SECTIONSHow Re-Order Criteria Work
Re-order criteria records let you replenish an item automatically. When the reorder process runs, it calculates the stock position of the item and compares it with the level on the re-order criteria record. If the stock position is below that level, the process creates a requisition and submits it for approval.
Each re-order criteria record uses one of the following controls:
- Reorder point control: It keeps stock at or above the reorder point level.
- Safety stock control: It keeps stock at or above the safety stock level.
You can create one re-order criteria record for each warehouse that holds the item.
Setting up the Reorder Process
To set up the reorder process for an item:
- Create a re-order criteria record from the item master. For more information, see Setting up Re-Order Criteria.
- Make sure that an active approval process exists for requisitions and requisition line items. The reorder process submits every requisition it creates for approval. If a submission fails, the reorder process doesn't create any of the requisitions in the same batch, not just the one that failed.
- Run the reorder process manually or schedule it. For more information, see Processing Re-Order Criteria.
For a description of each field on the re-order criteria record, see Re-Order Criteria Fields.
How the Stock Position Is Calculated
The reorder process doesn't compare the level with the inventory quantity of the item. Instead, it calculates a stock position that includes supply that is already on its way. The stock position is the sum of:
- The available stock: This is the quantity on available inventory positions, minus the quantity allocated to sales order lines, production order lines, or purchase order lines.
- The quantity still to be received on open purchase order lines of type Item. Purchase order lines with the status "Closed" or "Cancelled" aren't counted.
- The quantity on requisition lines of type Item with the status "Approved".
Only inventory, purchase order lines, and requisition lines that match the warehouse, condition code, and ownership code on the re-order criteria record are counted.
If the condition code or ownership code on the re-order criteria record is blank, only inventory and lines where that code is also blank are counted. For purchase order lines and requisition lines, the ownership code is taken from the purchase order or the requisition, not from the line.
If the Warehouse field on the re-order criteria record is blank, the reorder process uses the default warehouse, which is the warehouse with the Default checkbox selected. If no warehouse, or more than one warehouse, has the Default checkbox selected, the reorder process doesn't create any requisitions for the item, and requisitions for other items in the same batch might not be created either.
To avoid this, select a warehouse on the re-order criteria record, or make sure that the Default checkbox is selected on only one warehouse.
The following quantities aren't counted in the stock position:
- Stock on hold.
- Requisition lines placed on a sourcing request line.
- Requisition lines with any status other than "Approved".
The reorder process creates a requisition only when the stock position is below the level. If the stock position equals the level, it doesn't create one.
How the Order Quantity Is Set
The level that triggers a requisition and the quantity ordered depend on the control selected on the re-order criteria record.
| Control | Level Used | Quantity Ordered |
|---|---|---|
| Reorder point control | Reorder point level |
The fixed order quantity or, if no fixed order quantity is entered, the difference between the reorder point level and the stock position, kept within the minimum order quantity and the maximum order quantity. You can enter a fixed order quantity or a minimum and maximum order quantity, not both. |
| Safety stock control | Safety stock level | The fixed order quantity in all cases. With this control, you must enter a fixed order quantity greater than 0 and you can't enter a minimum order quantity or maximum order quantity. |
The reorder process always submits the requisition and its lines for approval. The Supply Requisition Auto Firm field on the item master doesn't affect this process.
Requisition Line Status and Auto Place PO
A requisition line counts as incoming supply while its status is "Approved". It stops counting when its status changes to "Placed on a Purchase Order". From then on, the quantity is counted through the open purchase order line instead.
If the Auto Place PO custom setting is selected, approved requisition lines are placed on a purchase order automatically. A line is placed on a purchase order automatically only if a supplier catalogue item is found for it. Otherwise, it stays "Approved" and keeps counting as incoming supply. For more information, see Auto Place PO.
If the Auto Place PO custom setting isn't selected, an approved requisition line keeps counting as incoming supply until someone places it on a purchase order manually.
Example
An item has a re-order criteria record with the reorder point control selected and a reorder point level of 50. The minimum order quantity is 10 and the maximum order quantity is 100. The warehouse holds 30 units, and 5 of them are allocated to a sales order line. There are no open purchase order lines.
- With no approved requisition lines, the stock position is 25 units (30 − 5). This is below 50, so the reorder process creates a requisition for 25 units (50 − 25).
- If an earlier requisition line for 30 units is still "Approved", the stock position is 55 units (25 + 30). This isn't below 50, so the reorder process doesn't create a requisition.
Troubleshooting
If you click ReOrder Process and no requisition is created, this usually means that the stock position is at or above the level on every re-order criteria record for the item.
If no requisition was created and you expected one, check the following records and settings:
- Requisition lines with the status "Approved" that are no longer needed. For example, a requisition line whose purchase order is already closed but whose own status is still "Approved". These lines still count as incoming supply.
- Open purchase order lines for an item that you no longer expect to receive.
- The warehouse, condition code, and ownership code on the re-order criteria record. Inventory and order lines that don't match aren't counted.
- Blank condition codes or ownership codes on the re-order criteria record. Only inventory and lines whose codes are also blank are counted. Check the ownership code on the purchase order and the requisition, not on their lines.
- A blank warehouse on the re-order criteria record. Select a warehouse on the re-order criteria record, or make sure that the Default checkbox is selected on only one warehouse.
- Approved requisition lines not placed on a purchase order automatically because no supplier catalogue item was found for them.
- The level on the re-order criteria record. If the stock position is exactly equal to the level, the reorder process doesn't create a requisition. It creates one only when the stock position is below the level.
- The approval process for requisitions and requisition line items. If the reorder process can't submit a requisition for approval, it doesn't create any of the requisitions in the same batch.