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Standard MRP only calculates “backwards” from a supply

Topics solved with Reverse Planning
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Presenter: Sune Lohse, Chief Strategy Officer

One of the classical issues on MRP planning is that it only calculates backwards.

This means it’s not possible to calculate reverse and that’s why we did the reverse planning.

Of course, so for instance here if I go into the planning worksheet and let’s say that this is the standard planning worksheet and everything is perfect.

So I have been calculating on my location code production and I’m running it right now and everything is optimized.

Everybody’s happy.

All demands and supplies is in place and basically I can go home because stuff’s already.

I’ll expect it to show no lines in here.

That’s very nice.

Now, the issue is that my vendor in the Far East, he calls me and he says we have an issue on one item.

So I have the vendor here who does my rubber parts.

He calls me and say, you ordered this tire and we have an issue on that one.

So find the item number here.

I’m looking at the profile for that item and it says we have an agreement on here on May 8th of May.

And it’s only possible to deliver this on May 20th.

So we cannot do this, unfortunately.

It could also have been that it’s in a ship which is delayed or for whatever reason.

The fact is that this is not possible.

And we have several items on this one, but on different dates.

And the issue is this date is not possible.

So we have to postpone it till the 20th of August instead of the, sorry, 20th of August instead of the 5th of August.

And that’s the only thing we can do.

So going back to, of course, this means if I run the graphical profile again to look at this item, just again, we will have some negative issue here because we have some expectation for this item on a date here, which is now not possible due to our postponed purchase order here.

If you go into the planning worksheet again, what the MRP does is that it calculates backwards.

So if I calculate now, exact same criteria as before, it will just calculate the full plan starting from the supplies, which are all that matters, and then calculates backwards, backwards, backwards, and ends up figuring out, oh, you need to do something with this item, you need to replenish this one on an earlier date, because that’s what we need, that was what the calculation said.

In real life, it’s not possible, because I called my vendor, he said, that’s not possible, you can have it on August 20 instead.

So the problem is it doesn’t matter how much I calculate.

I will only get two lines and only on this item.

So what I need instead is a tool.

And that’s what we do with our reverse planning, the move demand dates in here.

So when I suggest moving demand dates, and we will explain that more in other videos with the template in here, I would expect it to find this one item and move that item and then find all the consequences.

So if I look at my first tool line, my back wheel and my front wheel, and I look at my new date, it says here you have to move this one from one day to another date.

And if I view my supply changes here, I can see there are some issues here on my tire.

And due to my work date in this scenario, it postpones it until August 10 here, new day date so I can see the supply changes up here and further down I can see the consequences on my sales order lines.

So the issue is that we have to have something that can postpone all the supplies up through the, sorry, all the demands up through the hierarchy and that’s what we need does with the reverse planning move demand dates.

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