Re: Safety stock

If you study MRP, there is an order policy code system where you can have
different rules for different parts.



Example: a customer part has seasonal demand. As the season approaches, you
stock up on extra inventory, based on MRP using the order policy code
formula to create safety stock of some number of weeks extra supply. Then
as the season ends, the safety stock goes back to zero.



We use minimum balance for safety stock on selected items, mainly end
customer parts where we have a contract with the customer for us to be able
to ship them whatever quantity they ask for the same day they ask for it,
but if they cancel using that part, then they will pay us for all that we
have in the pipeline of that part.



A significant problem for us is that many employees pay no attention to MRP.
They manufacture based on what the customer orders call for, ignoring the
minimum balance requirement. MRP does not ignore it. This contributes to
our past due, since the safety stock is supposed to compensate for the
customer lead time violations.



Al Mac = Alister William Macintyre

-----Original Message-----
From: bpcs-l-bounces@xxxxxxxxxxxx [mailto:bpcs-l-bounces@xxxxxxxxxxxx] On
Behalf Of Arthur Shaffer
Sent: Thursday, February 13, 2014 10:41 AM
To: BPCS ERP System
Subject: Re: [BPCS-L] Safety stock



If you are running MPS/MRP, the assumption is that you will only put into
inventory the quantity based on the yield.

When you put more into inventory and then run the planning, you will receive
messages to cut back planning because you have more inventory.



Why not use the minimum balance?



Thanks



Art Shaffer, CPIM

Master CPIM Instructor

ABShaffer@xxxxxxxxx

908-403-2803

________________________________

From: Lee Dixon <leoncrisp@xxxxxxxxx>

To: BPCS ERP System <bpcs-l@xxxxxxxxxxxx>

Sent: Thursday, February 13, 2014 10:48 AM

Subject: [BPCS-L] Safety stock

I have a notion that I can use the yield factor to build safety stocks!

Does this sound far fetched. It looks like if I do this everything will
still be cost properly and back flushed ok. What's the danger?

RD

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