Pegged demand fulfillment – 1Ci Support

Using pegged demand fulfillment

Pegged demand fulfillment is used to solve the following business tasks:

Pegging of goods and works for selling to customers:
- Purchase goods against sales orders.
- Purchase goods against sales orders to distribution center warehouses and transfer them to distribution warehouses (pegging for a recipient assignment).
- Purchase components pegged against sales orders with the specified need to supply components (pegging for a recipient assignment).
- Purchase goods for a line of business without preliminary demand recording (for example, for trading).
- Purchase goods for a line of business according to the demands specified in the sales orders (pegging against sales orders within a line of business).
Pegging of goods for internal consumption:
- Purchase goods for a line of business.
- Purchase goods against orders specifying demand for goods operation for internal department needs.
Pegging of materials for production:
- Purchase materials for a line of business to release manufactured products.
- Purchase materials with pegging for a sales order which records the need to supply products (pegging for a target product assignment).
- Purchase materials with pegging for production stages to release products with further sale to customers.
- Purchase materials with pegging for a production order to release products, etc.
Pegging of materials for production by a third party toller:
- Purchase materials with pegging for a toller/contract with a toller and transfer these materials in order to release products.
- Purchase materials with pegging for a tolling order to release products.
- Purchase materials with pegging for a sales order which records the need to supply products (pegging for a target product assignment).
- Purchase materials with pegging for a line of business to release products and sell them to customers, etc.
Pegging of materials for repair activities:
- Purchase materials with pegging for an order for materials.
- Purchase materials for a line of business.

Pegged demand fulfillment can be used both in the simplified and advanced demand fulfillment options. To use the feature, select Master data and settings – Master data and sections – Warehouse and delivery – Demand fulfillment – Pegged order fulfillment.

Accounting dimension of pegged goods, materials, and works

Pegged goods, materials at a warehouse are recorded by additional dimension Assignment. Demands for goods, materials, and works can be fulfilled on pegging basis for the following values corresponding to the additional dimension Assignment:

Order – assignment related to an order with the specified demand (for example, Sales order, Production order, Tolling order).
Partner – assignment without drilling down to order (used for tolling).
Partner + Contract – assignment without drilling down to order (used for tolling).
Line of business – assignment without drilling down to order.
Line of business + Order.
Partner + Contract + Order.

Actual receipt of goods and works for a specific assignment is recorded by specifying this assignment in the receipt documents.

With a pegged fulfillment, received goods and materials can be shipped only against the specified assignment. For example, goods and works pegged for Order can be shipped only against the source order of the pegged demand.

Line of business

You can use the following assignment kinds for any line of business considering costs:

Assignment without drilling down to order (Line of business in general).
Assignment drilled down to order (Line of business + Order).

If the Pegging of goods and works beyond demand is allowed check box is selected in the line of business profile, the following options can be applied within line of business:

Purchase for the "Line of business in general" assignment without (or over) preliminarily recorded demands in orders.
Goods shipment according to the "Line of business in general" assignment (invoices without preliminarily recorded demands in orders are used).

Assignment selection service

Assignments are specified in the Assignment field in the receipt document form. To select assignments in the Assignment selection form, you can use a default assignment list restricted by the indicator set. Each indicator is specified by selecting a check box.

The following indicators are used to perform a visual control in the assignment selection form:

Available in stock – shows stock balance pegged for assignment at a warehouse (department) from which goods transfer is registered with a document.
Demand in warehouse – shows unfulfilled pegged demand for goods (for a line of business, an order, or a production stage) in a warehouse or a department addressed by the document.
Demand in all warehouses – shows demand for goods for which an assignment is selected at all warehouses (including demand of the warehouse specified in the document as a recipient for receiving goods).

Specific set of used indicators depends on the document type. For example, all above mentioned indicators are available for selecting a pegged object in the Transfer order document.

If all indicator check boxes are cleared in the Assignment selection form, a full list of assignments is shown (considering restrictions according to lines of business).

If a line of business is specified in the order (the Line of business field on the Additional information tab), default filter by a line of business is set in the assignment selection form. Only assignments (pegged objects) related to this line of business are shown in the assignment selection form with the specified line of business.

Pegged fulfillment algorithm

There are the following features of pegged demand fulfillment:

Options of pegging goods, materials, and works are determined with the corresponding functional options.
When entering shipment orders, functional option value determines assignment of the demand specified in the order.
You can change functional options while using the infobase. Valid value of the specified functional option is applied only to newly created order documents. If orders created earlier are reposted, posting determined by a pegging option valid as of their creation date does not change. You can apply a new scenario of pegging goods, or works to an existing document manually. To do so, change one of the important document attributes in the order you correct (for example, Line of business).
To control supply of goods and works beyond demand by a line of business, select the Pegging of goods and works beyond demand is allowed check box (in the line of business profile).
To control supply of goods and works beyond demand by order without a specified line of business, click Master data and settings –Master data and sections – Warehouse and delivery – Demand fulfillment – Allow pegging goods and works beyond order (not including material provider orders; supply beyond demand is possible by partner). If the functional option is selected, you can purchase and move pegged goods at warehouses other than a shipment warehouse. It also simplifies cancellation of orders provided on pegging basis. If you clear the functional option Master data and settings – Warehouse and delivery – Demand fulfillment – Allow pegging goods and works beyond demand, the following options are available:
- You can check if pegged goods quantity in the shipment order corresponds to the one in the demand fulfillment order. Pegged goods quantity against demand fulfillment orders cannot exceed the quantity required to be fulfilled by shipment orders. Control is performed while posting the order which fulfills demand against a shipment order.
- You can control cancellation and reduction of shipment orders for which demand fulfillment order is already registered).
- You can prohibit from changing an assignment in demand fulfillment orders.
Default recipient assignment is specified for a transfer order, an assembly order, and an order for materials for production as a pegging option. Order is specified for all other types of orders.
If pegging option by recipient assignment is selected, but it is not specified in the order, pegging will be performed by the order. Pegging for recipient assignment is always substituted with pegging for order (disassembly order) for disassembly.
If pegging option by a line of business is selected, but it is not specified in the order or it is specified without costs, pegging will be performed by the order.
If you select pegging option by product assignment, cost grouping is limited only by products and production stages for a tolling order.

Pegged fulfillment strategies

Pegged fulfillment strategies can be used at the following levels of details:

Order in general.
Order item (goods, manufactured products, or a set).
Orders of a specific customer.
Product item in general (goods, manufactured products, or a set).
Toll manufacturing.

Operations of a responsible employee in case of pegged goods fulfillment against an order are displayed in table 4.4.

Table 4.4

Operations of a responsible employee with an order	Actions in case of fulfillment on general conditions	Actions in case of pegged fulfillment
Record demand	To fulfillment	Provide on pegging basis
Reserve as soon as goods are available	Reserve to date or Reserve at warehouse	Not required as goods are delivered against a specific order
Ship order items	Ship	Ship on pegging basis

A responsible employee can record pegged demand for an order item based on the current stock (the Provide on pegging basis action option is specified for an order item in the order form).

For pegging by an order in general, click Supply – Fill in supply in the order form (for all order lines).

Shipment orders with the Provide on pegging basis action option are used as a pegged object. Goods with pegged fulfillment are reserved for a specific order. Such goods can be purchased, produced, assembled for a specific order, or transferred from another warehouse. It guarantees that purchased goods will be sold to a specific customer only.

If you need to fulfill all orders of a specific customer on pegging basis, select the Fulfill orders on pegging basis check box (on the Sales conditions tab) in the agreement with the customer.

If a separate product item should be supplied on pegging basis, select the Pegged purchase/sale check box (the Supply and production section) in the product profile.

In the diagram, you can see a scheme of pegged demand fulfillment against an order for one warehouse.

