Lead-time offsetting

Enterprise Planning offsets lead times to find order start date and the order finish date. If, during order planning, demand is generated, planned order receipts exist in a certain plan period. This planned reception of goods requires the release of that order in an earlier period, so that the manufacturing location can start the production process, the sales department can dispatch the ordered quantity, or the supplier knows when to ship the goods for transport.

The following diagram shows the crucial points in time in the lead-time offsetting process:

A	Start date
B	Finish date
C	Requirement date

Based on the lead-time components of which the total lead time of a planned order is built up, and which vary according to the order source type (purchase, production, or distribution), Enterprise Planning computes the date on which a planned order must be released. This process is called lead-time offsetting.

The basic data that Enterprise Planning needs to perform lead-time offsetting are:

Lead-time data: lead-time components are partly common, partly source-specific.
Calendars: calendars determine when the resources required to produce or buy the required goods are available, and what their capacity is.

Before Enterprise Planning can offset lead times, the lead-time components must be converted from days to hours. Only then, Enterprise Planning can compare the resulting hours with the available plan hours in the appropriate calendar.

During the lead-time offsetting process, Enterprise Planning takes the requirement date as point of departure, and from there, takes into account the separate lead-time components in a fixed inverse chronological order to take backward steps in time. How big the steps are that Enterprise Planning, depends on the type of lead-time component, and the available space (plan time) in the calendar used to offset the lead-time component.

This process finally brings Enterprise Planning to the point in time where the involved supplier must start the activities to be able to deliver the required goods in time: the order start date.

To offset the individual lead-time components, Enterprise Planning uses different calendars. A calendar in LN not only represents the dates in a chronological order, but for each date it also includes a daily schedule that indicates:

whether a resource is available on a particular day, or not.
the exact hours on which the resource is available.
what the capacity/efficiency rate of the resource is on specific hours.

Which calendar Enterprise Planning selects to offset a specific lead-time component depends on the resource where the logistic activity to which the lead-time component relates, is carried out. For more detailed information about calendars, see help topic Calendars in Enterprise Planning.

When Enterprise Planning finished the offset of a specific lead-time component, the offset mechanism stops at a certain time on a particular date. From that point in time, the process continues to offset the next lead-time component of the total order lead time, for which Enterprise Planning switches to the calendar linked to the resource that carries out the activity to which that lead-time component relates.

Depending on the fixed lead-time horizon, Enterprise Planning can offset in a detailed way, or in a more aggregated way. When Enterprise Planning offsets lead time in a detailed way, it individually offsets all the lead-time components of which the total order lead time for each order type is built up. In the more aggregated way, Enterprise Planning only offsets one lead-time component between the order start date and finish date.

Note

You can define lead-time components in days or in hours. If there is only one hour/one second available on a day, Enterprise Planning considers this as an available day in lead-time planning.