MRP lines (Planning Worksheet) with transfer orders

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Posted on by Community Member Microsoft Employee

We mostly purchase our items from our Head Office overseas. When they send the items, they issue the invoice and we make the value figure as goods in transit in our G/L. After the transport time (typically 5 weeks seafreight in total) we receive the goods in our location, empty the goods in transit value on G/L and enter the items in our inventory.

To perform that process, we:

1) created a "virtual" location which represents the outgate of our head Office. Thus we can receive/invoice the PO to that location and the value enters the G/L goods in transit.

2) created a transfer route, a goods in transit location and we create the transfer order to bring the items from the "virtual" location to our physical warehouse. We post the shipment of the transfer order. The transfer order represents the transport.

3) we post the receipt of the transfer order in our warehouse and the process in accomplished. The value of goods in transit leaves G/L account and enters the inventory account in a normal way.

We did this with the single intention of being able to figure the value of the goods in transit on the G/L through a normal process (invoicing/receiving the PO) instead of manual G/L controls (all G/L transactions happen automatically behind the logistic process).

We created SKUs for items and proper setup to create reasonable replenishment MRP messages for each item. Local SKU is set as "Fixed Quantity" and virtual SKU as "lot-for-lot". Typical delivery time ex-works of my head-office is 8W and transport time (by sea) is 5W. The reorder point is set to reflect 8+5=13W consumption (end-to-end replenishment time). And here comes the problem we did not realize during implementation of this process:

If the reorder point is crossed-down in my local location today, MRP suggests to create today a transfer order from the virtual location. In a chain/tied fashion, MRP suggests to create a PO to my head-Office to fulfill the just created need at the virtual location. So far so good, but the time frame. I cannot start a transfer today because the PO would be created in the past. I can start a PO today to be delivered at the virtual location 8W ahead and from that date create a transfer which will take 5W on top to bring the item to my local location. Before accepting the actions from the planning worksheet we can adjust the dates to reasonable ones, of course. But when we run the planning worksheet again, MRP consider the actions are too late and asks me to delete the existing order and create other ones with earlier dates. These are waste messages and should not show up.

Questions:

1) Is there a way to set SKU, locations, etc... to force right time frame for such transfer/PO chain?

2) Would you suggest another way to represent this process within NAV?

Thanks

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Community Member Microsoft Employee on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Dear Tatiana,

Thank you very much for your reply.

I would say out setup concerning the timeline is quite in a good shape. Our problem is that the replenishment at our location through a transfer is suggested by MRP to start "immediately" (when crossing down reorder point). In a cascade, it causes to create a PO at the virtual location overseas backwards in the past. The timeline is ok except by being inconveniently shifted to the past. It causes a lot of fake rescheduling suggestions and then there is no setup to fix such situation.

We are now checking the possibility to get rid of transfer orders and the virtual location and replace it by customizing the PO process to represent also the transport process in it.

Thanks for your help.

Best regards
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tpupko 2,048 on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Hi Hilbert,

Please check all your time parameters in your process

community.dynamics.com/.../inventory-planning-part-3-microsoft-dynamics-nav
Community Member Microsoft Employee on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Thanks for your suggestion Robertas R,

Based on that I made tests in that way but, as you can see from my answer to Tatiana, playing on the virtual location does not sactisfy the MRP. The only way I found was to bring the whole time schedule into the transfer but it creates trouble on the purchase process because of unreal 0D delivery time on it.
Community Member Microsoft Employee on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Thanks Tatiana,

I tested this but still cannot represent correctly exworks delivery time + shipping time. The result is that MRP still keeps creating wrong replenishment messages. The only way I found (keeping multiple locations and tranfers) is to set 0D as delivery time for the PO and 8W+5W = 13W as shipping time on the transfer. In other words, I brought the whole time schedule into the transfer order thus it makes MRP quiet, finally. But you can immagine I created a big mess on the purchase process. Thus still not good, unfortunatelly.
RobertasR 5,002 on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Hi Hilbert,

I agree with Tatiana - your virtual location setup should say 5 weeks for outbound warehouse handling time (that is how long it will take good to come in by ship), and 8 weeks for inbound handling time. Would that work for you?

Robertas
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tpupko 2,048 on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Hi Hilbert,

When we receive the items, they will already show up as "quantity on hands" and will seem to be available on the location for production orders, sales, etc... and it is not true since the items are still under transit in such moment.

Do you see any way to avoid that issue?

It is right, in this case it is not your variant and you need to have separate location as you have now.

For MRP please check time Outbound handling time and Inbound Handling time for locations
Community Member Microsoft Employee on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Dear Tatiana,

Thank you very much for your answer. Your suggestion sounds very good to me.

My only doubt concerns your comment "But in this case to check real quantity in location you need to check invoiced quantity".

When we receive the items, they will already show up as "quantity on hands" and will seem to be available on the location for production orders, sales, etc... and it is not true since the items are still under transit in such moment.

Do you see any way to avoid that issue?

Thanks again.
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tpupko 2,048 on at

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RE: MRP lines (Planning Worksheet) with transfer orders

Hi Hilbert,

As variant you can use one location for purchases Items and Expected cost post to GL

When head office send you items you can post item receipt.

system will create transaction with expected cost

When you receive items you can post invoice.

system will create transaction for actual cost.

But in this case to check real quantity in location you need to check invoiced quantity.

MRP and time calculation - you can specify time Outbound handling time and Inbound Handling time for location

MRP lines (Planning Worksheet) with transfer orders

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