Mastering replenishment lead time

SAP ERP Replenishment Lead Time The time it takes between placing an order with a supplier and that order arriving on the manufacturing floor to be filled. The goal is to have a short lead time for replenishment orders, but not so short that inventory management is compromised. The elimination of waste is the key to successful Lean Manufacturing. Reduced lead time is the most effective way to eliminate waste. Reduced lead time implies that a product or service should be manufactured and delivered faster than it needs to be replenished in stock. This is possible through availability checks and replenishment lead times.

This blog will look at the Replenishment lead time, also known as the RLT in Availability check.

Understanding RLT

What is Replenishment Lead Time (RLT)

Replenishment lead time (RLT) is the time needed to order or produce the requested material. The RLT can be measured at various time intervals, depending on the type of material. RLT is included only in the test performed on the basis of the ATP quantity.

The availability check primarily uses the replenishment lead time to calculate the material availability date in sales orders.RLT is only used when performing an ATP check (Available To Promise). RLT is specified on the material master record.

How to calculate Replenishment lead time

  • Consider factory calendar days when considering externally procured materials. Configure in transaction OPPQ (Material Planning Run section)
  • Planned Delivery Time: Assume standard calendar days when setting the planned delivery date. Transaction MM02 (MRP 2 view) or ME12 ( 1 view).
  • Goods Receipt (GR) Processing Time: Again, consider factory calendar days when configuring in Transaction MM02 (MRP 2 View).

How replenishment lead time (RLT) time is determined

The replenishment lead time depends on data maintained in the material master, as follows:

  • For materials procured externally, the replenishment lead time equals the processing time required by the purchasing department plus the planned delivery time and goods receipt processing time, as defined in the material master.
  • For materials produced in-house, there are different ways to determine the RLT, depending on settings in the material master, as detailed as follows:
    • If the total RLT is maintained in the material master, it is used as the replenishment lead time in the product availability check.
    • If the total RLT is not maintained in the material master, the in-house production time plus the receipt of the goods processing time is used as replenishment lead time in the availability check.
    • If the total RLT is not maintained for certain material types (for example, finished goods), the lot-size-dependent in-house production time is used. When this happens, the RLT equals the setup time, interoperation time, and processing time.

The availability is only checked until the end of the RLT. When the inventory delivery date (ready for packaging and transportation) is determined on the basis of the current date for the item to lie after the RLT, the item itself can be confirmed given the lack of stock available. In this case, the system assumes that any quantity requested by the customer can be obtained by the date of material availability and considers the products available.

Availability Check with RLT

The customer wants 20 units to be fully delivered by the requested delivery date. Using backward scheduling, the system determines the date of material availability. However, no goods are available as the inward movement of 100 pieces is used by the outward movement of the stock. Therefore, no stock is available for the date of availability of the material as determined by the system.

Availability Check with replenishment lead time
Availability Check with replenishment lead time

Availability Check without RLT

Availability Check without replenishment lead time
Availability Check without replenishment lead time

Replenishment lead time takes for a material to become available, either internally (in-house production) or externally (outside production) (from a vendor). The most important factors to consider during an external procurement are purchasing and MRP2 (procurement) views of MMR, which consider purchasing processing time, planned delivery time, and goods receipt processing time. Internal procurement, on the other hand, is based on in-house production time (MRP 2 view) goods receipt processing time, or RLT time (MRP 3 view).

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