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Safety Lead Time Functional Overview

Oracle Advanced Supply Chain Planning uses safety lead time or safety stock to hedge against demand uncertainty. Safety lead time schedules supplies in advance of demand due dates based on a specified lead time, creating an inventory buffer. Setup involves enabling safety lead time in profiles and specifying lead time values in item attributes. Planning then generates supplies according to lead times and pegs them to demands on corresponding future dates.

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320 views

Safety Lead Time Functional Overview

Oracle Advanced Supply Chain Planning uses safety lead time or safety stock to hedge against demand uncertainty. Safety lead time schedules supplies in advance of demand due dates based on a specified lead time, creating an inventory buffer. Setup involves enabling safety lead time in profiles and specifying lead time values in item attributes. Planning then generates supplies according to lead times and pegs them to demands on corresponding future dates.

Uploaded by

parthiragunath
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
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Oracle Advanced Supply Chain Planning Functional Overview Safety Lead Time

Contents
Introduction .................................................................................................................................................. 2 Without Safety Lead Time............................................................................................................................. 3 Setup and Process ......................................................................................................................................... 5 Setup and Process ......................................................................................................................................... 7 Dependencies and Interactions .................................................................................................................... 9 Additional Resources .................................................................................................................................... 9

Introduction
Safety lead time is the amount of time that ASCP schedules supplies in advance of the corresponding demand due dates This results in an inventory buffer during the span of the safety lead time which can hedge against demand uncertainty Use of safety lead time is an alternative to planning to safety stock target levels Not applicable to unconstrained plans and constrained (without scheduling) plans Corresponding demand due dates means due dates of the demands to which the sup plies are pegged. Safety stock target levels are considered during the middle, netting/pegging phase of ASCP planning. It is possible for some of the planned orders created during this phase to be moved in or out during the final, detailed scheduling phase of ASCP constrained planning. Therefore ASCP constrained plans are not guaranteed to follow target safety stock levels. By contrast, safety lead times are considered during the final detailed scheduling phase of ASCP planning. This mechanism can be a more reliable hedge against uncertain demand. With safety lead time, supplies are not pegged to the safety stock level Safety lead time is a soft constraint It will be violated if the supply cannot be scheduled earlier than the demand due date due to other constraints

The following table presents how supply is generated for an item with safety lead time of 2 days: Item A Demand Supply PAB 1000 1000 1000 2000 1000 Day 1 Day 2 Day 3 1000 Day 4 1000 1000 1000 1000 Day 5 Day 6 1000 1000 1000 1000 2000 1000 0 0 Day 7 Day 8 1000 Day 9 1000 Day 10

Supply of 1000 on Day 1 is generated for the demand of 1000 on Day 3, 2 day s ahead of demand because the safety lead time is equal to 2 days. Similarly supplies of 1000s on Day 2, Day 4, Day 6, and Day 7 are generated for demands of 1000s on Day 4, Day 6, Day 8 and Day 9. In this example the Average Inventory Level = 1000 and Excess Inventory = 0.

Without Safety Lead Time


Safety Stock Level (SSL) is calculated based on the Bucket Days = 2 and Percent = 300%. Day 1: SSL = {[(Day 1 + Day 2) Demand] / 2} 300 / 100 = [(0 + 3000) / 2] 300 / 100 = 4500 Day 2: SSL = {[(Day 2 + Day 3) Demand] / 2} 300 / 100 = [(3000 + 2000) / 2] 300 / 100 = 7500 Day 3: SSL = {[(Day 3 + Day 4) Demand] / 2} 300 / 100 = [(2000 + 1000) / 2] 300 / 100 = 4500 Day 4: SSL = {[(Day 4 + Day 5) Demand] / 2} 300 / 100 = [(1000 + 2000) / 2] 300 / 100 = 4500 Day 5: SSL = {[(Day 5) Demand] / 2} 300 / 100 = [(2000) / 2] 300 / 100 = 3000 Day 1 Supply = 4500 based on the SSL. This supply is pegged to Non-transient SSL of 3000 on Day 1 for the quantity of 3000. It is also pegged to Transient SSL of 1500 on Day 1 for the quantity of 0. In addition this supply is pegged to demand of 3000 on Day 2 for the quantity of 1500. The supply of 4500 on Day 1 is moved to Day 2 by the scheduling process due to capacity constraints. Day 2 Supply = 6000 based on demand on Day 2 and the increase of 3000 in the Transient SSL. This supply is pegged to the Transient SSL on Day 2 for quantity of 0. Additionally it is pegged to demands of Day 2 through Day 5. This supply is moved to Day 4 due to capacity constraints.

