Planning Time Fence Value

[Former Member]

Hi Team,

I would like to maintain planning time fence value in material master. I do not have any clue that how to determine the value for the planning time fence. Some where i read that the planning time fence value will be the interval time between two MRP runs (ie, if i run MRP four days once, 4 days will be the planning time fence). Is this logic work out? Any guidance to determine the planning time fence for the material?

Thanks

[marianoc]

Hi Sugan,

Was your question answered?

If yes, please select the correct answer !

Thanks!

Mariano

[former_member184574]

Hi Sugan,

Please explore before posting these kind of generic questions..

please check the below links to understand more about planning time fence...

Thanks

Kumar

[Former Member]

Hi Sugan,

Planning time fence for 'Manufactured items-FERT/HALB ' is not so popular among Top managment of SAP implementation... reason , it reschedules(P1) plan order to end of 'Time Fence' . Essentially , it provides stability to 'Planners' , but Managment would want to accomodate any last minute request  if it can be delivered. Hence most PP implementation has no value in those fields for FERT/HALB

But it can be used very effectively, if 'Planned Delivery time' field for Raw material(ROH) doesnot meet requirement of 'procurement lead time'.

You can put 'Procurement lead time' of  raw material as planning time fence & leave 'Planned delivery time' blank. MRP will always generate PR for new requirement at the end of Planning time fence. So if you convert PR to PO immediately , vendor has consistantly same time to fulfill PO

It also has Autofirming capability (PTM type=P2, P4)  which is also not so popular.

Hope it helps,

Jatin

[Former Member]

HI Jatin,

My situation is:

I am using planning strategy 40. Normally i will have next 6 months forecast plan (PIR:MD61) for my FERT item. For my FERT item, i have BOM components which has longer planned delivery time (40 days). But sometimes emergency sale order comes today & it needs to be delivered to customer within a week. How to handle these emergency situations? Will implementation of planning time fence help to handle this situation?

What is the difference between "Planned delivery time" & "Procurement lead time". Where to maintain "Procurement lead time" in material master?

Thanks

[Former Member]

Hi Sugan,

Implementation of 'Planning time fence' will delay procurement for ugent orders. In fact , it will go against your objective of delivering urgent customer order within week. Leve it 0.

Reason for using planning strategy 40 is to make for forecast as well as customer order. You should run MRP as soon as urgent customer order is entered & use pegging report(MD09) to identify Raw material shortages.

"Planned Delivery Time' is SAP field for business requirement 'Procurement lead time'(Business term). They are same.

Hope it helps,

Jatin

[marianoc]

Hi Sugan,

As Caetano said, this depends exclusively on your business requirements.

The system will not plan within the time fence.

The definition of the time fence depends on how your business execute the replenishment and business conditions. Suppose that you are in a Manufacturing plant and the business executes a weekly Production plan continued of a scheduling process in which it is ensured two weeks of scheduled orders. In an scenario like this, you would maybe want to keep a frozen plan for the next 2 weeks, in which the MRP will not create any new planned order (specially because your have already scheduled the next two weeks). So in this case you will use a time fence equal to 10 working days (2 weeks).

Now suppose that you have the same scenario described above, but you also have a just in time replenishment process for your packaging materials. Suppose that you don't have any available inventory of packaging components. Now suppose also that your buyer has 3 weeks of planned delivery time. In this case, even when your business only schedule 2 weeks of order, you will need to keep a frozen plan of the next 3 weeks in order to share your plan with your vendor of packaging materials. So in this case your Time Fence would be 15 days (3 week if you have a calendar of 5 working days per week).

Thanks and Regards,

Mariano Cabalen

[Former Member]

Hi Mariano,

Can you please help me out....

My situation is:

I am using planning strategy 40. Normally i will have next 6 months forecast plan (PIR:MD61) for my FERT item. For my FERT item, i have BOM components which has longer planned delivery time (40 days). But sometimes emergency sale order comes today & it needs to be delivered to customer within a week. How to handle these emergency situations? Will implementation of planning time fence help to handle this situation?

