Understanding Soft Reserve Items

With soft-reservation processing, part of the business unit's total available quantity for the item is reserved for an order line and cannot be consumed by other orders staged for fulfillment processing.

To manage short-supply situations, you can require that soft-reserved items be reserved only manually, using the Shortage Workbench, which enables you to control which orders receive the available quantity of an item. You can also control the sequence in which orders for soft-reserved items are processed by establishing inventory priority rules that help to ensure the stock is soft reserved for the most profitable orders first.

Defining Soft-Reserved Items

To flag items for soft reservations processing, the Soft Reserve check box must be selected. You can set this option at the business unit level on the Setup Fulfillment-Reservation page and override it for specific items on the Setup Item Fulfillment page.

Requiring Manual Soft Reservation

To require that a soft-reserved item be reserved only manually using the Shortage Workbench, select the Reserve Online option for the business unit on the Setup Fulfillment-Reservation page or for a specific item on the Setup Item Fulfillment page.

Reserving orders manually enables you to control how the business unit's available quantity is distributed among the order lines flagged for soft reservation processing. All non-lot-allocated order lines identified for soft reservations can be soft reserved manually using the Shortage Workbench. However, those identified only for manual reservations (the Reserve Online check box) must be reserved in this manner, as the Reserve Materials process, online reservations, Fulfillment Workbench, and Inventory Reservation EIP do not pick up order lines that require manual reservations.

Soft Reservation Processing

Order lines identified for soft reservations, but not requiring manual reservations using the Shortage Workbench, can be processed by the Reserve Materials process, online reservations, Fulfillment Workbench, and Inventory Reservation EIP using the reservation and backorder rules to determine when to reserve and move the fulfillment state from unfulfilled to releasable. The reservation processes only pick up demand lines that match the search criteria of the process and that have scheduled shipment dates falling within the reservation lead days. The number of reservation lead days is specified at on the Setup Fulfillment-Reservation page (business unit level) and can be adjusted for specific items using the Setup Item Fulfillment page (item level). The reservation lead days can be overridden on the fulfillment transaction request.

If there are no reservation and backorder rules, the reservations process reviews the Partial Quantities Can Ship and Cancel Backorder check boxes on the order line to determine whether partial quantities are permitted and whether backorders should be created for any unfulfilled quantity. These options can be set during order entry using the Order Entry Form component in PeopleSoft Order Management or the Create/Update Stock Requests component in PeopleSoft Inventory. For stock requests created automatically by other PeopleSoft application processes (except for stock requests created from planned messages), the default values come from the Setup Fulfillment and Setup Item Fulfillment components.

The Partial Quantities Can Ship and Cancel Backorder check boxes work together to determine the reservation and backorder decisions. The following actions are taken depending on the settings:

  • If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is selected, then partial quantities are reserved and a backorder created for the shortage.

  • If the Cancel Backorder check box is not selected and the Partial Quantities Can Ship check box is not selected, then either the full requested quantity is reserved and released or no quantity reserved and released.

    A backorder is created for the full quantity if no quantity is reserved

  • If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is selected, then a partial quantity is reserved and the backorder is canceled for the shortage.

  • If the Cancel Backorder check box is selected and the Partial Quantities Can Ship check box is not selected, then full quantity is canceled if it is not available to be reserved.

At shipping time, if the Partial Orders Can Ship check box on the Setup Fulfillment page is not selected, then the shipping processes do not allow any of the lines on the order or unit of work to be shipped unless all of the lines within the order or unit of work can be shipped.

Note:

When a backorder is created and the Create Adhoc Requisitions check box on the Setup Fulfillment page has been selected, then an adhoc replenishment request is created to be processed by PeopleSoft Purchasing or a third-party purchasing application.

Calculating the Available Quantity

The reservation processes calculate the available quantity to reserve as:

  • Quantity requested on the demand line (QTY_REQUESTED_BASE).

  • Less the quantity already allocated or promised (QTY_ALLOCATED_BASE or QTY_PROMISED_BASE)

  • Less the quantity backordered (QTY_BACKORDER_BASE)

  • Less the quantity pegged to an incoming supply (QTY_PEGGED_BASE)

  • Less the quantity shipped (QTY_SHIPPED_BASE). This can apply when a work order demand line has been issued at least once.

Interunit Transfer Order Lines

The fulfillment engine handles interunit transfers slightly differently from other order lines.

  • For interunit transfer orders for soft-reserved items, the fulfillment engine calculates the available quantity to reserve by subtracting the interunit par quantity (BU_ITEMS_INV.qty_iut_par) defined for the item from the current available quantity (BU_ITEMS_INV.qty_available) for the item.

    The interunit par quantity is defined for the business unit on the Define Business Unit Item - Inventory: Shipping/Handling page.

  • If reservation or backorder rules are not used on the demand line then the reservation process uses the Partial Quantities Can Ship check box and the Allow Interunit Backorders check box on the Setup Fulfillment page.

    If both the Partial Quantities Can Ship check box and the Allow Interunit Backorders check box are selected, the fulfillment engine soft reserves or promises as much of the requested quantity as possible and backorders the remaining quantity. If the Allow Interunit Backorders check box is clear, the fulfillment engine does not create a backorder for the remaining quantity.