Investigating Item Card Fields in Business Central: Part Three

This is the third instalment on posts regarding Item Card fields. This post will cover the ‘Planning’ tab. This tab has the most content to cover so it’s quite a lengthy post! If you missed the blog covering the ‘Replenishment’ tab, click here. Let’s run in the order they are displayed on the page and start with ‘Replenishment’.

Planning

Reordering Policy

The Reordering Policy lets you define how you are reordering the stock – on what basis are you doing so. Which Reordering Policy you select will affect which other fields can be edited. I’ll preface this by saying, the numbers generated can be affected by not having a Location set for your stock. To remove this from being an issue when you run MRP, go to Inventory Setup, and make sure the Location Mandatory field is ticked. When testing different reordering policies, we found this to cause irregularities in what figures were produced.

The field is a dropdown menu with four options: Fixed Reorder Qty., Maximum Qty., Order and Lot-for-Lot.

Fixed Reorder Qty.

The Fixed Reorder Qty. field states that where your stock levels for an item fall below a set level, an exact amount is to be reordered each time. So for example, if there’s a reorder point for an item of 25. If stock falls to 11 or 24, the same amount (the reorder quantity) will be ordered each time.

Maximum Qty.

This is similar to Fixed Reorder Qty. The difference between the two is the suggested quantity of the item to replenish. The quantity is determined at the point when the system identifies the reorder point has been crossed. The system calculates the difference between stock levels at this stage and the maximum stock. If a maximum stock level hasn’t been entered, the system will make sure the stock level at least matches the reorder point level.

Order

This states that there’s a direct relationship between the amount sold and the amount replenished. They match. Unless a purchase order is made which isn’t in response to an incoming sales order, then stock levels should remain consistent.

One thing to bear in mind when using Order is returns. When replenishing exactly what’s sold, there’s the risk of stock building up over time if previous sales have been returned for any reason. With highly individualised products for customers, this is less likely to occur. To get around this potential issue, you can either manually amend the planning Lines created or the related Production Order.

Lot-for-Lot

This is similar to Order. The key difference is Lot-for-Lot accounts for forecasts and blanket orders. So, without orders necessarily coming in, it will pre-emptively bring in stock to match demand. Lot-for-Lot calculations factor in the current stock in the Locations when working out what needs replenishing. This does depend on the ‘Include Inventory’ field being ticked in the Planning tab.

For example, if there’s a sales order for 71 to be shipped from a specified Location where there’s five in stock already, Lot-for-Lot parameters will come back suggesting you buy 66. The Order policy would have suggested buying 71 in this case.

If there are two sales orders, Lot-for-Lot will aggregate the planning Lines whereas Order will create two separate Lines accounting for the two separate orders.

Order Tracking Policy

Order Tracking Policy, it’s fair to say is slightly outdated nowadays, but it’s a means of running MRP on a line-by-line basis. It runs without any influence from different reordering policies, it merely looks to replace the quantity that has been sold on individual Lines. Where you have sold an Item which is a BOM and is manufactured from phantoms, you need to click Get Action Message twice for the system to integrate both stock elements of the equation.

Dampener Period

The Dampener Period specifies a period of time whereby changes to incoming sales orders’ requested receipt dates won’t affect the purchase order dates for the stock required in that sale. For example, if a customer changed their Requested Delivery Date by one day, which caused MRP to suggest amending incoming purchase order dates by one day, it can be extremely inconvenient. To negate this issue, incorporating a Dampener Period allows you to specify after how many days over the initial Requested Delivery Date will be accepted without suggesting amended purchase order dates. This field won’t be available for all reordering policies, only for Order or Lot-for-Lot.

Dampener Period example

As this is quite a complicated thing to get your head around (at least I thought so), let’s demonstrate this in the system.

  • Firstly, we need our item to be set up appropriately. In this case, we have a Dampener Period of 1M. We have a quantity of 0 in stock, a Replenishment System of Purchase and a Reordering Policy of Lot-for-Lot. The Requested Delivery Date on the sales order is 1/12/2021. In this case, we have a sales order quantity of 10.
  • After creating the sales order, we can go to the Planning Worksheets and press Calculate Regenerative Plan, which generates an action Line.
  • Next click Carry Out Action Message. This essentially says, ‘you need 10, let’s create the purchase order to replace them’. Obviously in this case, we are testing the functionality and know that we are going to have to change the sales order date. In real life, you’d run this action prior to knowing that the customer wants to push their requested order receipt date into the future, hence why we are carrying out the action.
  • After this, we need to go back and amend our Requested Delivery Date. The Requested Delivery Date I have changed it to below is within our Dampener Period, meaning no alterations to when our purchase order arrives should be made.
  • As you can see, after deleting the Line in the Planning Worksheet and clicking Calculate Regenerative Plan, we get blank Lines with no content.
  • Where I change the Requested Delivery Date to a time not within a month, Lines like these are created:

Rescheduling Period

This field is a little bit below on the Card, but fits well into this part. The Rescheduling Period defines an amount of time where, if orders are changed, instead of creating a ‘Cancel’ and a ‘New’ Line like the one shown above, it will instead just create a singular ‘Reschedule’ Line. The advantage of this is if the Planning Worksheet has hundreds of Lines, where there’s order rescheduling, you can half the amount of data on the screen. Using the same sales order as the one shown in the Dampener Period explanation, I have added a Rescheduling Period of 2M and deleted the planning Lines. I then clicked Calculate Regenerative Plan and have the Line below:

Dampener Quantity

This field follows a similar pattern to the Dampener Period. The Dampener Quantity sets a quantity limit of when to amend planning Lines. Where a change in a sales order quantity is within the range allowed by the Dampener Quantity, the system won’t suggest a change in replenishment. If the change is outside the allowed range, then it will. If a dampener quantity value isn’t set, the default value found within the Default Dampener % field in Manufacturing Setup. Like with the Dampener Period, use either Lot-for-Lot or Order as the Reordering Policy to use this functionality.

