Lead time in SYSPRO enables you to quote achievable delivery dates to customers and to determine the right time to order or manufacture an item to meet customer demand without creating a costly overstocking situation. It also enables you to make decisions about the feasibility of performing other related activities such as increasing forecasts or production for delivery within certain periods.
- Elements of lead time
- Module considerations
- Transaction processing considerations
- Post implementation considerations
SYSPRO uses the following categories of lead time:
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Purchasing lead time
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Subcontract purchasing lead time
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Manufacturing lead time
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Cumulative lead time
Purchasing lead time represents the time it takes in days (including non-working days) from when you recognize the need to purchase a product, to when it is available in your stores to use. SYSPRO uses the lead time of purchased items used in manufacturing to calculate the cumulative lead time of the parent items.
Subcontract purchasing lead time represents the time it takes in days to recognize the need for a subcontract service and prepare the paperwork.
Manufacturing lead time represents the time it takes to manufacture a made-in product (excluding non-working days) assuming all the raw materials are available. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory.
Cumulative lead time represents the longest path in the bill of materials, including raw material purchasing and manufacturing lead time. It is established by reviewing the lead time for each bill of material path below the item; whichever path adds up to the greatest number defines the cumulative lead time.
Within the Inventory module, each stock code has lead time fields.
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When adding a bought-out (i.e. purchased) stock item, you manually enter the purchasing lead time (including non-working days) at the Lead time (days) field.
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When adding a made-in stock item, you ignore the lead time fields as values are calculated when you run the Bill of Materials Lead Time Calculation program. However, you can enter a value at the Dock to stock (days) field as SYSPRO uses this for lower level items (i.e. components) when calculating the lead time of the parent.
Lead time is used when you run the Minimum Quantity Calculation program to establish the minimum quantity required for each stock code for each warehouse.
Within the Bill of Materials module, you use the Lead Time Calculation program to calculate the cumulative and manufacturing lead times of an item and update the relevant fields against the stock item.
When adding an internal operation to a bill of material routing, you enter the values for the different elements of manufacturing lead time. This includes setup time, startup time, run time, teardown time, wait time and move time. In addition, the queue time from the work center against which you define the operation is an element of the item's manufacturing lead time.
When adding a subcontract operation, you enter off-site time, dock-to-stock time and move time. You can also enter lead time, which SYSPRO uses to determine when to raise the subcontract purchase order. This lead time is absolute and therefore not subject to the non-working days ratio calculation.
The following example illustrates how the SYSPRO Lead Time Calculation program calculates the cumulative and manufacturing lead times of an item.
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The Lead Time Calculation program does not use absolute dates to determine non-working days, because what constitutes a non-working day depends on the days and year to which the lead time is applied. SYSPRO therefore calculates a ratio of working days per year as follows:
RATIO = DAYS IN YEAR / (DAYS IN YEAR - NON-WORKING DAYS)
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SYSPRO applies the ratio to the following time fields that are based on the company calendar:
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dock-to-stock (DTS) against a component
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manufacturing lead time (MLT) based on elapsed time of routings
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sum of time taken for all operations against a parent
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SYSPRO does not apply the ratio to lead time (LTD) against a bought-out item because purchasing lead time is absolute.
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SYSPRO adds the lead time defined against a subcontract operation to the MLT calculated up until the start of the subcontract operation. If the result is longer than the total MLT for the item, then SYSPRO saves the result as the MLT for the item. As with the lead time for a bought-out item, subcontract lead time is absolute.
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The Lead Time Calculation program calculates the manufacturing lead time for a subcontract operation as follows:
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Lead time (note that the non-working days ratio is not applied to this) + (dock-to-stock + offsite time * Non working days ratio).
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It becomes the parent manufacturing lead time if it is longer than the manufacturing lead time calculated against the internal operations.
