Question

Planning Method B IFS Cloud (11) - Future demand

  • 30 May 2023
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Hello all, the IFS Documentation shows this example:

 

What would happen with Planning Method B if there is a demand within the purchase lead time period? For example a customer order reserving 10 inventory units on 26-01-20XY.

This would show a Customer Order in Status Reserved for 15 on 26-01-20XY, making the Projected QTY drop from 20 units on 25th to 10 units on the 26th.

My understanding for Planning Method B is IFS won’t “see” the future demand of 10 on the 26th and since the Projected Qty is still above the SS (SS=10 in this case), it will not trigger an Order Proposal for a purchase requisition of 16 units (2x 8 lot size) to buy now for arrival on 29.01.20XY. Am I correct?

If I am correct, why? I feel this means that if the daily demand for part keeps coming, they are at risk of being out of stock since IFS hasn’t created an order proposal foreseeing that we’ll be below the Order Point in the future.

 

I’m trying to understand in IFS Cloud how to manage inventory taking into account future demands we know are happening (reservations from stock or pegging from POs for future delivery)?

6 replies

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Hi @sibouc ,

The reason that future demands are not considered is that the parameters of SS and OP should be chosen to cover the normal demands during lead-time. If future demands were to be considered, it would result in ordering too soon and a quantity-in-stock higher than required.

System will consider the future demand only if the future demand is higher than Order Point minus Safety Stock (OP-SS) and if so then the OP will be temporarily increased within the order proposal logic.

You should always make sure the order point (OP) should be equal to daily demand * lead time, so that stock will be refilled before it reaches the safety level and safety stocks are maintained to manage the situation when there are delay in the deliveries.

If need, you can use calculate planning date to calculate the OP,SS & lot size  based on the historical consumption. If you are using IPR (inventory planning & replenishment) function in IFS along with demand planner, then these values can be calculated based on the future forecast using demand planner.

Hope this helps!

Regards,

Mithun K V

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Thank you @EqeMithuV .

Our monthly demand pattern are not very stable and are somewhat erratic. The standard deviation, month-to-month, is high making it difficult.

In addition, we often have wanted delivery from customer orders in the future, hence why we make inventory reservation or pegging to ensure availability at the time of wanted customer delivery date.

What would then be the best way to manage a larger than usual future demand (but not greater than OP-SS) that is somewhat “automated” or prompted by the system?

Or do we have to accept manually planning the supply versus future demands

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Hi @sibouc,

Most of the times planning methods B & C are used for the planning of consumables which are more of low cost items and can be purchased in bulk just to make sure that you always have this items in stock to cater the needs irrespective of demand and this items will be planned based on consumption.

So, if you want to plan based on the demands, then you can use other planning methods such A,D,G,E or F. By using this planning methods MRP will make sure that you will have the enough supplies to stratify all your future demand where MRP plans right material with right quantity at right time.

You can also monitor if there are any discrepancies such as delays in the planned supplies, through MRP action proposals

Regards,

Mithun K V

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Hello @EqeMithuV ,

I did think the Planning Method G was going to help, since it says that “the lot size is determined by the total demand during the order cover time”, however I ran some tests using 180 days cover time (which I thought meant the system would look ahead 180 days for demand) and it still didn’t take into account future reserved demand.

It seems I’m struggling to find the appropriate Planning Method of the particularities of our business, which is inconsistant standard demand, for which we still need stock, and with episodes of abnormal demands.

 

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Hi @sibouc 

The order cover time of planning method G is calculated form the date of the first demand and then aggregated in the bucket of cover time (180).

My suggestion would be to use Planning Method A with proper safety stock or Time phased safety stock ( if your abnormality is seasonal) to handle the abnormalities in the demand. 

Also, you can make use of safety lead time and Min lot size so that you always order enough and earlier than the actual need date.

Regards,

Mithun K V 

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Hi Simon,

If you have some spare time checkout this lengthy conversation I had with a customer… where we ended up in DDMRP :-) Safety Stock Replenishment Window | IFS Community

It’s like 1 hour training session in the concepts of DDMRP

Best Regards,

Mats

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