Establishing Vendor Lead Times and Product Build Times

Home | FAQs & Troubleshooting

 

Expand/Collapse all Show/Hide All

When you begin the MRP generation process, the system calculates the action-by date for each recommendation on the MRP Report by taking into account the vendor lead times and product build times. This information is found in the Std. Lead Time field for the primary vendor (entered in the Primary Vendor field) in the Item Maintenance window in the Inventory Management module.

For items that have a procurement type of "make," establish a fictitious vendor name in Accounts Payable that can be selected in the Primary Vendor field, and then select the build time for that item in the Std. Lead Time field. If no lead time is specified for an item in Item Maintenance, the values entered in the Default Build/Lead Time (Days) field in the MRP Generation window is used.

When inventory level adjustments are recommended, the MRP generation process will use the Lead Time for the item plus the MRP Accounting Date to determine the Required date for the inventory level adjustment. The Action by Date will be determined by the Required date less the Lead or build time.

Build time is the number of days required to build a product from its components. When Lead Time is selected in the Build Time Calc for Make Items field in the MRP Options window, the system uses the primary vendor’s lead time in Item Maintenance to determine the Action by Date and the component required dates. If the lead time is 0 or blank, the default entered in MRP Generation is used.

If By Work Order Routing is chosen in the Build Time Calc for Make Items in MRP Options, the Action by Date is determined by the routing assigned to the bill of material. The Action by Date for each item on a bill of material will be equal to the Start Date of the step to which the item is assigned. It is recommended to assign a default lead time for make items as the lead time plus the MRP Accounting Date will be used to determine when the inventory level adjustment is needed. If no lead time is specified for the item, the Default Lead Time, entered MRP Generation, will be used.

 

Expand/Collapse item  Establishing Vendor Lead Times - Example

The following is an example of how the system establishes vendor lead times and product build times for a computer with a three-level bill of material:

  1. Assemble motherboard from five components

  2. Assemble case from box, power supply, diskette drives, and motherboard

  3. Assemble final computer from case, video display, keyboard, etc.

If the vendor lead time in the Inventory record for this item is 0, entering 1 in the Default Build/Lead Time (Days) field between levels means that the computer will take 2 days to build: 1 day between levels 1 and 2, and 1 day between levels 2 and 3. In this example, the lead time is assumed to be blank or 0 (zero) in the Inventory record for this item and the default build/lead time is substituted for the 0.

Note When the method to calculate build time is Work Order Routing and the MRP Generation process encounters a bill of material that does not contain a work order routing or the routing is invalid, the Lead time from the vendor will be used. If this value is 0, the value in the Default Build/Lead Time field will be used.

 

For more information, see:

The MRP Generation Process

MRP Generation