Peg distribution in the outbound process

During the outbound advice and during inspections, the outbound order line cost peg distribution is updated with the advised quantities, approved quantities and the rejected quantities. When the goods arrive at the staging location and are shipped, the actual pegs are created. During the confirmation process, the shipment line peg distribution is created.

Generating outbound advice

While generating an outbound advice for a pegged outbound order line, additional inventory checks are performed to determine the pegged inventory that must be advised. LN first searches for the available stock points. If the stock point is identified, the outbound order line cost peg distribution is advised based on the available quantity at the stock point and the available quantity in the project pegged inventory. The peg distribution is based on the earliest required date.

When determining the quantity that must be advised for each separate peg line, this calculation is performed before searching for the project pegged inventory:

Quantity to be advised = Required Quantity - Advised Quantity - Rejected Quantity
 - Shipped Quantity - Not Shipped Quantity - Expected Not Shipped Quantity

Quantity to be advised = Minimum (To be distributed (Stock point Quantity), To be Advised )

This table explains the quantity that must be advised:

After the to be advised quantity is retrieved, the project pegged inventory search engine is activated.

These scenarios exist:

• No shortages, full advise
• Shortage on project pegged inventory

• Shortage on stock point inventory

  • Part that can be advised has no shortage in project pegged inventory
  • Part that can be advised has a shortage in project pegged inventory

No shortages, full advise

Initial position of the inventory:

In the example, you can see that the outbound order line can be advised because the inventory levels are sufficient.

This example displays results after an outbound advice is created:

Shortage on project pegged inventory

The cost peg transfer functionality enables you to track the shortages in project pegged inventory. For more information, refer to Cost peg transfers in Warehousing.

Initial position of the inventory:

In the example, peg line 20 has a higher priority, because the required date is earlier.

The resulting inventory after the outbound advice is created (without the use of transfer logic) is listed in these tables:

Shortage on stock point inventory

The possible scenarios for stock point inventory shortage:

The part that can be advised has no shortage in the project pegged inventory

In this example, there is not enough inventory available. However, the part of the inventory that can be advised must also be handled.

Initial position of the inventory:

A shortage of 10 pieces is present on the inventory level. The advice can be created only for the available pegged inventory. LN generates a message for shortage and an outbound advice of the available inventory is created. Following is the resulting inventory after the outbound advice is generated:

The part that can be advised has a shortage in the project pegged inventory

There is a shortage in the project pegged inventory.

Initial position of the inventory:

There is a shortage of 10 pieces on the inventory level. In the part that can be advised, a shortage of 5 pieces is also identified on the project pegged inventory. In this situation, LN determines that 30 pieces can be advised. However, an additional shortage of 5 pieces is identified. Hence, only 25 pieces are available to be advised. The resulting inventory is explained in these examples:

Create outbound advice despite inventory shortage

LN does not allow you to generate an outbound advice with an advised quantity higher than the total advised quantities of the related outbound order line cost peg distribution.

Outbound advice ownership

LN automatically generates the outbound advice ownership when the outbound advice is created if the outbound line is project pegged. LN does not allow you to change the ownership distribution for the project pegged order lines. The ownership distribution is based on the issue ownership set on the outbound order line.

LN does not allow you to generate ownership distribution or insert, modify, delete records for pegged outbound order lines in the Outbound Advice Ownership (whinh4128m000) session.

Inventory search engine

Inventory selection during the process of generating an outbound advice must be changed to support the project pegged inventory. When demand for a pegged item is advised, the process takes care of these peg distribution lines. So, the inventory search engine logic is extended to support the project pegged inventory.

The initial point of these steps is that the inventory on item warehouse level is found. The search sequence for inventory:

• Search for available inventory with the required peg.
• Search for available cost peg transfer orders (cost peg transfer orders created by Enterprise Planning or manually entered).
• Search for available excess.
• Search for available to transfer (non-excess inventory).
• Unpegged inventory.
• Alternative Items.

Manual outbound advice

For a manually created outbound advice, when there is insufficient inventory to allocate for the manually entered advised quantity, LN displays an error message. The cost peg transfer logic is also executed.

Manual changes on outbound advice

When you modify the outbound advice quantity, LN updates the advised quantity on the underlying peg distribution.

In case of a decrease in the quantity, a peg redistribution is initiated. The decrease in advised quantity must be based on the latest required date. For example:

When you change the advised quantity to 45, the following is the result:

Undo outbound advice

When an advice is removed, the advised quantity on the deleted outbound advice line must be removed from the outbound order line cost peg distribution.

Process pick

When the user processes the picking list, LN also processes the pending cost peg transfers for the outbound advice that is picked.

Outbound advice for returns

Advising is done based on the latest required date; the pegs with the latest required date are advised first.

Creation of shipment line cost peg distribution

When the shipment lines are confirmed, the shipment line cost peg distribution is created for shipment lines related to an outbound order line that is pegged. The shipped quantities are distributed over the pegs for the shipment lines. The distribution is explained in these examples:

For this situation the following shipment lines are created:

When the shipment is confirmed, the shipped quantity is updated on the outbound order line cost peg distribution

Underdeliveries and overdeliveries

For underdeliveries, the quantity not delivered must be distributed on the peg distribution, beginning with the peg line with the latest required date. For overdeliveries, the quantity overdelivered must be distributed equally over the available peg lines for the outbound order line.

Not shipped quantities

The peg line distribution data is transferred to the transfer order / adjustment order only if a not-shipped quantity exists on peg distribution. During the confirmation process the not-shipped quantity is updated on the outbound order line cost peg distribution and the shipment line cost peg distribution.

Shipments for returns

When the items are not shipped to the destination, but are shipped back to the origin, a reverse required date priority is applied when generating the shipment line cost peg distribution during the confirmation of the return shipment line. As item inventory is decreased, LN changes the pegged inventory with the latest required dates.

Cost peg transfers

Cost peg transfers enable transfer of costs between two different pegs (pegged to unpegged and vice versa). The cost peg transfers do not physically move the inventory but only transfer the costs of the inventory. Cost peg transfers are performed within the same warehouse. It is not possible to transfer the goods across warehouses. For more information, refer to Cost peg transfers in Warehousing

Transfer (manual) orders / Transfer orders

LN allows you to use an inbound and outbound cost peg distribution to specify transfer manual orders to transfer actual goods between warehouses. LN generates the outbound order line cost peg distribution based on the project pegged inventory. The cost peg distribution can also be created manually and transferred to the inbound line cost peg distribution.

Change warehouse order at a later stage

LN allows you to modify the outbound warehousing order data related to the sales order/schedule. The data can be modified for warehousing orders of all origins. You can also define up to which outbound procedure step the data can be modified. For more information, refer to To modify the outbound warehousing order data.

Additional costs on shipment header/line

When the cost item that is mandatory pegged is added as additional cost to the shipment, the cost item is not displayed because LN cannot decipher which pegs must be added to the additional cost line.

When the cost item that is mandatory pegged is added as additional costs on the shipment line, or when the parent shipment line has a peg distribution, LN copies the peg distribution data to the additional cost line. The cost peg distribution of this additional cost line is transferred to the sales cost order. For more information, refer to Additional costs - shipment based