MRP Configuration: System Settings

As a part of configuring material requirements planning in Acumatica ERP Manufacturing Edition, you need to specify the system settings on the MRP Preferences (AM100000) form, as described in this topic.

MRP Settings

On the MRP Preferences (AM100000) form, you specify the following:

Settings for generating exception messages (optional): In the Exceptions section, you can specify the time periods (days before and days after) that determine when the system should not generate the Defer and Expedite exception messages. For details, see Exception Message Management.
Forecast-related settings (optional): If you use forecasts, in the Forecast section, you can specify the demand time fence within which the forecast will be excluded from demand data and the numbering sequence for forecast identifiers. For more information about the demand time fence, see Time Fences in MRP.
Master production schedule settings (optional): In the MPS section, you can specify the default master production schedule (MPS) type and the MPS time fence within which the MPS orders will be excluded from data used for planning. For details about the MPS time fence, see Time Fences in MRP. For more information about MPS types, see MPS Types.
Planning order type: In the Plan Order Type box (General section), you select the default planning order type (which should be created in advance) for the system to create planning orders during MRP.
Grace period (optional): In the Grace Period box (General section), you can specify the time period within which the supply orders will be regarded as satisfying the demand date. For details, see Grace Period in MRP.
Stocking method: In the Stocking Method box (General section), you select the method (either Reorder Point or Safety Stock) the system will use for replenishing the demanded items, which is initiated by MRP process.
Settings for including documents on hold in planning: By using the Include On Hold check boxes in the General section, you determine if sales orders, purchase orders, and production orders on hold must be considered by the system during planning. For more information, see Documents On Hold in MRP.
The setting determining the calculation of manufacturing times: You decide if you want the system to calculate lead times dynamically for a planned order or use the fixed lead time specified for an item by clearing or selecting, respectively, the Use Fixed Manufacturing Times check box (General section).
An indicator of whether expired blanket sales orders must be included in MRP: You decide if you want to include blanket sales orders that are expired in MRP by clearing or selecting the Include Expired Blanket Sales Orders check box (General section).
Consolidation settings (optional): The system can consolidate items with the same ID from multiple demand documents into a single planned order during MRP. To configure this, you select the Use Days of Supply to Consolidate Orders check box in the Consolidation section. You can also set up the system so that it consolidates demand documents with deferred requested dates. For details, see the Consolidation of Items in Multiple Demand Documents section below.

Lead Times in MRP

When the system creates planning orders during material requirements planning on the Regenerate MRP (AM505000) form, the system calculates an action date for each order. For a planning order to be converted to a production order, the action date is the date when the production must start. For a planning order to be converted to a purchase order, the action date is the promise date, that is, the date when materials must be available in a warehouse.

The system calculates action dates for planning orders by using lead times, which can be any of the following:

Purchase lead times, which the system uses for planning orders for materials to be purchased from vendors. For details, see the Lead Times for Purchased Items section below.
Manufacturing lead times, which the system uses for planning orders for materials to be produced. Depending on the settings you have specified, it uses one of the following:
- Fixed manufacturing lead times if the appropriate settings are specified. For more information, see the Fixed Manufacturing Lead Time section below.
- Variable manufacturing lead times if fixed lead times are not configured. For details, see MRP Configuration: Variable Manufacturing Lead Times.

Lead Times for Purchased Items

In material requirements planning, the system uses purchase lead times to calculate the action dates for planning orders with the Purchase source. Purchase lead times are always fixed and do not depend on the order quantity, so you should specify these times based on a typical order size. You set up the purchase lead times as follows:

You specify the calendar that the system will use for the action dates in the Purchase Calendar ID box on the MRP Preferences (AM100000) form.
For each stock item to be purchased, you do one of the following on the Stock Items (IN202500) form:
1. If a default vendor is selected on the Vendors tab, you make sure that the lead time for this vendor is specified in the Lead Time (Days) column.
2. If no default vendor is selected for the stock item or the lead time is not specified for the vendor, you can specify the time in days in the MFG Lead Time box on the Manufacturing tab, and the system will use this time as the purchase lead time.

For example, suppose that the production must start on January 30, which is a working day. The purchase lead time is 10 days. Then the action date for the planning order must be January 21. Further suppose that January 21 is a Saturday, which is a non-working day, according to the work calendar. Then the system moves the action date to January 20 because it is the nearest working day.

Fixed Manufacturing Lead Time

You may want the system to calculate manufacturing lead times by using fixed values for each stock item. This means that the lead time does not depend on the quantity of produced item and is always the same. In this case, you do the following to set up the system:

On the Production Preferences (AM102000) form (Scheduling section), in the Fixed MFG Calendar ID box, you specify the work calendar the system will use for calculating the action dates for planning orders.
In the Fixed MFG Units box in the same section of the form, you select the time unit—days or hours—the system will use for the lead time.
For each stock item to be produced, on the Stock Items (IN202500) form, you specify the time required to produce the item in the MFG Lead Time box on the Manufacturing tab.
If the manufacturing time for any item is warehouse-specific, on the Item Warehouse Details (IN204500) form, you specify the time required to produce the item in a particular warehouse in the MFG Lead Time box on the Manufacturing tab.
If fixed manufacturing times must be used for all production orders by default, on the Production Preferences (AM102000) form, you select the Use Fixed Manufacturing Times check box in the Scheduling section.
If fixed manufacturing times must be used in MRP, on the MRP Preferences (AM100000) form, you select the Use Fixed Manufacturing Times check box in the General section.
If you need to use fixed manufacturing times for a particular production order, on the Production Order Maintenance (AM201500) form, you select the Use Fixed Mfg Lead Times for Order Dates check box on the General tab.

Exception Message Management

When the system performs material requirements planning, it uses the requested dates specified in demand orders and finds out if these dates can be satisfied according to the lead times of suppliers (for either your own manufacturing or that of your vendors). To help you decide if order dates (either the shipping date for the customer or the promise date for suppliers) should be adjusted, the system generates exception messages on the MRP Exceptions (AM403000) form for orders with items that can be delivered too early or too late.

To manage the generation of exception messages, you specify the values in the Days Before and Days After boxes of the Exceptions section on the MRP Preferences (AM100000) form. Both values must be less than or equal to the value in the Grace Period box in the General section. The greater the values, the fewer exception messages are generated. If the values are zero, then messages are generated whenever a supply date does not cover the demand.

The Days Before value represents the number of days that are acceptable for items to be supplied before the date requested by a customer. If the items in the order can be supplied earlier than the requested date minus the Days Before value, the system generates the Defer exception message on the MRP Exceptions form. If most of the lead times of your vendors are a week or less, then 7 days would be the appropriate value for the Days Before setting. When demand changes, you would want your vendor to defer a delivery to a later date. If the lead times of the vendors are larger, then you need to consider how often you want to ask your vendors to adjust their promise dates.

The Days After value represents the number of days that are acceptable for items to be supplied after the date requested by a customer. If the items in the order will be supplied later than the requested date plus the Days After value, the system will generate an Expedite exception message. This value is more critical than the Days Before value because a late delivery from a supplier impacts your ability to manufacture and ship to customers. We recommend that you use a value of 2 to 5 days. MRP will not create a planned order to cover demand if the supply order is due within the grace period, but an Expedite exception message is generated to let the planner know that the supply order needs to be expedited so the inventory item is available when it is needed. If the order cannot be expedited, then the orders that require the inventory item need to be rescheduled to show that they will be late.

Time Fences in MRP

You can specify the demand time fence and the MPS time fence to control which data the system will use during planning.

The demand time fence is the time period from the MRP run date during which the forecast is no longer included in the total demand and the projected available inventory calculations. During this period, the system considers only customer orders when planning materials. Beyond this period, the greater value of dependent forecasts and actual demand drives MRP. You choose the value of the demand time fence based on how many days in advance customers place orders; the forecasts are used by invoices released and sales orders with ship dates within the starting and ending dates of each forecast. For example, if customers place orders at the beginning of every month and no more orders are expected, you may not want to consider the remaining forecast in MRP demand. You specify the value of the demand time fence in the Demand Time Fence box of the Forecast section on the MRP Preferences (AM100000) form.

Similarly, the MPS time fence is the time period from the MRP run date during which the system excludes MPS orders for which production orders have not been created from the data used for planning. You specify the value of the MPS time fence in the Time Fence box of the MPS section on the MRP Preferences form.

Grace Period in MRP

The grace period is the number of days after the requested date of an item in a demand order within which the item can be received in inventory (purchased from a vendor or produced internally) and still be considered as satisfying the requested date.

During planning, for each demand date (that is, the requested date of an item in a sales order), the system determines if a supply order (that is, a purchase or production order) within the grace period can fully satisfy the demand. You specify the grace period in the Grace Period box on the MRP Preferences (AM100000) form. If the demand is not fully satisfied by supply orders within the grace period, then the system creates a planned order to satisfy the remaining demand.

For example, suppose that you specify the grace period as 30 (which represents 30 calendar days). Further suppose that you have two sales orders, the first for 10 items with October 6 as the requested date and the second for another 10 items with October 10 as the requested date. Your vendor can deliver the materials required to produce the item on November 9. This supply will satisfy the sales order dated October 10 and will not satisfy the sales order dated October 6.

When a due date of a supply order is earlier than the demand date, the system does not consider the grace period and it satisfies all demands because there is no need to create a planned order.

You should consider your demand and supply patterns, supply lead times, and minimum order quantities to determine an appropriate value for the grace period.

Regardless of the grace period value, exception messages are always generated to expedite or defer supply orders based on the values of the Days Before and Days After boxes on the MRP Preferences form.

Documents On Hold in MRP

You can decide if sales orders, purchase orders, and production orders that are on hold should be considered by the system when planning materials. We generally recommend that you include the documents on hold in MRP. To do this, you select the Include On Hold Sales Orders, Include On Hold Purchase Orders, and Include On Hold Production Orders check boxes in the General section of the MRP Preferences (AM100000) form.

You should not include the on-hold orders in MRP if any of the following conditions is true in your company:

Sales orders are always prepaid, and they are on hold until they are paid; when the orders are paid, the dates are set appropriately. Another case is when customers frequently cancel orders or change the dates and new dates should be specified in the order. In these cases, the Include On Hold Sales Orders check box should be cleared.
Production orders are placed on hold when the sales orders are in the process of being canceled or changed (these orders could include configured items). In this case, the Include On Hold Production Orders check box should be cleared.
The purchasing department creates orders far in advance with suppliers and often needs to await confirmation of delivery dates and quantities from the supplier. In this case, the Include On Hold Purchase Orders check box should be cleared.

Consolidation of Items in Multiple Demand Documents

During material requirements planning, if multiple demand documents (such as sales orders) contain the same item and have a due date (such as a required date in a sales order) that is within a specific time period, the system can consolidate items from these documents into a single planned order. To implement this behavior, you select the Use Days of Supply to Consolidate Orders check box in the Consolidation section of the MRP Preferences (AM100000) form.

With this check box selected, for short-term planning, you specify the time period for consolidating items in the Days of Supply box in the following locations for the needed entities:

The General tab (MRP Consolidation section) of the Item Classes (IN201000) form for an item class. The system copies this setting to all newly created stock items for which this class is selected,
The Manufacturing tab (Planning Settings section) of the Stock Items (IN202500) form for a stock item.
The Manufacturing tab (Planning Settings section) of the Item Warehouse Details (IN204500) form for an item–warehouse pair. Thus, for an item that is stored in multiple warehouses, you can specify a different number of days for the item in each warehouse.

For example, suppose that the Days of Supply setting for a juicer is specified as 7. Further suppose that two sales orders containing the juicer have been created with the requested date within the same week. When MRP is run, the system will group juicers from these two orders in one planned order as a potential production order, instead of generating two planned orders, one per sales order.

If sales managers create long-term sales orders for some customers to provide a discount, you can configure the system to use a long-term consolidation bucket, and you can specify settings that are specific to long-term consolidation. To do this, in the Consolidation section of the MRP Preferences form, you first select the Use Long-Term Consolidation Bucket check box. On the form, you then specify the number of days after which the system starts consolidating items from demand documents in the Consolidate After (Days) box and the number of days within which the requested dates in the demand documents must fall in the Bucket (Days) box.

If you use forecasts for planning item demand, the system also consolidates forecast records during MRP. For example, suppose that weekly forecast records exist for the following quarter. Further suppose that the value of the Consolidate After (Days) box is 45, and the value of the Bucket (Days) box is 30. In this case, when performing MRP, the system will create a single planned order for all forecast records with dates starting from today's date plus 45 days and within 30 days after the starting date of consolidation.