Inventory Planning

Inventory planning involves answering two questions

When should we place a new order?

How much should we ordered?

Using the Oracle Inventory application, we can set up the following types of inventory replenishment plan:

Min-Max Planning
Re-Order Point Planning
Kanban Replenishment Planning
Replenishment Counting (For Non Quantity tracked sub inventories)

After we select replenishment method that we want to use, Oracle inventory concurrent programs populates the requisition interface. Oracle inventory planning interfaces with Oracle Purchasing and indirectly with Oracle Order Management.

Replenishment Considerations:

Before we replenish our inventory, we should consider the followings:

Order Time
Order Size
Planning Method

When To Order: We should order when the On-Hand quantity + Incoming Supply – Demand < The Specified minimum inventory levels.

How much to order: We should order a quantity that balances the cost of placing an order with cost managing inventory while covering expected demand. After we determine the amount to order, we can create a requisition to replenish inventory from another organization or a supplier.




Oracle Inventory Replenishment Method:

We can use Oracle inventory to set up specific replenishment methods to help us to decide the size, timing and amount to order. Oracle Inventory supports following replenishment method:

Min-Max Planning

Re-Order Point Planning

Kanban Replenishment Planning

Replenishment Counting

We can perform replenishment planning at the organization and Sub Inventory level. Note: Kanban replenishment is performed at locator level.

Min-Max Planning:
 
Min-Max Planning will determines how much to order based on user defined minimum and maximum inventory levels. In compare to Re-Order Point Planning Min-Max Planning is not based on demand projection and does not consider lead time. With Oracle inventory, we can perform Min-Max Planning at both the organization and sub inventory levels. Sub inventory level planning cannot generate jobs and does not consider WIP jobs as supply or WIP components as demand.

Note: To perform organization level Min-Max Planning for an item, we must specify organization level minimum and maximum quantities.

Deciding when to Order with Min-Max Planning:

We should follow when the order is true: (On-Hand Quantity - Demand)+(Quantity On Order) < Minimum Quantity.

Quantity on Order: It represents supplies that we have not yet received in our organization. It is the sum of Purchased Order or Requisition or In-Transit Shipment quantities. It also include WIP jobs as supply at organization level.

How much to Order with Min-Max Planning:

We should follow how much to order is true: Order Quantity=(Maximum Quantity)- [(On-Hand Quantity) + (Quantity on Order)].

Min-Max Planning Steps:

 

Requesting the Min–Max Planning Report: To request a min–max planning report you define parameters for min–max planning calculation, choose the sorting criterion for the report, and choose whether to create internal requisitions. The INV: Minmax Reorder Approval profile option governs the approval status of internal requisitions created by the Min–Max Planning Report. (Move Orders are automatically approved.)

When you run the Min–Max Planning report, you can have Oracle Inventory create requisitions for buy items and unreleased jobs for make items by answering Yes to restock. You must also specify a location to serve as the default deliver to location on the requisitions.

Organization-Level Min-Max Planning:

Assign person name Stone, Mr. Michael as employee to user CHARAN and save it.

Navigation: System Administrator > Security > User > Define > Query for user CHARAN.


Inventory Min-Max Planning Continuation
Inventory Reorder Point Planning...read more
Inventory Kanban Replenishment Planning...read more
Inventory Replenishment Counting...read more