Simplifying Lead Times

Purchasing can come in various shapes and sizes but, really, only 3 flavors: scheduled, express, and inconsistent. The goal for most manufacturers is to have scheduled purchase orders that ensure a regular delivery of raw materials that, in turn, get converted into product that is also sold at a set schedule. When the orders are that steady, you can count on lead times that perfectly represent how long after the PO is sent to your vendor that you will receive the shipment.

Express orders can be a problem because there is usually a surcharge for rushed orders and a higher cost for smaller shipments, instead of bulk shipments. However, if your vendors are reliable, you can still be sure that your order will be dispatched and received within the acceptable amount of time.

The problem starts with the inconsistency of the latter. Of course, if you had a local vendor that kept you guessing at their lead time, you would likely leave them for a more reliable source, or work with them to improve their times. In this case, we are looking at those shipments that by their very nature are inconsistent: overseas containers.

Inconsistent Lead Times

When it comes to receiving shipments from overseas vendors, there are a great number of issues that will arise to cause delays in your receipt of the order. Things like:

• Regulations
• Customs issues
• Land-based traffic delays
• Port delays
• Language issues
• Documentation errors
• Poor localization processes
• Sudden storms

To help with planning for capacity and resources in situations where the timing of your incoming shipments can be a guessing game, you have finite capacity planning and scheduling.

What is Finite Capacity Planning?

Finite capacity planning is a planning method that takes into account what you have on hand and plans for what you can produce during that timeframe when you consider the resource and labor limitations. It is used to ensure that your work can continue at a steady and efficient pace, regardless of other factors.

Because of the more realistic view of the shop floor, finite capacity planning can be seen as a more accurate schedule of your production process when compared to infinite loading. With it, if there is a lack of resources, the product delivery date is updated to ensure that you have the resources and capacity on hand.

How OnRamp ERP Helps

OnRamp’s Purchasing Finite Schedule feature gives you the tools to manage lead times and part scheduling. The screen was originally designed when our clients were having scheduling issues due to inconsistent lead times from containers coming from overseas. These inconsistencies lead to inside lead times being constantly updated, leading to planning issues when the traditional MRP model was not working.

From our customer:

“OnRamp’s purchasing finite scheduling really helps with import to consolidate freight. After we implemented with imports, we found that it worked for all suppliers both domestic and overseas.

The benefits we can get from purchasing finite scheduling are:

• It is easy to combine orders and maximize container loads (LCL, FCL) to ensure we are getting the maximum amount of material in each container while reducing freight costs per piece
• For shipments with skid count limits, the number of skids can be easily managed
• On the purchasing finite scheduling spreadsheet, you can easily to see your safety stock level and know whether or not you will be short
• Color coded stock levels, ensure that it’s easy to see any negative stock level, as it will be highlighted red
• You can conveniently see all the demand in front of you and place your orders against it
• You can manage the existing inventory to ensure you have enough when you need it while reducing inventory
• By keeping a record of the previous finite schedules, it is easy to identify the demand change

To summarize, the Purchasing Finite Scheduling has helped the Mancor PA Purchasing Group a great deal with the ease and convenience of the built-in Excel Spreadsheet and its fast upload to OnRamp. “

Ying Wang, Global Sourcing Manager

Mancor PA Inc.