In this task you will plan a standard Lead Days for all P items.
NOTE: Lead days for your manufactured items will be dynamically calculated by DBA.
MRP Settings is a super task set!
You must enter:
1.Reasonable Lead Days on 100% of your purchased items
2.Reasonable Job Days on 100% of your manufactured items
3.A clear cut item Order Policy based on lead day contribution
Do not skip or partially complete
Item MRP settings -- along with BOM routings and locations -- is a "super task" set. Item MRP settings are required for MRP and shop control and cannot be skipped or partially completed.
Links:
MRP Guide - Time to Shipment Planning
Video - Guideline P Item Lead Days
Plan a standard Lead Days for all P items
(MRP - MRP Settings)
In this task you will plan a standard Lead Days for all P items.
The P item Lead Days is a required MRP setting
The purchased item Lead Days is an integral element of Time to Shipment MRP and is a required setting that cannot be skipped or given artificial values. Without exception a standard Lead Days value must be assigned to each and every P item.
The P item Lead Days is standard delivery time
The P item Lead Days is the item's standard delivery time, expressed in calendar days.
NOTE: If an item has variable delivery where sometimes it can be procured quickly and sometimes not, you must assign a standard Lead Days value somewhere between the two extremes.
Lead Days Purposes
Establishes PO due dates
The item's standard Lead Days establishes PO due dates, which are forward scheduled from the current date at time of MRP generation.
Contributes to higher-level lead times
A job that uses a component item with a To Order policy must wait until the item is procured or manufactured before the job can be started. When several To Order policy components exist, the one with the longest lead time determines the parent item's pre-job Lead Days allocation. Therefore any P item with a To Order policy is a lead time contributor to higher-level items.
Enables late PO tracking
The standard Lead Days determines PO due dates for late PO tracking and expediting in the PO Schedule screen, which is vitally important for minimizing delays to dependent jobs.
Determines item planning periods
The standard Lead Days (along with the system MRP Interval setting) determines each item's planning period action window for PO generation. Any demand beyond the planning period will be responded to in a future MRP session when it falls into the action window and becomes current demand.
Replenishment Time affects inventory levels
Your Lead Days value contributes to the Replenishment Time for your items. In the Demand Driven order policy, the system will convert the Monthly Potential Demand value into a daily usage and multiply that by the Replenishment Time for the item to establish the Reorder Point. Therefore, it is essential that your Lead Day allocations remain reasonably accurate to keep your inventory lean and efficient.
The P item Lead Days is not an isolated setting
The P item Lead Days is not an isolated setting. When a P item has a To Order policy, it contributes to the lead times of higher-level M items. If you give the Lead Days a padded or inflated value, you get inflated M item lead times and inflated time to shipment targets and distorted sales order required dates. So it is essential that the Lead Days is a realistic value that approximates actual delivery time.
Lead Days Entry
Go to the MRP Setting - P Items screen and enter a value in the Lead Days field.
Guidelines
•Enter a realistic value that represents the item's standard delivery time, expressed in calendar days.
•If the item has a variable delivery time where sometimes it can be procured quickly and sometimes not, you must enter a standard Lead Days somewhere between the two extremes.
Never pad or inflate Lead Days to expand item planning periods
One thing you must absolutely avoid is to pad or inflate P item Lead Days settings in order to expand item planning periods. Inflated Lead Days settings inflate M item lead times and top level time to shipment targets and distort sales order required dates.
If you prefer longer planning periods:
Item planning periods keep inventory lean because they prevent POs from being generated prematurely before they are needed. That being said, if you feel more comfortable with longer planning periods, never pad or inflate Lead Days settings, which has harmful consequences. Instead, go to the MRP - MRP Defaults screen and use the Planning Period - Extra Days for P Items setting to expand all P item planning periods by a set number of days.
Never use the Manufacturer's lead time
\When planning for electronic components or any item where a manufacturer part number is specified, never use the manufacturer’s lead time as the standard Lead Days because a long lead time will have harmful consequences to higher-level lead times. When a manufacturer's part is currently not available, you will typically source an alternate part and therefore the manufacturer’s lead time is never used for actual planning.
Use the Delivery Inquiry for guidance
For guidance in establishing the standard Lead Days, click the Delivery tab to reference past delivery times.
When you have thousands of P items:
Is Lead Days entry practical with thousands of P items? Actually, it can go quickly because within a given supplier, the standard Lead Days values are typically the same or similar for most items. So even though you have thousands of P items, most companies have a small set of suppliers.
Mass entry by supplier
Within a given supplier, standard Lead Days values are typically the same or similar for most items. To facilitate mass entry, you can filter the screen by Default Supplier and then apply consistent values to all items sourced by that supplier.
As an alternative to manual entry, you can filter the screen and use the Output tool to generate a spreadsheet for mass Lead Days assignment. When your spreadsheet is completed use the Data Import - Stock Items - MRP Settings - P Items data import utility to import the Lead Days values.
