MRP question

[Jeff20]

My company is using JD Edwards Enterprise one version 8.9, and we are running into an issue where MRP is telling us to bring in our raw materials sooner than we need them.

MRP is assuming infinite capacity, and we are consuming the raw materials at a slower pace than what MRP is calculating.

Has anyone run into a similar problem, and how did you address it?

 

[AlexM]

If the problem is affecting ALL purchased items in terms of dates, it can be related to R3482/R3483 P.O.
Lead Time Tab : Purchased Item Safety Leadtime

If the problem is only affecting some purchased items in terms of DATES it can be linked to the "Offset time" in the BOM
If the problem is only affecting some pruchased items in terms of QUANTITY it can be linked to the "scrap percentage" in the BOM

I assumed first : Leadtimes in the Item/Branch file are properly set up !

 

[Terry DeMoure]

Jeff significant information is needed before I can help you with your problem such as could you please share the F4102 Item Branch characteristics/parameters for the item(s) in question such as Safety Stock, Multiple Order Quantity, Leadtime Level, Order Policy, Value Order Policy, Planning Code, and Planning Fence Rule. Are you utilizing forecasting?

It is also important to note that Material Requirements Planning and Capacity Requirements Planning are two totally different tools. MRP specifically plans supply (material) to meet demand without consideration of capacity. CRP plans levels of labor and machine capacity needed to produce projected level of work over a specified length of time. The two can work together but they are still separate processes.

 

[Jeff20]

Our order policy code is set to lot for lot on all our manufactured items. We use order quantities, but only equal to a days worth or perhaps a lots worth of production. Planning code is equal to 1 for all FG and 2 for everything else. We also run MPS and MRP as two separate jobs.

We are a make to stock company and our standard FG safety stock target is approximately 4 weeks worth of sales. We don't keep any safety on our sub-assemblies, and our safeties on purchased items are usually around 4 weeks worth of usage. Sometimes a little higher or lower depending on LT and vendor reliability. We also do have a weekly sales forecast. Our planning fence rule is greater of FC or sales within 30 days, and FC after.

Our problem really lies when we experience a backorder situation. MRP gives messages to clear the backorder, build safety stock, and have a weeks worth of sales ready to go within a day. When in reality it might take us three months to get back to that position. So it is telling us to bring our raw materials in much sooner than we need them.

 

[Terry DeMoure]

I am a little confused Jeff, your focus kind of changed a bit in your response from your initial posting. In your initial posting you indicated "MRP is telling us to bring in our raw materials sooner than we need them" and in your reply to me you indicate "MRP gives messages to clear the backorder, build safety stock, and have a weeks worth of sales ready to go within a day" which makes me think that there may be a problem with leadtimes and safety stock levels on your FG assemblies.

I apologize for all of the questions but I would really help and to do so I need to know more.

MRP is going to give you planning action to bring in your raw material to meet start date of the planned/firmed work order to meet your sales order demand (and/or forecast) pursuant to established leadtimes. You say it takes you three months to get back to that position? Is this then the Leadtime Level set for your FG assembly?

Could you also please elaborate on your comment "We use order quantities, but only equal to a days worth or perhaps a lots worth of production" as to where you are setting this value specifically. (i.e., Multiple Order Quantity? Reorder Point? etc.)

Your Planning Code settings (1 for FG and 2 for everything else) are okay but you could easily utilize "3" for both but this is not really contributing to your problems.

What are the average Leadtime Levels of your purchased part raw material?

When you indicate backorder are you referring to backorder generated at sales order creation? Pick Slip print?

Safety Stock is planned by MRP which will plan to have you bring in the entire safety stock quantity exactly when your inventory balance barely dips into it as opposed to gradually throughout your period of consumption.

Please provide me a little more info and I may be able to help.