Planning in Business Central #4
In this short post I will cover the following topics:
Replenishment Systems
Up to now, I have referred to ‘Supply Orders’ and generally demonstrated what happens when purchasing items in Business Central.
However, Business Central has four possible replenishment systems. This means we can setup Business Central to create four types of supply orders.
Three of them can be found on the item card, in the Replenishment fast tab:
- Purchase: the supply order suggested will be a Purchase Order
- Prod. Order: the supply order suggested will be a Production Order
- Assembly: the supply order suggested will be an Assembly Order
The fourth option is only possible in the context of a multi location setup. In that case, if you need to replenish more than one location, you will most likely be using stockkeeping units.
On the stockkeeping unit card, the final option is available:
- Transfer: the supply order suggested will be a Transfer Order
In all of these cases, some setup is required.
If replenishment is to be done by Purchase Order, i.e. you are buying the item, then the Purchase section of the fast tab is generally populated with some default values.
If replenishment is to be done by Production Order, the production module must be enabled by acquiring a premium licence. The module must be setup, and the item being replenished must be setup to be manufactured. This means that the information in the production section of the fast tab must be setup for your needs.
If replenishment is to be done by Assembly Order, then the Assembly section of the fast tab should be populated. A suitable assembly policy should be picked, and an assembly bill of material setup.
Finally, if replenishment is to be done by Transfer Order, then at least two locations must exist, and at least one stockkeeping unit must be setup. A transfer route must exist between the two locations. In that case, it is possible to setup Business Central to replenish stock in one location by transferring stock from another location using a transfer order. A Transfer-from Code must be indicated on the SKU.
Stockkeeping Units
A stockkeeping unit is a record of cost, replenishment, planning and warehouse parameters specific to a location or variant, or both.
In other words, by using a stockkeeping unit, it is possible to use settings specifically for a location, variant, or both.
Use case examples of stockkeeping units:
- Your company has separate operational sites or business units, and they all buy their own supplies
- Your company has separate warehouses. One warehouse is where you buy or manufacture items, store them in bulk, and the other locations get replenished from the bulk warehouse by transfer of stock
- You have one physical location, but decide to setup Business Central with one production location and one components location for ease of planning. You can then plan for purchasing components and producing finished goods separately using a location filter. This can be very useful if there is a division of operations, with purchase planning and production planning done by different teams
To create a stockkeeping unit, use the action found in the ribbon of the item record.
Then indicate the types of stockkeeping units you want to create: one SKU per location, per variant, or per location and variant combinations. If you want to create a SKU only for a specific location or variant, then use the filters located at the bottom of the request page.
By default, the parameters found on the item record will be copied across. But they can be overwritten to make them specific for the SKU.
Note that the SKU and the item are NOT synchronised! It would make no sense to do this!
In the first fast tab of the SKU card, you will find some general setup. You must indicate a location code or a variant code, or both.
You can see flow fields to various various documents or document lines on the right hand side, and the numbers are filtered to the location/variant indicated on the SKU.
The Invoicing fast tab shows cost information.
If the item is standard costed, then different standard costs can be setup in different SKUs.
The Unit Cost field shows the average cost of the item. The average cost calculation can be setup to be specific for the location and variant, i.e. per SKU, or can be for the item overall. This is setup on the Inventory Setup page.
The Last Direct Cost field shows the last direct cost for the location and variant.
The Replenishment tab is very similar to that found on the item record. However there are notable differences. The following fields are not available on the SKU record, only on the item record. This means that these are global settings, which cannot be setup specifically for a SKU.
- Purchase Unit of Measure
- Purchasing Blocked
- Rounding Precision
- Overhead Rate
- Scrap Percentage
- Assembly BOM
The following fields are only available on the SKU record, and both relate to planning in the context of using a SKU.
- Transfer-from Code
- Components at Location
In the planning tab, there are notable fields missing. Again, this means that these can only be setup globally.
- Reserve
- Order Tracking Policy
- Stockkeeping Unit Exists flow field
- Critical
Finally, in the Warehouse fast tab, the only field that cannot be setup on a SKU is the Warehouse Class Code.
Common Issues When Using SKUs
When using SKUs, be careful not to get caught out by these common pitfalls:
- Your item is setup to be standard costed. A SKU record is created, and the standard cost field is not maintained. When you purchase the item in the location of the SKU record, the standard cost used will be that of the SKU record! Be sure to maintain both the item record and the SKU record. A common scenario is to setup an item, leave the standard cost as 0. Create a SKU. Update the standard cost of the item. The standard cost on the SKU remains at 0. When you buy an item in the location of the SKU, the standard cost will be 0!
- Your are calculating a plan for replenishment. The planning parameters look fine on the item record, but the results are not as expected on the planning worksheet. In all likelihood, there is a SKU record for the location, where the planning parameters have not been maintained. Remember that if SKU records exist, Business Central will always prioritise the SKU parameters!
Resources
Other related posts: