Supply Chain Rebuild

This document includes a description of the process of changing the receiving warehouse on a purchase order (PO) line and how this can trigger a supply chain rebuild (SCR). This means rebuilding a supply chain when working with purchase orders depending on the warehouse to which the delivery will be shipped, so that the goods always reach their intended destination. Three business scenarios are supported:

Background

After a purchase order has been created, there is a possibility that the supplier delivers to another warehouse than the warehouse entered on the purchase order line. This means that the supply chain may require some adjustment. Furthermore, the planner may request a change of ship-to warehouse due to the demand point having changed.

Limitations

Before you start

  1. Set 'Allow change of ship-to-warehouse' = 1 in 'M3 Settings - Purchase' (CRS780/H) for your division.

  2. Create a normal PO type (category 20) in 'Purchase Order Type. Open' (PPS095).

  3. If supply chain rebuild should be enabled, select an appropriate DO type in the '750 DO type for supply chain rebuild' setting in (PPS095/K).

  4. Enable the '760 Inventory bypass' setting in (PPS095/K), depending on whether you will use inventory bypass instead of confirming a new ship-to warehouse.

Workflow - supply chain rebuild

When a PO line is updated with the new warehouse where the goods will be received, the supply chain may have to be rebuilt to avoid undesired effects, such as unwanted planned purchase orders. In general, distribution orders (DOs) will be generated to transfer the goods to the warehouse where the demand arose. Such distribution orders that are generated by a supply chain rebuild are called SCR distribution orders.

Example:

To enable this, a DO type must be entered in (PPS095/H) in the '750 DO type for supply chain rebuild (P750)' field. This DO type will be used in the creation of SCR distribution orders.

A supply chain rebuild can be triggered during the following events:

The aim of a supply chain rebuild is always to move goods between two warehouses, and it tries to use a distribution chain. Searching for a suitable distribution chain is as simple as possible: The first chain with a matching From and To warehouse will be used. If one is found, the order type of the SCR distribution orders will be determined by the sequences in the chain. If no suitable distribution chain is found, a single SCR distribution order is generated from the ship-to warehouse to the top-level warehouse.

All distribution orders that are generated will get generation reference 52, 'Planned distribution order, generated via supply chain rebuild'. These distribution orders will be order-initiated, and there will be an order reference from the PO line to the DO line. This means that the connection between the PO line and SCR distribution order line will always be one-to-one.

How the distribution orders are generated depends on whether the purchase order is part of a supply chain and the type of supply chain.

Inventory bypass

During inventory bypass, a different ship-to warehouse is automatically assigned immediately when a purchase order is manually created or released, triggering a supply chain rebuild. You can use inventory bypass when you know that a purchased item normally ships to another warehouse than the one where it was requested. As the default ship-to warehouse, the 'Supplying warehouse' (SUWH) field in 'Item. Connect Warehouse' (MMS002/E) is used. The warehouse and the supplying warehouse must belong to the same division (this is a limitation in the MUC scenario); however, this is not verified in (MMS002).

To use inventory bypass, enable '760 Inventory bypass' in 'Purchase Order Type. Open' (PPS095/K).

When a PO line is created, M3 verifies that the following settings are defined:

If all this is true, the ship-to warehouse of the PO line will be updated, triggering a supply chain rebuild that will generate distribution orders from the supplying warehouse to the ordering warehouse.

Follow these steps

This workflow describes the process of confirming a new ship-to warehouse.

  1. Open 'Purchase Order. Confirm' (PPS250), filter on your purchase order number, and click 'Change' on the desired PO line.

    • You can confirm a purchase order with several lines from the F panel (function key F14).
  2. The E panel shows the default information from the line including the 'Ship-to warehouse' field. In this field, enter the desired warehouse in which the goods are to be received and click Enter.

    • A confirmation of a new ship-to warehouse will move the material demand to this warehouse. This is reflected in 'Material Plan. Open' (MMS080), 'Purchase Order. Lines' (PPS201) and 'Purchase Order Transactions' (PPS330).
    • The supply chain will be rebuilt, taking the new ship-to warehouse into consideration. This is where the goods are received and where subsequent PO activities take place before shipment to the ordering warehouse. A distribution order is automatically created from this warehouse back to the ordering warehouse using the order type specified in (PPS095/K). You can view the reference order number in (PPS201/E).
    • Confirming a ship-to warehouse always triggers a recalculation of purchase order charges. In addition, the geographic code or VAT code found for the item/warehouse will be retrieved again depending on the tax settings. No new prices will be retrieved according to the new warehouse.
    Note:  'Item. Connect Warehouse' (MMS002) must contain a valid record for the items that are confirmed to a new ship-to warehouse.
  3. Open (MMS080). A filtering on the ordering warehouse will show that the purchase order has been moved to the new confirmed ship-to warehouse in which the goods will be received. Distribution orders are also created in the affected warehouses in order for the goods to be finally received in the ordering warehouse if supply chain rebuild is enabled.

Reverse the purchase order in (PPS330)/(PPS250)

  1. Perform the steps in (PPS250) and (MMS080) as described above.

  2. Delete the PO transaction from (PPS330). The demand is moved back to your ordering warehouse in (MMS080), and any related distribution orders are also deleted.

    • When reversing a transaction with a status of 35, the warehouse is always updated by the value from the ordering warehouse.
    • The same result is achieved from (PPS250).

Perform goods receipt

  1. Receive your purchase order in 'Purchase Order. Receive Goods' (PPS300) by entering your ship-to warehouse on panel A and your order number.

  2. On panel B, click 'Change' to access panel E. From there, receive the goods by entering the received quantity and then clicking Enter.

    Receiving the goods will capture statistics for both the ordering and receiving warehouses, which can be viewed in 'Item Statistics. Display' (MMS090/E). The 'Ordered purchase quantity' will be updated at the ordering warehouse, regardless of where it was delivered. The PO goods receipt will also update the 'Purchased quantity' of the receiving warehouse.

Outcome

Settings descriptions

Program ID Field heading Description
(CRS780/H) 57 Allow change of ship-to warehouse If this setting is disabled, it is not possible to change the ship-to warehouse at confirmation or shipment advice, and inventory bypass is disabled.
(PPS095/K) 750 DO type for supply chain rebuild The DO type that will be used by the distribution orders generated by a supply chain rebuild (unless this is overruled by distribution chain settings).
(PPS095/K) 760 Inventory bypass Enable this to activate inventory bypass when applicable.
(MMS002/E) Acquisition code Inventory bypass is only applicable for items with 'Acquisition code' = 2 (Purchased).
(MMS002/E) Supplying warehouse If inventory bypass is used, this will be the default ship-to warehouse.
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