Tuesday, October 9, 2012

Getting the Availability Check right for Stock Transport Orders

Assume you have a distribution network around the globe and use SAP's intra stock transport order process for movements from plant to plant (inside a company code) and the inter stock transport order process for movements between plants from different countries. Your DCs most likely have a VSF forecast that creates demand for product. The MRP run then generates stock transport orders so that the product gets shipped from the plants and that there is enough inventory to sell to the customer quickly from stock.

Just recently I found out that for those stock transport orders the same availability checking screen can pop up as it does for Sales Orders. This is new functionality that came with EHP4 or 5 (I'm not quite sure).

This opens up a number of opportunities!

But first you need to set up the master record correctly. What's important is that there are:

- procurement type
- special procurement type
- planned delivery time
- GR processing time
- total replenishment lead time
- availability check

...all on the MRP2 and MRP3 screens of the MMR.

Here is my suggested setup for the demanding plant (the DC / Warehouse that has the VSF and sells to customers) and its implications:

1. The checking rule: set it up so it includes safety stock and available stock and check WITH replenishment lead time. Include Purchase and Production orders but not planned orders or requisitions.

This means: when the DCs STO finds stock in the delivering plant, it confirms the shipping date after the Planned Delivery Time + GR processing Time.

When there is no available stock in the delivery plant but there is a fixed receipt (like from a production order), it will confirm the shipment date to the date the receipt is confirmed + Planned Deliveyr Time + GR processing time.

When there is no stock and no receipt, it will use the Total Replenishment Lead Time in MRP3 to confirm the shipment date (but only if the procurement type in MRP2 is set to E).

2. Total Replenishment Lead Time: this is the estimated timespan it takes to replenish the product from scratch through the entire supply chain. Set it to a value that you feel comfortable quoting to your customer when you have no stock.

3. Planned delivery time (and GR processing time): represents the time to transport the product from the delivering plant to the warehouse when its freely available to transport.

4. Special Procurement Type: points the demand to the specific delivering plant. When MRP runs it covers open demand by generating stock transport requisitions pointing to the plant defined in the special procurement type. These STOs are offset by the planned delivery time.

Procurement Type: this is the tricky part. You would think it should be set to 'F' for external procurement so it generates requisitions. In that case the TRLT would not be considered. Therefore you need to set it to 'E' (because you set a special procurement indicator it will still create a requisition) and in that case the TRLT is used in case there is no stock or fixed receipt in the delivering plant.

Note that MRP works with the Planned Delivery Time to plan for transport whereas the availability check looks for stock or else, uses the Total Replenishment Lead Time to meet demand.