Dampener Quantity example

Before showing the Dampener Qty field in action, I’ll show you what the system will do without it.

  • We have a sales order for 10 of an item, with a Reordering Policy of Lot-for-Lot. If we click Calculate Regenerative Plan, we get this:
  • Next, click Carry Out Action Message. Following this, amend the sales order quantity to 6. We’re depicting a scenario where the customer changes their desired order quantity, after planning the replenishment.
  • When we re-run MRP, we receive an Action Message of Change Qty. The reason there isn’t a ‘Cancel’ and ‘New’ Line is because the order date hasn’t changed, only the quantity.
  • If I amend the Item Card, adding a Dampener Quantity of five, running MRP will result in blank Lines. This is because the quantity difference between the sales order originally and now, is four. This is within the range of five, meaning MRP will not suggest different actions around the change.
  • Let’s next demonstrate lowering the Dampener Quantity to three. This value is lower than the change in sales order quantity, four. In turn, this means MRP will suggest replenishing the exact quantity of the amended sales order, six.
  • Alternatively, if I change the sales order quantity to 14, then the Planning Worksheet’s recommendation would be to purchase 14. This is because again, the change in sales order quantity is outside the range of the Dampener Quantity.

Critical

The Critical field will only be of use where you are using BOMs and order promising functionality. If you want the system to incorporate the item lead times for components into calculations for the production of a parent item, this will have to be ticked. To be clear, this will have to be ticked on the component Item Card, not the parent.

Safety Lead Time

This field allows for a buffer in the Lead Time. Where a vendor or item has a lead time, you can use a Safety Lead Time to factor in any obstacles that might cause a delay. For example, if we had a Lead Time of 5D and a Safety Lead Time of 2D, you are essentially acknowledging the possibility of waiting for two extra days.

Safety Stock Quantity

The Safety Stock Quantity acts as a buffer. This is the minimum amount of stock permittable, which can add a value to orders replenishing stock. In the two examples below, I have a Reorder Point of 20, a Reorder Quantity of 10 and a current quantity of 19. So without a Safety Stock Quantity, the system will see the quantity is below the Reorder Quantity and order however many multiples of the Reorder Quantity are needed to get the quantity above the Reorder Point. In this instance, as it’s in 10s, only one set is required as we are one item short of the Reorder Point.

If you have a Safety Stock Quantity lower than the Reorder Point, MRP will suggest using the Reorder Quantity to meet the Reorder Point requirements. In the image below, I have a Safety Stock Quantity of five.

In the second image, below, I have a Safety Stock Quantity of 25. When you have a Safety Stock Quantity higher than the Reorder Point, you can see below that MRP creates two Lines. The first Line, with a later due date, is reflecting the quantity required to match the Reorder Point levels. The second Line is to meet the Safety Stock Quantity requirements. This Line takes precedence and with a Work Date of 14/09/21, you can see it works in advance to try and reach the levels immediately. See the Starting and Ending Date-Time fields below:

Lot Accumulation Period

Where you are using the Reordering Policy ‘Lot-for-Lot’, you will need a Lot Accumulation Period. This is a field where you will input a date formula e.g 1M. This time period will be used to group all orders within that period into one order. So every month in this example, a new order will be made which will be made up from the demand in that period.

Reorder Point

The Reorder Point sets a baseline figure for minimum stock levels. If stock goes under this value, then MRP will suggest replenishing back above this. How far above will depend on various factors like the Reordering Policy, Reordering Quantity.

Reorder Quantity

The Reorder Quantity dictates the quantity to be replenished when the stock falls below the Reorder Point. This applies for the Maximum Qty and the Fixed Reorder Qty reordering policies.

Maximum Inventory

This field allows you to set the maximum inventory level allowed for this Item.

Minimum Order Quantity

This specifies the minimum quantity of an item that can be suggested by MRP for reorder. Here I have a Minimum Order Quantity of 60. MRP has suggested 60 as a result, despite the original sales order only being for a quantity of 50.

Maximum Order Quantity

This specifies the maximum quantity of an item that can be suggested by MRP for reorder. The image below shows I have an unposted sales order for 50 of Item 1095. I have a Maximum Order Quantity of 17. Because of the quantity required, it has created three Lines of 17 or below to satisfy the requirement.

Order Multiple

This dictates how many have to be ordered at once. MRP is oblivious to quantities set against particular units of measure. So, using this you can dictate how many have to be ordered at a time. To illustrate, let’s use the example of candles. It may be that candles can only be ordered in boxes of 50. For that reason, if it’s Lot-for-Lot, I may only need 30 but because of this I will have to get 50.

Here we can see that where the sales order has a quantity lower than the Minimum Order Quantity, which is lower than the Order Multiple, then the Order Multiple takes priority. To explain, as only 50 are required, you’d want as few over that figure ordered as possible. As the Order Multiple states that they are ordered in 70s, it overrides the Minimum Order Quantity of 60. If we use the examples of candles in a box, it’s essentially saying you have to get a whole box, not a partial one.

If I had a sales order quantity of 71, a Minimum Order Quantity 70 and a Order Multiple of 70, then MRP would suggest two Lines of 70 for a total of 140. However, if I didn’t have an Order Multiple, as long as the quantity required was less than the Maximum Order Quantity, then it would suggest one Line of 71.

Closing remarks

I appreciate this post was a lot to take in! If you have any queries or comments, please get in contact with us by clicking here.

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