Material Planning for Internal Sales

Defining the supply network

When creating internal suppliers, define 'Internal sales facility' and 'Supplying warehouse' on 'Supplier. Define Purchase Financial (CRS624/G). Specify the selling facility and warehouse that the supplier represents. These fields are only visible for suppliers of supplier type 7 - 'Internal'.

If an internal supplier is associated with a supplying warehouse, it will automatically be proposed as supplying warehouse when selecting the supplier in 'Item. Connect Warehouse' (MMS002).

Material planning of planned purchases

An internal planned purchase order will automatically create a material reservation with order category 310 - 'Planned CO' at the supplying warehouse.

The supplying warehouse for the planned customer order issue is retrieved from:

(MMS002) if the supplier of the planned PO is equal to the supplier specified in (MMS002)
(CRS624) if a different internal supplier is used, or if the supplying warehouse in (MMS002) is blank.

If no supplying warehouse is found, no planned customer order issue is created, since it is not known at the planning stage which warehouse will be used. The customer order warehouse will then be assigned when the customer order is created, according to standard customer order logic.

Having a planned customer order issue is important if planning method 1 - 'Reorder point' or 2 - 'MRP' is used for the item at the supplying warehouse. The planned CO issue will:

Affect the projected on-hand balance, so the MRP/RoP calculation will create a planned replenishment order if a shortage occurs.
Consume forecast as if it were a customer order.
Reduce the available-to-promise (ATP) quantity.

The planned CO issue will always reflect the current state of the planned purchase orders, with negative quantity. Its status will indicate the status of the planned PO. If a planned CO issue has been created, it will exist until the planned PO has been released and printed and it is replaced by the actual customer order.

Lead time management

Lead time for internal sales is handled similarly to normal purchasing, with one exception in 'Supplier. Connect Transp Lead Times' (PPS010), where both fields 'Transportation lead time 1' (TLE1) and 'Transportation lead time 2' (TLE2) are always enabled for input, if the supplier has 'Supplier type' set to 7-'Internal supplier'. This makes possible to indicate the supplier’s transportation lead time, which is any transportation lead time before the delivery point, when the supplier is still liable for the goods. Note that this depends on goods responsibility.

This table presents lead time components.


Lead time component	Description
Postal lead time	If time for communication with selling facility and CO registration is needed
Supply lead time	The total lead time for the supplier, which is the time provided in days and counted from the moment, when the supplier receives the order until the delivery date. This includes all transportation time for which the supplier is responsible. It works the same for internal and external suppliers.
Transportation lead time 1	With goods responsibility 1, TLE 1 belongs to the normal transportation lead time, after the delivery point. With goods responsibility 2 or 3, TLE 1 belongs to the supplier's transportation lead time.
Transportation lead time 2	With goods responsibility 1 or 2, TLE 2 belongs to the normal transportation lead time, after the delivery point. With goods responsibility 3, TLE 2 belongs to the supplier's transportation lead time.

The planning date in the material plan for the planned CO issue (order category 310) is calculated by subtracting the supplier's transportation lead time from the requested delivery date of the planned PO.

Note: Since supplier’s transportation lead time is included in 'Supply lead time' (LEA1), any transportation lead time on the supplier's side is not included in the field 'Transportation lead time' (LEA3) in (MMS002). It also means that LEA1 should not be lower than the transportation lead time on the supplier's side as specified in (PPS010).

Note: Once released, the customer order will not check the supplier’s transportation lead time in (PPS010) when calculating its planning date from the delivery date. The standard customer order logic will apply, which means that it is recommended to use route management to retrieve transportation time between CO issue date and delivery date.

The image presents the purchasing lead time components.

Planning Time Fence Calculation

If a supplying warehouse is specified in (MMS002), 'Planning Time Fence Horizon. Calculate' (MMS355) can be used to calculate the planning time fence for internally purchased item, similar to as for distributed items, by accumulating the lead time and safety time of the supplying warehouses until a purchased, manufactured or master scheduled level is found.

Low-level code calculation

If a supplying warehouse is entered in (MMS002), it will affect the low-level code calculation in the same way as if the item were distributed, increasing the distribution level. This will happen automatically when the supplying warehouse is changed.

The low-level codes are a prerequisite for the MRP calculation to be performed in the right order. This means that when MRP is calculated for an item, the warehouse that is supplied by internal purchase will be processed before the supplying warehouse. This is important since planned purchase orders created at the supplied warehouse affects the demand at the supplying warehouse.