To generate order advice (SIC)

In the Generate Order Advice (SIC) (whina3200m000) session, you can generate order advice to replenish items. However, you can only do so if:

• For the item/warehouse combination, the supply system is set to None. You can specify the supply system in the Supply System field of the Item Data by Warehouse (whwmd2110s000) session.
• The items are of type Purchased, Manufactured, or Product. You can specify the item type in the Item Type field of the Item Defaults (tcibd0102m000) session.
• The items are non- floor stock items. An item is a non-floor stock item if the Floor Stock check box in the Item - Warehousing (whwmd4600m000) session is cleared.

Order horizon

Before LN generates order advice, LN determines the order horizon for which the replenishment must take place. The order horizon is determined as follows:

order horizon = current date + (total lead time * order horizon factor) + order horizon constant

LN determines the total lead time based on the item type, without taking the calendars into account.

If the item type is Purchased, LN retrieves and adds up the following lead times:

• Internal Processing Time from the Items - Purchase Business Partner (tdipu0110m000) session.
• Safety Time from the Items - Purchase Business Partner (tdipu0110m000) session.
• Supply Time from the Items - Purchase Business Partner (tdipu0110m000) session.

If the item type is Manufactured, LN retrieves the Order Lead Time from the Item - Production (tiipd0101m000) session.

Reorder point and safety stock

The reorder point does not need to be a fixed amount; it can fluctuate over time. The fluctuations of the reorder point depend on the fluctuations of the seasonal pattern with its seasonal factors of the forecast/demand.

You can let the safety stock fluctuate based on a seasonal pattern with its seasonal factors. For more information, refer to Seasonal pattern for safety stock and demand.

You can specify:

• The seasonal patterns in the Seasonal Patterns (tcmcs0116m000) session.
• The seasonal factors in the Seasonal Pattern Factors (tcmcs0117m000) session.

In the Item Data by Warehouse (whwmd2510m000) or the Items - Ordering (tcibd2100m000) session, you can specify:

• The base reorder point in the Reorder Point field.
• The base safety stock in the Safety Stock field.
• The seasonal pattern for safety stock in the Seasonal Pattern field.

To generate orders

With the Generate Order Advice (SIC) (whina3200m000) session, LN generates an order advice for each requirement within the order horizon. A requirement may occur if the projected on hand drops below the reorder point, which can be caused by:

• A decrease of the projected on hand.
• An increase of the reorder point.

The ordered quantity depends on:

• The safety stock. (If seasonal patterns apply, the safety stock defined at the end of the order horizon is taken into account.)
• The projected on hand.

• The replenishment settings defined in the following sessions:

  • Item Data by Warehouse (whwmd2110s000)
  • Items - Purchase Business Partner (tdipu0110m000)

The kind of order advice that is generated for the item depends on the item type:

To determine the requirement date

The requirement date is the date on which the projected on hand drops below the reorder point.

To determine the actual requirement date, LN takes into account the actual calendar. If the requirement date is not available according to the actual calendar, LN looks backwards for the first available date/time before the requirement date. LN sets the first available date/time as the actual requirement date.

To determine the planned receipt date

LN determines the planned receipt date by planning forwards from the requirement date and taking into account the actual calendar.

LN determines the planned receipt date as follows:

planned receipt date = planned requirement date + outbound lead time + inbound lead time + item safety time + supplier safety time

LN only takes into account:

• The supplier safety time if the item type is Purchased.
• The outbound lead time and the item safety time if the requirement is caused by a planned inventory transaction.

LN retrieves:

• The outbound lead time from the Item Data by Warehouse (whwmd2110s000) session for the default warehouse that is linked to the item in the Item Defaults (tcibd0102m000) session.
• The inbound lead time from the Item Data by Warehouse (whwmd2110s000) session for the default warehouse that is linked to the item in the Item Defaults (tcibd0102m000) session.
• The item safety time from Safety Time field of the Items - Ordering (tcibd2100m000) session.
• The supplier safety time from the Safety Time field of the Items - Purchase Business Partner (tdipu0110m000) session.