Day 5 Supply = 500 based on demand on Day 5. It is pegged to demand on Day 5. With Safety Lead Time Safety Stock Level (SSL) is calculated based on the Bucket Days = 2 (looking ahead) and Percent = 300%. Day 1: SSL = {[(Day 2 + Day 3) Demand] / 2} 300 / 100 = [(3000 + 2000) / 2] 300 / 100 = 7500 Day 2: SSL = {[(Day 3 + Day 4) Demand] / 2} 300 / 100 = [(2000 + 1000) / 2] 300 / 100 = 4500 Day 3: SSL = {[(Day 4 + Day 5) Demand] / 2} 300 / 100 = [(1000 + 2000) / 2] 300 / 100 = 4500 Day 4: SSL = {[(Day 5) Demand] / 2} 300 / 100 = [(2000) / 2] 300 / 100 = 3000 Day 5: SSL = 0 Day 1 Supply = 6000 is generated based on demands of Day 2, Day 3, and Day 4 (3000 + 2000 + 1000) since the safety lead time is equal to 3 days. This supply is pegged to demands of Day 2, Day 3, and Day 4. This supply is moved to Day 2 by the scheduling process due to capacity constraints. Day 2 Supply = 2000 is generated based on demand of Day 5 (2000). This supply is pegged to demand of Day 5. This supply is moved to Day 3 due to capacity constraints.

Setup and Process

Setup Set Key Profile Options


The key setup steps are to specify the Safety Lead Time profile option and Safety Stock item attributes.

MSO: Use Safety Lead Time Enables ASCP to schedule supplies with respect to safety lead time

Profile Value

Description ASCP calculates and plans for safety stock directly based on the Safety Stock Percent item attribute. This is the default value. ASCP schedules supplies earlier to account for safety lead time based on the value specified in the Safety Stock Percent item attribute as the safety lead time (days).

No

Yes

Setup Define Safety Stock Item Attributes

You can specify Safety Stock Method and Percent in the Organization Item window: Set Safety Stock Method to MRP Planned % Value in the Percent field represents the Safety Lead Time when the profile option MSO: Use Safety Lead Time is set to Yes (example: 5% = 5/100 day) Navigation: - Inventory : Items : Organization Items : General Planning Tab

Setup and Process

With Safety Lead Time:


Planned orders are generated in the netting process based on the transient safety stock requirements and demand. The final schedule of these planned orders are determined during the scheduling process. Pegging ignores the transient safety stock and supplies are pegged to actual demands and scheduled 2 days earlier than their corresponding demand due dates. Planned orders on Day 4 are 400, 400, and 200. The first 400 is generated for the transient safety stock of 400 on Day 1. The second 400 is generated for the increase in the transient safety stock to 800 on Day 3. Another planned order of 400 is generated during the netting process for the for the increase in the transient safety stock to 1200 on Day 5. This planned order is split (based on the setting for the profile option MSO: Demand Size Tolerance Before Splitting Planned Orders) to 2 planned orders of 200s. During the pegging process the first 200 is pegged to the demand on Day 6. The second 200 is pegged to the demand on Day 8.

Dependencies and Interactions


There are no dependencies on other products.

Additional Resources
For more information about Oracle Applications http://www.oracle.com/applications/home.html For more information about Education http://www.oracle.com/education/index.html For more information about Support http://www.oracle.com/support/ For Oracle Product documentation: http://www.oracle.com/technology/documentation/applications.html

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