Supply Planning in Business Central for Modern Manufacturers, Distributors, and Retailers

Maintaining the delicate balance between supply and demand is a challenge. Overstocking ties up capital and warehouse space; understocking leads to missed sales, unhappy customers, and strained supplier relationships.

Whether you’re a manufacturer managing raw materials, a distributor coordinating product movement, or a retailer planning seasonal inventory, Microsoft Dynamics 365 Business Central’s supply planning tools offer the automation, visibility, and flexibility you need to stay ahead of demand and optimize resources.

What is Supply Planning in Business Central?

Supply planning is the process of ensuring that inventory levels are optimized to meet anticipated demand. In Business Central, this process is powered by built-in planning tools that help users calculate what to order, how much to order, and when to order it.

Business Central provides two primary planning tools:

• Requisition Worksheet – For purchasing and assembly planning.
• Planning Worksheet – For more complex planning, including production orders and transfers.

These tools utilize historical data, demand forecasts, current inventory levels, lead times, and replenishment policies to generate actionable suggestions—such as purchase orders, transfer orders, or production orders—that planners can review and execute.

For an in-depth look at the supply planning parameters in Business Central, read Understanding the Reordering Options in Business Central and When to Use Them.

Core concepts behind Business Central Supply Planning

Understanding the key building blocks that influence how the system makes recommendations is important to fully leveraging Business Central’s supply planning capabilities.

Item Replenishment System

Every item in Business Central can be set up with a Replenishment System, which determines how inventory is supplied:

• Purchase – Buy the item from a vendor
• Production – Make the item in-house
• Assembly – Use a lightweight production process to assemble components
• Transfer – Move stock from another location

Planning parameters

Business Central’s planning engine relies on various settings at the item (or SKU) level:

• Reorder Point – Minimum inventory before replenishment is triggered
• Maximum Inventory – Helps avoid overstocking
• Lead Time – Days required to receive, produce, or transfer stock
• Order Modifiers – Set the Minimum and Maximum Order Quantity and the Order Multiple
• Lot-for-Lot, Fixed Reorder Quantity, or Order Multiple – Policies that determine the quantity suggested

Forecasting and demand

Supply planning in Business Central can incorporate sales forecasts, current sales orders, and production demand, so that you’re not just reacting to today’s needs, you’re also preparing for tomorrow’s.

Action and exception messages

The planning worksheets generate Action Messages such as:

• New Order
• Cancel Order
• Change Quantity
• Change Date
• Change Date & Quantity

These messages guide planners to take proactive steps in adjusting supply plans as demand shifts.

Applying Business Central Supply Planning across industries

Supply planning in Business Central isn’t just one-size-fits-all. Different industries apply Business Central’s supply planning tools to meet their unique needs – from a complex multi-level production order to simple, large-volume production to a hybrid model using both assembly and production orders.

For Distributors: Streamline replenishment and transfers

Distributors often manage high SKU counts across multiple locations, making accurate inventory management a crucial task. With Business Central, distributors can:

• Set up transfer orders between warehouses or branches based on demand and stock availability
• Automate purchasing through the Requisition Worksheet to reduce manual effort and delays
• Use lead time calendars and vendor performance tracking to account for supplier delays

For example, a regional food distributor might use Business Central to ensure that each branch warehouse has the right mix of perishable and non-perishable goods. With lot tracking and shelf-life considerations built in, the system helps prevent spoilage and stockouts.

For Manufacturers: Align production and material availability

Manufacturers must ensure raw materials are available when needed and align with production schedules. Business Central supports this with:

• Planning Worksheets that generate both production and purchase suggestions
• Multi-level Bill of Materials (BOM) planning to account for complex assemblies
• Finite capacity planning through integration with production scheduling tools

Example: A machinery manufacturer uses Business Central to plan sub-assemblies based on confirmed sales orders. The system flags when components are running low and suggests production or purchase orders, helping the plant avoid idle machines and rush orders.

For Retailers: Meet seasonal and store-level demand

Retailers face unique challenges, including high seasonality, short product lifecycles, and store-level stocking requirements. With Business Central:

• Use location-specific planning to adjust stock levels at each store or channel
• Leverage demand forecasting to anticipate trends and create automated replenishment plans
• Adapt reorder policies to high-volume items to avoid out-of-stocks during promotions

Best practices for successful supply planning

To get the most from Business Central’s supply planning tools, consider the following tips:

• Set up items correctly – Ensure all items have accurate replenishment methods, lead times, safety stock levels, and reordering policies. When planning by location, SKU Cards will be created for each Item-Location to handle its unique planning requirements.
• Review planning worksheets regularly – Treat planning as a daily or weekly habit to respond to changes in supply or demand conditions.
• Use forecasting wisely – Start with simple forecasts and refine them over time. Business Central allows manual or Excel-imported forecasts, or you can integrate with AI-driven tools to generate future forecasts based on historical usage.
• Train your team – Even the most powerful tool can be underused if teams aren’t confident in how to use it effectively.

Utilize the strategic advantage of smarter supply planning

Modern supply chains are volatile. From global disruptions to local demand shifts, businesses must be ready to respond quickly and intelligently. Microsoft Dynamics 365 Business Central equips companies with the tools to make data-driven planning decisions that minimize costs, reduce manual effort, and improve service levels.

With powerful supply planning capabilities baked into the core system, Business Central helps organizations of all sizes and industries turn inventory into a strategic asset rather than a liability.

Contact ArcherPoint by Cherry Bekaert to help you optimize your Business Central supply planning.

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