1. Requirements Planning Implementation Guide
  2. Requirements Planning for Lot-Controlled Items with Safety Stock

Requirements Planning for Lot-Controlled Items with Safety Stock

Companies that work with lot-controlled inventory must consider expiration dates when managing this inventory. Satisfying demand from item lots before they expire is a key to efficient use of resources. The ability to satisfy demand from inventory that is set to expire but does not expire by the demand date overrides the need to maintain safety stock because safety stock can easily be replenished. Safety stock, including lots that are due to expire in the future, is considered available to meet demand.

When you generate requirement plans using the MRP/MPS Requirements Planning (R3482) or the Master Planning Schedule program (R3483), you can set up the system to use expiring lots from safety stock before generating additional planned order quantities. To ensure that expiring lots are included and that safety stock is decreased to satisfy demand, you must set the following processing options for the planning programs:

  • Include Lot Expiration Dates = 1 (Include)

  • Decrease safety stock = 1 (Decrease)

As a result, the system reduces safety stock by expiring lots, starting with the lots that are set to expire first, and only creates new planned orders to replenish safety stock and to satisfy any demand that exceeds the available quantity in safety stock.

The following example illustrates how the results of this process are displayed in the time series.

Assume you have safety stock of 20 lot-controlled items with 10 items to expire in the near future. You also have additional inventory of 20 that is available. Your planning system tells you that you have forecasted demand of 30. To satisfy demand, you can use regular inventory and take the 10 items that are due to expire from safety stock.

The time series indicates a reduction in the quantity of expired lot items (-LEXP) and a planned order quantity (+PLO) that is smaller than it would have been, had the safety stock been completely respected. You thus reduce waste by using lot-controlled items before they expire and avoid over-planning the item quantity needed for replenishment.