Material Requirements Planning

If you build what you sell, the hard question is never what do I need — it's when do I need to start. A finished product due in six weeks means its sub-assembly is due in four, and the raw material that goes into that had to be ordered last Tuesday. Work that backwards by hand, across a few hundred parts, and the answer is out of date before you finish.

Material Requirements Planning does that arithmetic. One run reads your demand, opens up every recipe underneath it, subtracts what you already hold and everything already on its way, and hands back dated suggestions: make this, buy that, move the other — and start each one on this date.

The organising idea is that a plan is a proposal, not a commitment. A planning run creates nothing real. It produces planned orders, which are suggestions you can edit, ignore, or throw away by running the plan again. They become real purchase orders, manufacturing orders and transfers only when you deliberately carry them out. That is what makes the plan safe to run as often as you like.

Start here

If you're setting this up for the first time, work in this order:

1. Set item planning policies — how each item should be planned: made or bought, in what order sizes, with how much lead time and safety stock. The engine plans nothing for an item with no policy, so this comes first.
2. Run a planning cycle — choose the horizon and what to include, then start the run.
3. Read the time-phased plan — the period-by-period view behind every suggestion, and the one screen worth learning properly.
4. Work the exceptions inbox — the prioritised list of what needs attention, including anything that can no longer arrive in time.
5. Carry out planned orders — turn the suggestions you trust into real orders.

Read How a planning run works once before you rely on the output. It explains netting, the order parts are planned in, and why a suggested start date can land in the past — the behaviours that otherwise look like mistakes.

Working the plan

• Firm and pin a planned order — hold a quantity or a date so the next run stops moving it
• Trace why an order exists — follow a suggestion back to the customer order or forecast that caused it
• Compare two runs — what changed between yesterday's plan and today's

Driving demand in

• Build a master production schedule — state what you intend to build, independently of customer orders
• Import MPS entries and planning policies — load either in bulk from a spreadsheet
• Plan replenishment across warehouses — the transfer lanes that decide where a warehouse is resupplied from

Checking the plan is achievable

• Check capacity — whether the hours the plan implies fit the hours you have
• Promise a delivery date — what you can commit to for a specific quantity, from stock or by building it

Reference

• Planning policy settings — every setting, what it does, and which lot-sizing rules use it
• Action and exception messages — the six message types and what each one is telling you
• Exports, imports and permissions — what you can get out, what you can put in, and who is allowed to do it

Related

• Create a recipe (BOM) — the recipes a planning run opens up; an item planned as Make needs an active one
• Build with a manufacturing order — what a carried-out Make order becomes
• Handle component shortfalls — what to do when the parts for a build aren't there
• Forecast and replenish stock — sales-based replenishment for what you buy rather than build, and the better tool when there's no recipe underneath