Offsetting Purchase Orders

The planning of a purchase order depends on the supplier choice. The supply strategy, defined in the Supply Strategy (cprpd7120m000) session, determines a supplier from the Items - Purchase Business Partner (tdipu0110m000) session.

If no supplier is found, or if the supplier cannot deliver the required quantity due to capacity constraints, Enterprise Planning creates a purchase order without supplier.

An item supplier has a Lead Time Horizon (Days) defined. This horizon sets a date in the future. If the estimated start date is within this horizon, the purchase order is planned at a detailed level.

Otherwise, the Calculated Lead Time (Days), which is defined in the Items - Purchase Business Partner (tdipu0110m000) session, is used for planning purposes. The reason for using a calculated lead time is the same as in the case of planned production orders: To gain performance.

Similar to production orders, first the start date is estimated using the calculated lead time so that a choice can be made for detailed or rough planning.

With supplier, within lead - time horizon

If you are planning at a detailed level, the supply order lead-time consists of the following lead-time components:

• Item supplier processing time
• Supply time
• Transportation time (from business partner to warehouse)
• Supplier safety time

The supplier safety time is already part of the Enterprise Planning offset, which determines the planned order finish date.

The planned finish date is the planned arrival date as communicated with the supplier. The offset of the order start date is then determined by transportation time, BP supply time, and internal processing time.

Transportation time

Transportation time is the time to deliver the goods from the ship-from business partner address to the receiving warehouse. The transportation time is calculated either by means of Freight, or by means of the distance tables in Common:

• If Freight Management (FM) is implemented, then FM tries to plan the shipment by means of a route. Also loading and unloading time is included. If no route is found, the distance tables in Common are used.
• If FM is not implemented, the distance tables are used to find a shipping time. The distance tables are based on the transport category. The transport category is linked to the carrier (defined per item supplier, or linked to the BP). If no carrier can be found, the shipping time is selected by means of the transport category Not Applicable.

With supplier, outside lead - time horizon

If the estimated planned order start date (the requirement date minus Enterprise Planning offset and calculated lead-time) falls outside the supplier’s lead-time horizon, the start date is planned using the calculated lead-time. The calculated lead time is the sum of processing time, BP safety time, supply time, and transportation time, calculated in days. If one of the detailed components is defined in hours, it is converted to days using the average hours per day in the Workweeks (tcccp0105m000) session.

The availability type that deals with the BP safety time, supply time, and internal processing time for the purchase order is defined in the Procurement Parameters (tdpur0100m000) session. The availability type that deals with carrying goods (transportation time) is defined in the COM Parameters (tccom5000m000) session.

Without supplier

If no valid supplier is found, only the supply time from the item purchase data is used. This supply time is a substitute for BP supply, internal processing and transportation time.