Defining Lead Time for MRP Planning

In certain planning situations, the system may use lead time to approximate the time needed to acquire, make, or receive an item. In all cases, you define lead time for MRP Planning in the following fields on the Items or Multi-Site Items form:

Fixed Lead Time
Variable Lead Time
Dock-to-Stock Lead Time

Note: Expedited Fixed Lead Time and Expedited Variable Lead Time are used only in APS mode. Paper Work Lead Time (in addition to Dock-to-Stock Lead Time) is used by the MPS Processor, Material Planner Workbench Generation, and on the Order Action Report.

This help topic describes how lead time applies to purchased items, manufactured items, and transferred items.

Purchased and Manufactured Item Lead Time

For purchased items, you must enter the values manually in the lead time fields. For manufactured items, you can enter the lead times manually or use the Lead Time Processor to generate the lead times from the current routing's operation times.

How the System Determines a Planned Order Start Date

When MRP creates a planned order, it determines the planned order's internal start date by backward planning the requirement from the due date to the item's lead time (counting only days on the MDAY calendar), where lead time is calculated as:

Fixed Lead Time + (Variable Lead Time * Quantity Required)

This PLN start date is not displayed on any form or report, but the system uses it as the due date of component PPLN requirements exploded from the PLN. For example, suppose item A's lead time is 3 days. Item A is made from component B. The system creates a PLN for item A due on 4/22. The PLN's internal start date is calculated to be 4/19. The due date of the PPLN for item B will also be 4/19.

How the System Determines a Job or PO Start/Release Date

When you firm a planned order, MRP determines the start or release date of the resulting job or purchase order using this calculation:

Start/Release Date = PLN Due Date - Fixed Lead Time - (Variable Lead Time * Quantity Required) - Dock-to-Stock Lead Time

Purchased items typically have a fixed lead time, a dock-to-stock and paperwork lead time, but usually no variable lead time.

Example

For this example purchase order, assume the following conditions:

Current date/time = 5/16 at 08:00.
Planned purchase order due date = Monday 5/31 at 08:00.
Quantity = 10
Purchased item's lead times are:
- FLT = 1 day
- VLT = 0.5 hour. Although purchased items usually have a VLT of 0, a non-zero value is used here for illustration purposes.
- DSLT = 1 day

The system calculates the release date of the purchase order by performing this calculation, in this sequence:

Sums the FLT and DSLT lead time values for a result of 2 days.
Multiplies the VLT value of 0.5 by the quantity of 10 for a result of 5 hours.
Adds 5 hours to (2 days * 24 hours) for a result of 53 hours total lead time.
Starting at the due date (Monday 5/31 at 08:00), the system counts backward 53 hours, counting only days on the MDAY calendar (for this example, assume the MDAY calendar is 8 a.m. - 5 p.m. Monday - Friday with a 1-hour lunch break at 12:00).
The resulting release date is Thursday 5/20 at 11:00.

Where Purchased Item Lead Time is Used

In addition to calculating the start date of the planned order and the release date of a PO firmed from a planned order, MRP also uses purchased item lead time to perform the following functions:

When you cross-reference and create a purchase order from a job material, the system deducts the item's dock-to-stock lead time from the operation's start date, if not blank, or the job's start date if the operation's start date is blank.
When you manually create a purchase order line or purchase order requisition line and a vendor contract exists for the item and the PO vendor, the system calculates the default due date by adding the item vendor record's lead time to the appropriate date:
- PO line: adds item vendor lead time to PO order date.
- Blanket PO release: adds item vendor lead time to the release date you entered.
- PO requisition line: adds item vendor lead time to the requisition date.

Where Manufactured Item Lead Time is Used

In addition to calculating the start date of the planned order and the start date of a job firmed from a planned order, MRP may use manufactured lead time to determine the due date of material components when exploding requirements from a job to the job bill of material.

See the field description for Plan Materials at Operation Start for details about the situations in which lead time is used to plan the due date of material components.

MRP also uses manufactured item lead time to determine the effectivity of the operations and materials.

You can use the Lead Time Processor to calculate the lead time for all manufactured items automatically, using the current operation times.

Transferred Item Lead Time

The system calculates lead time for transferred items in the same manner as purchased and manufactured items, except it adds the transit time (defined on the Inter-Site Parameters form) to the total lead time. For example, if an item's lead time is 1 day, and it takes 3 days to ship to the receiving site, the total lead time is 4 days.

See Setting Up Planned Transfer Order Replication for more information.