Calculating the Dates: Planning Calendar

Introduction:

Sometimes clients ask for materials in a truckload to rule the transportation cost out. In this cases, MRP controllers or the planners go for Periodic lot sizes when bulk planning is not an option. Another factor then comes into play, the GR time.

In this blog, the author suggests a method to plan the delivery dates (not totally MRP driven) with a manual control.

Scope:

In Indian scenarios, the local vendors grab the lion-share, just because they can ensure delivery in a short time and the industries are unwilling to carry extra inventory for the high volume raw materials:

(a) Inventory is still considered as a risky element, and the planners are more than ready to cut down any extra cheese on that pizza.

(b) Sometimes the customers are also okay to add some buffer on the delivery dates; it is thus easier to cash on that flexibility and trust on to the availability of the standard variants- with a sacrifice on the lead time.

In a situation like this, a vendor who can cut the transportation cost and ship the truckload on given days is considered to be a good business partner.

Proposal:

When we use periodic lot sizing and advise the MRP component to throw schedules on a given date, we miss a point. What about the GR processing time?

Simply, Available date = GR date + GR time.

Consider a bunch of materials with weekly lot sizing. The variation in the GR time and the net requirement makes the delivery schedules distorted. They are not aligned and the vendor is confused. Although he was supposed to ship weekly, practically he is shipping every day and the transportation cost is becoming higher.

Solution:

We can plan according to planning calendars. We can take the approach as suggested:

(a) Group the materials with same periodic lot size according to the GR processing time. Suppose we have GR times as 2 Days, 4 Days and 6 Days.

(b) Maintain Planning calendars according to the GR processing time; for example, for materials with 2 days GR time, define periods starting from Wednesday, so that the delivery is generated on Monday. Similarly, for materials with GR processing time 4 days, maintain periods as Friday to Thursday, and the delivery will thus be on Monday.

Similarly the planner can manipulate to have delivery clubbing and cut the transportation cost significantly.