Double requirements for production builds in Microsoft Dynamics AX

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Posted on by gluken

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I have a question regarding how MRP calculates production requirements in AX. I'm seeing a large, almost double, demand for the current week. Every week into the future after the current week appears to be planning the right amount to be built. Is there a setting in MRP parameters or Master/Forecast scheduling that needs to be set?

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Weaveriski 23,620 Moderator on at

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What is your reduction principle for forecasting? Do you have a reduction key set? I am presuming you forecast as you have mentioned it and it is this that is not netting off against actual orders.

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gluken 160 on at

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Thank you so much for your reply!

We implemented AX in October of 2010, so I'm still learning what settings should be enabled in MRP. In Master Planning/Setup/Master Plans, this is what I show:

Include on hand inventory, inv. transactions, forecast plan, finite capacity, bottleneck scheduling. The reduction principle is set to Purchase/Sales orders. We are not entering the actual forecast number. I am importing "plan" qty's from an Excel spreadsheet. Do you think this is the correct setting for our process?

We recently decided that I would have to manually reduce the plan each day by what was built in production the previous day. (We plan in weekly production qty's).

Thank you for your help.

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Weaveriski 23,620 Moderator on at

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If you include a forecast plan you need to run forecast scheduling - do you actually do this?

I am presuming your imported plan goes into a forecast? It is not clear. What are you doig with it?

Against the coverage group record you will have a forecast days and a reduction principle, you have to set this even if using purchase/sales orders, set one to use 100%

The production plan should be based on the forecast and sales, so not sure why you reduce the plan each day, especially if you plan production weekly, unless you have a daily plan and reduce the total weekly production on the difference of an apportioned forecast and actual sales, but presumably not irrelevant of the quantity actually produced.

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gluken 160 on at

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I import a plan into the "forecast" in AX once at the beginning of each week. Forecast scheduling is run the first night of each week after the plan is imported; master scheduling is run each night.

in coverage group/Other/forecast plan - forecast plan time fence is set to 455 days. The reduction key options are "NoReduct" and "NoReduce". It is currently set to "NoReduct".

Planned orders section under coverage group: requested production status is set to scheduled.

In General, coverage code is set to requirement, negative days is 2, positive days is 455.

We haven't actually started reducing the weekly plan each day based on previous day's builds. We are still trying to figure out if this is the cause of the large demand in this week's production requirements. Because the plans that are imported are based on actual production scheduled builds, we don't want the system to automatically reduce this number based on sales orders booked. This is why we assumed that we needed to start reducing it manually each day. Do you think this would be unnecessary?

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Weaveriski 23,620 Moderator on at

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Okay so you run the forecast once a week and planning each night. Lets say you forecast 100 units of item X, 20 a day, the planning prior to day one tells you 20 a day. You run it on the second day and you have made 20 but sold 30, you may or may not have stock, but the system would still count the 80 as a requirement, even though arguably you have sold 10 of the next days.

It does depend upon dates and settings, but guessing your NoReduct has 0% set it means you would not net off your sales orders against your forecast, so if we have 20 a day and there is a sales order loaded on Monday for 20 a day, you need, according to your planning settings, 40 a day, 20 for the forecast and 20 for the sales order. Basically if you do not get the system to reduce it based upon sales booked you are manually reconcilling this on the suggestions, and all the system can do is suggest you make both - contributing to your situation of the systme suggesting nearly twice as much as you need (shows your forecast is accurate). It is not a case of reducing it each day, it is a case of reducing it in line to sales, so if there is a sales order for Thursday, you need to reduce the forecast on that day. I do not think it is unncessary, the way you are working this it is critical to prevent massive over production.

Why have you decided on a negative days of 2? Do you have much movement on sales orders once loaded?

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gluken 160 on at

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I'm not sure I understand what you are suggesting.

We currently have the reduction principle set to "purchase/sales orders". Does this need to be changed? The other options are "none" and "percent".

The NoReduct does have 0% set.

To be honest, I don't remember why we set negative days to 2. We had our integrator make a lot of these decisions for us.

As far as movement on sales orders, I'm not sure what this means. Are you referring to the ship date being adjusted often?

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Weaveriski 23,620 Moderator on at

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You are reducing by sales orders but have the reduction percengtage set to zero, so you may as well have it set to none.

The low negative days can have an impact if order dates move. With a high negative days, master planning will generate an 'Action Advance' message - with a low negative days, you will get a new planned order, so if you then firm it you can have two orders to meet the same requirement. For purchased items it seems to make sense to set the negative days equal to the coverage time fence (and monitor the Action Advance messages). But for production orders, your users may prefer to rely on planned orders and in that case, set the negative days low, but be aware this can cause a secondary order to be created, and the original, if made would also act as a mechanism to double supply over demand.

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MichaelWC 136 on at

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I am guessing you are using a discrete week by week forecast and a reduction key that works in a similar way. Did you set up a reduction key with the wizard for 7 day units either fixed or non fixed start date by chance?

Although this would seem to make logical sense, the effect is not the desired result. Think of each unit interval as a discrete bucket unaware of the other buckets. What happens in one bucket, stays in one bucket. So you have a forecast for qty 10 per week and a sales order comes in on week 4 for 40, no other sales orders. Only the 10 forecasted items in that week are netted off leaving a forecasted demand still greater than the original forecast.

You will need to setup a new reduction key for a wider interval or bucket to nett with. How big depends on a number of factors and you will need to balance realistic futures with lead times. A unit of 1 year unfixed will roll up all forecasted qty's in that year and nett them against the demand plan so that your sales order for 40 is reduced from your forecasted qty and the plan returns to the weekly runs.

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