Upstream Rules in Supply Chain

Upstream changes of a supply chain

Prerequisites

The upstream functionality is controlled through several parameters in the 'Supply Chain Policy. Open' (CRS709), where the triggering of an upstream change is defined. For example, if a receipt should be a trigger, or if only a higher quantity, a lower quantity, or both, should be triggers. There is also an option to trigger an upstream change when a change in date is done.

You can also define the order in which the supply chain should be affected by the upstream change. That is, either by order priority or by planning date. This is useful if there are several supply chains connected to, for example, one purchase order (PO).

The last set of parameters are the tolerances set in (RPS380). These tolerances finally decide if an upstream change should be done and how big the change can be.

Workflow

When upstream changes are activated on the supply chain policy and the quantity change is within tolerances in (RPS380), the supply chain is adjusted according to the confirmed/received quantity. The change is propagated up to the top level of the supply chain and then, at the top level, the supply chain is regenerated according to the new quantity. The normal rules at generation also apply here, that is, only proposals are changed, released orders are not changed etc.

If the received quantity is outside of the tolerances set in (RPS380) then firstly the supply chains are adjusted up to the maximum or minimum tolerance. If there is still a quantity left to be distributed, a message is sent to the user responsible for the received item, informing them that a shortage or excess of material exists. Any excess material is put into stock.

When that user receives the message, they can decide what to do with the excess/shortage quantity. If they want to use the excess/shortage quantity on specific supply chains, they can enter that supply chain in the 'Supply Chain Header. Open' (RPS200), and manually adjust the supply chain quantity on the E-panel. That is, regenerate the supply chain with a new manually set quantity. They could decide not to implement the excess quantity but use it for other supply chains.

If a shortage quantity exists and the user does not want to decrease an existing supply chain, the MRP generates a proposal for the missing quantity, which can be manually pre-allocated to the supply chain having the shortage, or automatically pre-allocated at, for example, release.

Since a top level supply chain customer order (CO) involves a customer, no automatic changes of the CO quantity occur. This must be done manually. However, all levels below the CO are affected by the upstream change. As the top level CO is not changed, the supply chain must be over pre-allocated or over allocated at the level in order to reflect the real need.

Top level distribution order (DO) quantities are always adjusted automatically to reflect the real quantity on the receiving warehouse.

Note that the tolerance percentage is checked at the top level and the changed quantity is compared with the order line quantity. This means that if the CO line quantity is manually changed to reflect the upstream quantity, this new CO line quantity is used as a comparison at the next upstream change. This is also true for top level DOs as they are always changed automatically.

If supply chains are stretched over warehouse or facility levels and you do not want automatic upstream changes through the whole supply chain, you must ensure that separate supply chains are used for each warehouse. To do this, set the DO item with a supply chain policy on both the sending and the receiving warehouses, but set the supply chain policy on the receiving warehouse at the lowest level. In that case, there is one supply chain number on warehouse 1 and one supply chain on warehouse 2, linked together by a pre-allocation. When an upstream change is performed on warehouse 2, only that supply chain changes.

Upstream examples

Example 1

At put away of a PO 225 pieces are received instead of 200.

These are connected to two supply chains of 100 pieces each.

Supply chain 1 has a tolerance of 10% and so can be increased to 110 pieces.

Supply chain 2 has a tolerance of 20% and so can be increased to 115 pieces.

No excess or shortage quantity exists, so no manual interaction is needed.

Example 2

At put away of a PO 150 pieces are received instead of 200.

These are connected to two supply chains of 100 pieces each.

Supply chain 1 has a 10% tolerance and so can be decreased to 90 pieces.

Supply chain 2 has a 20% tolerance and so can be decreased to 80 pieces.

This results in a shortage, so a PO proposal is generated for 20 pieces (90+80–150 = 20).

Example 3

There is a supply chain of 100 pieces with a 10% tolerance.

PO confirmed with a quantity of 75 pieces and finish marked.

Supply chain created of 90 pieces (100–10%) but as the PO is only 75 pieces, a new PO proposal of 15 is created.

If you reverse the transaction, the upstream functionality considers this as an increase of 25 pieces (100–75). So, the supply chain tries to increase to 115 pieces (90+25) but the tolerance says 110 (100+10%). This means that the supply chain ends at 100 pieces, and since the PO was for 100 pieces, a new PO proposal of 10 pieces is created.

The supply chain needs to be manually adjusted to the correct quantity.

In the table, there are the parameters to be set: