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Working with the Replenishment form in Microsoft Dynamics AX 2009

What Is PAR Level?

PAR level stands for “Periodic Automatic Replenishment.”

PAR level refers to the exact amount of product you should have in stock to meet demands

PAR levels are boundary markers in inventory levels that signal replenishment is necessary.

Why use PAR Level?

If your PAR levels are set too low, you risk running out of stock.

If your PAR levels are set too high, you may have more money invested in stock than is necessary.

The Ideas behind the form design

Design the form exactly as per the users’ requirement

Display the information as needed by the end-users

Show inventory and future receipt status in real time

Display inventory issues and receipt history to allow the users to make better replenishment decisions

The lower pan of the form shows the pegging transactions that required inventory replenishment

Principal fields

Sales Orders

Production quantity

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The Replenishment form description

Form path: Inventory Management >> Inquiries >> Stock Replenishment

The form is divided into 3 sections:

1. The filters section 2. Item inventory level section 3. Pegging section

A. The filters Section

Fig 1: The filter section of the Replenishment form

The users can use this section of the form to filter the inventory items by: - The item status which could be

1) Active, 2) Obsolete 3) All, to display all items regardless of their status

- No dialog check box: use this to disable the assistance dialog box. - Inventory level status:

o Critical , when the Required quantity is below the quantity on-hand and the scheduled receipt

o Required, when the scheduled receipt quantity is greater than or equal to the required quantity.

o Above PAR , when the required quantity is below zero

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B. The inventory level section

Overview Tab (trunked display)

Note: Please note that the overview tab of the form has been trunked to allow screenshot image to fit the page.

Field Description

Item number Identify item. Item name Description of the item. Available Quantity available to promise. The Available quantity is the uncommitted

inventory balance.

Available = 'Tot. On-hand' - 'Physical reserved'

Physical reserved Quantity reserved of the physical quantity

On order Quantity on order

Note : Quantity on order concerns only Sales Orders placed against this item

In Prod Physical quantity scheduled to be received, but not posted

Scheduled Scheduled production quantity.

Note: The quantity scheduled here is dynamic. Once any production attached to this item starts the scheduled quantity will decrease.

Par level Minimum on-hand, safety stock applying to the item when master scheduling Required Quantity needed to fulfill actual requirement.

Required Quantity calculation= Total On-hand - Physically Reserved -On Order- PAR level

To Production Quantity to be sent to production

To Production = Max (Required; Skid Qty; Min Inventory Qty.)

Split Use the Split option to split the quantity that is needed to be produced into 2 production orders.

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Note: the split quantity = Max ( Split Qty; Min Inventory Qty; Skid Qty)

Num. of Prod Number of production , this field helps creating multiple production orders at once

Select This check box allows the users to "Firm" the quantity required and then create a production order

Skid qty Displays the quantity of cases on skid or pallet Net weight Net weight of one case Skid Weight Skid Net Weight ( we don’t consider here the tare weight ) Prod Weight Compute here the production order’s weight

Setup Tab

Total Tab

Field Description

Required Quantity needed to fulfill actual requirement.

Required Quantity calculation= [Total On-hand] – [Physically Reserved] + [Scheduled]- [On Order]- PAR level

Physical reserved Quantity reserved of the physical quantity Received Physical quantity received, but not posted

On order Quantity on order

Note : Quantity on order concerns only Sales Orders placed against this item

On hand Physical quantity available from the inventory

Here it is the total quantity on-hand for this item

Started production quantity

Quantity of Finished Goods production started

Field Description Item group Item group that the item is attached to.

Coverage group Group that determines how a requirement is calculated for the item. Buyer group Identification of the buyer group. Quantity per layer

Quantity per layer on standard pallet

Net weight Net weight of inventory item for one inventory unit Par level Minimum on-hand, safety stock applying to the item when master scheduling

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C. The Pegging section

The pegging section of the Replenishment form uses 4 tabs to display data about the finished good items’ transaction.

Replenishment Form, Pegging Section

Replenishment Form, Pegging, Overview Tab The Overview tab shows the different requirements (Productions, Sales Orders) that have that pending transactions. For example when a production is scheduled but not started or when a sales Order is not fulfilled.

Fields Description

Sales Order Sales Order number that is pegging with this items.

Line Number Sales Order Line number Weekof This field displays the week when the

transaction should be made. For example, for a particular sales order, the “week of” will be the week of the Requested shipment and for production the “week of” is the week the production should be rendered

Production Production number pegged to this Finished Good item but not yet fulfilled

Date Scheduled Show the scheduled date Quantity Quantity scheduled or on the sales Order

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Replenishment Form, Pegging, Future Tab

Fields Description

Production Production number pegged to this Finished Good item but not yet fulfilled

Sales Order Sales Order number that is pegging with this items.

Line Number Sales Order Line number Date

Shows the future message date

Started Shows the started quantity for a particular production order

Report remainder as Finished Quantity remainder after report as finished

Replenishment Form, Pegging, Week and Month Tabs

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Pegging section showing weekly issues and receipts

Pegging section showing monthly issues and receipts

Pegging section showing monthly issues and receipts graph

Working with the Replenishment Profile Form

We will use the following example to understand how we should work with the form. Example: The sales agent or the sales manager opens the Replenishment form located at: Inventory Management >> Inquiries >> Stock Replenishment

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She reviews the form and notices that there are several Items that are needed to be produced. If no action is taken the company will most likely go out of stock for these items. (Note: For the sake of simplicity we will choose only 1 item to be replenished.) She decided that she will create a production order for the Item “174612CL”. The table below summarizes the inventory status of the item “174612CL”

Item Number 174612CL

Available 300 Physical Reserved 8 On Order 123 In Prod* 0 PAR Level 235 Skid Qty 100

Based on the data in the table above, we can calculate the required quantity in order to avoid that

the item goes out of stock. The required quantity = Required Required = Available + in Prod -On Order- PAR level Required =300+0-123-235= -58 Thus, we need 58 cases to keep the item at a safety stock level (or at PAR Level) But the Sales Manager doesn’t want to produce just 58 cases because it’s not cost effective. The

company rules set the minimum production quantity at a Skid Qty. So, in our case the minimum quantity is 100 cases.

