Example: cumulative order lead time (COLT)

This topic explains both the cumulative order lead time (COLT) and the noncritical COLT.

Noncritical cumulative order lead time

The noncritical cumulative order lead time (noncritical COLT) of an item is equal to the longest of the following lead times:

• The item's purchase lead time. For more information, refer to Purchase lead time calculation.
• The item's noncritical cumulative production lead time. For more information, refer to Noncritical cumulative production lead time.

The reason why it can be necessary to compute a noncritical COLT is as follows. Suppose that a particular item has the following planning horizon:

OH	Order horizon
MPH	Master planning horizon
C	Current date
x	Requirement

In this case, order planning is used to cover short-term requirements, while master planning covers long-term requirements. As long as requirement X falls within the master-planning horizon, this requirement is exploded to the item's critical components only. Explosion to noncritical components only takes place after the requirement has shifted into the item's order horizon. When that takes place, the total lead time for the item and its noncritical components must still fit within the order horizon: otherwise, the order will be delivered late.

Rules

For items that are critical in master planning (see the Items - Planning (cprpd1100m000) session) and that have an item master plan, the following rules apply:

• The item's planning horizon must at least be equal to the item's total COLT.
• The item's order horizon must at least be equal to the item's noncritical COLT.

For items that are critical in master planning (see the Items - Planning (cprpd1100m000) session) and that have no item master plan, the following rules apply:

• The item's planning horizon must at least be equal to the item's total COLT.
• The item's order horizon must at least be equal to the item's total COLT.

For items that are not critical in master planning (see the Items - Planning (cprpd1100m000) session), the following rules apply:

• The item's order horizon must at least be equal to the item's total COLT.
• The item's planning horizon must at least be equal to the item's order horizon.

Moreover, the following rule also applies to noncritical items:

• The item's order horizon must at least be equal to the order horizon of the nearest critical parent item in the (multilevel) BOM structure.

For more information on this rule, see To synchronize order horizons between BOM levels.

Cumulative order lead time

Item A is manufactured from components X, Y, and Z. Components X and Y are purchased from a business partner. Component Z is manufactured from subcomponents Z-1 and Z-2. Subcomponents Z-1 and Z-2 are purchased from a business partner.

Item	Lead time (days)
A	2
X	5
Y	2
Z	1
Z-1	7
Z-2	9

The lead times include safety time, extra lead time, and outbound time.

The COLT of item Z is 10 days (1 + 9). The COLT of item A is 12 days (2 + 10).

Now, suppose that the item can also be purchased, and that the supply time in the Item - Purchase session is 21 days. This is converted to 15 working days. In this case, item A's COLT will be 15 days instead of 12.