You will find a general description of how to manage lists in MONITOR in the chapter Managing Lists in the System under General in the MONITOR Basics guide.
What Does This Procedure Do?
Under the Create tab you print lists that show stock shortages for parts during different periods. These lists can be used as a basis to create manufacturing orders and purchase orders, or used to generate order suggestions or your own custom suggestions, which can later be used to generate actual orders to cover shortages that will occur in stock. If you select a detailed list, it shows the same information that can be found under the Order Window tab in the Part Info procedure.
What Is a Requirement Calculation?
The requirement calculation is the foundation or basis for all requirements planning and is the primary procedure in the materials control portion of MONITOR. The program creates a calculation to determine which periods will have stock shortages for certain parts, that are caused by transactions from registered customer orders or manufacturing orders. A shortage can appear for a part if a transaction brings the available balance below zero (0), or if you apply safety stock - when the available balance falls below the safety stock balance. The Requirement Calculation list shows which periods will have shortages. Transactions may result from, for example, an incorporated part in a structure, when a requirement for a certain quantity has arisen for the "higher level" part, which is larger than the available balance for that period.
A requirement calculation can create order suggestions for manufacturing orders and purchase order based on shortages, if any. These order suggestions can later be used to generate actual manufacturing and purchase orders. Another way is to load these order suggestions into the Manufacturing Order Suggestion or Purchase Order Suggestion procedure, where you can generate "actual" manufacturing orders or purchase orders for the shortage parts. The generated orders are then automatically given the right start, finish, and delivery period so that they can supply these shortages. The start period is always set to "today" (today's date) if the available balance falls short of the safety stock.
Please note that any shortages in past time in the system, can generate suggestions that will also be in past time. However, these suggestions can be moved ahead in time by default, if you deactivate the setting Create order suggestions in past time? under Requirements Planning under the Inventory tab in the Settings procedure. You can also determine this in the actual list by right-clicking in the list to open the Info menu and selecting the same option there.
Please note that if you do not allow suggestions in past time, the following will apply: The order period ("today") will be displayed in red font if the suggestion was supposed to have been created for an order in past time.
Also see Work Flow Using Order Suggestions and Work Flow Without Order Suggestions.
The requirement calculation can also generate rescheduling suggestions for existing orders instead of generating new order suggestions, if an order that has already been placed with a later period could actually cover a shortage that will arise before the actual order's finish or delivery period. To replan an order via a rescheduling suggestion, you must first load the order in the Rescheduling Suggestion - In procedure, or by selecting the option Replan order... via the Info menu by right-clicking in the list.
Suggestions generated for S- and P-parts in the requirement calculation reserve material one level down in the structure. Material reservations and manufacturing order suggestions are created at all levels in the structure of M-parts.
For structure parts, you must perform the requirement calculation so that all parts at all levels are calculated. In the structure part shown below, you have three levels (levels 0-2), with M-parts and S-parts at the highest levels, and P-parts at the lowest level.
Example of a structure part.
Reorder Point List
A simpler form of requirements planning, by just looking at the physical balance plus orders on hand versus the reorder point which provides a requirement signal, can also be done in the requirement calculations. You therefore have the option to take only actual orders into consideration. In that case, you do not select actual reservations. This way you can take advantage of the fact that the Requirement Calculation procedure generates order suggestions taking the existing actual orders and physical balance into consideration.
In the case when you want to take the reservation planning into consideration, the reorder point functions as a safety stock. Reservations may interfere with simpler calculations by giving a "too early" requirement signal, when the calculation reviews the Order Window or planning info.
A more advanced form of requirements planning against the reorder point is made by using the Stock Refill System (SRS) in the Refill List - Purchase and Refill List - Manufacturing procedures, for example.
Please Note! Also note that parts using the lot sizing rule B (Bucket part) are not requirement planned in the system. Those parts are not processed at all in this procedure or the Run Netting procedure. These parts are intended to be used in conjunction with physical supervision or monitoring. If you want these parts to be included in the requirement calculation, you must enter another lot sizing rule for them.
Sales Forecast
You can also perform a requirement calculation that takes saved sales forecasts into consideration. In order to avoid having forecasts and received customer orders double your requirement, the program will deduct the forecasts. The calculation rule for this stipulates that each forecast record "from today and on" + lead time "up to and including" the date of the last placed customer order, is decreased with the factor "placed orders / forecast quantity". In this case, the sales forecast for customers (customer order rows with a Forecast status) are treated as sales. In other words, they are calculated as if they were orders and not forecasts.
Example: All forecasts in past time - or within the part's lead time - are not included, since we will not have time to manufacture them before the requirement will arise. If the forecast says that we will sell 100 parts starting 10 days from now (lead time) and up to and including (through) the date of the last placed customer order, and if we have already received a customer order for 30 parts for the same period, we will deduct these 30 parts from the forecast. This means that each forecast is decreased by 30/100 = 30%. One advantage here is to set your round-off quantity to at least 1 for all the parts that use the unit pieces, in order to avoid having requirements for part fractions. Any forecast items that are further ahead in time than the last customer order will not be affected by this deduction.
Quote Backlog
The requirement calculation can also include the quotes in your quote backlog that have been selected for simulation / requirements planning. A quote can be given a probability code that indicates the result that can be expected from the quote. Each probability code has a certain percentage value. For example, two quotes have a probability of 50% and the same part with a quantity of 100. This would give a total quantity of 200 for that part. The probability (or likelihood) is that 50% of the quotes will be accepted, which means that both quotes are requirement calculated with a total quantity of 100 parts.
Important Considerations During Requirement Calculation
In order to be able to perform requirements planning using the Requirement Calculation procedure, the part information must be correct. If the part information is not correct, the system cannot load reliable information to use in the requirement calculation. It is therefore important to check the following part information before running a Requirement Calculation for the first time:
If you also apply Order suggestions, when order suggestions and actual orders are generated by the system, you must also make sure that:
What Update Options Exist for this Procedure?
If you have checked the Order suggestions option under the Show heading under the Create tab, you can generate manufacturing order suggestions for M-parts, S-parts, F-parts and purchase order suggestions for P-parts in case any shortages should arise for these parts.
You can then also register your own suggested quantity on all the rows in the list under Own suggestion, or another finish period for M-parts and S-parts under Finish or a new delivery period for P-parts under Del. period.
Distribute Purchase between Suppliers
If you have activated the setting Distribute purchase between several suppliers? you can enter a distribution percentage in a supplier link for a part in the Update Part - Purchase procedure. This setting is found under the Orders / Inquiries heading under the Purchase tab in the Settings procedure. This makes it possible to distribute the purchases of the part between two or more suppliers according to the entered percentages. Only one purchase order suggestion will be created, but two or more purchase orders will be created when the suggestion is generated into actual purchase orders. One purchase order will then be created for each supplier according to the distribution in the supplier links.
Max. Quantity
If a max. quantity is entered for a part, the Run Netting, Requirement Calculation and manually registered manufacturing orders will take the part's max. quantity into consideration. Order suggestions and manufacturing orders will never exceed this quantity. If the requirement is larger the current order will be divided into several manufacturing orders with the max. quantity as the largest order quantity. The start and finish periods on the divided orders will be distributed evenly during the period. This to avoid that loading and material requirements will be created against the same finish time.
Example: The requirement is 100 pcs (pieces) and the max. quantity for the part is 20 pcs. This means that you need 5 manufacturing orders to fulfill the requirement.
The max. quantity applies only to the part types S and M, and can be entered only if you have activated the setting Show max. quantity, under Requirements Planning under the Inventory tab in the Settings procedure.
Can Any Charts Be Displayed?
There are no charts or graphs available in this list.
Window Functions
Use Save to generate order suggestions or reschedule orders.
Read more about the other Window functions under Window Functions in the MONITOR Basics guide.
See also: