Solved

Safety Stock Replenishment Window

  • 6 January 2022
  • 20 replies
  • 1288 views
S
Rank
Userlevel 3
Badge +5

I am looking to see if there is a field that will allow us to determine how low the safety stock can get before MRP will issue a req to replenish. For example, if we set the safety stock at 100, do we not want a req to generate for 1 pc every time we dip down to 99. Instead, let’s say that we only want safety stock to replenish when it falls below 50 pcs. Is there a field where we can tell IFS to wait until we are at 50% of safety stock before replenishing? 

We want to move away from lot size and reorder points on planning method “C” and move to safety stock on planning method “G” but are looking to solve this issue first. 

I see that there is a field for “Service Rate” - would this perform the function I am seeking? If not, is there a field that will serve that purpose?

 

Thanks - Sarah 

icon

Best answer by majose 8 January 2022, 20:22

View original
This topic has been closed for comments

20 replies

R
Rank
Userlevel 6
Badge +10

Hi @Sarah Neuman - As per my knowledge there is no functionality n IFS to achieve your objective currently. 

But as I think, to achieve you purpose, best alternative would be to move to Planning Methods C where you can order up to a point you define when the on hand qty falls below the order point.

For example, you can have an Order Point as 50 and Lot Size as 100. Then when the stock falls below 50, a new requisition will be created to refill the qty up to 100.

However this Planning Method is not handled by MRP. Instead, it is handled by Create Order Proposal job. You can schedule this job as you need. Thanks.

M
Rank
Userlevel 6
Badge +12

Hi Sarah,

In MRP, if there is a safety stock, that safety stock qty becomes the new “zero - onhand level”. MRP do whatever it takes so that projected onhand never goes below below safety stock.

You might want to explore DDMRP (available in Applications 10 and later). Yes yes I know, it is a big challenge for you to explore the DDMRP world. But the red-yellow-green buffer mechanism in DDMRP is much more of a shock-absorber, compared to the static safety stock. Sometimes I simplify DDMRP, by saying it is a fancy reorderpoint logic embeddded in MRP. Don’t get me wrong… but if you want to explain it, I think having that picture in your mind helps you to get a basic idea how DDMRP buffers works.

-Mats

S
Rank
Userlevel 3
Badge +5

Mats,

Thanks so much for the recommendation! We are now testing this in our system and are very excited about the possibilities! We have already watched the short demo, but have been unable to locate further educational material that dives further into how DDMRP works. Do you happen to know of other resources that we can read/review on this subject? 

We are particularly interested in how DDMPR determines the spike order threshold, buffer zone limits and how we manage new parts until they have enough run time for buffer calcs to be meaningful.

Thanks so much again for your help!

All the best,

Sarah 

 

M
Rank
Userlevel 6
Badge +12

Hi Sarah,

I have attached a pdf document where ½ of the presentation describes DDMRP and ½ describes S&OP. Hope it can help.

I can also recommend the book: Demand Driven Material Requirements Planning by Carol Ptak and Chad Smith. ISBN: 978-0-8311-3628-4

I am happy to hear that you get excited about DDMRP :-)

Very short answer to your questions:

Order Spike threshold

Order spike threshold is calculated like: (Red Base + Red Safety) * Order Spike Threshold/100 (associated with the Buffer Profile ID)

Within the order spike horizon system looks for gross requirement summed per day that are greater than the order spike threshold. If yes then consider the entire gross requirement that day, and sum it with other order spikes within order spike horizon for the given part.

New Parts with no History

You know in Inventory Part Planning Data / Buffer Part Attributes you can work with different Operational ADU Sources. Like for example: Manual, Forecasted ADU, Calculated ADU and ADU Alert Qty. For parts where you kind of have a pretty stable demand picture over time then Calculated ADU is recommended. But for new parts, well for a period of time, I would choose Manual or Forecasted ADU. And you know, you also have the option to manually set the Buffer Zones as well.

