Item Resource Planning and MRP

  • Item Resource Planning and MRP

    Posted by DSC Communities on February 24, 2017 at 9:15 am
    • Brian McCollum


      February 24, 2017 at 9:15 AM

      I have just started as Supply Chain Manager at a company that is moving from excel based planning to GP MRP planning.  I have worked in several different MRP/ERP systems in the past, but I’m having trouble getting PO Planning to function like I am trying to set it up.  I understand that MRP functions a bit differently and that PO generator does what I want, but it does not take into account MO/SO for future demand.

      In Item Resource Planning we’re selecting site ID to production and checking Calculate MRP for our items.  We are wanting to use order policy lot for lot.  I was originally trying to use order point QTY as my minimum and order-up-to level as my maximum.  I now understand that Order Point Qty is the “ideal” stock or what I’ll call our maximum plus safety stock for an item.  Order-up-to level will only kick in if there is MO/SO order demands it will not order more than this quantity?

      Then you have the order quantity modifiers but I’m not clear on the uses.  I have plugged various numbers in, but it does not appear to have an impact during Quantities Query for Planned PO’s.

      Is the only way to set-up a min/max level plus consideration for MO/SO to create a optimum Order Point QTY and then put your minimum order qty on your supplier to be the difference between optimum and minimum?

      For Example:
      I want 40 widgets on hand at all time and that be my trigger point to re-order and I want a Maximum of 80.
      Order Point Qty: 80
      Order Up to level 160

      Minimum Order Qty under primary Supplier 40.

      When my inventory drops below 80 will it request I order 40 or will it wait until my inventory level drops below 40 pcs? 

      Any other way to do what I want that I’m missing?  I spent quite a while researching and working with IT and did not come up with a solution.

      Brian McCollum
      APR, LLC
      Opelika AL

    • Mike Redman


      February 24, 2017 at 4:20 PM

      Hi Brian,

      Glad to see another manufacturing person in here! I will note, I am not a partner and am just a slightly experienced/exposed GP manager. 

      One trick if you are not seeing how you expect is to check the primary vendor record for that item. MRP will always use the order policy on the primary vendor record (if there is one) before it will use the values from Item Resource Planning Maintenance window. Also, make sure you are updating the order policy at the Item/Site combination as well. 

      In your example, I believe your order point quantity should be the 40 units, with an order up to level of 80. This would mean when MRP sees demand taking on-hand under 40 units, it will trigger a shortage. The thing I will warn you about is setting the Order Up To level too low. If the order up to level is ever exceeded (in theory, not even in reality) it will give you exception messages that the item is ‘oversupplied’.

      The order quantity that it suggests would be based on your order policies, but if you had a minimum order quantity under the primary supplier record of 40, it would order at least 40. 

      Another thing you should make sure you understand is the planning time fences you have set-up. These will restrict the results you are seeing within your Quantities Query. 

      I highly suggest you take some time to read over the following document — it is a great reference and definitely helped clear a few points up for me in regards to MRP with GP.

      There is also an extremely helpful MRP SmartList that I learned about this last year at the GPUG Summit, I was sent that SmartList and use it currently. If you are interested in seeing it, send me a PM. 

      Mike Redman
      UnderCover, Inc.
      Rogersville MO

    • Sunny Mattoon


      February 27, 2017 at 12:41 PM

      HI Brian,
      Mike’s tips regarding the Primary Vendor and checking to be sure your settings are set on the item/site are good.  The Order Quantity modifiers and the lead time are values that MRP will look for first on the Vendor Item relationship if there is a Primary Vendor for that Item/Site combination.  The Max on the Order Quantity Modifier does not change the amount MRP will order overall, it just indicates the max that should be on a single order.  So if MRP thinks you need 150 of something and the Order Qty Max is 75 you’ll get two orders of 75 each.

      As for what MRP will suggest, it’s important to remember that it does not use the same logic as PO Generator.  PO Gen works between a min and max.  MRP logic does not.  It uses the Order Point as your zero (any time MRP forecasts that the supply/demand netting is going to leave stock on hand below that Order Point, MRP will order anything it takes to bring it back up to the Order Point).  The amount it orders beyond that depends on the quantity of your demand, not a max.  It will order whatever is needed to satisfy the demand and still leave you with the Order Point on hand.

      The Order up to level puts some brakes on MRP and is mostly useful if you want it to start suggesting some Move Out/Cancel logic.  Setting the order up to level too low can cause you issues if you have real demand in the system that would pop you above that number.  It shouldn’t put you above 80 unless you have something in the demand calling for that.  In a lot for lot world that usually doesn’t happen because the supply and demand occur on the same day. You end each day at your Order Point Qty.

      I hope this helps!

      Sunny Mattoon
      Implementing Consultant
      InterDyn BMI
      Portland OR

    • Tony Prelesnick


      February 27, 2017 at 7:20 PM

      In your post you mentioned PO Generator,  I do not normally mention products in this forum, however,  Willoware has an add-in for PO Generator to allow it to see the MO supply and demand.

      Tony Prelesnick
      NextDyn, LLC
      Maple Grove MN

    • Brian McCollum


      March 8, 2017 at 11:31 AM

      Thanks everyone for the answers.  We loaded all our components based on the suggestions and research and it seems to be working.  We’re running our previous replenishment worksheet in parallel with GP to iron out any discrepancies.

      How we set it up.
      Order Policy – Lot-to-lot
      Calculate MRP Selected on all “Production” Location Materials
      Order Point – Minimum desired on Hand + Safety Stock
      Order-up-to-level – (Order Point + Minimum Primary Vender Order Qty) * 5
      This may be adjusted but gave us somewhere to start.
      Primary Vender Minimum Order – Desired Release Level

      This is what we used to batch load the information and will continue to refine individual part requirements as needed. 

      Also, I did look into Willoware previously.  I was curious about multiple item BO’s and automated release schedules to suppliers.  This may be something we look into as we move forward. 

      Brian McCollum
      APR, LLC
      Opelika AL

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