Recurrency's inventory planning tools support both Order Point/Order Quantity (OP/OQ) and Min/Max replenishment strategies. While Dynamic Min/Max is recommended for most items due to its flexibility and responsiveness to demand changes, there are specific scenarios where using OP/OQ is the better choice. This article outlines when it makes sense to use OP/OQ instead of Min/Max.
1. Fixed Purchase Requirements or Supplier Constraints
If your supplier requires purchases in specific quantities or packaging sizes, OP/OQ allows you to set a fixed Order Quantity (OQ) to match those constraints. This helps ensure compliance with supplier terms while still benefiting from Recurrency's dynamic Order Point (OP) calculations.
Note: This is different from Purchasing UOM’s which Recurrency and P21 purchasing support through conversion.
2. Purchasing in Bulk to Reduce Small or One Off PO’s
If you want to reduce the frequency of your purchase orders by buying in larger quantities, OP/OQ can help. You can leverage Recurrency's dynamic OP values while keeping your OQ aligned with how much you prefer to order at once.
Example: Items like pipe or conduit that are stored in standard lengths may benefit from a fixed OQ. You can configure Recurrency to trigger replenishment dynamically while ensuring you always order, say, 500 feet at a time instead of placing smaller, more frequent orders.
System Notes:
Switching from Min/Max to OP/OQ requires changes in your ERP system (e.g., P21), while switching from OP/OQ back to Min/Max can be managed directly in Recurrency.
Recurrency will still calculate dynamic Order Points for OP/OQ items, ensuring that your reorder points remain responsive to trends even if your order sizes are fixed.
Bottom Line: OP/OQ is a valuable replenishment method for items with specific supplier or packaging requirements, or bulk purchasing preferences. Use it when your order sizes need to remain constant but you still want intelligent, data-driven replenishment timing from Recurrency.
For most other scenarios, we recommend leveraging Recurrency's Dynamic Min/Max strategy for maximum flexibility and responsiveness.
For more information about OP/OQ, check out this article