The following scenario can be used for pegging of demand against a sales order:

Sales orders are processed individually by a logistics specialist. When accepting an order, a responsible employee specifies the Provide on pegging basis action option for goods.

A purchase order is registered based on the sales order. An employee of the procurement department fulfills an accepted sales order by using document creation on the basis (Create on the basis – Purchase order in the sales order form).

A responsible employee can periodically monitor goods receipt against the selected orders using the Warehouse and delivery – Demand fulfillment – Order fulfillment states workplace. Goods received against an order go to the reserve automatically (the Reserve – In warehouse column).

To initiate shipment, select the Ship on pegging basis check box (click Supply – Fill in supply in the sales order form) in the sales order for goods provided on pegging basis.

When posting an order, the application controls whether there are pegged goods. Pegged goods can be sold/shipped only against an order which recorded pegged demand.

Managing pegged demand assignment

You can determine assignment details for each order type (before an order, manufactured products, a line of business, or a recipient). It assists in managing supply and allows you to control pegged supply with goods and works with necessary details.

Options of pegging goods, materials, and works which determine assignment details can be set by functional options in the respective infobase sections (Warehouse and delivery, Sales, and Manufacturing).

Let's have a look at pegging options.

Goods pegging options for internal consumption

Goods pegging options used on goods transfer

To specify an option of goods pegging in distribution center warehouses (a storage location from which goods are transferred to other warehouses, such as production warehouses, trading warehouses, supply warehouses, etc.), select Master data and settings – Master data and sections – Warehouse and delivery – Goods transfer – Goods pegging. It determines an assignment in case of pegged supply with goods used in internal consumption. The following values are available:

By line of business – allows you to fulfill demand for goods in distribution center warehouses for a line of business. Goods can be used for transfer between enterprise warehouses (or between enterprise companies) within a line of business for which these goods were reserved. A pegged object is a line of business.

By recipient assignment – allows you to fulfill demand for goods in distribution center warehouses against orders (for example, customer orders, i.e. goods reserved for a customer are purchased for a distribution center warehouse and then transferred from it to a selling warehouse). A pegged object is a target recipient assignment determined by a specific sales order (production order) or line of business.

In the diagram, you сan see an example of goods pegging in distribution center warehouses by a recipient assignment.

In a shipping warehouse, goods are supplied and shipped on general conditions with the Ship action. In a receiving warehouse, goods are reserved for an assignment, i.e. a sales order.

By transfer order (default) – allows you to fulfill demand for goods against a transfer order. A pegged object is a transfer order.

Goods pegging options in internal consumption

To specify a pegging option of goods planned for commissioning or write-off as expenses/assets, select Master data and settings – Master data and sections – Warehouse and delivery – Internal goods consumption – Goods pegging. It determines an assignment in case of pegged supply with goods used in internal consumption. The following values are available:

By line of business – allows you to fulfill demand for a line of business for internal department needs. A pegged object is a line of business.
By order for internal consumption – allows you to fulfill demand against orders which record the need for inventory operation for internal department needs. A pegged object is an order for internal goods consumption.

In the diagram, you can see an example of goods purchase with pegging for a line of business with further transfer for internal consumption and sale to a customer.

Goods pegging options used on assembly (disassembly)

To specify a pegging option of goods planned for assembly from components and/or disassembly into components, select Master data and settings – Master data and sections – Warehouse and delivery – Assembly (disassembly) – Goods pegging. It determines an assignment in case of pegged supply with components (sets) used for assembly (disassembly). The following values are available:

By line of business – allows you to fulfill demand for components (sets) for a line of business. A pegged object is a line of business.
By assembled set assignment – allows you to fulfill demand for components against the sales order which reserved the need for set supply. A goods pegging object is a target set assignment which is determined by a specific sales order or line of business. Assembled sets are handed over to assembly with assigned components. For the Disassembly into components operations, a set will be pegged for a disassembly order (a disassembly order is an assignment). For the Assembly from components operations, a set and components will be pegged for a sales order.
By assembly (disassembly) order – allows you to fulfill demand for components (sets) against the order which recorded the need for assembly (disassembly). A pegged object is an assembly (disassembly) order.

