The EDC defines the time period for which the requirements are combined into a procurement quantity as part of MRP. The EDC is therefore used for order quantity calculation and lot sizing. Requirements can result from customer orders, dependent requirements from production orders or planned values. The EDZ has a considerable influence on the stock level and is often the cause of excessively high stocks.
The higher the EDZ selected, the higher the procurement quantities and the higher the ranges. The EDC also has a significant impact on administrative expenses in purchasing and production control as well as operational expenses in logistics and production. The shorter the coverage period, the higher the number of procurement processes and therefore the number of order and production order items as well as changeover processes and goods receipts.
Our tip:
Check your cover periods. It is not uncommon for the time period to be set too long, for example, so that the material in question does not appear on the table or screen again so quickly (quarters or half-years are not uncommon). Base the coverage period on target ranges or stock turnover figures. The formula for this could be: EDZ = target range – safety stock/consumption. If you are aiming for double-digit stock turnover, you should choose stocking periods of less than 4 weeks. If you want to know the exact relationship between the coverage period and the inventory level in your company, you can use the simulation tools from Abels & Kemmner.
