How to do Advanced Production Planning and Scheduling in Business Central
In today’s business world, mid-size manufacturers are launching modernization efforts to make a digital transition, and find more utilization and operational profitability. A recent 2021 LNS Research survey shows how almost all manufacturers or process operations are creating “Industrial Transformation (IX) teams that provide a coordinated approach in leveraging technologies to create step change improvement in industrial operations.”
As digital transformation gains traction, manufacturers are turning to Microsoft Dynamics 365 Business Central’s Manufacturing Module. The base module features a robust planning engine with advanced planning parameters to execute Master Production Scheduling and Material Requirements Planning. No separate extensions are needed.
Business Central’s Manufacturing Module Optimizes Planning
In order to configure an item for replenishment, you must first set it as a Production or Purchase Item. For Production Items, you have the ability to build and assign Bill of Materials (BOM) and Routing. You may set a Production Item to be either Make-to-Stock or Make-to-Order. For Purchase Items, you can designate the primary vendor as well as secondary ones, while specifying typical lead times per Vendor.
Next, you can specify Replenishment parameters that will tell the Planning engine when and how much to replenish inventory. There are four primary options:
The first two are fixed order and maximum order quantity strategies that contend with managing inventory levels, such as raw materials. For these two options, Business Central’s planning engine looks at the top level and proceeds downward when it plans. With fixed order, for example, the system’s planning engine will deliver a signal to replenish when an inventory level dips below 100. From there, the module will order a fixed quantity to replenish supply.
Maximum order quantity is another option and many ERP systems do not offer this option. Here, you set the minimum and maximum inputs, and the system will maintain an inventory level between the two.
The Item Card also offers order-for-order and lot-for-lot replenishment options. With order-for-order and lot-for-lot, there is a direct connection between supply and demand. The latter two planning options offer the ability to keep a limit on your supply chain, even for non-inventory items.
Business Central keeps adding features in the planning area. Recently, Microsoft added a new feature that offers the ability to set material and routing around Stockkeeping Unit level (SKU). SKUs are an extension of items that allow you to set planning parameters for both Location and/or Variants. At the Location level, that means if you have geographically dispersed warehouses that have varying inventory requirements, you can set it based on the specific location.
Advanced Scheduling in Business Central
The essential takeaway with planning is to produce accurate master data and make sure supply is equal or exceeds demand based on your company’s policy, so advanced scheduling can work. In Business Central, advanced production scheduling is executed within the Planning Worksheet. The Planning Worksheet uses the Master Production Schedule (MPS), Material Requirements Planning (MRP), or it can calculate both at the same time.
MPS is the calculation of a master production schedule based on actual demand and forecasted demand. The planning algorithm always starts with executing MPS to identify Sales/Forecast Demand to drive Production Orders.
MRP is the calculation of material requirements based on actual demand for components and the demand forecast on the component level. MRP is calculated only for items that are not MPS items. The purpose of MRP is to provide time-phased formal plans, by item, to supply the appropriate item, at the appropriate time, in the appropriate location, and in the appropriate quantity. Most industry experts insist that MPS and MRP work together in Business Central
According to Microsoft, the planning algorithms used for both MPS and MRP are identical. The planning algorithms pertain to netting, reuse of existing replenishment orders, and action messages.
At the heart of Business Central are action messages that suggest a new order, change an order – quantity or date – or cancel an order already on order. Order refers to purchase orders, assembly orders, productions orders, and transfer orders.
Business Central’s manufacturing module is a powerful tool for all types of mid-size manufacturing applications. As with many other types of advanced software, solid business processes go a long way to ensure success in managing and producing finished goods.
Learn More about Manufacturing in Business Central
Digital transformations are here. ArcherPoint’s manufacturing subject matter experts can help you optimize your planning and production in Dynamics 365 Business Central’s Manufacturing Module.