What is inner fence in SAP SCM-IBP-DM - Demand?

SAP Term: inner fence

• Component: SCM-IBP-DM

• Component Name: Demand

• Description: A boundary of the tolerance lane calculated during outlier detection. Historical values that are unusally high or low compared to the rest of the data are identified as outliers by the system. To identify such values, the system calculates the upper and lower boundaries of the tolerance lane with the help of a multiplier specified by a data scientist. The most commonly used multipliers are 1.5 and 3. If the multiplier is set to 1.5, the boundaries are called inner fences. The values outside the inner fences are identified as weak outliers. This means that the data scientist needs to review them manually to decide if they are actual outliers or false positive results.

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• Key Concepts: 
  Inner fence is a feature of SAP's Demand Management component of the Supply Chain Management-Integrated Business Planning (SCM-IBP) suite. It is used to define the maximum and minimum values for a given demand plan. This helps to ensure that the demand plan is within the desired range and that any changes to the plan are within acceptable limits. 
  
  How to use it: 
  Inner fence can be used to set the maximum and minimum values for a given demand plan. This can be done by setting the upper and lower limits for each item in the plan. Once these limits are set, any changes to the plan must stay within these boundaries. If a change is made that exceeds the inner fence, it will be rejected and an alert will be sent to the user. 
  
  Tips & Tricks: 
  When setting up inner fence, it is important to consider the impact of any changes on other parts of the supply chain. For example, if a change is made that increases demand for one item, it may also increase demand for other items in the supply chain. It is important to consider these impacts when setting up inner fence so that any changes are within acceptable limits. 
  
  Related Information: 
  Inner fence is just one of many features available in SAP's Demand Management component of SCM-IBP. Other features include forecasting, inventory optimization, and order fulfillment optimization. All of these features work together to help ensure that demand plans are within acceptable limits and that any changes are managed effectively.