« February 2013 | Main | June 2013 »

May 2013

Written by Richard on May 20, 2013

What does "Use All Supply before Applying Leadtime" exactly mean?

Good question!

The setting determines how MRP will create planned orders (or not) to satisfy demand.  If this option is turned on, VISUAL applies all quantities for a part from open supply orders (ie: purchase orders, work orders, and incoming inter-branch orders) in calculating the planned order quantity.

Here's a simple scenario:

A work order has been entered calling for 10 units of Part ABC.  You have zero on hand, BUT you do have an open PO for 100 units of part ABC to be delivered in 2 months (60 days).  The leadtime for part ABC is 10 days.

If you have this setting turned ON - VISUAL will not create a supply planned order for this part because you already have an open PO for it.  This PO is considered "available supply". 

The potential impact here is that if your purchasing agent is not on top of their game, the work order will only be scheduled to start in 2 months if "Check Material Availablility" is checked.  OUCH!

This is not to say that you shouldn't use the "Use All Supply before applying Leadtime" option.  You should use it to keep inventory levels down (especially on high $$$ items).  Just make sure all parties are on the same page and running exception reports in the MATERIAL PLANNING WINDOW to expedite (or push out) orders when needed - saving everyone a lot of grief!