Forecasted ADU - During MRP calculation system calculates the future average daily usage, using exploded Demand coming from MRP calculation itself (so… you need to perform a MRP calculation first for your Buffer Parts in order to get any Forecasted ADU qty). In Lead Time Categories screen you can control how far out in the future you will consider exploded demand by changing the Forecast ADU Horizon Factor.

Oboy tons of information to digest - I think I stop here.

I think it is really really important to understand the concept, then you can start up in small scale with some purchased parts that are good candidates for being buffered.

Good Luck!

-Mats

1 Attachment
S
Rank
Userlevel 3
Badge +5

This is great info! 

Can you please tell me how far back it goes in history to make buffer calcs? And can we control the timeframe for how far back it goes?

Also, all of the buffer numbers are in the decimals, and the system creates purchase orders with decimals. How can we make sure that the purchase reqs are created in whole numbers?

 

You are the best! Thank you for all of your help! We are looking to roll out DDMRP with our company in the coming months!

 

Sarah 

M
Rank
Userlevel 6
Badge +12

Hi again,

A Friday night call from Sweden...

As you know buffer parts are associated with a Lead Time Category, that depends on the unprotected lead time and the part type. So please have a look into the Lead Time Category window. Out to the right hand side you have the Rolling Time Horizon for Historical ADU. You can modify this one :-)

When you calculate ADU and some other attributes system goes backwards like this:

|-------------------------------------------------------------------------------------------------------------|--------->

Start Analysis                                                                                            yesterday

<----------------------------------------------------------------------------------------------------------->

unprotected lead time + Rolling Time Horizon for Historical ADU

 

Regarding decimals - I know we use the Calc Rounding field that you can find in Inventory Part window. If possible set it to 0 or 2.

 

Also good to know - it could be a good habit to schedule the job Calculate Cumulative Lead for your site. At the end of this job we are refreshing Unprotected Lead Time AND also Lead Time Category Classification AND also detecting lead time critical path down in the manufacturing structures.

For different jobs we are logging changes into the DDMRP log. So good to keep an eye on this screen as well.

Good Luck with your DDMRP journey!

-Mats

S
Rank
Userlevel 3
Badge +5

Mats,

 

Thank you so much again for all of your help! We will go do some testing with changing the rolling time horizon. 

We are curious about something…. for example if we are using the last rolling 12 months to calculate ADU, and we are have a part that on average has a monthly usage of 5 parts, but we had a one time outlier order for 100 parts during the 12 month period, is the historical rolling ADU still using the outlier order in the calculation for ADU? We are concerned that these one off spike orders that exist in our rolling time horizon will artificially inflate our ADU and therefore the system would recommend higher buffer zone thresholds than is desired. Do you happen to have any insight into this potential pitfall? Does the system automatically weed out the outliers when making the ADU calculations? 

Happy Friday! 

Have a great weekend!


Sarah

 

M
Rank
Userlevel 6
Badge +12

Hi Sarah,

In Customer Order we have the option to mark a CO Line demand as abnormal and then it becomes invisible to:

  • Our Demand Planner tool (forecasting)
  • DDMRP ADU calculation
  • Inventory Part and Replenishment tool
  • (perhaps some more places)

But we don’t have this option for shop order demands. Perhaps we should have this option there as well.

And as I said earlier, when starting up DDMRP I suggest to start with a set of purchased parts where demand and/or supplies flexes and you have kind of long purchase lead times.

***

One year ADU Horzion - perhaps to conservative. The ADU => Buffer will not flex much at all if there is a upward or downward trend

The extreme alternative. A few weeks ADU Horizon - well, here we are balancing “on the biggestawave” and the buffer flexes too much.

Is there a golden mean? Probably.

***

5 pcs per month … hmmm low volume in my eyes. Is this part a candidate to buffer? Consider MRP normal MRP planning for this part instead? Have you tried out the Component Sumarized whee use screen? Critical Path and No Of Products are key columns that helps you to identify if the component is a good candidate to buffer. A component that exists in many products receives a more stable demand which makes the ADU calculation even more robust. And if you buffer this component it will act as a shock absorber for many products.

