Short and sweet: Fixed Lot Size 

Prof. Dr. Andreas Kemmner

The “fixed lot size” is a lot-sizing procedure in which a production order or a purchase order to suppliers contains the production or order quantity defined in the fixed lot size. If the material requirement is higher than the fixed order quantity, then as many orders are triggered until the material requirement quantity is reached or exceeded. For example, with a fixed lot size of 25 and a requirement of 60 pieces, 3 orders of 25 pieces each are triggered.

The “fixed lot size” is mainly used when technical or organisational restrictions require it. For example, certain technical processes demand that production is carried out with a certain batch size or packaging quantities on pallets suggest a certain fixed batch size.

Our hint:
The mechanism of the “fixed lot size” seems simple, but is handled differently in different ERP and planning systems, e.g., with regard to the consideration of production scrap. Before working with this lot-sizing procedure, you should therefore understand how your planning system works at this point.

In order to comply with packaging or transport units in a production or purchase order, it is often cleverer to use a different lot-sizing procedure, such as a coverage time, and to set a rounding lot size (lot-size increment). Instead of several production orders, which may all have set-up times and set-up costs, one production order is created in this case, which is closer to reality.

The “fixed lot size” can be an interesting way to set up a pseudo kanban mechanism without it having to be specifically mapped in the planning system. In this case, each production order or purchase order at the recipient is interpreted as a kanban card.

Prof. Dr. Andreas Kemmner

Autor | Author

Prof. Dr Kemmner has carried out well over 150 national and international projects in over 25 years of consultancy work in supply chain management and reorganisation.

In 2012, he was appointed honorary professor for logistics and supply chain management by the WHZ.

The results of his projects have already received several awards.

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