Options of pegging goods and works for selling to a customer

To specify a pegging option of goods and works planned for selling to customers, select Master data and settings – Master data and sections – Sales – Wholesale – Use orders – Goods pegging. It determines an assignment in case of pegged supply with goods used in sales. The following values are available:

By line of business – allows you to fulfill demand for goods for a line of business and sell them to customers (for example, provide goods for wholesale). A pegged object is a line of business.
By sales order – allows you to fulfill demand for goods against sales orders. Pegged objects are sales orders or requests for goods return from a customer (in case of goods return).

In the diagram, you can see an example of goods pegging for a sales order.

Options of material pegging for production

With production management (2.2), you can use various options of material pegging for manufactured product release. To specify a pegging option of materials planned for using in production, select Master data and settings – Master data and sections – Manufacturing– Materials pegging for production. The following values are available:

On order for production – allows you to determine an assignment in case of pegged supply of a production stage with materials and works:
- By line of business allows you to fulfill demand for materials for a line of business to manufacture products. These materials can be used for production within the line of business for which these goods were reserved. A pegged object is a line of business.
- By product assignment – allows you to fulfill demand for materials with pegging against the sales order which records the need for manufactured product supply. It is recommended if materials for target (pegged) manufactured product release are purchased before creating production orders. An object of pegging of materials planned to be used within production is a target product assignment which is determined by a specific sales order or line of business.
- By production stage – allows you to fulfill demand for materials for each production stage. Pegged objects are production stages. Materials are supplied to fulfill demand of pre-generated production stages.

In the diagram, you can see an example of material pegging by a production stage in order to manufacture products and sell them to a customer (production management 2.2).

By production order – allows you to fulfill demand for materials against a production order without details up to stages. Overall demand for materials in order to release all manufactured products of one production order is fulfilled. This pegging option allows you to purchase materials before creating production stages. Pegged objects are production orders.
- On order to storeroom – allows you to determine an assignment in case of pegged fulfillment of an order for materials to a storeroom:
By line of business – allows you to fulfill demand for materials in a shop storeroom for a line of business to manufacture products. A pegged object is a line of business.
By recipient assignment – allows you to fulfill demand for materials which are transferred for production stages by the target method. A pegged object is a target recipient assignment determined by a specific production stage.
By order for materials allows you to fulfill demand for materials against an order for materials from production. A pegged object is an order for materials for production.

With production management (2.1), you can apply various options of material pegging. To specify a pegging option for which production will be supplied with materials, click Master data and settings – Master data and sections – Manufacturing – Materials pegging for production:

Using production orders determines the assignment when supplying materials and works for production on pegging basis, and has the following values:
- By line of business allows you to fulfill demand for materials for a line of business to manufacture products. A pegged object is a line of business.
- By product assignment – allows you to fulfill demand for materials with pegging against the sales order which records the need for manufactured product supply. It is recommended if materials for target (pegged) manufactured product release are purchased before creating production orders. A material pegging object is a target product assignment which is determined by a specific sales order or line of business.
Using order for materials for production determines an assignment in case of pegged fulfillment of an order for materials for production:
- By line of business – allows you to fulfill demand for materials for a line of business to release products. A pegged object is a line of business.
- By recipient assignment allows you to fulfill demand for materials which are transferred for production orders by the target method. Material pegging object is a recipient assignment which is determined by a certain production order.
- By order for materials allows you to fulfill demand for materials against an order for materials from production. Pegged objects are orders for materials for production.

Options of material pegging for repair

To specify a pegging option for materials planned to be used in repairs, select Master data and settings – Master data and sections – Manufacturing – Material pegging. It determines an assignment in case of pegged supply with materials used in repairs. The following values are available:

By line of business – allows you to fulfill the demand for materials for a line of business to use them in repairs. A pegged object is a line of business.
By repair order – allows you to fulfill the demand for ordered materials required for repair. Such materials can be used for repairs within a specific repair request for which materials are reserved. Pegged objects are repair orders.

