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Planning > Planning with shelf-life

Planning

Planning with shelf-life

13/12/2010

Author: Jan De Bock

1. Introduction

One of the most distinctive factors to consider in food production planning is the limited shelf life of products. Shelf life restrictions directly influence scrap rates, out-of-stock rates and inventory levels. Furthermore, the strict customer requirements concerning the minimum remaining shelf life have an important influence on production planning.
The provision of considering shelf life in planning is therefore a crucial function in the MRP tool of the EPR system for the food industry.
 
2. Planning with shelf-life

Most APS systems (Advanced Planning Systems, e.g. SAP APO) offer a solution to cope with shelf life during planning. However, the basic MRP algorithm that is incorporated in the most common ERP systems has no ability of considering shelf life during the planning run. Because of this ‘lack-of-functionality’ the food customer needs to monitor the effect of shelf-life expiration very closely with limited support of their ERP system.
A typical shelf-life related problem that can occur when using the basic MRP algorithm is a backorder situation as illustrated in fig. 1. At the moment a certain batch of stock expires, the stock is not available for MRP. In case the replenishment of the product takes longer then the committed delivery date towards the customer, a backorder situation takes place.

 
Fig1: backorder situation


 
Within the SAP FAST-Food™ solution, the MRP algorithm was given more intelligence by adding the knowledge of shelf-life to the algorithm. By adding a special function before the calculation of the replenishment by MRP, the system incorporates remaining shelf-life and creates the situation where it is possible for MRP to anticipate on shelf-life related back-order situations.

Access to the remainder of this article is reserved for members of the FAST-Food community (continue reading here).

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