This rule is already incorporated within the Replenishment application and “100” is shown in the “To Production” field.

Item 174612CL inventory level status

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In the pegging section of the form, you can see that 56+60+15=123 which is the total of cases on

order.

A. Create a Production Order

To create the Production order for Item 174612CL, the sales manager will click on the select check box in the requirement section of the form.

Then, she will make 2 clicks on Option>> Firm button. The first click is meant to review the quantity to be produced and the last click is to create the production order.

Once the production order is created, a dialog box will pop up to notify her that the new production is created.

Production order Creation notification.

The pegging section now shows the production order created

Production Order No. 195515P of 100 cases created

B. Setup the Item’s Inventory order

Now let’s consider another item named Item CHEL 55 CLR HP. The table below summarizes the inventory status of item “CHEL 55 CLR HP”

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Item Number CHEL 55 CLR HP

Available 501 Physical Reserved 200 On Order 0 In Prod 0 PAR Level 875 Skid Qty 100

The Quantity that is displayed in the “To Production” field for item CHEL 55 CLR HP is 374 Cases,

Because it is not cost effective to have just 375 cases, the company decided to produce at least 400 cases per lot. To do this, the Sales Manager needs to setup the inventory order for item CHEL 55 CLR HP. Procedure

Open the Replenishment Profile form Inventory Management >> Inquiries >> Replenishment Profile

Select the item CHEL 55 CLR HP and Click on the Setup button and finally click on the Inventory tab.

Next enter the following inventory order quantities Inventory Order Setting

Multiple 100

Min. Order Quantity 400

Max. Order Quantity 900

Standard Order Quantity 500

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Item Inventory Setup Form

After setting up the item, close the form and click on the Refresh button to refresh the data.

The figure above shows that the “To production” quantity is 400 cases even though the required quantity is “375 cases” which is already above the 100 cases / skid.

C. Create multiple Production Orders

In this example the company wants to split the production into 3 production orders. Once the “To Production” quantity is split, the application will create 3 production orders to reflect this change.

The table below summarizes the inventory status of item “CXP-3658XXX”

Item Number CXP-3658XXX

Available 2 Physical Reserved 0 On Order 260 In Prod* 0 PAR Level 425 Skid Qty 60 To Production 683

The figure below shows that there are 3 sales Order that need some attentions

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Sales Orders pegging

The Sales Manager decides that the 260 cases on order should have the priority in production

activities and the remainder can be manufactured later and this is the reason why the Sales Manager wants to slip the “To production” quantity.

The production rule is to manufacture bags by multiple of skid quantity. In this order case, the sales manager will not order 260 cases but 300 cases or 5 pallets.

She also decided to create 2 more production orders (with lower priorities) of 240 cases each. Procedure: To do this, the Sales Manager selects the item CXP-3658XXX

Enters 300 in the split field

Enters 240 in the “To Production” field

Enters 2 in the Num. of Prod field

Clicks on the select field check box

Then clicks on Option >> Firm to firm the production Orders

Production order preview In the figure above you can see that there are 3 production orders that will be created. The quantities will be 240, 300 and 240 respectively.

Next, she will click on Options>> Firm to finalize the replenishment process for this item.

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The figure above shows 3 production orders of 240, 300 and 240 cases that have been created. This information can be viewed in the pegging section of the form.

D. Working with Inventory Order Setting: Lot sizing

Now let’s assume that the Sales Managers or/ the Planning Managers want to receive items within the inventory by following a certain rule. In our case, the user wants to create a new production every time the required quantity reaches a specific quantity. Scenario: The Sales Manager has set a lot of 100 cases for Item BP IDC92P620F. That means that the planner should create production orders by the multiple of 100 cases. The table below summarized the inventory status of item “CXP-3658XXX”

Item Number BP IDC92P620F

Available 534 Physical Reserved 25 On Order 260 In Prod* 0 PAR Level 857 Skid Qty 25 To Production 333

Based on the To Production quantity, the system should create 3 production orders of 100 cases the remainder 33 cases will be scheduled a time required How to do it On the Replenishment profile form Click on the Setup button. A customized Default Inventory Order Setup form will open

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Default Inventory Order Setup Form, Inventory Tab Here we will work only with the Standard Order Quantity field.

Let’s enter 100 as the standard order quantity and close the form Back to the Replenishment form, let’s refresh all the data by clicking on the Refresh button.

Now you can see that: The “To Production quantity”: 100 and number of Production is 3 meaning that 3 productions of 100 cases will be created. To proceed:

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- Click on the select checkbox - Then click on Options>> Firm

A summary will appear for a final update as shown below

To order productions click on Options >>Firm

Conclusion

The replenishment form is a powerful application that can be used in Microsoft Dynamics AX to refill the inventory in a Make –To-Stock environment.

There is more that can be done with the form, for example working with the maximum quantity in the inventory Order Setup Form the application will create only a production order up to that maximum and leave the reminder quantity for the next job.

The Replenishment form jobs are integrated with the Production Table and Material Requirement table .Because this application is part of the Production Scheduling sub-module, there is no need to calculate the MRP form for each production order.