In my previous role as a raw material / production planner working for a chemical company, we were almost entirely reliant on running our planning processes using spreadsheets, with a little bit of help from Min/Max replenishment reports generated by our then-ERP system. It was hit and miss, reliant on well-disciplined and conscientious planning staff, made it difficult to cover a colleague’s role, and was incredibly labour intensive. Our company then began their search for a new ERP system, and it was at this point that I became familiar with AX, and more importantly Master Planning.
Master Planning is AX’s implementation of an MRP, or Material Requirements Planning module. It allows replenishment of products to be controlled in a variety of ways, ranging from creation of suggested orders all the way through to fully automated replenishment. It allows for forecasts to be used and fed into the overall plan. It allows for minimum stock levels to be reviewed, and new figures suggested based on a number of available calculations.
Master Planning is a very powerful tool, but it is also often overlooked due to concerns over its complexity. Master Planning should not be feared (in fact it should be embraced!), and to my mind is one of AX’s greatest assets; a powerful planning system which, if implemented correctly, can increase operating efficiency, freeing up staff to focus on other more critical areas of operation. With the latest version of AX, Master Planning is now more powerful than ever before.
So what are the basic principles behind Master Planning? Every released product needs to have a number of basic settings defined, usually at a number of different levels, with the usual approach within AX to define a rule at a top level, and then exceptions at a lower level. The more common settings used are:
- Default Order Settings – what is the normal type of order used to replenish this item? Purchase Order, Transfer Order, Production Order. Any rules around minimum, maximum, multiples or standard order quantities? Should there be a default site where replenishment always occurs regardless of where the demand is?
- Site Specific Order Settings – same as Default Order Settings but here exceptions from the rules created above can be defined on a site by site basis
- Item Coverage – how AX should create planned orders based on any grouping defined. Should each demand it finds result in a unique planned order? Should it consolidate all demand in a given time period into a single planned order? Should any minimum or maximum stock levels be maintained at all times?
The system will also, subject to configuration, reference trade agreements, purchase agreements, and approved vendor records to help it understand the correct supplier, pricing (if replenishment is defined as a purchase order) and lead time.
Once these settings have been defined, the system runs a periodic process known as Master Scheduling. This is usually run overnight to maximise system performance and because it is a very complicated calculation (or a number of complicated calculations) that can take hours to complete depending on the complexity of the set-up.
The output of Master Scheduling is the Master Plan. Depending on configuration and some of the settings defined in Item Coverage, this will result in either a set of planned (purchase, transfer, production) orders for a planner to review and approve as required, or pass through this phase automatically resulting in fully approved orders, ready to go, in their respective modules. In most cases a variety of settings will be used as most companies will want at least some of these planned orders to be reviewed prior to “firming” (the process of turning a planned order into an actual order).
Further information on MRP is available through a variety of sources ranging from Microsoft’s Technet, the new Dynamics AX Wiki, some good white papers, and literature from Microsoft Master Planning courses.
About the author
David has worked in a variety of roles across Supply Chain in the 15 years prior to joining HSO – Customer Services, Transport Planner, Logistics Manager, Raw Material / Production Planner, and Buyer. David is a Member of the Chartered Institute of Purchasing & Supply (MCIPS).