Infor M3 Item Planning Parameter Worksheet: Safety Stock and Reorder Point
Before you load planning parameters into M3, you need a defensible safety stock and reorder point per item and warehouse. This worksheet computes both from demand variability, lead time and your target service level, and gives you a table ready for Excel.
| Item number | Warehouse | Planning method | Average daily demand (units) | Std dev of daily demand (units) | Lead time (days) | Service factor (Z) | Safety stock | Reorder point | Order multiple | |
|---|---|---|---|---|---|---|---|---|---|---|
75 | 635 | |||||||||
53 | 473 | |||||||||
11 | 67 | |||||||||
258 | 1,458 | |||||||||
23 | 158 |
Safety stock uses the standard formula Z x sigma x sqrt(lead time) and assumes independent daily demand and a fixed lead time. Load the resulting values into the item warehouse planning fields in your own test environment, and review items with lumpy or intermittent demand separately.
Recalculate planning parameters from live M3 data
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How to use the worksheet
Add one row per item and warehouse. Enter average daily demand and its standard deviation from your history, the replenishment lead time in days, and a service factor. The worksheet calculates safety stock and reorder point and totals the safety stock so you can see the inventory investment. Export to Excel and use it as the source for a data load or a review with the planners.
- Use at least 6 to 12 months of demand history
- Match the lead time to the real supplier or production time
- Pick the service factor by item class, not one value for all
The method
Safety stock is Z times the standard deviation of daily demand times the square root of lead time in days. The reorder point is average daily demand times lead time plus the safety stock. Z comes from the normal distribution: about 1.28 for 90 percent, 1.65 for 95 percent and 2.33 for 99 percent cycle service level. The result is rounded up to whole units.
Using the results in M3
In M3 the item warehouse record holds planning values such as reorder point and safety stock, and the planning method decides how they are used. Reorder point items trigger when balance falls below the point, while MRP planned items use safety stock inside the net requirements calculation. Review the output by planner before loading, and avoid applying a formula to items with sporadic demand.
Frequently Asked Questions
Which service factor should I use?
Use higher values for critical or long lead time items and lower values for cheap, quickly replenished items. A common starting point is 1.65 for 95 percent, then adjust by ABC class and the cost of a stockout.
Does this work for MRP planned items?
Yes for the safety stock value, which MRP uses when calculating net requirements. The reorder point is mostly relevant for items planned by reorder point, but it is still a useful check on cover.
What if demand is intermittent?
The normal-distribution formula assumes steady demand. For intermittent items use a different approach, such as a service-based fixed quantity or a forecasting method designed for sporadic demand, and review manually.
How often should I recalculate?
Review at least quarterly and after major demand or supplier changes. Lead times and variability drift, and stale parameters are a common cause of both stockouts and excess stock.
If you want planning parameters recalculated regularly from your M3 history instead of by hand, we can discuss a read-only analysis agent.
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