The goal of the Replenishment for BOM and Components functionality is to provide a solution to calculate demand for BOM (bill of material) items and then break down the demand to linked components which are purchased and transferred.
This scenario is common in hospitality where recipe or BOM items are sold and there is a need to purchase the Ingredient or Component items to cook, bake, or produce the sold items. This process applies to all item types that use the Assembly BOM concept.
Note: The workflows below are described with hospitality items and terminology, but are not limited to this industry.
Component/Ingredient centric scenarios make use of the Replenishment Template Type Standard and are used to replenish component/ingredient items without recipes.
There are two replenishment approaches:
- Stock level based
- Sales (consumption) based.
Stock level based
This process replenishes component items based on their stock level, using the Replen. Calculation Type of Stock Levels. When the inventory quantity of a component falls below the Reorder Point, a Purchase Order or Transfer Order proposal will be calculated in the Replenishment Journals.
Sales flow
- Customer orders a Meal.
- The Meal is cooked and sold, without using a recipe.
- The user in the kitchen posts the consumption of ingredients regularly, either by
- posting manual Negative Adjustments, or
- doing manual stock counts which will lead to Negative Adjustments.
Replenishment flow
- The Replenishment flow supports the scenarios of Purchase to Warehouse and Transfer to Stores, Purchase to Stores, and Purchase to Warehouse with Cross Docking.
- This process is similar to the standard Replenishment process for non-BOM items.
The Replenishment calculation will consider the Effective Inventory of the item, and depending on the Reorder Point and Maximum Inventory setup, the Replenishment Journal will suggest a purchase or transfer. For more information, refer to Calculation Type – Stock Levels.
Setup for this process
- Replenishment Templates
- Replenishment Journals with Template Type Standard.
- Item
- Field Use BOM/Component Journal in the Replen. Control Data page has to be deactivated.
- Field Replenishment Calculation Type in the Retail Item Card page has to be Stock Levels.
Sales (consumption) based
This process replenishes component items based on historical sales (consumption), using the Replen. Calculation Type of Average Usage. A component is usually never sold, but it is possible to track its consumption over time, similar to the sales history of a generic item. Based on the historical consumption, a forecast can be calculated and used to predict future demand.
Sales flow
- Customer orders a Meal
- The Meal is cooked and sold, without using a recipe.
- The user in the kitchen posts consumption of ingredients regularly, either by
- posting manual Negative Adjustments, or
- doing manual stock counts which will lead to Negative Adjustments.
Replenishment flow
- The Replenishment flow supports the scenarios of Purchase to Warehouse and Transfer to Stores, Purchase to Stores, and Purchase to Warehouse with Cross Docking.
- This process is similar to the standard Replenishment process for non-BOM items.
The Replenishment calculation will consider the Effective Inventory of the item, the Average Daily Sales, and the Coverage Period. The Average Daily Sales is considering sales from the Item Ledger Entry table and also Negative Adjustments. This allows the Replenishment process to calculate demand based on consumption.
Setup for this process
- Replenishment Templates
- Replenishment Journals with Template Type Standard.
- Item
- Field Use BOM/Component Journal in the Replen. Control Data page has to be deactivated.
- Field Consider Consumption as Sales in the Replen. Control Data page has to be activated.
- Field Replenishment Calculation Type in the Retail Item Card page has to be Average Usage.
Note: When Consider Consumption as Sales is activated, Item Ledger Entries of Type Sale, Negative Adjmt., and Assembly Consumption are considered for the sales history to calculate the Average Daily Sales quantity.
See also
Replenishment for BOM and Components - BOM Centric