MRP for imported material

[Former Member]

hi

i am THENNARASU, PP consultant. in our case client is impoting some raw material that is very costlier and lead time also high ( 90days). for that type of material how to plan, whether we can use MRP... i need some clarification

[Former Member]

This message was moderated.

[csaba_szommer]

Hi Thennarasu,

The business process should be decided first, SAP is just a tool to support it.

The use of MRP doesn't depend on the lead time or on the value of the goods.

Generally, high stock levels are not desired for goods of high value - e.g. JIT was invented to solve that problem (other question is that JIT process places a burden on the supplier...).

Because your lead time is very long some safety stock should be kept from that material even though the value is high...

Sometimes, customers force their suppliers to keep stock at their location that is owned by the supplier. The supplier have to keep the stock between certain (dynamic or statics) stock levels. This is the combination of consignment and VMI - that might be unfair since the supplier have additional costs.

Safety stoc can also be kept at the cost of the customer.

Sometimes, the supplier builds a samll plant near the customer and this way, relocating its production (or part of it), tries to solve this kind of situation.

In my opinion, you should consider the use of some kind of safety stock, since the long leadtime might jeopirdize the production if something goes wrong.

But of course, w/o knowing anything about your business process these are just general ideas.

Regards,

Csaba

Edited by: Csaba Szommer on Nov 13, 2008 2:27 PM

Edited by: Csaba Szommer on Nov 13, 2008 2:27 PM

[Former Member]

hi CSABA,

we are using both make to stock & make to order (OEM) scenario for that product. Planning is done for 3 months through forecasting, one month firm plan and two moths rolling plan. planning is relased every middle of the month. first 15 days manufacturing plant will use previuos month rolling plan. once plan is received from central planning dept, they will compare and will produce remaining material. in that case they dont want to use MRP for high value material which imported ( 90 days)

[neeraj_bhardwaj4]

See in this scenario you should use consumption based planning... keeping saftey stock as per the lead time you have mentioned... i know it will increase your inventry a bit... you can reduce the inventory if you have precise information about the location of material in transit....

I would suggest consumption based planning only...u will have to calculate the safety stock and reorder point very carefully..

Thanks

Neeraj

[former_member326961]

hai,

because lead times are more ie 3 months, and are of high cost and you need to have more control on these materials.

so go for MPS Type mrp. maintain som safety stock for thos r/m based on their consumption.