Allocation and Cross-Docking Concepts

This document describes what allocation, pre allocation and cross docking are and when they are used.

Outcome

  • Balance IDs are allocated to order lines.
  • Orders are pre-allocated, which will be allocated during goods receipt flow.
  • Goods connected to an acquisition order (PO, DO, RO or MO material) are received, cross-docked and put in a location where they are available for dispatch.

The following changes are done in M3:

  • The allocated balance ID is stored in the MITLOC file.
  • The allocated order, order line and so on are stored in the MITALO file.
  • Soft allocated balance IDs (reserved) are stored in the MITBAL file.
  • Details of performed cross-docks are stored in the MITTCD file.
  • Stock entrance allocation is executed in the MITALO file.
  • Some details about the cross-docking are recorded in the MITTRA file.

The primary use of allocation is to release orders for picking, packing and delivery to the customer as fast as possible and prioritize in shortage situations.

Automatic allocation

Automatic allocation can be divided into two parts:

  • Completely automatic allocation, which is useful for medium volumes and standard products
  • Automatic allocation with manual release, which is useful for high volumes and when wave picking is to be performed. (Wave picking is a collection of picking lists released at the same time.)

Automatic allocation can be used together with or without:

  • Location type table (MMS057)

    The location type table controls allocation according to location type.

    Rules that can be determined per location type:

    • Minimum quantity allocation
    • Sequencing of location type searching
    • Normal quantity determines the multiple used for allocation
    • Remaining quantity: Used so certain quantity breaks only get allocated from their designated location type, even if it means waiting for more stock to arrive
    • Allocate to empty: Allocate only if will empty location of this balance ID.
    • Exclude some order types: Do not allocate from certain location types for certain order types.
  • Allocation table (MMS123, MMS124)

    The allocation table controls which balance identities can automatically be allocated for a specific requirement, and from which locations.

    For example, customer orders could be allocated from one location and manufacturing orders from another location.

    You can also prevent larger requirements from allocating small quantities and, thus, block small orders from delivery.

  • Batch allocation, but only if the subsystem is stopped in (MNS050).

For more details, refer to Automatic Allocation.

Batch allocation

The purpose of batch allocation is to allocate stock according to priorities, or a fair share distributed among equal priorities when there is a stock shortage.

Example: At the end of the month you want to ship goods, but there is a stock shortage for some items. The existing stock for these items must be shipped to the most important customers. The batch allocation function enables you to de allocate the items from existing orders and to reallocate them for prioritized customers according to user defined rules.

Fair Share, allocation priority rules and allocation priority with fair share

Current allocations are reallocated and distributed across demand order lines according to user defined rules. This is most likely to happen due to a shortage problem. Redistribution can be done in one of the following ways:

  • Fair share, where a percentage of the original requirement is allocated to each record
  • Allocation priority rules according to priorities.

    This priority can be done in one of the following ways:

    • Define the default priority for the order header.
    • Define a default priority per customer.
    • Define allocation priority in (MMS156, 157).
    • Define an allocation priority model (MMS181, MMS182). This alternative is valid for customer, distribution and requisition orders.
  • Allocation priority in combination with fair share.

    This distribution method can only be used if allocation priority hierarchy 1 uses the allocation priority model. Demand order lines are grouped according to allocation priority from the model, while allocation is performed in allocation priority order. When the allocated net is not sufficient to cover all demand lines within an allocation priority group, fair share is used to distribute remaining available net quantity among demand lines within the priority group.

    If check allocation limits is activated in batch allocation run, the allocated quantities will be validated after redistribution and adjusted if validation against limits failed.

Allocation rules for a group of lines (Joint delivery rules)

Joint delivery rules check for allocation over a group of lines that are defined by an implied joint delivery code instead of a joint delivery code (joint delivery code=delivery together of several different order lines within a customer order). For example, these groups of lines may contain the same style and color.

Joint delivery rules can be used with automatic allocation or with batch allocation.

With this function, you can perform a check to see if a group of lines pass or fail for dispatch according to the joint delivery rules. These rules are user defined and do not necessarily have to be for 100% allocation. Instead, each line is for instance 60% allocated, or, in total, 80% of the group is allocated.

  • The primary use of joint delivery is to ensure delivery according to a customers’ requirements prior to the release of the order for picking, packing and delivery to the customer
  • Joint delivery also frees up stock for other orders if joint delivery rules prevent shipment on the order that currently has the allocation.

Manual allocation

Manual allocation can be used for certain products or for products that normally are automatically allocated, but occasionally need to be manually allocated.

Pre-allocation

A pre-allocation is defined as being all or part of an acquisition order line (PO, DO and MO) that is promised to a demand order line (CO, RO, material MO and DO).

Pre-allocation can be done at any time providing that a demand order is released and that an acquisition order is firm planned (proposal with status 20) or released.

A pre-allocation becomes an allocation at the time when stock is reported as received.

Soft allocation

Soft allocation is frequently used when there are many lots and it does not matter which one is picked. It can be performed with or without a check against allocable balance on warehouse level. Issued balance identities are specified manually when reporting picking lists.

It can be used:

  • To enable pickers to select which specific balance ID is picked, instead of forcing them to find a specific balance ID.
  • When it applies to an environment where lot control is used and many lots could be found in the same picking location and it does not matter which one is picked.
  • When lot numbers are only needed for traceability. It should not be used when lots have expiry dates.

Cross-docking

The cross-docking function in M3 identifies when stock being received is required for issue within a short time period. It then directs stock to the appropriate cross docking location instead of to the ordinary location. What activates cross-docking is demand in combination with a stock shortage.

Cross-docking results in an allocation to the demand order that caused cross-docking.

Demands can be internal or external orders, or acquisition orders. Internal orders include material manufacturing orders, distribution orders, move orders and requisition orders. External orders are customer orders. Acquisition orders can be manufacturing orders, purchase orders, distribution orders (receiving warehouse) and requisition orders (order category 40).

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