| # Purchase lead time calculation An important task of Enterprise Planning is to calculate and plan order start dates and order finish dates. One of the dates Enterprise Planning calculates is the lead time for purchased items. Dependent on the situation, Enterprise Planning uses one of the following three methods to calculate lead times for planned purchase orders: Based on order-specific purchase data. Based on the calculated lead time. Based on the supply time. The method that LN uses is determined by the supplier that LN selects to deliver the ordered goods. LN selects the supplier according to the priority rule that you defined in the Supply Strategy (cprpd7120m000) session, and is also based on the priorities that you specified for the eligible supplier in the Items - Purchase Business Partner (tdipu0110m000) session. The Lead Time Horizon (Days) field in the Items - Purchase Business Partner (tdipu0110m000) session determines the method that LN chooses to compute lead time for planned purchase orders. The function of the lead time horizon is comparable to that of the fixed lead-time horizon that you can set for planned production orders. Purchase lead-time calculation based on order-specific purchase data If the finish date is within the lead-time horizon, and LN finds a valid supplier, LN first calculates the interim finish date, which is included in the purchase order sent to the selected supplier. The lead-time components that LN uses to calculate this date, and the sessions from which it retrieves these data are: Items - Planning (cprpd1100m000). Items - Ordering (tcibd2500m000). Warehouse - Item (whwmd2510m000). Next, LN calculates the final finish date, for which it uses the following data: Warehouse - Item (whwmd2510m000). Items - Purchase Business Partner (tdipu0110m000). Finally, LN computes the exact order start date based on supplier-specific data. The specific lead-time components that LN uses and the sessions in which they are defined are: Transport time: LN calculates the transport time based on the distance between the ship-from business partner address, and the address of the receiving warehouse business partners, distance tables, and carrier. Business partner supply time: Items - Purchase Business Partner (tdipu0110m000). Internal processing time: Items - Purchase Business Partner (tdipu0110m000). Purchase lead-time calculation based on calculated lead time If the finish date of the planned purchase order is outside the supplier's lead time horizon, LN computes the order start date based on the calculated lead time, which is the rough purchase item lead time. LN offsets the calculated lead time from the finish date to find the start date. The calculated lead time is the sum of the following lead-time components: Internal processing time ( Items - Purchase Business Partner (tdipu0110m000). Business partner supply time ( Items - Purchase Business Partner (tdipu0110m000)). Transport time (based on the distance between the ship-from business partner address, and the address of the receiving warehouse business partners, distance table and carrier. Business partner safety time ( Items - Purchase Business Partner (tdipu0110m000)). Inbound lead time ( Warehouse - Item (whwmd2510m000)). Next, LN computes the finish date by offsetting the business partner safety time and the inbound lead time from the requirement date. This is necessary because these two lead-time components must be excluded from the supplier's planned receipt date. Purchase lead-time calculation based on supply time If LN cannot find a valid supplier for the purchase order, or if the supplier that LN selects has no capacity left, it plans the order without a supplier. In this situation, the only purchase-related lead time component LN uses is the supply time that you defined in the Items - Purchase (tdipu0101m000) session. This is a substitute for the more specific lead-time components such as internal processing time, business partner supply time, transport time, and business partner safety time which LN uses if it cannot find a valid supplier for the purchase order. Related topics Cumulative order lead times and horizons To compute supply lead-times Lead times and horizons |