What is echelon level in SAP SCM-IBP-INV - Inventory?

SAP Term: echelon level

• Component: SCM-IBP-INV

• Component Name: Inventory

• Description: A numerical value indicating the node position within a supply-chain hierarchy.

Smart SAP Assistant

• Key Concepts: 
  Echelon level is a concept used in inventory management to define the number of levels of inventory that are maintained in a supply chain. It is used to determine the amount of inventory that should be held at each level of the supply chain. The echelon level is determined by the demand for the product, the cost of holding inventory, and the lead time for replenishment. 
  
  How to use it: 
  In SAP Inventory Management, echelon levels are used to determine the amount of inventory that should be held at each level of the supply chain. The echelon level is determined by the demand for the product, the cost of holding inventory, and the lead time for replenishment. The echelon level can be adjusted to meet changing demand or cost conditions. 
  
  Tips & Tricks: 
  When setting up echelon levels in SAP Inventory Management, it is important to consider both current and future demand for the product. This will help ensure that there is enough inventory available to meet customer needs without overstocking or understocking. Additionally, it is important to consider the cost of holding inventory and the lead time for replenishment when setting up echelon levels. 
  
  Related Information: 
  Echelon levels are closely related to safety stock levels, which are used to ensure that there is enough inventory available to meet customer needs in case of unexpected demand or supply disruptions. Additionally, echelon levels are related to reorder points, which are used to determine when an order should be placed for additional inventory.