safety stock & Reorderpoint

[Former Member]

HI SAP Folks,

Any one tell me what is the difference between Safety stock and reorderpoint and what is their role in SAP?

Thanx in advance AND will be rewarded points.

Regards,

mnsr

[Former Member]

Hi;

We are using reorder point when we using planning type as reorder planning.

I will try to explain you this using a foll. example

suppose Matl A is having daily consumption as 50 while replenishment lead time for this material is 5 days. in this case if safety stock = 50 , reorder point should be maintain as 300 . it works as follows

reorder point stock = sfty stock + Repl lead time * daily consumption

in this case reorder point = 50 + 5 * 50= 300

When your stock falls below your reorder point , planning file entry is get created for the given material & procurement proposal get created for that material in next MRP run. Hence here replenishment time is 5 days , it will consume stock 300 to safety stock 5 in next 5 days till the goods receipt happens.

I hope it will clear your doubt. Let me know if you require further details

Rajesh

[Former Member]

Hi,

Safety stock you can define to cover for any unwanted demand and delay from vendor for the consignment during the lead time of replinishment.

For example your reorder level is 500 and safety stock is 50. When the reorder falls below the point then procurement proposal will come for the maximum stock. after this your purchase cycle will start but production will cover by stock which is betwwen 50 to 500. Now you must get the delivery of the proposal till this stock touch to 50.

If suppose you didn't get this because of any delay in transportation from vendor or suppose you get some unwanted consumption (scrap) then you can use this safety stock to avoid any stoppage of production due to material unavailability.

Safety stock you can define with calculation of average daily consumption with respect to the demand and lead time for procurement. It is not must...if you wish you can maintain.

If helpful rewards your points.

Regards

TAJUDDIN