What is the difference between "Planned delivery time" & "Procurement lead time". Where to maintain "Procurement lead time" in material master?

Thanks

[marianoc]

Hi Sugan,

You will need to setup some coverage for your finished products. The forecast that you load in MD61 is the best possible estimation made by the business of the sales. Knowing that this is an estimation, most of the companies work with coverage in order to ensure Service Level.

So this coverage will give you the addition inventory needed to react when you have those emergency sales orders.

The procurement lead time is the planned delivery time. You can enter the planned delivery time in your Purchasing info records and/or in the Material Master. The system will give priority to the Purchasing Info Record value.

Anyway, we can say that the total procurement time would be:

Planned Lead Time (Purc.Info Record / Material Master) + GR processing time + Purchase processing time (maintained in OMEW)

Thanks and Regards,

Mariano

[Former Member]

Hi Mariano,

Thank you for the info. So in order to cater the emergency sales orders, we need to maintain the coverage profile for the FERT items.

Q1: To cater emergency sale orders, implementing planning time fence will not help?

Q2: Is the coverage profile to be maintained in material master?

Q3: Can you please explain the usage of coverage profile with some example?

Q4: Suppoe, i have maintained the planned delivery time as 5 days, GR processing time as 2 days & purchase processing time as 1 day in OMEW. So the "procurement lead time will be 5 + 2 + 1 = 8 days. What is the purpose of maintaining "purchase processing time in OMEW"?

Thanks

[marianoc]

Hi Sugan,

Q1: By implementing Time Fence, you are losing flexibility, so this goes against the service level, so is not going to avoid cutting sales. However, sometimes you still need to use a time fence in order to provide some stability to your supply chain (maximize the use of your production capacity, coordinate the component replenishment with your vendors, etc..).

Q2: Yes. It is in the MRP2 tab of the material master.

Q3: As coverage you can use different methods: coverage profile, safety time, safety stock, etc. The coverage profile is a key that needs to be predefined in advance. I will try to simplify the explanation. Suppose that your coverage profile says that you want to have 10 days of target coverage. If you have a constant forecast of 1000 CS per month and you have 20 working days in a month, this 10 days of target coverage will mean that you want to have 500 CS in excess of your forecast. So the MRP will plan to start the month with 1500 CS (1000 CS of forecast + 500 CS of coverage).

Q4: The Purchase processing time is the time that your pruchasing department requires to convert a purchase requisition into a purchase order. In your case, suppose that you need to have a material in your production line on Aug 23rd. In that case, because your GR processing time is 1 day, the delivery date in the purchase order will be Aug 22nd (so your vendor will deliver the material 1 day earlier). Now because your lead time is 5 days, the Purchase Order form will have to be sent to the vendor on Aug 17th (In this example your work the 7 days of the week). Finally, because you need one day to convert the requisition into a purchase order, then the release date of your requisition will be Aug 16th. Release date is the date in which the requisition should be converted into a PO.

Thanks and Regards,

Mariano

[Former Member]

Hi Mariano,

Q1: By implementing Time Fence, you are losing flexibility, so this goes against the service level, so is not going to avoid cutting sales. However, sometimes you still need to use a time fence in order to provide some stability to your supply chain (maximize the use of your production capacity, coordinate the component replenishment with your vendors, etc..).

Your statement is: "By implementing planning time fence, you are losing flexibility".

"Losing Flexibility" means, if there is sudden sales requirement (Eg: Emergency sale order), accordingly the manufacturing plan will NOT be smoothened. Do you mean this as "Losing Flexibility"?

For your information, i am using strategy group 40 for my FERT item. The strategy group 40 will be mainly used to smoothen the manufacturing plan according to the sudden sales requirement. Implementing strategy group 40 & planning time fence together for a material will be AGAINST of each other know?

Coverage Profile:

Your statement is:

Q3: As coverage you can use different methods: coverage profile, safety time, safety stock, etc. The coverage profile is a key that needs to be predefined in advance. I will try to simplify the explanation. Suppose that your coverage profile says that you want to have 10 days of target coverage. If you have a constant forecast of 1000 CS per month and you have 20 working days in a month, this 10 days of target coverage will mean that you want to have 500 CS in excess of your forecast. So the MRP will plan to start the month with 1500 CS (1000 CS of forecast + 500 CS of coverage).

