Be careful of pages 33 in

Dear All,

I am afraid that there is a mistaken in page 33 (appendix C. Examples of Planning Parameter) of Planning Functionality Microsoft Business Solutions–Navision Manufacturing 2.60
Microsoft Business Solutions–Navision 3.00, 3.01, 3.10, 3.60, 3.70, 4.00
Technical White Paper Updated: May 2004

I rewrote as follows:

1. As required/variable Reorder Quantity

Here is a situation where you simply want to order the actual required quantity of a particular item, but you also want to keep the number of replenishment orders to a reasonable level. You want to reorder this item when you expect the inventory to pass below zero or the Safety Stock Quantity. When you have to reorder something, you want to include additional demands within the nearest future so as to optimize setup time and order handling. You define the nearest future time period in the Reorder Cycle on the item card.

Example:

Produced item

Safety Stock Quantity = 10

Manufacturing Policy = Make-to-Stock

Reordering Policy = Lot-for-Lot

Reorder Cycle = 3w

Actual inventory on hand = 90

Gross requirements:

· 20 units to be delivered 3 days after the planning starting date

· 70 units to be delivered 2 weeks after the planning starting date

· 25 units to be delivered 3 weeks after the planning starting date

The planning system calculates that the first demand can be met by the inventory on hand (70 left including 10 as safety stock).

The second demand can be partially covered by inventory, but there is a shortage of 10 units.

Now that there is a need to reorder, the planning system investigates the Reorder Cycle for additional requirements and finds the third requirement of 25 units. The order is calculated as 35 units, and it is scheduled backwards from the day of the second demand, when the first 10 units are due.

Manufacturing Policy Field
The Item Table

This field defines whether the program will calculate additional orders for any related components. This covers production orders - whether created manually or from sales orders - and production order proposals that are generated by the planning calculations. Click the AssistButton and select one of the following options:

Make-to-Stock
The program considers just the first level of the bill of materials (BOM) and allows only one item per production order.
A make-to-stock item is produced to inventory levels. Typically, these are standard items with a relatively short manufacturing lead time or items that are used as required subassemblies for other items.
This manufacturing policy is generally used with the reordering policies of Fixed Reorder Quantity and Maximum Quantity.

Make-to-Order
The program explodes the BOM, and creates an additional production order line (or production order proposal line) for each level in the BOM structure where that item’s manufacturing policy has also been defined as make-to-order. This means that if you want to make multilevel production orders, then the manufacturing policy for the parent item, as well as the component items at all levels, must be make-to-order.
When you use make-to-order, the program will create an automatic reservation between the requirement and the corresponding replenishment order proposal. This will preserve the customized information on the relevant orders and link them for inventory and costing purposes.
This manufacturing policy is generally used with the reordering policy of Order and possibly, Lot-for-Lot.

My question is based on the blue and the red words. Why they give different explanation…? Tks a lot for your attn beforehand.

Rgds,

MrGM

Hi

They are different but equally applicable. Not sur eon why you highlighted the bits in blue as the reordering and manufacturing policy are separate, although in the pre 3.60 (?) days they were connected.

So to your red in make to stock you surprisingly make replenishments to include a stock holding. Fixed reorder and maximum clearly give you this. Lot-for-Lot will also depending upon your configuration and arguments as you can over order and therefore are ordering stock, but the differentiating factor is that it is true demand triggering Lot-for-Lot unlike Fixed Reorder and Maximum where the reorder point concept is used.

With make to order, wait for it wait for it, yes you make to order, this means there needs to be demand pulling the replenishment through in the form of an order, obviously the policy of order allows this as it plans solely to orders, but arguably Lot-for-Lot also does the same as it takes an order to trigger the requirement but only when inventory goes below zero.

No idea why the subject title is called what it is.

Hi Steven,

Tks for your answer. What I want to know that make to stock only can apply fixed reorder qty and maximum qty as their reordering policies and make to order is lot for lot and order. The manufacturing policy can be make to order for parent items and make to stock for sub-assemblies, but it can’t be one item contains make to stock and lot for lot. It is contrary with the online help (F1). According to ERP book I have, it tells so.

Rgds,

MrGM

Hi

Throw the ERP book away and ignore the help. there is NOTHING stopping you having a parent as make to order and components as make to stock. In many industries this is the best practice.

As for make to stock and lot for lot again see above. lot for lot requires demand, and not an inventory trigger, so arguably is make to order, but if your order is one and your order modifiers tell you to make 10 then you are only making one for the order, and you are clearly making 9 for stock!

I can only suggest you a) look at how Navision actually works on these instances b) put them into real life situations (not help and books) and c) think about it.