

Its how many months system need to consider for allocating, System first goes backwards if no quantity
available then system checks in forward

From 1909 onward Capacity Sequence groups have been introduced

Sales sequence groups are checked against product allocation before the product availability check. Capacity
sequence groups are considered after the product availability check.

 Open Sales sequence groups and from the drop-down select the Allocation Object which we created in 1 st step

The time period can be given as per requirement

Once maintained all values click apply and save

4. Open Assign Product to Product Allocation App

From Name itself, we can understand what needs to be done ?

We need to assign Material to Allocation Object

Note:- Unit of measure which we given initially while creation allocation object and materials which we add
must be same or else system will give an error

We can add materials as per requirement and once added click save

5. Open Product Allocation Overview App

To see allocation consumption

Allocation Object RUTHVIK PAL consumption is 0 now let us create a sales order and see
Created Sales order for FG126 with 20 Qty, but we have allocated only 10 in the month of April

From march to may it considered and allocated as per our allocation object

Now we can see Planned Qty Consumed Qty & available Qty
 In this way, we can allocate product and delivery to customers without any delays

Please share, Like and Comment anything else you want to share or add points.

Thanks & Regards

View more...
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39 Comments
You must be Logged on to comment or reply to a post.

Venkata Ravi Nanduri

April 3, 2020 at 2:05 pm
 Hi Ruthvik this a very good info. 
 Like 1
Pravin Mandgaonkar
November 1, 2020 at 7:32 pm

Hi Ruthwik,

Really a good blog to understand the product allocation process in new environment of S4 HANA.

Once we allocate 50 Pcs qty based on certain levels (say Sales Org/Dist Chann/Customer Group
1000/10/ZA)  Is this 50 qty available for any other customer from other customer group ZB?

I tried all the configuration as per your blog and did allocated qty as i said above, and observed that
it can be consumed by other customer group ZB. How we can avoid consumption by cust group?

Please suggest.

Venkat Ch
 Like 0
 Share

Ruthvik Chowdary
Blog Post Author
January 4, 2021 at 9:13 am
If you want to control a cross customer group, that needs to be maintained in paramaters while
maintaining
 Like 0
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Oriana Mercado
January 13, 2021 at 9:28 pm

Hi Ruthvik,

Thank you for sharing!

Is there a function or  similar application to Product allocation Overview App for product allocation in
SAP S4 Hana 1709 FPS02?

We really need an option not necessarily in fiori, for our implementation.

Regards
 Like 0
 Share

Ruthvik Chowdary
Blog Post Author
February 8, 2021 at 5:19 am

Hi Oriana Mercado

Product Allocation functionality is available from 1909 version

 Like 0
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venu gopal
February 25, 2021 at 1:29 pm

Hello Ruthvik,

I have maintained the same settings, but still sales order qnty is getting confirmed more what ever i
give.

Is there additional set up required?

Please let me know if you need some other screen shots.

 Like 0
 Share

Ruthvik Chowdary
Blog Post Author
February 26, 2021 at 5:56 am

Hi venu gopal,

Apart from the above-mentioned steps other aspects also matter like in Manage Product Allocation
Sequences allowing past will also matter

as you said from Feb you allocated 10 CS so the system will consider JAN and December as well
that might be the reason for getting allocated full stock for SO you create
 Like 0
 Share

In case there is a return of a product due to a quality issue, then the customer would return back and
be sent a new replacement product. How do we make the system update quantities based on
returns as well.

In the above case, without the return being updated ( as increase in allocation ), the system would
update the replacement being sent out to the customer resulting in an incorrect update of consumed
quantity.

How do we handle this in S4 HANA. ?

 Like 0
 Share

March 24, 2021 at 6:31 am

I'm Not sure this can be handled in PAL, If it's Customer Return it has to be having a Quality issue
so bringing it back to stock is up on quality clearence.

Rohit Zalani
April 9, 2021 at 11:38 pm

Hi Rutvik
 The issue is if you want to use Product allocation to manage "customer quota" arrangement where
you want to control the quantity of products that a customer can purchase in a given period ( say for
products that have a promotional pricing and you need a balanced market spread ).

In principle, you may be able to assign a product allocation object in the sequence that temporarily
"bumps up" the quantity allowed for the same period based on the returns received, but that would
be offline process.

ECC allocation had possibility to define incoming returns as a key figure with update rules and with a
move to S4 HANA, the clients would tend to loose that functionality.

Let me know what you think.

 Like 0
 Share

Manoj Kansal
April 7, 2021 at 2:01 pm

Hello Ruthvik,

Thanks for your effort and your post helps a lot . We are in middle of upgrading to S42020 and we
want to ensure that our system delivers the same results as earlier.

In S41809 we are using  PAL successfully by using two sequence groups in the Manage prodicut
allocaiton sequences.app with different product allcoation objects .

Here the system used to confirm the max available qty which was available from both the allocation
objects (e.g Req del date 01.05.2021 , order qty 300,  100kg maintained in Obj1 and 50 maintained
in Obj 2) so system confirmed 150 .

but now if I read the below information for S42020

(https://help.sap.com/viewer/f132c385e0234fe68ae9ff35b2da178c/2020.001/en-US/
da2927df848e4aa98818ec1aa737c35e.html)  , it says it will only confirm the max qty which is
available in both the objects which means (  it will check Obj 1 and Obj 2 both but confirm only 50, as
common qty on the same date across two objects is 50 )

Can you throw some light on this if you have come across such case ? or my understanding is
incorrect

Rohit Zalani
April 12, 2021 at 1:00 am

Hi Manoj
 There is a flag on the Allocation Sequences where you can specify that it should take the values with
the Consume overlapping quantities only.

Does that use help you in this case ?

Hatem Moubarak
August 22, 2021 at 8:36 am

Hello Ruthvik,

Thanks for this helpful information.

I am wondering if I can set planning data for product allocation as a percentage from the available
stock not quantities.

Thanks.
 Like 1
 Share

Abishek Gubbi Murugappa .

November 4, 2021 at 6:23 am

Hi Ruthvik,

There is a Business requirement in one of the clients, where they want product allocation to be set
up based on the customer classification in customer master (Classification: Group1 & Group2). Is it
possible to bring this field into the characteristic catalog to be used in product allocation planning
data? If yes could please let me know the steps to follow?

Thanks,

Abishek
 Like 0
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Ruthvik Chowdary
Blog Post Author
November 13, 2021 at 5:19 am

Hi Abishek Gubbi Murugappa .

 in the standard PAL, that field is not available to make rules, but we can get those fields in selection
rules by doing app extensibility by enhancing
 Like 0
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Abishek Gubbi Murugappa .

November 15, 2021 at 3:58 am

Hi Ruthvik,

Thanks a lot for your response. I have another requirement for one of the client, where we have
activated 4 weeks of backward scheduling & 1 week of forward scheduling. But the problem is if the
customer does not consume the quantities allocated to him during the allocated period. The system
should not consider these allocated quantities for the future, in which case the allocation does not
exist for this customer/material combination. Is there any settings where there is no allocation
existing for this customer for that period, the consumed quantity can be made void?

Hope to get a positive response! 

With regards,

Abishek
 Like 0
 Share

Ruthvik Chowdary
Blog Post Author
November 15, 2021 at 11:30 am
I'm not sure let me check and get back to you
2021 at 8:21 pm

Hi Ruthvik,

Thanks for this blog. What would a customer that does not go for aATP but chooses to stick with
basic ATP have as alternative? Is Product Allocation also available there? Especially interested for
customer using S4HANA Cloud.

Would be great if you could provide some kind of overview comparing the features of aATP with
basic ATP (both in S4 on prem and S4 cloud).

Kind regards,

Wouter
 Like 0
 Share
 Ruthvik Chowdary
Blog Post Author
November 25, 2021 at 7:17 am

Hi Wouter Van den Branden

firstly aATP is the same in S/4HANA and S/4HANA Cloud

Product allocation is not available in basic ATP

in aATP we have 4 components

 Like 1
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Raj kumar
December 3, 2021 at 1:52 pm

Hi Ruthvik,

Great Blog.

I have a query.

Suppose I have a total quantity of 1000 PCS in a particular month which I wish to allocate among
various customers.

I allocated CUST 1 (200 PCS), CUST 2 (300 PCS), CUST 3 (100 PCS). So total 600 PCS allocated.
to CUST 1, 2 and 3.

Now the balance 400, I don't want to allocate to any specific customer. Any customer (excluding
CUST 1, 2 and 3) can purchase the balance 400.  How to achieve this functionality ? Kindly suggest.

Ruthvik Chowdary
Blog Post Author
December 13, 2021 at 12:02 pm

Hi Raj kumar,

balance 400 you can utilize like normal Sales process system will show available Qty to other
customers other than  CUST 1, 2 and 3 no need to do anything else
 Like 0
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 Afreen Shaikh
December 9, 2021 at 6:28 pm

Hi Ruthvik,

Thanks for blog...!

I have Activated PAL in SPRO (1909) and follow all the steps still confirmed qty in sales order its not
show in consumption just want to know its only after invoicing its show as consumed ? and if the Qty
is not confirmed so how it will show in bar chart please guide what is missing.

can we link IBP forecast planning data with aATP PAL check is there any scope for Automation ?

Thanks

Ruthvik Chowdary
Blog Post Author
December 13, 2021 at 11:59 am

Hi Afreen,

Until if the Sales order is confirmed with the proposed Qty or the Qty is Delivered it wont show as
consumed.

Yes we can Link IBP and can Automate

 Like 0
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Vineet Kumar
April 21, 2022 at 12:11 pm

Hi Ruthvik,

Thanks for the blog. It was very helpful.

I have configured the Product allocation and maintained the allocation quantity in the Manage
Product Allocation Product data App (say 100 qty) for the customer A.

In the Assign Product to Product Allocation App, maintained three materials.

When creating the sales order for customer A. For 1st material, it got confirmed for 100 qty based on
the allocation quantity. For the 2nd material, nothing is confirmed as the quantity is already allocated
for the 1st material.
 I have a requirement that the the allocation quantity should be applicable to each material. Like 1st
material - 100 qty, 2nd material - 100 qty & 3rd material - 100 qty. Currently the allocation quantity is
applicable to all the three materials.

Could you please help on how do I achieve this requirement.

Thank you.

July 18, 2022 at 5:57 pm

Hi,

It is very informative.

What are the t-codes which corresponds to these apps in S/4 HANA?

Thanks,
 Like 0
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Ruthvik Chowdary
Blog Post Author
August 24, 2022 at 5:53 am
there is no t.code onlu works and available in fiori
 Like 0
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Sharath K
January 12, 2023 at 10:08 am

Hi Ruthvik,

Thanks for the blog. It was very helpful.

How can we add new characteristics into the list. My requirement is, I have to use SO and STO both
but when I select both then I dont see Sales office field. I can see it when I select either SO or STO.

Regards

Sharath
 Like 0
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 Carsten Kreuels
January 23, 2023 at 4:28 pm

Hello Sharath,

you have to extend the Mixed characteristic catalog via app Manage Characteristic Catalogs.
Precondition is that the field Sales office is part of both catalogs, the SO and the STO catalog.

Then press Edit on the Mixed catalog. Next press Create and enter an Alias (the alias will be the
name of the new mixed characteristic). Then assign a base characteristic for both characteristic
catalog types by pressing button Assign Base Characteristic for each of the items. In the pop-up
select the corresponding base characteristic (in your case the Sales Office). After you saved your
changes, you have created a new mixed characteristic which can then be selected and used in the
Configure Product Allocation app.

Best regards,
Carsten
 Like 0
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Rohit Zalani
March 8, 2023 at 5:46 pm

Allocation for Made to Order based on Capacity

==================================================

Hi,

The Product allocation works fine for stock items that you would like to control for distribution.
However, in the configuration, the assignment of the check rule can also be to made to order. Does
this work for made to order items where we would like to control the quantity that you can be
confirmed based on the capacity constraints only ? So, you would have an allocation strategy that
does not have sales constraints, but for made to order, you only maintain the capacity constraints.

What does the forum think ?

Regards

Rohit Zalani
 Like 0
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 Jeswin Noelraj
March 27, 2023 at 7:50 am

Hi,

I have activated the configure product allocation application in SICF and the services are activated in
maint services tcode, when I try to add the characteristics, a popup is opened with the list of options
in a  tree structure where most of the fields are In disable mode, I got the requirement to enable
those fields that are in not active. kindly anyone help me to resolve this issue .

Characteristics Popup
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