I’m curious how far out you reserve or allocate for Job, Sales or Transfer demand in fulfillment workbench? To clarify, not as a hard rule, just in your business and practice, what are good parameters.
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I’d be interested in what others have to say on this subject as well.
My opinion: Hard Allocations can cause problems depending on WHO is doing the allocation. IF someone from Sales does the allocation, and they can allocate material that is way out in the future, it could cause supply interruption for other customer needs that are more rushed. But there is also the argument that if you have X parts in stock and you promised the customer they could have them next month, that they should be allocated. My argument is that if the customer REALLY needs them next month, and they want you to hold them, that maybe they should pay a premium for you to hold them… (ok… getting too deep into my opinion).
Anyway… Short story is, allocations should not be done any more in advance then truly necessary. If the stock has a 5 day lead time, it doesn’t make sense to allocate 10 days out.
ALSO, there is the misconception that MRP will pay attention to Allocations… IT WILL NOT! SOooo… if you allocate parts to a customer that is not going to ship for 30 days, and then you have a need that is 10 days out, MRP will not tell you to rush in parts to meet the 10 day order. MRP assumes that all inventory is available (even allocated material).
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Planning Contracts?
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Yes, you could use planning contracts, and move the inventory to a contract locations, but that solution may be overkill too. I would prefer to use more of a grocery store concept… if you come in, and the stuff is on the shelf, then you can buy it, but if not, you will need to wait till the next delivery. I know, this is not always feasible due to true contracts with big customers. But in those cases where you have more than one customer purchasing the same product, and you need to reserve inventory for firm commitments, you need to somehow segregate that inventory. One method is to “consign” the inventory to the customer by creating a special site that is specific for that customer, and then move the inventory to the special consignment site. This also will resolve the MRP problem because MRP will only look in the regular inventory site.
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Sorry for the necro-post…
@timshuwy, I was asked last week about the best way to “reserve” a certain quantity of inventory for potential future prototyping by engineering. The easiest solution seemed to be to create a non-nettable bin and move the desired quantity to that bin (and physically move it, too, of course). There are no “prototyping” projects/jobs at the moment, but the need for them could arise at any time. I searched the forum for other suggestions and found this topic. Curious if you see any major downside to non-nettable solution. Sales won’t see the quantity as available to sell and (AFAIK) MRP won’t see it as available to use.
Minimum on hand?
non-net is “invisible” from MRP but not restricted from use. best would be to create a job, and allocate the material to the job. Another option I have seen is using FORECAST against a specific “in-house customer” (ie… engineering), and and since the material is forcasted, MRP will generate additional orders to fill the forecast. It would not be “reserved” if only a forecast.