Planning Method B and On Hand quantity

I always find this help topic is pretty good about explaining this:

[yourifsinstance]/ifsdoc/documentation/en/default.htm?openpage=https://ifshelp.instron.com/ifsdoc/documentation/en/MaintainInventory/AboutOrderProposals.htm

The short answer is that Order Point is different than MRP and ignores any current demand in the system, it operates only on the Projected Quantity On hand which is different than Available Qty.  Available is based on a viewpoint of time = now (unless you simulate future availability), but Projected Quantity On Hand is a calculation that is one leadtime into the future, but future demand is not part of the equation.  Unless you are picking the inventory to the orders that require it on a realtime basis, just reserving doesn’t help you with Order Point.

Hello,

If your safety stock and reorder point are well calculated, they should cover the average demand during the procurement lead time (the 6 months then), plus the variability of the demand and the supply. Your explanation is only true if you have a peak of reservations that far exceeds the average consumption. In that case, it means you are above the 97% of service rate we usually take as input in the safety stock calculation. And that’s the game with the method of replenishment, which supposes the part is compatible which such an approach. Or you should change your plans and use a demand-driven model.

I agree with the above explanations. I order to detect potential shortages for B and C parts where you may have some exceptional demands, maybe an unexpected supply shortage or when supply exist but to late to meet actual demands, is to use the “inventory part availability exceptions”. This is a background job that will create alerts if for example your projected (future) inventory is going negative. Creating a lobby that displays a list of those parts with potential shortages goes a long way in my experience. 

Is this issue resolved completely? We are facing the same problem. this might help.
 

Hello @Bertrand Dousset, thank you for your reply. You are correct, we have calculated reorder point and safety stock based on standard method, however our industry has a very unpredictable demand pattern and many demands for parts will often exceed the standard deviation.

What you say is Planning Method B shouldn’t be used in such cases then, correct? If yes, how in IFS should I then plan my inventory replenishment? Ideally, I would like the same feature as Planning Method B, but instead of making the calculation on Hand On Qty, the calculation for replenishment is made on Available Qty (meaning it takes into account part reserved by customers).

Is there something? If not, which planning method is the closest?

Hello @ShawnBerk,

This issue seems to be precisely what you say: future demand is not considered. Our problem, is we have customers buying parts but asking for delivery only in months from now.

Example, we have 1000 units protected On Hand in one lead time period (which is 6 months). Our customer buys 500 units to be delivered in 4 months (the 500 units are reserved). I would like for IFS to tell me know to buy more because in 4 months I will have a large chunk of my stock taken. If they tell me now, I’ll only be exposed for 2 months.
I assume now that Planning Method B is not correct for this type of part, but I’m unsure which method would be correct.

Thank you for your support.

Thank you @ShawnBerk, I will test it!