Options of material pegging for tolling

To select a pegging option of materials used to release manufactured products involving third party tollers, select Master data and settings – Master data and sections – Manufacturing – Processing by the third parties – Materials pegging. It determines an assignment in case of pegged supply with materials used in tolling. The following values are available:

By line of business – allows you to fulfill demand for materials for a line of business for product manufacturing by a third party toller. Materials can be used to release products only within the line of business for which these goods were pegged (reserved). A pegged object is a line of business.
By product assignment – allows you to fulfill demand for materials with pegging against the sales order which reserved products. Materials can be used only to fulfill sales order for which these materials were reserved. A material pegging object is a target product assignment which is determined by a specific sales order or line of business.
By tolling order – allows you to fulfill demand for materials against the order which records the need for product release by a third party toller. Pegged objects are tolling orders. All unfinished tolling orders are available for selection in the assignment selection form.
By toller/contract – allows you to fulfill demand for materials for a toller (or a toller contract) which the company intends to involve in product release. Materials can be used to release manufactured products of the third party company (toller) for which these goods were reserved. With this option, you can use advanced purchase of materials. Tolling orders are created later. During initial agreements, materials can be pegged for the selected partner (toller). If relationships with a toller are stipulated in a contract, the contract can be used as an assignment for materials pegging. The following values are available in the Assignment selection form:
- Contracts with the With toller relationship type.
- Full partner (toller) list.

In the diagram, you can see an example of materials pegging for a specific toller.

Pegging option combination

Various pegging options can be combined. Below you can see recommendations for combining pegging options:

Various procedures of demand processing. For example, in a selling warehouse, pegged objects are sales orders. In a distribution center, pegged objects are batches of goods transferred to a selling warehouse.
Various methods of product manufacturing. For example, products can manufactured against an order and materials for production can be purchased for a toller contract in advance.
Various rules of competition among responsible employees. For example, goods for resale are purchased against a specific order accepted by a responsible employee, thus precluding goods shipment against another order. The same goods are used as components during set assembly.

In the diagram, you can see an example of combination of various goods pegging options.

Managing pegged goods transfer

To organize pegged goods transfer and facilitate its management, use Warehouse and delivery – Internal goods transfer – Pegged goods transfer. This workplace allows you to plan goods transfer schedules, fulfill pegged demand, and allocate stock by generating transfer documents (orders/invoices).

With the Manage pegged goods transfer workplace, you can:

Pick goods based on the date of demand in a shipping warehouse and the required date of transfer start in order to timely transfer goods by the demand date.
Show data on demand for products.
Show data on product availability.
Calculate recommended quantity of pegged products for transfer to a warehouse.
Generate a schedule of goods transfer to the receiving warehouse.
Generate a schedule of goods transfer from the shipping warehouse.
Create, fill in, and post documents for transfer between warehouses.

To use the workplace, select Use management of pegged goods transfer. This check box is selected by default if you select one of the following check boxes:

Master data and settings – Warehouse and delivery – Demand fulfillment – Allow pegging goods beyond demand.
Master data and settings – Sales – Toll manufacturing.
Master data and settings – Financial result – Financial result and controlling by lines of business.

Using the workplace, you can manage a pegged goods transfer while implementing various scenarios:

Scenario 1. Distribution centers and trade:
- Sales orders are accepted in pickup points (shipping warehouses).
- Customer can pick up goods from a nearby point.
- Goods pegged for a customer are delivered to a distribution center warehouse.
Scenario 2. Toll manufacturing:
- Demand for provided materials is registered in a shop storeroom of a production department while planning production stages.
- Schedule of transferring provided materials to a shop storeroom is generated for a procurement warehouse.

The workplace designed to manage pegged goods transfer is a wizard with the following operation modes:

Stock allocation – allows you to allocate pegged goods in stock by transferring them from the shipping warehouse to receiving warehouses.
Demand fulfillment – allows you to fulfill only pegged goods quantity required for a specific order in the receiving warehouse.

On the first step, specify data based on which pegged goods transfer documents will be generated.

In the Demand fulfillment mode, specify the following:

Receiving warehouse – a warehouse to which pegged goods should be transferred.
Shipment date – a date on which start of shipment of pegged goods from a shipping warehouse should be planned. Goods transfer is planned according to the quantity of goods available on the specified date in the shipping warehouse.
Demand before date – goods to fulfill demand in the receiving warehouse before the specified date will be offered for transfer. It allows you to limit quantity of goods transferred to the receiving warehouse based on demand dates specified in orders in the receiving warehouse.
Registration option – depending on the specified option, the Transfer order or Goods transfer documents are registered. It is recommended that you use goods transfer generation option if shipment is planned for today.
Shipping warehouse – a warehouse from which it is required to transfer pegged goods to the receiving warehouse.

On the second step, the following information is displayed for each product and assignment at the top of the tabular section:

Demand date – a date of pegged demand for goods in the receiving warehouse.
Demand – quantity of pegged goods which should be transferred to the receiving warehouse.
Available – quantity of goods reserved for a specific assignment in the shipping warehouse as of the shipment date.
For transfer – quantity of pegged goods which should be transferred from the shipping warehouse to the receiving warehouse to fulfill demand of a specific order. The application automatically calculates quantity of goods recommended for transfer.
Transfer period – duration of goods transfer (in days) from a shipping warehouse to a receiving warehouse.

You can see totals by goods planned for transfer in the lower tabular section of the workplace.

The application automatically generates a schedule of goods transfer to the receiving warehouse on demand fulfillment. The application determines an order of selecting shipping warehouses for goods transfer to a receiving warehouse based on the transfer period by the supply method in the shipping warehouse. To specify an order of selecting shipping warehouses and quantity of goods transferred from each shipping warehouse, you can adjust a schedule of goods transfer to a receiving warehouse (access the Schedule of goods transfer to the warehouse form by clicking the For transfer column value). The following information is displayed in the schedule of goods transfer to the warehouse:

Shipping warehouse – a list of warehouses with pegged demand.
Available – quantity of goods reserved in the shipping warehouse.
For transfer – quantity of goods recommended by the application considering demand for transfer from the shipping warehouse to the receiving warehouse.

On the third step, you can see generated documents: orders or invoices – depending on the specified registration option. Documents are generated for all product items marked for transfer on the previous steps.

If goods are transferred to a shop storeroom, material transfer orders or material transfers to a shop storeroom are generated.

In the Stock allocation mode, on the first step within the workplace, specify a shipping warehouse and a shipment date on which pegged goods transfer from a shipping warehouse should be planned.

Only in this mode, you can specify the next shipment date. Next shipment date – goods which should be shipped from the shipping warehouse before the specified date in accordance with the demand date in receiving warehouses considering duration of transfer between warehouses will be offered for transfer.

The application automatically generates a schedule of goods transfer from the shipping warehouse during stock allocation. The application automatically determines an order of selecting receiving warehouses for goods transfer based on the demand date and transfer period by the main supply method in the receiving warehouse. To specify an order of selecting receiving warehouses and quantity of goods transferred to each receiving warehouse, use the Schedule of goods transfer to the warehouse form by clicking the For transfer column value. The following information is displayed in the schedule of goods transfer from the warehouse:

Receiving warehouse – a list of warehouses which should be supplied with pegged goods.
Demand date – a date by which the receiving warehouse should be supplied with pegged goods.
Demand – total demand for goods of a certain order in the receiving warehouse.
Available – quantity of goods reserved for a specific assignment in the shipping warehouse.
For transfer – quantity of goods recommended by the application and required to be transferred from the shipping warehouse to the receiving warehouse.

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