***

In general DDMRP is designed so that we should not penetrate deep down in the red buffer zone. Customer Service is in danger.

Do you know that over time the average inventory onhand will be the RED zone + the GREEN zone/2 for the part?

 

Cheers,

Mats

S
Rank
Userlevel 3
Badge +5

You have been so very helpful and our company is grateful! We do have a few more questions if you don’t mind!

 

  1. Where can find the intended process flow for turning on, calculating and and updating buffer zones? We are curious what specific workflow IFS had in mind for DDMRP.
  2. Do we have an option to mass update buffer zone attributes by sections of parts instead of just a single part or by the entire site? We see where can can do this with the buffer zone calc, but not with the attributes. 

Happy Monday from the US!

Sarah 

M
Rank
Userlevel 6
Badge +12

As you know DDMRP consists of five steps:
1) Strategic Inventory Positioning – Identify strategic decoupling points.
2) Buffer Profiles and Levels – Assign lead time category, variability category and calculate buffer levels based on ADU
3) Dynamic Adjustments – If necessary, adjust levels based on seasonality, product ramp up and ramp down.
4) Demand Driven Planning – Generate planned supply orders.
5) Visible and Collaborative Execution – Manage orders and action messages.

 

Some recommendations from my end - and remember ‘one size does not fit all’

  1. Strategic Inventory Positioning - Here we have the Component Summarized Where Used screen with tons of good planning data, that supports you to find good candidates to buffer. And here we have some useful RMBs to navigate to other pages. However this is step is much of manual work for you, like factory physics, lumpy demand picture, supplier reliability etc.
    • Following job is supporting this process
      • Cumulative Lead Time Calculation - this step also calculated unprotected lead time and detects critical (lead time) path and performs the lead time category classification
    • Run this job on weekly basis
  2. Buffer Profiles and Levels
    • Calculate Historical Average Daily Usage - why not try to run this job on daily basis… but there could be heavy number crunching here, I mean it might take some time to finish. Then run it on weekly basis
    • Calculate Buffer Zones - why not run this job on daily basis. This job is putting it altogether, by looking at ADU, Unprotected Lead Time, Lead Time Factors, Variability Factors and min order qty
  3. Dynamic Adjustments
    • Work with Buffer Part Attributes Adjustments
      • Ramp ups, Ramp downs, seasonality
      • Promotions
      • New parts may require special attention

      • Parts with very lumpy demand pattern probably needs to be associated with a High Variability Category in order to increase the red safety zone

  4. Demand Driven Planning

 

  1. Visible and Collaborative Execution

 

  1. Use the DDMRP LOBBY

Hope this helps - I ran out of time

Best Regards,

Mats

S
Rank
Userlevel 3
Badge +5

Hello again Mats! Happy Thursday! 

Quick question. We deal a lot with projects here at our company and we have a question about how DDMRP and PMRP work separately or together. For example, 

  • If we have a planning method “H” part that we inventory, DDMRP calculates buffers zones and create purchase reqs for that part. 
  • If we create a shop order for a project that needs to use that particular “H” part,  the part gets allocated to the shop order as “Project Inventory”. PMRP then runs and creates a pur req specifically for the amount required on the shop order without consideration of buffer zones etc correct? 
  • Does DDMRP take into account project inventory usage when calculating the buffer zones or does it ignore all of the usage that goes into shop orders tied to projects? We are not currently using PMRP yet, but would like to turn it on and want to be sure that we understand how it will interact with DDMRP and with parts that are “H” but also get consumed in shop orders tied to projects. 

Thanks again for all of your excellent help with our questions! 

 

Sarah 

M
Rank
Userlevel 6
Badge +12

Hi Sarah,

As you might now a part can have standard inventory and project inventory. DDMRP is designed to work together with MRP, using standard inventory.

However, when calculating ADU, which is the main input together with unprotected lead time, for calculating the size Buffer Zones, then all issues are considered. Even if it is project connected. We have really never thought much about it.

