The process of identifying dependencies between supply chain activities is called pegging. So what exactly is Pegging in Supply chain, SAP and why is pegging needed. Let’s find out by reading the article below.
What is Pegging in Supply Chain, SAP?
Peg link demand with incoming goods. You can create peg chains between supply transactions and demand transactions from either side. Demand transactions can be linked to supply transactions, and conversely, supply transactions can be linked to demand transactions. The peg prevents incoming supply from being reserved or allocated to another demand transaction.
Why is pegging needed?
Peging are used to assign suitable existing product receipts and product stocks that can satisfy the demand to product requirements. Peg organize the material flow through all BOM levels, for example, from the procurement of components and raw materials to the delivery of sales orders. Orders linked together and their peg relationships form a peg structure.
I hope this article will help you to learn what exactly is Pegging in Supply chain, SAP and why is pegging needed. Pegging can only link requirements elements, stock elements, and receipt elements within a pegging area
