How to Use Manufacturing Lead Times in Dynamics GP Manufacturing
Posted on: April 4, 2014 | By: Jim Bertler | Microsoft Dynamics Manufacturing
Many organizations use MRP in Microsoft Dynamics GP. The manufacturing lead time is a critical element in achieving success with MRP, but is often misunderstood and misused. The following details provided by one of Logan Consulting's manufacturing experts should shed some light on the subject. If you have more questions feel free to contact Logan Consulting – your Microsoft Dynamics Manufacturing Partner.
MRP – Use of Manufacturing Lead Times
First, it’s very important to note that MRP does not use manufacturing times from the routings to calculate the release date for Planned Manufacturing Orders. MRP also will not change the release dates of any MO’s that are manually created, unless there is a need to change the due date for the MO (MRP will look at the Due Date for existing MO’s to determine if there is sufficient supply to meet the demand). All MRP calculations for Planned Manufacturing Orders are based on the Manufacturing Lead Times in the Item Resource Planning window for the specific item/site combination. The lead times can be entered here manually or calculated and generated automatically based on the routings using the Calculate Mfg Lead Times utility. MRP will look to the item-site combination in Item Resource Planning. Since MRP suggests manufacturing orders for make item only, enter the lead times in days or fractions of days in either the Mfg Fixed Lead Time field or the Mfg Variable Lead Time field or both. MRP uses these fields differently as you might suspect.
- Mfg Fixed Lead Time – does just that, adds a fixed number of days to the MO when calculating the release date. The formula is Due Date – Mfg Fixed Lead Time. For example, if your forecast shows a suggested MO with a due date of 2/1/2014, and the Item Resource Planning window shows 5 days for the Mfg Fixed Lead Time, the release date would be 5 days earlier or 1/27/2014 as long as 1/27/2014 is not a down day on your work center calendar. If, however, there is already an existing MO with a due date of 2/1/2014, regardless of the Start Date for the MO calculated at the time of the entry of the MO, MRP will not suggest any changes to the existing MO. MRP will look at the Bill of Materials for the MO to determine the need to order any components. It will use the MO Start Date as the required date for the components, and will use the Purchasing Lead Time in the Item Resource Planning window to determine the release date for the PO.
- Mfg Variable Lead Time – is variable based on the quantity suggested. The formula is Mfg Variable Lead Time * quantity, rounded up to the next whole day. For example, if I have a Mfg Variable Lead Time = .01 (remember this is represented in days) and a quantity of 500, my lead time is 5 days (500 * .01).
- Total Manufacturing Lead Time for a make item is Mfg Fixed Lead Time + Mfg Variable Lead Time, rounded up to the next whole day. For our situation described above, the total Manufacturing Lead Time would be 10 days. Therefore, any suggested MO’s from MRP would be set with a start date of 10 days before the due date. It is also important to note that these 10 days are only “non-down days” from the Work Center Calendar. In reviewing your Work Center Calendars, you have all Saturday and Sundays as down days, therefore, they would not be considered in counting back the days to calculate the start date. Finally, it is very important to note that the calculation will round up to the next nearest day regardless of the fraction of a day. For example, I tested the routing and “Calculate Mfg Lead Time utility for 3088-13-EL-120. As the routing currently exists, this utility would update the item/site combination in the Item Resource Planning window to a Mfg Variable Lead Time of 25.375 days. When calculating the start date for any suggested MO, MRP would go back 26 days.
The most important thing to remember is that MRP uses the Manufacturing Lead Times only in calculating release dates for Planned Manufacturing Orders, not calculating start dates for already existing and scheduled Manufacturing Orders.
I welcome your feedback on your use of Dynamics GP to manage your MRP needs. If you have questions on MRP in Dynamics GP or any other Dynamics GP Manufacturing topics, please contact us.
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