No development issues this time, just seeking advice.
We deal with multiple, large, automotive companies that like to hit us with $500k-$1mill blanket orders every year. We are a make-to-order manufacturer and we don’t usually keep an inventory of product.
What would be the best, or easiest, way to handle these? How does your company handle them?
My idea was to make the product, put it inventory, and create a counter sale as we receive MFRs against the blanket order. May have to start using the fulfillment workbench for this concept. My only concern is that the “inventory” would start being used against other orders and we might not get PO suggestions like we should as we already have a “stock”. All advice is appreciated.
My go to for this situation would be the Demand Management Module. While originally designed for EDI, it’s creating Demand Contracts for the total blanket order and then release lines as they send you release confirmations. The Demand Contract will keep track of the accumulation, so you know at any given time how far you are from the blanket total.
The Demand Contract will hit the same Sales Order and create a new line for each release qty, which will drive MRP Job Suggestions. It is then up to your Sales Team to decide how much to release in advance. Those orders could be setup as Make Direct, or you could try to use Planning Contracts as well which would help with inventory ‘quarantine,’ but I’m not sure that is needed if you can just have a good mechanism to keep track of the blanket order (Demand Contract) and Release to the Sales Order as needed.
Sounds like what I’m looking for but still open to other ideas. I will do a little more research into the Demand Management Module and see if this would suit us. I will pass your advice along to upper management. If this works for us, I will be sure to mark your answer as our solution. Thank you for the suggestions!
Another way is more manual and would be to enter the sales order with releases for the orders that will ship within the next 60 days - 90 days. The final release will need to be created with the balance of the order and set for the ending date of the Blanket PO. You will need to create more releases every 15 - 30 days, to keep up with manufacturing, and reduce the quantity from the original ending release. It’s a manual process and quite cumbersome to manage though.
Do you have a requirement that the customer must purchase the total number of parts on the blanket by the end date?
That’s 2 votes for Demand Management, I better contact our Epicor rep to get a price.
That’s kind of how we handle blanket orders now and while it does work, it’s far from efficient. I’m unsure of the purchase requirements, I’d have to ask. I’m thinking not.
I am dealing with a similar issue, however, the customer is saying the total quantity might change in the future. From my testing the line is locked once multiple releases are entered, what are your thoughts on this?
The way we dealt with this was to create an order in the distant future with the total quantity, creating a new order when we receive an MRF, deducting the quantity from the first order. Once we release the last quantity, we delete the first order. It’s kind of a pain in the ass but seems to work for our team.
I still need to investigate Demand Management, just need to talk my employer into paying the licensing fees for it.
We tried this and we still use it for some fleet orders.
Nobody has mentioned the forecast module, isn’t that what it’s for?
We have found our automotive OEMs to be so unreliable in the past 12 months that we don’t preload their orders at all. We have the luxury of selling them PPAP’d. versions of our regular products though, so generally inventory is not a problem.
Especially for automotive or other EDI release accounting, I agree that Demand Management was made for this. You could do things with MPS and Forecasting too but with more effort.
Production orders are done through Demand Management.