Procurement Priority in SNP Heuristics

[Former Member]

We have a scenario where Returned Goods are stored centrally in a warehouse. My client interested in to first look into Returned Warehouse before creating Planned orders or purchase reqs. In other words, DC should first have stock transfer order to bring over whatever is available as returned goods from Returned Warehouse and then create the balance quantity against the forecast at DC.

I had tried giving a higher priority at T-Lane for Returned Warehouse, but SNP Heuristics then create all the subsequent supply elements from Returned Warehouse for the same product rather than creating orders on a manufacturing plant after consuming stock at Returned Warehouse. If I do make procurement periority same for both manufacturing and Returned Warehouse then Heuristics continually create orders on plant and never make a stock transfer to DC for Reutrned Warehouses' inventory.

I was thinking to first run SNP heuristics just between DC and Returned Warehouse and transfer all the available stocks to DC and later run SNP heuristics again between DC and a Plant to create orders for the balance requirements. But this is not working eithe because heuristics continually create supply elements from Returned Warehouse for the whole planning horizon.

Any help appreciated.

CA

[Former Member]

hi CA,

Please include step of CTM push distribution for moving stock from returned warehouse to DC before running heuristic

you can even have this receipts represented at DC by a diferent category.

Maintain tlanes between Returning WH to DC with procurement priority say 50(it could be product specific) with a outbound quota of 100..

This step needs to be run before the heuristic run.(tlanes between plant to DC or vendor to DC are maintained with PP as 1)

SNP Heuristic run will create planned orders / procurement requisitons at manufacturing location/ external vendor considering this receipt element at DC from Returning WH ..

Hope this answers ur query.

Thanks

AM

[Former Member]

Thanks all of you for your suggestions. I figure out that first I need to run deployment heuristics and delete distribution receipts but keep distribution receipt confirmed for stock transfer. Next, we need to run SNP heuristics for usual planning. It works fine this way.

Thanks again all of you.

CA

[srinivas_krishnamoorthy]

This may not be clear in the Q, but do you have a different set of product numbers for returned products ? I am not sure how you will draw a distinction among the returned and the genuine products otherwise in the system. The design will be smooth and manageable if the product codes are different for returned items. You can always integrate such a design with R3 even if they are same product codes in APO. Otherwise, I am afraid things will be little complex to manage.

[Former Member]

Product numbers are same in both DC and Returned Warehouse. Today, they run MRP first for DC and Returned Warehouse and later between DC and a Plant for the balance quantity. Since we are going to plan in APO therefore, we need a solution in APO.

[Former Member]

Hi,

You might want to look at the Capable to Match functionality, which would take into account transportation lane priority and will ensure consumption of stocks before creating purchase reqs.

Regards

Vinod

[Former Member]

Thanks for your suggestion, but client only want to have heuristic-based solution for now. Probably, they will implement other solutions after couple of years of using APO.

[srinivas_krishnamoorthy]

So let me rephrase this to understand clearly. The return warehouse is defined as a distinct location in APO compared with the forwarding warehouse. (heuristics or any supply planning tool cannot handle two way movement of products due to cyclicality that will also be highlighted through the LLC or low level code run). The movement of goods from forwarding warehouse location to DC is driven by Forecasts. However it is not clear what drives the movement of the same product from DC to return warehouse. I am assuming that you are doing some returning forecasting to drive this (though this is not very obvious from the description of the problem). If this indeed is the case, the supply network can be modelled as a three echelon model

forwarding warehouse --> DC --> returning warehouse

DC and Returning warehouses have their own forecasts to drive the supply through the network. The Supply from forwarding warehouse to DC will automatically be driven by forecasts at DC and returns forecast at Returning warehouse. In other words, system will take care of itself.

Let me know where I am going wrong in the analysis above.

[Former Member]

Returned Warehouse is a physical location where my client keep all the returned products from their customers. Forecast is only on DC and not on Returned Warehouse.

Now, what we are looking for is thonce we do planning, DC should get all the available quantity from Returned Warehouse first before creating a planned order for their manufacturing location or purchase req. into external vendor. They have 5 different DCs and only one Returned Warehouse. Each DC have unique set of products to handle and there is no duplication of products among them. But Returned Warehouse is just one location and keep all the possible products at any given time.

Hope this help understanding the issue.

Thanks

CA

[Former Member]

I think you can solve the problem using a combination of deployment and Heuristics. Try to deploy the stock of the Return warehouse and then propagate the rest of the demand to the Plants. ( Remember deployment will create Distribution receipt confirmed, which I think can be modified to make it as Distribution Receipt on a custom planning area. Or your users will be more happy to see what come from Return warehouse as different category.).