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Bill of distribution

By Anonymous - Posted on 06 February 2012

The bill of distribution (BOD) specifies how a product is further distributed within your enterprise following inward delivery from the supplier before being passed on to the customer. The concept is similar to the way BOM links component items to their assembly parents. In case of BOM when a demand is posted on a parent assembly item the MRP processor references the assembly’s BOM & explodes the requirement through the product structure, placing demand on the component parts. In case of BOD the structure had been designed to facilitate the transfer requirements from the components (the satellite warehouses) to the parent (the supplying warehouses).

This structure is  often called as an inverted BOM performs an implosion whereby requirements are passed up the structure rather than down. A BOD can be configured exactly to match a variety of channel inventory flows, E.g. not all items may be stocked in every warehouse. Again a mixture of products might be sold to the customer from central warehouse or from several regional or even local distribution points.

For DRP implosion to work effectively the proper BODs must be structured to details the flow of each product in the distribution channel.

The DRP & MRP system interface at the master production schedule level. The forecast of product demand filtered through the distribution plan, should be the major contributor to the master schedule. The master schedule can check distribution capacity as part of the rough cut capacity planning feasibility check.

Safety Stock and DRP

  • When there is more uncertainty in terms of timing, then it may be better to use safety lead time. A safety lead time is “an element of time added to normal lead time to protect against fluctuations in lead time so that an order can be completed before its real need date. When used, the MRP system, in offsetting for lead time, will plan both order release and order completion for earlier dates than it would otherwise
  • When the uncertainty is in quantity then safety stock may be better.
  • Carry safety stock where there is uncertainty (near the customer).



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