If you run PMRP, which of course nets inventory and open project supply orders between project activities (could be across projects as well), and system finds a part with planning method H, it will use planning method A (lot-4-lot) instead (within the DDMRP logic). So if there is project inventory available for the H-part it will create Material Transfer Requisitions between the excess project activity and the demanding activity.

Now - here comes an interesting thing, you can setup PMRP so it can net from standard inventory. So next thing in PMRP netting logic is that it tries to net from standard inventory (if it is allowed). And here is my point - untested :-)

*** Standard inventory for the H-part is DDMRP planned ***

That standard inventory can be a sort of shared buffer pool for your project activities. I have not tested this, kind of interesting indeed :-) 

If there is nothing in standard inventory, while running PMRP, system will lot size according to planning method A. But let say the buffer is properly sized, then it should never run dry.

Later when you kick of an MRP job, which will perform the ‘net flow equation’ for the DDMRP parts (H), DDMRP will discover that Inventory onhand has been reduced because of a Material Transfer requisition from  Standard Inventory to Project Inventory has occurred. System might respond with a PO Req if the Net Flow position is below the Green Zone.

DDMRP will always always always fill standard inventory.

Lots of information again Sarah. I guess you need to read this a couple of times and try to setup a test case in a test environment.

My advice is - start up in small scale with some purchase parts with long lead times and where those purchase items are used in many products. That is a good start in protecting the flow of material in your supply chain.

-Mats

S
Rank
Userlevel 3
Badge +5

Mats - Thanks again for the details and suggestions. We will do some internal testing with this! 

Last week we went live with DDMRP in one of our smaller divisions. We have one issue that we are hoping you can assist with. We know that we can mark new customer/shop orders as “abnormal demand” to prevent the system from using the values in MRP calculations and this is great. What we are having an issue with, is we have historical demand that was abnormal and going into the buffer calculations. When we go into these closed orders to try to mark them as “abnormal” the system will not allow it. We get an error message stating that you cannot mark demand as abnormal once it has been used in Periodic Aggregation. Why not?

This of course is a challenge, because this means that any abnormal historical demand will remain in the calcs and PO reqs will have to be manually ignored until that old demand falls outside of the historical horizon. This opens us up to a lot of human error. 

Is there a way that you know of, where we can somehow make those old orders as abnormal or hide them from MRP?

 

Thanks so much again! We are excited about all of the possibilities DDMRP. 

 

Will you be at the October conference in Miami by chance? We will have a team of 5 there to continue our learning! 


Sarah

S
Rank
Userlevel 3
Badge +5

Mats,

 

Are you available to answer the above question by chance?

 

Thanks,


Sarah

M
Rank
Userlevel 6
Badge +12

Hi Sarah,

For a couple of weeks I had problem with my “IFS community account”, then I kind of forgot to follow up this one.

Well, I have some bad news, you see when we aggregate Inventory Transaction History per statistical year and period, we calculate both monthly issues and also monthly abnormal issues. And this calculation cannot be rolled back. 

So you get the error message: “Abnormal Demand cannot be modified since Inventory Transaction ID 5423548 created for this order line has already been included in the Periodic Aggregation.”

So the software is not that flexible here - because we have updated Inventory Part Period History with the monthly issued qty, system can’t today go back and adjust monthly issued qty and monthly abnormal issued qty.

There is no good work around. The only thing is to wait for better days ;-) Well you can perhaps set a manual Average Daily Usage… but I guess you will not like it.

***

Amazing that you managed to startup DDMRP with just “tons” of hard work from your end and then some tips and tricks from a guy located in Sweden - fantastic :-)

-Mats

S
Rank
Userlevel 3
Badge +5

Mats - Thanks again as always! Definitely not the answer I was hoping for, but what I was expecting. We will find a work around until there is a formal solution lol. 

 

I do have another question (surprise surprise lol!)

I am hoping to begin a formal S&OP process with the company and noticed in the slide deck you sent me early on, that there is S&OP functionality in IFS. Is that available in APS 10 or is that a more recent version? Or is it a module we need to buy? We desperately need assistance with forecasting. 

 

We are reviewing the Demand Planning Module as well so it may be in that module?

 

Thanks!

 

Sarah 

M
Rank
Userlevel 6
Badge +12

Hi Sarah…

Aha turning from safety stock into an introduction course in DDMRP, and now into S&OP… Perhaps you should create a new thread. S&OP questions is not really related to safety stock :-)

Anyway S&OP belongs technically to the Master Scheduling components, so if you have Master Scheduling you have S&OP. And yes it is a part of Applications 10 :-)

In IFS (and other systems as well - typically) you do S&OP on Product Family level. In IFS you first have to define inventory parts with Inventory Planning Method O. Then you go into Product Family Master and create your basic data for S&OP… And then you begin your journey…

***

Demand Planner in IFS (a separate module) you do it per normal inventory parts - typically sales parts.

Then in Master Scheduling you can import your “demand planner” forecast into what we call “ms level 1 parts” You can also enter forecast manually.

In S&OP you can aggregate forecast from master scheduling level 1 into Product Families. You can then modify the aggregated forecast, work with the operations plan, study inventory projected plan. And there is also a whole lot of of good sales history per Product Family. Both in Qty and in $.

BUT BUT - do yoy use DDMRP for your Sales Parts?!?! DDMRP parts cannot be used in Master Scheduling, hence you cannot import Demand Planner forecast into Master Scheduling for DDMRP parts. Typically when I play around with Master Scheduling AND DDMRP, I use DDMRP for long lead time purchase items that exists in many parent parts. Then I kind of protect and promote the flow for many parent parts, by just a few buffer parts.

You can use Demand Planner functionality for DDMRP planned parts, but again, I am repeating myself, since the cannot be master sceduled you cannot simply import the forecast.

In S&OP itself you can work with Product Families that consists of DDRMP planned parts, you just have to work with forecast manually. 

S&OP is much more than software. I mean does the sharks from Sales talk same language as the elephants from Finance? (who thinks they own the truth) And does the cats in Manufacturing trust the dogs from Purchasing?

And you have to sustain in both your DDMRP project and a new S&OP project!!! Have you the muscles and bandwidth to run them in parallel?

Sorry for a lengthy answer.

-Mats

S
Rank
Userlevel 3
Badge +5

Mats - Ok great info on S&OP. I will table that conversation for now and go back to DDMRP!

Does IFS have a manual, SOPs, work instructions or any how to’s on how to operate DDMRP and fully utilize all of the screens and functionality within IFS? It would be nice to have some kind of road map as we continue to attempt to move to DDMRP in our organization.

 

All the best!


Sarah  ​​​​​​​

S
Rank
Userlevel 3
Badge +5

Mats - Good morning and hello from Pittsburgh! 

I have a question about the relationship between DDMRP and the Demand Planner Module. We do not currently have the Demand Planner Module add on. Is there anything within DDMRP that will not fully function or that we are missing due to not having the Demand Planner Module? Also, where can I find more information on the what the Demand Planner Module has to offer?

 

All the best,


Sarah

M
Rank
Userlevel 6
Badge +12

I’m back.

Well if you read what hardcore DDMRP guys thinks about using forecast and master scheduling. It is like a big NO. On the other hand they do mention seasonality, ramp ups and ramp downs. But in theory they do believe that demand should be driven by a true demand signal - ka-ching :-) In the extension of DDMRP where they talk about Demand Driven S&OP they do mention forecasting on product family level.

When it comes to IFS Manufacturing and our Demand Planner tool, it is integrated with Master Scheduling and a DDMRP part cannot be Master Scheduled - so there you have the answer.

But when I play around with test data here at IFS I sometimes use Master Scheduling for my top parts (sales parts) and then lower in the structure for my long lead time items I use DDMRP to protect and promote the flow of these items, and I think that could make sense in some real world scenarios as well.

***

However for the future it might be interesting to integrate DDMRP with Demand Planner, so that we can get a projected ADU per part in the future (I have really never ever thought about it until now)

-Mats

Terms & ConditionsCookie settings