According to you, the MRP will plan for 1500 CS instead of 1000 CS for the month. But for that particular month additional 100 requirement has come as emergency sale order. How to handle this? My requirement is "How to handle (cater) the emergency sale orders effectively in ECC?" Will "Back order processing in SD" can help to cater these kind of emergency cases?

Thanks

[marianoc]

Hi Sugan,

Q1: With Losing Flexibility I mean: if you have those emergency sales that consume your inventory, the MRP will react and propose replenishment, If you have a time fence of 15 days, the MRP will create the replenishment order out of the time fence, so you will start producing in 15 days and not when the sales spike occurs. Anyway, if you know that even when you have a sales spike that consume your inventory you will not be able to react in the short term, the time fence would not be a problem.

Q3: In my example, the system will try to have always an additional of 500 CS. Suppose that you have a sales order for 1100 CS, in this case, even when your forecast was 1000 CS you have 1500 CS because of your coverage. So you will be able to sale 1100 CS and you will not have any cut.

Now as soon as you sale 1100 CS your remaining inventory will be 400 CS and then the MRP will propose a replenishment of 100 CS to get your required coverage level of 500 CS.

I am not sure if the backorder processing is related to this matter. Based on what I know, it will help you to allocate your available inventory based on business priorities, so when you know that you are going to cut, you will decide when and to whom you are going to sale. Anyway, I am not an expert on this matter and I also think that is a different discussion.

Kind Regards,

Mariano

[Former Member]

Hi Mariano,

Really very good explanation.

Another disadvantage of "Implementing planning time fence" is:

Whatever the planning proposals (Eg: Planned orders) which lies within the planning time fence zone, will NOT be deleted during next MRP run, EVEN THOUGH its pegged requirements (Eg: the pegged requirement for the planned order is the PIR) are deleted.

I am drawing below business points to be considered before opt for planning time fence. IS THE BELOW POINTS RIGHT?

Q1. If manufacturing stability is highest concern rather than quicker response to emergency customer demands, we can opt for planning time fence. In my case, my manufacturing facility can accommodate any sudden sales spikes since i have infinite capacity in my shop floor. With this condition, implementing planning time fence will not be right choice. RIGHT?

Q2. If the forecast values (PIRs) are getting modified very frequently, implementing planning time fence will NOT be good choice. RIGHT?

Q3. If the procurement lead time of my BOM components are very long (eg: 40 days), implementing planning time fence will BE GOOD CHOICE. IS THIS RIGHT?

Thanks

[marianoc]

Hi Sugan :

Q1: You are right. If your manufacturing plant can accomodate any sudden requirement, then I would not use Time Fence.

Q2: Partially true. Anyway, the Time Fence is setup for the very very short term: weeks, when modifications of the PIRs are commonly done for the next month.

Q3: here you have to consider if you have or don't have coverage for your components in your warehouse. For example, if you have 2 months of inventory in your warehouse, you can react in case you have to increase your production, because you don't need to wait to buy components. Now if you don't have coverage, then you can use Time fence.

Thanks and Regards,

Mariano

[former_member185379]

Hi Sugan,

planning time fence: basically it is the period in which no changes to the plan happens automatically through MRP run.

When your orders are fixed for delivery we use the Planning time fence.

As per Below screen shot. First maintain MRP typr P1- and planning time fence as 15 days.

Unless and until you put the MRP type P1, you cant see Planning time fence in MD04

Then, go to MD61 create daily PIR and Run MRP

you will find following result.

Please get back to us if you have any doubt.

Thanks

Prashant

[Caetano]

Hi Sugan

This value depends exclusively on your business requirements. This interval shouçd represent your firm manufacturing/purchasing plan.

That means, a period of time where your planner don't want to have any new replenishment proposal created or changed by MRP, since it cannot be fulfilled.

Therefore, you should discuss with your business users the appropriate value.

BR

Caetano