Item safety stock in AX 2012

We came across the safety stock setting again the other day. Safety stock is one of those terms that is bandied about in master planning – I’ve often said in workshops that whole books are written about calculating safety stock – what I’ve never said is: “but I’ve never read any of them”.

Incidentally while I was thinking about writing this I came across this post: Safety Stocks: Beware of Formulas – and it wasn’t just the title that I liked.

So anyway, at first sight it looks like safety stock maps to the Item coverage minimum stock level.

Product information management > Common > Released products > Plan > Coverage > Item coverage:


If you have Product dimensions (Like Configuration, Size Colour and Style) your item coverage is planned for each dimension and has to be setup for each combination. We’re normally planning by warehouse, but that’s optional, and is defined by the Storage dimension group:


So how does master planning react to the Item coverage minimum? Simplest to look at the net requirements from the Release products form:


Safety stock is treated as a demand. This item has no stock on hand in this warehouse so the system proposing a planned purchase order, pegged to the safety stock demand.

Incidentally if you open the Filter in grid option on the transactions overview you’ll see that the form is filtering out the Safety stock demand transaction:


But you can make it visible:


And as soon as you do, you’ll be wondering where the system got that ‘Requirement date’ from.

The answer’s on the General tab of the Item coverage record:


This is an important parameter and it’s a shame that it’s tucked away on the General tab.

Generally I only use the first two options: “Today’s date” and “Today’s date + procurement time”. The default is “Today’s date” which to my mind makes the Minimum stock setting act as a safety stock – as soon as the system predicts that your on-hand stock will fall below the minimum you need to replenish it immediately. However the “Today’s date + procurement time” setting makes the minimum stock setting act like a re-order point; when the stock falls below this setting you’ll place a new order, and your existing stock on hand will cover you for expected demand until that supply arrives. So simplistically I’ve come to think that for purchased items you’re better off with the “Today’s date + procurement time” fulfil minimum setting, and for production items “Today’s date” seems to be a better bet.

There’s another reason for not using a fulfil minimum of “Today’s date” on purchased items. Let’s set our example item up with a four week lead time:


Incidentally I’ve also set an order multiple – IMHO all purchased items should have a Purchase order multiple (the vendor’s pack size). OK, so not all, but all that aren’t purchased as “one-off’s”.


Now the planned purchase order’s got a Futures date message. By definition it’s immediately overdue. You’ve specified the fulfil minimum for today, but you have a purchase lead time. To my mind that’s just generating noise in the system.

With the fulfil minimum equal to “Today’s date + procurement time” you get:


The planned purchase order has got an order date of today – but at least the system’s not telling you that you are already late.

If you’ve got this far through the post you must be interested in setting re-order point and or safety stock, and you’ll no doubt have (or soon will ) come across the Dynamics AX master planning ‘safety stock’ journal. Again, my personal view, but I think the calculations in the safety stock journal are too simplistic and I’d like to play the ‘Beware of formulas’ card.

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7 thoughts on “Item safety stock in AX 2012

  1. Hi, thanks for the explanation.
    We’re struggling with the same problem.
    Planned orders are planned very far away in the future, because that is the only moment when the safety stock will be again “to level”.

    Setting the Fulfill parameter to “Todays date + procurement” doesn’t help, because the procurement period is too short.

    Setting the Fulfill parameter to “Coverage time fence” solves that problem, but now the planned order to replenish the safety stock is moved way back. Because we have a coverage time fence period of 365 days…

    What would you suggest?

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    • Hi. I wish I could give you a definitive answer, but as you’ve discovered this situation doesn’t have a simple solution. I think you just have to experiment with the Minimum stock setting and the Minimum order setting until you get a reasonable plan. We’re working with a company just now that wants to use Min/Max planning for most of its items. I’ve not used it before (and they have a customised function that will set the Min and Max levels based on usage) – but they’re not live yet so I don’t know how effective this will be.
      Tim

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  2. Thanks Tim! Great article, really helped me to comprehend the concept of the fulfil minimum.

    I have discussed it with our purchasing guy and we decided to set it up as “Today’s date” – even though it might not be possible to bring in the item the same day he wants to be notified via Action messages ASAP that the stock dropped or is going to drop below safety stock.

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  3. Thanks for your post !
    It seems for us that the “Today’s date” parameter prevent us to relase SO lines that will consume the “security stock”. it’s only for our installation of anybody else get the sale issue ?
    If my minimum stock is 10 and inventory show 10 available physically, we can’t release the lines.

    What about the “First Issue” parameter ? Finally I use that. it seems to work better.

    There is no way to change the default parameter for this ?

    Thanks !

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    • Hi. Thanks for the comment. You make a great point. With Fulfill minimum = “Today’s date” when you look on the Net Requirements you see that the on-hand is pegged first to the safety stock demand. Well actually the on-hand is pegged to demands in requirement date sequence, and so the safety stock demand takes precedence over future dated sales orders (but not overdue sales orders). But that’s just Pegging (master planning coverage). You should still be able to reserve stock to the sales orders though – and work through the pick/pack/dispatch cycle. I can’t see how safety stock would prevent that. I’ll take a second look at ‘First issue” though – maybe that’s the best use of that setting.
      Agree, no way to change the default (without customization)

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