I’m interested in hearing about how others have dealt with this.
We have a hundred or so parts with lead times exceeding a year. These are generally PC board assemblies, electronic components, and specialty metal products. In some cases, lead times are close to 2 years, especially factoring in that it often takes several months to just obtain quotes on the more complex products. We’ve considered loading forecast and running MRP (for all parts) over a period longer than the longest lead time parts. However, after talking through the pros and cons, we are strongly leaning toward a solution where we would manually review long lead time parts on a regular basis to make sure orders are placed sufficiently far out into the future. (In extreme cases we currently have purchase orders placed with due dates in 2026 and 2027.)
Its a way of generating demand (detectable by PO Suggestions)… and then you can assign that Contract to jobs, sales orders, POs, etc. down the road to link everything together.
From Application Help: Planning Contracts is that kind of functionality that has its hands in many cookie pots. You will be able to find Planning Contracts in Quotes, Sales Orders, Jobs, Projects, and Purchase Orders. The idea behind planning contracts is that they are a way to link supply and demand, helping you to plan for those long lead items. You can link demand (such as sales orders and planning contracts lines) to a planning contract. This demand is then fulfilled specifically from warehouse bin locations that you mark as contract bins.
Our entire implementation process went by with Planning Contracts never being mentioned by our consultant (or if it was, it was in general conversation and we didn’t know to look deeper). You don’t know what you don’t know, right?
When talking to another consultant after Go-Live, we asked about long lead items and he immediately brought it to our attention. I can’t say we USE it much… but it appeared to work in testing. Its almost like a mini-“project” in that someone has to manually set it up and manage it to ensure everything is linked up correctly.
My involvement with Epicor began in 2009, and I’m not all familiar with planning contracts. I saw this note in the applications help, and I’m wondering if it should cause concern. Not sure what they mean by “general supply”. Some of our long lead time parts (especially PC board assemblies) are widely used across many product groups, and many are also sold on parts orders. If we had to link thousands of sales and parts orders to a contract for each long lead time part, that could be prohibitive.
My understanding is that buying against a Planning Contract is almost like reserving the material/part. When you receive it, you have to receive it to a “Contract Bin”… so it is kept aside (system-wise) from the “general supply”.
So, what I THINK this warning is saying is that… if you need qty (2) for your Planning Contract… but also want to buy qty (8) for your general warehouse supply… then you may need (2) PO Lines for the same part. you can’t just have (1) PO Line for Qty (10).
The PLUS side of this, is the qty (2) you linked to the Contract… being received into its own Contract Bin, will also show up separately when looking at stock/inventory. So, if the PC Board is purchased on a different sales order, your personnel should be able to identify that they can’t take the boards from a Contract bin. Only from a standard warehouse bin location.
Again, not overly experienced using this… I don’t know if the system will absolutely refuse to let you ship a “contract” part against another order… and of course, nothing can stop someone from physically taking the part and shipping it anyway.
for long leadtime purchased items you can use one of the following techniques:
create a PLANNING BOM (relatively new feature) and then forecast that bom… MRP will create PO Suggestions for the results
set a MIN On Hand or Safety qty for the part. Once you get below the quantity, it will tell you to order more, before you actually run out.
you could also create a FORECAST for the purchased item. If you associate that forecast with a customer ID, this will tie it up so that nobody else will grab it. I have seen companies use this to create seasonal demand for purchased items… they have their own customer ID and assign the forecast to that ID so that it simply builds inventory and keeps it to the forecast.
I agree with Tim here. These are good ways to order long lead time materials. Planning Contracts are better when one is purchasing for a particular customer project/order, IMHO.
We’ve been dealing with the same issues for the past couple of years thanks to the supply chain nightmare. For specific items or manufacturers that had parts on allocation we made the decision to place orders based on our history of usage. The problem with that is that in some cases we now have way more inventory than we currently need but there didn’t seem to be any other options at the time. More recently we’ve tried to make sure that we have a good min on hand quantity set so that we keep enough parts on order. Other than that, we’ve kept engineering busy finding alternates and/or redesigning our pcbs to use parts we can find.
Interesting info on the Planning Contracts; I don’t think that was ever mentioned to us by our consultants either. I haven’t done anything with the Planning BOM yet but it’s on my list…
