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Surplus and Obsolescence Planning

In: Service Parts Planning with SAP SCM™

Author

Listed:
  • Jörg Thomas Dickersbach
  • Michael F. Passon

Abstract

The goal of surplus and obsolescence planning is to identify inventory within the supply network—i.e. the BOD—which exceeds the projected demand and therefore only consumes warehouse space. In order to identify the surplus and remove it from the concerned warehouses, first the total surplus within the supply network is determined. This is done based on the total expected demand (including a safety buffer) and the total available stock and the stock in transit. In a second step the total surplus is disaggregated—in other words, the surplus quantities for the individual locations are determined. If the value of the surplus is within the predefined limits, orders for scrapping the surplus are created automatically. In the other case the scrap orders need to be approved interactively. Figure 7.1 shows the overview of the surplus and obsolescence planning process.

Suggested Citation

  • Jörg Thomas Dickersbach & Michael F. Passon, 2015. "Surplus and Obsolescence Planning," Management for Professionals, in: Service Parts Planning with SAP SCM™, edition 2, chapter 7, pages 155-169, Springer.
    • Handle: RePEc:spr:mgmchp:978-3-662-45433-6_7
    DOI: 10.1007/978-3-662-45433-6_7
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