The Orlicky Material Requirements Planning book, which seems to be the MRP bible, differentiates between MRP and Order Point as the two primary methods for inventory control in manufacturing. MRP considers dependent relationships to other parts, both vertically and horizontally, while Order Point parts are considered independently and reordered only when on-hand drops below a certain point. We have certain parts, which will not be part of a forecast, that we’d like to handle on an Order Point basis. These are often parts with low-use and/or erratic demand. For parts that are part of a forecast, we’ve always used a Safety Stock setting to ensure more parts arrive just as the On-Hand qty is depleted to the Safety Stock value. For Order Point parts, we will not be placing a new PO until we go below safety. I’m looking for a way to differentiate Order Point parts from parts driven by forecast, so buyers know which they’re looking at without having to perform any research or evaluation. We have not historically used Min On Hand / Max On Hand, but it seems like using these fields might be a relatively simple way to differentiate Order Point parts.
If anyone has any thoughts on this, I’d be interested.
You actually have, even if the min on hand of every part is 0, it is still a min on hand. A part dropping below minimum is the main way MRP is going to generate suggestions for you to buy/make things. You aren’t really going below safety, you are going below minimum. Safety stock interacts with minimum on hand when MRP is making it’s calculations, as MRP will subtract any safety quantity from current on-hand values when it is evaluating supply/demand.
Correct. We have actual forecast loaded in the form of a top-level BOM which drives MRP for sub assemblies and purchased parts. We have a lot of obscure-option parts and repair parts that are not covered by forecast. We allow dates in the past, so when a non-forecast “order point” part goes below safety + min on hand, the suggestion gives a due date requirement of 2 days in the past, which could cause unnecessary panic and expediting if a buyer doesn’t realize it’s an order-point part. Looking for a simple method to clearly differentiate order point parts from forecast parts so buyers know which they’re looking at.