The coverage codes in D365 determine, among other things, how the requirements from different order types are covered. A distinction must be made between three different main procedures.

Manual

Manual management is used when material management is not required. This can be, for example, external management or specially monitored components.

• Manual

Demand-oriented

Materials are reordered from various orders based on actual demand or planned requirements. → This can be extended with a safety stock.

• Period
• Requirement
• Priority (DDMRP)

Stock- oriented

Stock materials are reordered based on predefined stock levels, regardless of direct demand.

• Min./Max.
• Priority (DDMRP)

Production companies that want to evaluate and manage items according to the ABCXYZ methodology have long been limited with Dynamics (AX, F&O), especially for X items. Items with constant consumption are usually regulated and replenished exclusively via stock levels regardless of any impact of direct demand. Min./Max. management is problematic, as the reorder point could not be displayed until now. As a consequence, with the Min./Max. variant, the minimum is misused as a “reorder point” and not as what it should actually be, a minimum. Another variant is the use of Period in connection with a safety stock level (minimum). This means that a kind of sawtooth principle is achieved by means of the periodic grouping of demands. However, the timing of the safety stock is very problematic and leads to many undesirable effects in replenishment.

The hope for these problems lies in the new Priority functionality. According to Microsoft's documentation, the functionality can also be used without the direct prioritization of orders. This would allow the long-awaited sawtooth principle to be implemented. In a larger test with the new functionality, discrepancies and questions have arisen in the basic functionality of the new Reorder Point field.

Issue 1 – Requirement date vs. Planned order date

The reorder point is reached at a specific date. The expectation is that the coverage of the shortfall is set to the corresponding date the reorder point is detected on the time line. The system calculates the planned order on the principle of today + procurement time (Default PLOP). This means that regardless of when the reorder point is reached, the system sets the coverage using planned receipt to today + procurement time. The consequence is that procurement takes place too early. The expectation is that the planned receipt is set at the time when the reorder point is reached.

Issue 2 – Maximum Value

It is not uncommon for planned issues to be set far into the future based on forecast planning. Regardless of which maximum value is set, the system creates the first planned receipt according to Issue 1 with the necessary quantity to cover all future requirements. The maximum value is not taken into account. This is simply not effective. The consequence of this is that too much material is procured too early instead of allowing the planned orders to be created using the sawtooth principle. The expectation is that the first requirement will be covered by a replenishment up to the maximum value and the next replenishment at a later date when the next reorder point is reached.

To summarize, it can be said that a simple sawtooth management system is already in place. A new coverage code would have to be defined, where only the settings Min. ROP and Max. pull. The replenishment lead time must be subtracted from the ROP so that the corresponding order time can be calculated. Taking into account the maximum stock level, automated stock-oriented management can be achieved in this way. This has long been standard practice in manufacturing companies.