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MRP Display says "Safety Stock" even though part is negative to allocation

  • 2 February 2022
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We were under the impression that an MRP Display of “Safety Stock” indicates the item is only needed to keep the item quantity above the safety stock level. However, we are seeing items which are negative to allocation (ie. demand for the item on existing production orders exceeds the quantity on hand and on order) but MRP shows the item as needed for safety stock. Shouldn’t this be either MRP Requirement or Production Material? See below for sample item:

The “Safety Stock” designation is confusing and has resulted in stock outs as the items weren’t ordered in time to meet the real demand for the item. Any suggestions would be appreciated. Thanks

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Best answer by PaulMainard55 2 February 2022, 21:15

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Userlevel 4
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I’m not sure I fully understand your question, but here’s what I’m seeing.

You have 2 units on hand, less demand for 5 units, thereby reducing your available inventory to (-3) units.  You have your safety stock quantity set to 8 units, which should reflect the number of units that should meet your daily demand until you can fulfill a production order to replenish your stock.  This should effectively reflect your reorder point.

You Minimum Order Quanty (which should not be confused as a re-order point) and, not coincidently, your Lot Size quantites of 24 units is sufficient to replenish your inventory beyond the eleven units of product needed to meet your current production demand of 3 units, plus your safety stock level of 8 units.

The detail inquiry is basically stating that after you fulfill your production order of 24 units, which was triggered by the safety stock reorder point, you will have 21 units available due to the immediate production demand of your inventory.  Therefore it is unnecessary for MRP to associate any additional supply replenishment to your production demand as it’s coverd by the Safety Stock replenishment plan.  

Does that help at all?

Userlevel 4
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Yes, I agree with your analysis, but when looking at the Detail Inquiry for other items on the MRP Display above there doesn’t seem to be a clear reason why some are Safety Stock and others are Production Material. Both of the items below have demand which will pull the quantity below the safety stock level and one appears as Safety Stock and the other as Production Material on the display. We’re really trying to understand why the difference so we can either adjust our preferences and / or parameters so that we use the results appropriately.

Thanks!

Userlevel 4
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So, looking at the two examples provided, the differences appear very clear to me.  In the first example, your On Hand Inventory is alread below your safety stock level, so this will trigger a Safety Stock replenishment order of 72 units; again sufficient to not only increase your inventory to 109 units, but also to meet the immediate demand of 14 units. 

 

58 on hand - 14 Demand = 44 units Available which is below your reorder point of 109 units - therefore Safety Stock Replenishment.

44 + 72 > 109, therefore no additional demand or MRP replenishment required.  Also consider that the immediate available inventory is actually 56 because you have a demand for 2 units, and your safety stock replenishment can be made available in time to meet the remaining 12 units in demand with a promise date exceeding the replenishment date. 

On the second item, your available quantity is actually greater than your Safety Stock Level.  The immediate demand is 24 units, so if you subtract that from your On Hand inventory, (62 on hand - 24 immediate) your left with 38 units, which is still above your safety stock level of 29 units.  

The reason why your replenishment is MRP and not Safety Stock is because it’s the next production order that puts your available inventory below your safety stock, and therefore is being triggered by a future production order and not the immediate need to replenish your inventory to meet your safety stock requirement.

 

At the end of the day, Acumatica is calculating a need to replenish your inventory.  I guess a good rule of thumb is, if your “Available Inventory” (i.e., on hand minus pre-replenishment demand) is less than your safety stock, you will be prompted to generate a safety stock replenishment order.  Conversely, if your available inventory is greater than your Safety Stock level, but your post replenishment demand takes you below your safety stock, then you have an MRP Plan.  

Put more simply, the MRP Plan is basically stating that your future fulfillment demand will reduce your inventory below your safety stock.  The Safety Stock plan is stating that you’re already below your safety stock levels before taking into account any future demand.  

 

Userlevel 4
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Thank you for the thorough answer. It does make more sense now, however it also means that the warehouse manager will need to look at all MRP Display items as there is no easy way to differentiate between items which are critical based on real demand and items which are for safety stock.

Userlevel 5
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Thank you for the thorough answer. It does make more sense now, however it also means that the warehouse manager will need to look at all MRP Display items as there is no easy way to differentiate between items which are critical based on real demand and items which are for safety stock.

There is a type on the MRP display so you could sort by those that say Safety Stock vs MRP requirement. There is a difference between MRP and Item Replenishment, which can often create a bit of confusion. 

MRP will look at getting to your Safety Stock, on the assumption that the safety stock will provide sufficient material to meet your additional demands.  Item Replenishment will look at the MAX quantity, and will show you what to purchase differently.

If you are utilizing MRP buckets, it can potentially help with looking at the information as well.  Critical materials and items to expedite would be showing up on the MRP Exceptions page as well. 

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