Understanding Underdelivery Tolerance in SAP PP

In the world of Production Planning (PP) within SAP, ensuring you deliver the exact amount of product you commit to is ideal. However, unforeseen circumstances can sometimes lead to slight shortfalls. This is where Underdelivery Tolerance in SAP PP comes in.

What is Underdelivery Tolerance?

Underdelivery Tolerance defines the acceptable deviation between the planned production quantity and the delivered quantity. It acts as a buffer, allowing minor shortfalls without triggering automatic corrective actions.

How Does it Work?

Let’s say you have a production order for 100 product units. You define an Underdelivery Tolerance of 5%. This means the system will consider the order fulfilled even if you only deliver 95 units (100 – (5% of 100)).

Here’s what happens behind the scenes:

• Delivery Within Tolerance: If the delivered quantity falls within the tolerance range (e.g., 95 units in our example), the system treats the order as complete. No further actions are required.
• Delivery Below Tolerance: The system recognizes a shortfall if the delivered quantity falls below the tolerance threshold (e.g., 90 units). Depending on your configuration, it might:
  • Generate a message alerting of the underdelivery.
  • Create a new production order to fulfill the remaining quantity.

Benefits of Using Underdelivery Tolerance

• Flexibility: Accounts for minor production variances without unnecessary disruptions.
• Efficiency: Reduces workload by avoiding automatic order rescheduling for minor shortfalls.
• Improved Planning: Helps set realistic expectations based on production realities.

Configuration Options

Under delivery, Tolerance can be set in two ways:

• Material Master: Define a tolerance percentage directly in the material master data for a specific material. This applies to all production orders using that material.
• Production/Process Order: Set a tolerance specifically for a particular production order, overriding the material master setting.

Important Considerations

• Tolerance Limits: Determine an appropriate tolerance level that balances production realities with customer needs.
• Communication: Ensure clear communication with customers about tolerance limits to manage expectations.
• Monitoring: Regularly review under-delivery occurrences to identify potential production issues.

Conclusion

Underdelivery Tolerance in SAP PP is a valuable tool for production planning. You can balance production efficiency and customer satisfaction by effectively utilizing this functionality.