Reorder point

Generate suggestions to order (plan items) based on supply quantities

Overview

In many situations, it is probably best to order based on demand/project signals. However, there are certain parts, such as some consumables or fasteners, where it makes much more sense to order based on the amount in inventory. These parts may not have accurate mBOMs or a clear understanding of how much will be needed per instance, so they can be great candidates for reorder point.

When setting your reorder point, you will likely want to take into account things like consumption rates and the cost of the part. There is always the risk when ordering like this that you may over-order, so you will want to take care in managing this data.

Reorder Point Setup and Logic

Within the part library, there is an option to set a minimum and maximum under the Reorder point heading.

The minimum represents the supply quantity that will trigger Autoplan to create a plan item to order more. Supply quantity in this context means qty available in inventory + quantity on order + quantity in wip.

When this plan item is generated, it will have a quantity for the maximum reorder point quantity - BOM Demand Quantity. The existing supply will then get allocated to this plan item.

The start date of the plan item will be today, and the due date will be today + the part leadtime. Note that this can change if there is demand for the part and the plan item gets allocated to it.

Finally, these reorder point values can also be set via the parts importer.

BOM Demand vs Reorder Points

There may be scenarios where you have both BOM demand and reorder quantities set for the part. ION will still treat the BOM demand as the source of truth, but will ensure the maximum reorder point is satisfied when generating planning results if supply is less than the minimum reorder quantity.

This approach allows Autoplan to take the MAX of BOM demand and the maximum reorder point to prevent part shortages due to assuming one is more accurate than the other. Below are four scenarios to help explain:

Scenario 1: Total BOM Demand is less than the maximum reorder point, but supply is greater than the minimum reorder point:

• BOM Quantity = 100 Qty.

• Minimum Reorder Point = 50 Qty.

• Maximum Reorder Point = 200 Qty.

• Current Supply = 60 Qty.

• Autoplan Demand Results:

  • Total BOM Driven Demand: 100 Qty. This would be split into 60 & 40, with Qty. 60 Supply allocated to the 60 Demand Result.

Scenario 2: Total BOM Demand is less than the maximum reorder point:

• BOM Quantity = 100 Qty.

• Minimum Reorder Point = 50 Qty.

• Maximum Reorder Point = 200 Qty.

• Current Supply = 40 Qty.

• Autoplan Demand Results:

  • Total BOM Driven Demand: 100 Qty. This would be split into 60 & 40, with Qty. 40 Supply allocated to the 40 Demand Result.

  • Reorder Point Driven Demand: 100 Qty.

Scenario 3: Total BOM Demand is greater than the maximum reorder point, but supply is greater than the minimum reorder point:

• BOM Quantity = 300 Qty.

• Minimum Reorder Point = 50 Qty.

• Maximum Reorder Point = 200 Qty.

• Current Supply = 60 Qty.

• Autoplan Demand Results:

  • Total BOM Driven Demand: 300 Qty. This would be split into 60 & 240, with Qty. 60 Supply allocated to the 60 Demand Result.

Scenario 4: BOM Demand is greater than the maximum reorder point:

• BOM Quantity = 300 Qty.

• Minimum Reorder Point = 50 Qty.

• Maximum Reorder Point = 200 Qty.

• Current Supply = 40 Qty.

• Autoplan Demand Results:

  • Total BOM Driven Demand: 300 Qty. This would be split into 60 & 240, with Qty. 60 Supply allocated to the 60 Demand Result.