Master planning item coverage purchase lead time

I’ve just done a post about master planning item coverage production lead times, and thought I’d carry on and talk about purchasing lead times. When I was learning about Master planning on (Axapta version 3) I remember being told “don’t use working days for purchasing lead times – your calendars represent your working days, not your vendors”. I really don’t know whether that’s sound advice or not, but to this day I tend to use calendars days for purchase lead times.

You might have read the previous post, and if you have, you’ll remember that there are three places where you can set the purchasing lead time of an item:

The default order settings:

The Site specific order settings:

And the item coverage record:

You’d think that having three places to check would be sufficient, but wait there’s more – the Purchase price trade agreement:

Notice that there’s now a ‘Disregard lead time’ flag on the Purchase price trade agreement – always set that on if you are not using the lead time field (otherwise the system might interpret the record as meaning that you have a zero lead time). Also if you are using lead times on the purchase price trade agreement remember that there is a Master planning parameter. If you do not have a Primary vendor on the Purchase fast tab on your item master:

The system will search for a vendor in purchase price trade agreements:

Firstly, you have to allow master planning to search Purchase price trade agreements, and then you specify that it’ll use the cheapest or the fastest vendor.

I most often see folk using the lead time in purchase price trade agreements when there are multiple vendors for the same item – and in my experience that’s actually the minority of cases. When we’re setting up master planning, most items only have one vendor – and the simplest setup is that the vendor is setup as the primary vendor in the item master record. Even when there is more than one vendor, there’s often still a primary vendor, and again, the simplest setup is that the vendor is setup as the primary vendor in the item master. Sometimes, and this seems to happen most in electronics industries, there truly are alternate vendors for the same item, and sometimes a company wants to source the one item from multiple vendors concurrently (so as to ensure long-term continuity of supply). Unfortunately that last scenario – dual supply – can’t be handled by standard master planning.

So my rule of thumb: Don’t use purchase price trade agreement lead times unless you have multiple vendors for the same item; and set the default order setting’s purchase lead time to the lead time of the primary vendor.

However we may just be able to take advantage of the fact that we can set a purchase lead time on the purchase price trade agreement and a different lead time on the Item coverage record. A couple of weeks ago I posted about safety stock – (yes I know I’m always posting about safety stock) – and I was thinking about the scenario where you have purchase orders arriving regularly from your vendor, so you may have say a 60 day lead time, but you’re getting a purchase order receipt say every 2 weeks. In that case you want to calculate safety stocks based on your supply plan (every 2 weeks) and not on your overall lead time (60 days). This might just be the solution to that problem. Put your supply schedule lead time on the item coverage, and your purchase lead time on the trade agreement.