To determine the planned delivery date

LN determines the planned delivery date based on the planned receipt date with the following formula, taking into account the actual calendar:

planned delivery date = planned receipt date - transport time

LN determines the transport time between the ship-from's address and the ship-to's address, based on a relevant distance table (if available) in the Distance Table by City (tccom4137s000) session or in the Distance Table by ZIP Code/Postal Code (tccom4138s000) session. From which of these two sessions the transport time is retrieved depends on the value of the Usage Distance Tables field in the COM Parameters (tccom0000s000) session.

To take into account the actual calendar

When LN determines the requirement date, the planned receipt date, and the planned delivery date, it takes into account the actual calendar. Therefore, LN first searches for a calendar in the following order:

1. The warehouse's calendar.
2. If the warehouse's calendar is not specified, the company's calendar.

LN bases the actual calendar on the found calendar code and the availability type.

LN determines the requirement date, the planned receipt date, and the planned delivery date based on the actual calendar.

Before the calendar's start date and after the calendar's end date, the standard calendar applies.

When LN determines the requirement date, the planned receipt date, and the planned delivery date, and if the lead times are expressed in hours, LN takes into account all the time that is available on a day according to the actual calendar. However, if the lead times are expressed in days, LN considers a day a whole day if the actual calendar indicates that time is available on that day.

Example

To generate order advice for an item with item type Purchased.

• Current date/time: Wednesday, January 3/1:30:00 pm
• Inventory on hand on current date (in pieces): 18
• SIC order horizon factor: 3
• SIC order horizon constant (in days): 15
• Inbound lead time (in hours): 4
• Outbound lead time (in hours): 4
• Transport time (in days): 2
• Item safety time (in days): 2
• Supplier safety time (in days): 2
• Base safety stock (in pieces): 10
• Base reorder point (in pieces): 15
• Seasonal pattern for safety stock and demand has period type: Week.
• Number of periods: 53
• First allowed order date: January 3/10:00:00 am
• Order interval: 7 days
• Order quantity is economic order quantity, with EOQ = 24

The warehouse's actual calendar is available from Monday through Friday each week and has an 8:00:00 start time and a 17:00:00 end time.

LN determines the order horizon as follows:

• Order horizon = current date + [(inbound lead time + outbound lead time + transport time) * order horizon factor] + order horizon constant.
• Order horizon = January 3/1:30:00 + [(4 hours + 4 hours + 2 days) * 3] + 15 days.
• Order horizon = January 3/1:30:00 + [56 hours x 3] + 360 hours.
• Order horizon = January 3/1:30:00 + 528 hours = January 25/1:30:00.

The seasonal pattern for safety stock and reorder point is as follows, with the resulting safety stock and reorder point (only the first four weeks are listed):

Planned inventory transactions:

• January 11/18:00:00 planned issue of 9.
• January 23/11:30:00 planned issue of 8.
• No planned receipts.

The projected on hand before planning the replenishment is as follows:

Each day, the Generate Order Advice (SIC) (whina3200m000) session is run. This means for today (Current date/time: Wednesday, January 3/1:30:00 pm) the following information is valid:

• Reorder point: 15
• Projected on hand within order horizon = 18 – 9 – 8 = 1 piece.

This is below ROP, so an order advice will be created.

The order quantity will be: Safety Stock + Quantity Allocated – Quantity On Order – Quantity On Hand = 10 (Safety Stock is taken at the end of the order horizon, which is week 4) + 17 – 0 – 18 = 9. Because EOQ = 24, this quantity will be ordered and stored on the order advice.

The order date is the current date when creating the purchase/production order advice, which means for this example January 3/1:32:45 (some minutes after the Generate Order Advice (SIC) (whina3200m000) session was started).

The delivery date will be: Order Date + Inbound Lead Time (4 hours) + Transport Time (only for Purchase) (2 days) = Friday January 5/5:32:45 pm. Because this is outside the calendar, delivery date will be Monday January 8/8:32:45 am (08.00 + 32:45 minutes/seconds of Friday). Safety times are not calculated with forward planning used by SIC.

When the order advice is confirmed and transferred to purchase (or production), the first allowed order date will be increased with the order interval of 7 days to January 10/10:00:00 am.

This means that when Generate Order Advice (SIC) (whina3200m000) is run tomorrow (January 4), this item will be skipped, because the first allowed order date is still in the future.

The projected on hand after planning the replenishment is as follows: