Hi,
We have relatively longer replenishment lead times (8W) than for sales order lead times (4W). We are not using forecasts. Our system providor/consultant suggested using lot-for-lot for all items without a good explanation why or how.
In my mind this cannot work well. Our demand is shown mostly between now and 4W out, the planning system may notice that a safety stock breach will occur in 4W. Because the resulting supply order suggestion is backwards dated, it will suggest I place the order 2 weeks in the past (not possible). Furthermore, there is little demand to detect during the following accumulation period, so the order quantity will be enough to bring stock slightly above safety stock level. As time continues, the planning system will continue to suggest supply order dates in the past.
We could overwrite this by using a MOQ, but as soon as this is placed, the next planning suggests reducing the order quantity in order to return to the safety stock level. Again this can be overwritten by using an exageratted damper quantity..
But then it seems this mutated use of lot-for-lot has no advantage over the simple fixed order quantity and maximum stock policies.
Is this right? I realize forecasts can really help here, but is there another way to use lot-for-lot in our situation without, what I feel like, mutating the parameters?
Thanks,
Darrell
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