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Our example is based on the following bill of material which is not represented in the sample data:
| BOM Level | Part | Part | Part | Operation Offset | LTD | DTS |
|---|---|---|---|---|---|---|
| 00 | Radially Spoked Rear Wheel | 43 | 0 | |||
| 01 | Phantom | 3 | 19 | 0 | ||
| 02 | A | 1 | 6 | 5 | ||
| 02 | B | 1 | 12 | 5 | ||
| 01 | Small Flange Bicycle Wheel | 1 | 4 | 1 | ||
| 01 | Ball Bearing | 2 | 3 | 0 | ||
| 01 | Steel Rim Bicycle | 3 | 3 | 0 | ||
| 01 | Straight Gauge Spokes | 4 | 3 | 0 | ||
| 01 | Rubber Tubing 1 x 17" | 4 | 2 | 0 | ||
| 01 | Bicycle Tires | 4 | 2 | 0 |
| Op | Work Center | Type | Queue | ET | Move | |
|---|---|---|---|---|---|---|
| 1 | DRILL | Internal | 3 | 1 | ||
| 2 | MBWA | Internal | 1 | |||
| 3 | DRILL | Internal | 3 | 1 | -1 | |
| 4 | MBWA | Internal | 1 | |||
| 5 | GALV | Subcont | 7 | 6 | ||
| 6 | 11 | 5 | Total days required to make 1 parent = 22 |
![[Note]](images/note.png)
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For this example, the non-working day ratio we use is (365 / (365 - 105) = 1.403846.
MLT = TOTAL OPERATION ELAPSED TIME * RATIO
The calculation of the lead time for any part other than a bought-out item (or statistical part which is ignored in the lead time calculation) is performed by calculating the lead time of the component in relation to when it is required by the parent. (i.e. offset within the routing). SYSPRO applies the following formula to each component:
(COMP LTD + (COMP DTS * RATIO)) + (PARENT MLT - (COMP OFFSET * RATIO)
SYSPRO performs these calculations from the lowest level of the structure upwards. Therefore, in this example, we start the calculation with the phantom part.
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PHANTOM PART MLT = 0 (No operations are allowed against a phantom, therefore there is no MLT)
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PHANTOM PART LTD = 19
| Component | LTD | DTS | Offset | Calculation |
|---|---|---|---|---|
| A | 6 | 5 | 0 (Op 1) | (6 + (5 * 1.403846) ) + (0 - (0 *1.403846) = 7 |
| B | 12 | 5 | 0 (Op 1) | (12 + (5 * 1.403846) + (0 - (0 *1.403846) = 19 |
Component B has the longest lead time, so that becomes the lead time of the phantom.
B115 MLT = 22 * 1.403846 = 31
B115 LTD = 43
| Component | LTD | DTS | Offset | Calculation |
|---|---|---|---|---|
| PHANTOM PART | 19 | 0 | 5 (Op 3) | (19 + (0 * 1.403846) ) + (31 - (5* 1.403846) = 43 |
| Small Flange Bicycle Wheel | 4 | 1 | 0 (Op 1) | (4 + (1 * 1.403846) + (31 - (0 *1.403846) = 36 |
| Ball Bearing | 4 | 1 | 4 (Op 2) | (3 + (0 * 1.403846) + (31 - (4 *1.403846) = 28 |
| Steel Rim Bicycle | 3 | 0 | 5 (Op 3) | (3 + (0 * 1.403846) + (31 - (5 *1.403846) = 27 |
| Straight Gauge Spokes | 3 | 0 | 8 (Op 4) | (3 + (0 * 1.403846) + (31 - (8 *1.403846) = 22 |
| Rubber Tubing 1 x 17" | 2 | 0 | 8 (Op 4) | (2 + (0 * 1.403846) + (31 - (8 *1.403846) = 22 |
| Bicycle Tires | 2 | 0 | 8 (Op 4) | (2 + (0 * 1.403846) + (31 - (8 *1.403846) = 22 |
Component PHANTOM PART has the longest lead time against the parent, so that becomes the lead time of the parent.
Before using the Lead Time Calculation program, ensure that you run the BOM Structure Validation program. This is because the calculation aborts if any errors are encountered (e.g. structures with more than 15 levels and parent parts that are repeated as components in the same structure).
In addition, ensure that your company calendar is up to date, as the lead time for a made-in item will vary according to the number of non-working days defined.