Material Planning for Internal Sales

Defining the supply network

When creating internal suppliers, define 'Internal sales facility' and 'Supplying warehouse' on 'Supplier. Define Purchase Financial (CRS624/G). Specify the selling facility and warehouse that the supplier represents. These fields are only visible for suppliers of supplier type 7 - 'Internal'.

If an internal supplier is associated with a supplying warehouse, it will automatically be proposed as supplying warehouse when selecting the supplier in 'Item. Connect Warehouse' (MMS002).

Material planning of planned purchases

An internal planned purchase order will automatically create a material reservation with order category 310 - 'Planned CO' at the supplying warehouse.

The supplying warehouse for the planned customer order issue is retrieved from:

  1. (MMS002) if the supplier of the planned PO is equal to the supplier specified in (MMS002)
  2. (CRS624) if a different internal supplier is used, or if the supplying warehouse in (MMS002) is blank.

If no supplying warehouse is found, no planned customer order issue is created, since it is not known at the planning stage which warehouse will be used. The customer order warehouse will then be assigned when the customer order is created, according to standard customer order logic.

Having a planned customer order issue is important if planning method 1 - 'Reorder point' or 2 - 'MRP' is used for the item at the supplying warehouse. The planned CO issue will:

The planned CO issue will always reflect the current state of the planned purchase orders, with negative quantity. Its status will indicate the status of the planned PO. If a planned CO issue has been created, it will exist until the planned PO has been released and printed and it is replaced by the actual customer order.

Lead time management

Lead time for internal sales is handled similarly to for normal purchasing. The planning date of the planned CO issue will be the requested delivery date of the planned purchase order minus the supply lead time as specified in (MMS002).

Lead time for PO:

Material Planning for Internal Sales
Lead time component Description
Postal lead time If time for communication with selling facility and CO registration is needed
Supply lead time Time between CO issue and delivery date. Should include all transportation time for which the supplier is responsible.
  • If goods responsibility = 1, supply lead time is typically 0 since the supplier is not responsible for transportation.
  • If goods responsibility = 2, this should include time for transportation to ship-via address.
  • If goods responsibility = 3, this should include all transportation.
Transportation lead time 1 Only applicable if goods responsibility = 1
Transportation lead time 2 Only applicable if goods responsibility = 1 or 2
Note: The idea is that the supply lead time should not include time for the sourcing activities at the supplying warehouse. If consideration should be taken for the lead time at the supplying warehouse, it is recommended to use 'Master scheduled' = 1 at the destination warehouse and set a sufficient planning time fence.
Note: The released customer order will not check these lead time components when calculating its planning date from the delivery date. The standard customer order logic will apply, which means that it is recommended to use route management to retrieve transportation time between CO issue date and delivery date.

Planning Time Fence Calculation

If a supplying warehouse is specified in (MMS002), 'Planning Time Fence Horizon. Calculate' (MMS355) can be used to calculate the planning time fence for internally purchased item, similar to as for distributed items, by accumulating the lead time and safety time of the supplying warehouses until a purchased, manufactured or master scheduled level is found.

Note: For distributed items, only the transportation lead time of the supplying warehouse is added to the planning time fence, but for internally purchase items, the entire lead time of the supplying warehouse is added.

Low-level code calculation

If a supplying warehouse is entered in (MMS002), it will affect the low-level code calculation in the same way as if the item were distributed, increasing the distribution level. This will happen automatically when the supplying warehouse is changed.

The low-level codes are a prerequisite for the MRP calculation to be performed in the right order. This means that when MRP is calculated for an item, the warehouse that is supplied by internal purchase will be processed before the supplying warehouse. This is important since planned purchase orders created at the supplied warehouse affects the demand at the supplying warehouse.

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