Requirements

The term "Requirement" when used with respect to the procurement of materials and services for business refers to something that is a requisite to a process, such as stocking sufficient inventory of an item, or building sufficient product quantities. It is also used to mean a document that specifies these requisites, such as for inventory or for production.

In opentaps the term is used to mean information data records that specify what is required, such as inventory or products. These data records must be created in some methodical way, and opentaps provides two different ways to do it:

• Requirements can be created automatically when sales orders are entered into the system if certain specific conditions are detected, such as the number of items on hand will be below a minimum value as a result of the new order.
• Requirements can be created by running the Material Resources Planning application which takes into consideration a full range of considerations including new orders, quantity on hand, planned production runs, sales forecasts and the like.

This discussion points out that Requirements can result from a variety of different business operation factors beyond just new orders, and that different types of Requirements may exist to satisfy several different operating process needs. opentaps supports the following types of requirements:

• Product Requirement: These requirements are for products that are purchased from an external suppliers. When product requirements are approved, they can be aggregated into a purchase order on the Approved Requirements Screen.
• Internal Requirement: These requirements are for products that are manufactured internally. When these requirements are approved, they are automatically converted into a production run.
• Pending Internal Requirement: These requirements are for products which are also manufactured internally, but when they are approved, they do not automatically convert to production runs. Instead, they can be aggregated together into production runs. Internal or pending manufacturing requirements are created by Material Resources Planning based on the choice of the user.
• Transfer Requirement: These requirements are for products which need to be transferred from one facility to another. When they are approved, they can be aggregated into a Transfer Shipment, which can then cause inventory transfers to occur between the facilities.

As we will discuss in the next section of this manual, Requirements can be used in opentaps to further automate the purchasing of needed products if this is desired in your organization and method of business management. Such generated Requirements can be reviewed, revised,and approved or canceled for processing in the Open Requirements Screen.

There are important differences between the two ways that Requirements can be generated, which may determine the one you will want to use in specific situations.

• 1. Creating the Requirements directly from new orders is simple and very automatic, but does not consider a very wide range of factors, and does not lend itself to coordinated revision of existing orders and existing requirements. Consolidation may mean more manual editing. The simple process may be good for business that is itself fairly simple.

• 2. Creating the Requirements by running the MRP application Material Resources Planning is a separate process activity that does consider a full range of business factors including both resale and production demands, and it does lend itself to consolidation of demand for items into the Requirements, and editing of existing orders and Requirements. It is intrinsically more complex which can be very good if your business itself is also more complex. Using MRP means running that functionality at the appropriate times.

Manual pages >> Automating Requirements

What the Fulfillment Management Processes Do << Section pages >> Inventory Processes