I am curious why when I add a min to a part that has a safety stock value that the MRP suggestions seem to be treating the new Re-order point (Min + Safety Stock) as the floor and isn’t using the re-order point as the re-order point.
Anyone run into this before? The MRP suggestions make it such that it never wants to go below (Min + Safety).
That sounds right to me, but I am no expert.
In company or site configuration or maintenance there is a setting whether to consume safety or not.
the way that Kinetic’s MRP works… it considers minimum as the minimum that you ever want to have on hand, now or in the future… note that it is PREDICTIVE, so if it sees that in 60 days, you are going to fall below minimum, and your lead time is 10 days, it will suggest that 10 days before you are going to run below minimum, that you purchase more. It PREDICTS you will go below. THIS IS NOT REORDERPOINT LOGIC.
Safety Stock is “Extra” above and beyond your minimum… you are NEVER allowed to go below safety. If you ever do, it will tell you to BUY AND RECEIVE NOW… and if you dont, it will tell you again tomorrow. It will never let go because YOU ARE BELOW SAFETY!!!.
As mentioned above, there is another setting that is “Allow consumption of Minimum” that you SHOULD set to TRUE. This allows you to dip below minimum AS LONG AS you have more on order, and the order is going to arrive before the lead time of the part (or before you dip below safety).
So.. the end result is that MRP will add the two values together and those become the total Min/Safety. 100 minimum + 20 safety means the system will do everything in its power to keep you at or above 120 pieces indefininatly.
Correct, that is what Safety Stock is.
Safety Stock should be used for, “if we run out of this material, we might as well shut down”. It is intended for material that you can never, ever run out of.
How are you using the safety stock field?
So essentially, Epicor treats min on hand and safety stock as 2 buffer ranges that get added to determine the floor? I am curious why the MRP wouldn’t just take you to your min on hand level (treat that as the targeted floor) and try to get another injection of parts right before you hit your min on hand value. Instead you would never get close to your min on hand value if it is min + safety stock. It’s like you should pick between min and safety stock instead of stacking up both and inflating your inventory floor well beyond your desired minimum on hand value.
Thanks for the explanation… I think I am tracking with Epicor’s logic. I think in many situations if you have a min on hand defined then it likely doesn’t make sense to have a safety stock value defined unless it is small. In some cases you basically treat your min on hand value as your buffer, and if you want even more buffer, then you add that as safety stock or increase your min on hand.
Yesterday we did set the “Allow consumption of Minimum” setting to True. We were expecting to see the MRP react in such a way that it would let you get close to your min on hand value even if there is a safety stock value, but it is still min + safety as the floor.
Set your safety stock to 0?
Epicor subtracts your safety stock value from your on hand value when doing MRP calculations. Like it pretends you don’t have it…
Wait, if I set this to true will MRP stop generating supply suggestions when I drop below minimum and instead wait until I will drop below 0 (or safety)?
this only does something if you ALSO have a lead time on the part. Otherwise allow consumption of min will work the same true or false.
the leadtime that is in the purchasing section… i believe that is the second one on your list.
We were simply using the Safety Stock field as our total buffer stock and not necessarily setting a min value above (or in addition) to that. I am still not entirely certain of the benefits or tradeoffs of splitting your total buffer stock amongst two values (min on hand vs safety stock) or simply going with one or the other.
OK… lets go back to what my typical suggestion is on setting up parts. I have been teaching this for over 2 decades… This is the type of information you get at Insights in Extended Education for MRP (Which we are running again this year as well). We typically have over 100 people in the extended ed class.
Many times, I experienced companies doing something like this: for example:
Minimum = 1050
Safety = 100
Now, MRP will aim to keep 1150 at a bare minimum at all times… BUT it will also allow you to dip below 1050 pieces AS LONG AS you have more on order that are arriving before the lead time of the part.
OH… one more thing… there is a process that will calculate Min/Max/Safety that follows the above rules… so you dont really have to think about each part. You simply run the calculation and it will calculate your average usage per lead time and then calculate the min/max/safety values you need. Then you just need to accept the recommendations.
Tim,
Where does the Days of supply value come into the suggestion to purchase more. I believe you had a post about this before but haven’t been able to find it again.
Days of supply simply groups all the requirements into buckets of the days of supply (DOS)…
example, if you have DOS set to 30, and you have one requirement per week of 10, 20, 20, 30… it will see the first requirement of 10 pieces, and then look ahead 30 days to see how many more you need… it would add up those and buy all 4 demands at once (10+20+20+30 = 80)… then it will look for the next demand… if the next one is out at 50 days later, then it starts looking from the 50 day mark and looks out 30 more days, and gathers up all the demands and sums them again.
The idea is that when you need to by 1, look ahead X DOS days to find how many more you need.
Interestingly enough the reason we started to look at using Min on Hand values is because we are about to begin our journey with Inventory Optimization which gives you all 3 values, Safety Stock, Min, & a Max.
@timshuwy, I was just reviewing the DOS course on Epicor Learning Center, and I think they have made an error. The course specifically states that DOS calculations in MRP work off of Need By Date for demand from an SO release. But I believe they are based on Ship By Date for an SO release. (Job material demand is not mentioned in the course)
