Introduction

20 minutes

The Master planning workspace and module, allows companies to determine and balance the future need for raw materials and capacity to meet company goals. Master planning assesses the following information:

The requirements to complete production, transfers, and purchases
Current availability of materials
What is needed to meet company goals, such as which materials must be manufactured, purchased, transferred, or set aside as safety stock

Master planning uses information from many different areas of the system to determine how much of each item you must purchase and by what date you must purchase the inventory (based on lead times in Dynamics 365 for Supply Chain Management) to fulfill the item requirements on time.

By using master planning, you can:

Demand from existing sales orders - Sales orders are one of the primary sources of information for deriving purchasing requirements. Depending on your type of business, this might drive direct purchases for distributed goods or direct purchases for raw materials that are required to assemble or produce another item.
Demand from existing sales quotations - You can optionally select to include sales quotation information in the estimates that are formed for the planned purchase orders in the master planning output. This can be especially useful in make-to-order scenarios or scenarios where products have a longer lead time.
Estimate the forecast - You can use demand or supply forecasts in Supply Chain Management to estimate how much of a product you'll require during a specific time period. Master planning can then use this information to derive planned purchases for direct distribution or production scenarios.
Demand for upcoming production - When you use Master planning to plan your production, the bill of materials (BOM) defines the products that are required to make a finished product. These requirements can derive demand for you to purchase more raw materials to fulfill the production requirements.
Demand to meet safety stock levels - You can optionally configure safety stock for key items in your warehouse to ensure that you always have a certain amount on hand. When your inventory levels fall or are expected to fall below the safety stock level that you have defined, Master planning generates purchases for these items to bring the on-hand level in your warehouse back up.
Demand to meet minimum stock levels - You can optionally define minimum and maximum levels for items in your warehouses, which will drive the requirements to keep a certain amount of an item in your warehouse.

Master planning calculates requirements and results in the generation of planned orders. The Master plan calculates net requirements. It's based on actual current orders and enables companies to control inventory replenishment on a short-term, daily basis. Another term to describe it's the "Net requirements plan."

Companies can change the output of the plan. They can run regenerative or net change or both. Regenerative plans update all requirements, whereas, net change plans only update the plan on items with new requirements that have come in since the last master planning run.

The main purpose of running master planning is to calculate how the company can best meet the requirement of having the correct material, at the correct time, by using the correct resources in the correct place. You can do this by exploding the demand and calculating the net requirements of products and resources. To do this, master planning collects all relevant information based on a master plan's parameters settings that are collected from other modules in Supply Chain Management, such as inventory transactions from a sales order or purchase order, whether to include sales quotation probability or not, and many more.

Using master plans

Due to the speed at which the system is able to process master planning, you can set up as many plans as you like and run them as often as needed to fit your business requirements. For example, it's possible to run a plan twice a day to always keep with the latest demand and supply and to have other plans for different forecasts or simulations.

If you use capable to promise (CTP) for Planning Optimization, it runs the plan specified as the Current dynamic master plan fields on the Master planning parameters page (Master planning > Setup > Master planning parameters).

Example

For short-term planning, whether daily, weekly, or even monthly, consider using a dynamic plan to stay up to date with changes in daily operations, such as min/max requirements to ensure that the created safety stock journals cover the requirements for available items on hand.
For long-term plans, yearly, you need to set longer safety margins to protect against unforeseen circumstances, such as dealing with vendors who didn’t deliver the goods as promised.

Based on parameters that you set, Master planning checks on-hand inventory and factors in all sales orders (including sales quotations, if they're included in the Master plans setup), inventory transactions, purchase orders, and previously planned production orders. Then, Master planning creates a new planned order, if you selected regeneration when you were running a plan. It can also update the existing plan with Actions and Calculated delays.

You can also set up the starting dynamic plan so that it's updated with the new requirements plan every time that you run master planning. You can specify these settings on the Master planning parameters page.

Master planning > Setup > Master planning parameters

Maintain planned orders

You can manage planned orders from the Master planning workspace, the Planned order list, or the Planned production orders, Planned purchase orders, and Planned transfer lists. You can use the Status field to help track your progress. The following values are used:

When master planning generates planned orders, the planned orders have a status of Unprocessed.
If you decide not to firm a planned order, you can give it a status of Completed.
When you decide to firm a planned order, you can give it a status of Approved. This status indicates that you approve firming of the planned order, but it isn't firmed yet.

Note

An approved planned order is transferred, in its current state, to the next master planning calculation.

You can firm planned orders by selecting Firm. You can firm the following planned orders:

The planned order that is selected
Multiple planned orders
Planned orders that are generated by an explosion from the Explosion page. Select Planned orders, select the planned order, and then select Firm.

When a planned order is firmed, orders are created based on the reference type of each order, such as Purchase, Production, Kanban, and Transfer.

Forecast planning

To plan, companies must have a good estimate of future demands. In most companies, this estimation or projection is performed by a forecasting technique.

Forecasting in Supply Chain Management provides a starting point for assessing upcoming product demands (gross requirements) and helps companies take steps that meet realistic demands over time.

Forecasting in the master plan helps determine demands for materials and resource capacity that will affect the financial future of the company. The forecast provides an estimate of the prospective sales of finished goods and trade goods.

Intercompany master planning

The intercompany master planning process in Supply Chain Management is streamlined by using relationships between companies and their respective master plans. Planners can account between both supply and demand resources that are supplied across multiple companies. For configuring master planning, you must create batch linked batch jobs in the respective companies for running their master planning.

Some important features in intercompany master planning include the following:

Ability to explode product requirements throughout a set of companies in a series of master planning runs.
Flexibility to create connected demand and supply between companies not only for the firm (committed) demand in the short term, but also for planned long-term demand and supply.
Ability to create purchase and sales orders based on cross-company demand.
Ability for intercompany planning groups to participate in master plan integration. This lets intercompany master planning for some, but not all, companies in an instance.
Ability to view a comprehensive supply schedule page for increased visibility in the supply chain.