Microsoft Dynamics 365 in Distribution: Master Planning

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Microsoft Dynamics 365 Finance and Supply Chain (D365FSC) is Microsoft’s premium business application suite, and is purpose built for modern distributors combining world-class Azure technology and infrastructure with best practice business processes, and fully integrated analytical reports. Dynamics 365 can relieve the pains that are very common within the distribution space. Manufacturers and distributors have begun to rely heavily on master planning to understand how their organization can best manage having the correct inventory and materials at the correct time in the correct place.

About Dynamics 365 Master Planning

The master planning engine within Dynamics 365 is extremely powerful. The solution allows organizations to understand the future needs of their customer base and plan for those demands accordingly. Master planning evaluates what inventory is currently available, as well as what plan purchases, transfers, and production orders are needed to fulfill or meet that demand.

Those demand sources can include things like sales, quotation, sales orders, sales forecasts, safety stocks, transfers, and production orders. Dynamics 365 (D365) allows for three major planning processes, including master planning, forecast planning, and intercompany master planning. Within those supported processes, organizations can run regenerative, net change, or both. Regenerative plans update all requirements, while net plans only update the plans on items with new requirements that have come in since the last master planning run.

How to Use Marking in the Master Planning Workspace

Let’s take a quick look at the master planning workspace that sits within D365. The system allows for both static and dynamic master plan runs for both short and long-term planning.

Once the system runs, it generates recommended transactions in order to meet and fulfill demand. D365 utilizes inventory marking, which links supply and demand. It is similar to pegging, which indicates how master planning expects to cover that demand. Marking is essentially a more permanent form of pegging.

In the bottom pane, the system has organized the recommended plan purchase transfers and production orders into categories by statuses. As you can see, the statuses are urgent, delaying sales, delaying forecast, and delaying safety stock. Each of those identify the urgency or priority in which these planned or recommended transactions should occur. A planner can drill into the recommended transaction to see where the demand is coming from and why the system recommends it.

In this case (see the video above), the demand is coming from a sales order, transaction 1346. When/if the planner decides to firm the plan transaction, they’ll have options of how to handle the marking. The options include no marking, standard, where marking is updated based on the pegging, or extended, where both the demand and the supply are marked no matter the quantity on the supply order.

Once the order is firmed, then it becomes a live transaction instead of a recommended transaction. Of course, there are ways to include automation, rules, and criteria as part of these master planning runs.

Planning Optimization Add-in

Microsoft has started releasing new functionality for master planning called the planning optimization add-in. Planning optimization add-in allows for master planning calculations to occur outside of Dynamics 365 and its associated SQL database. Planning optimization functionality improves performance and minimizes its impact on the SQL database during master planning runs.

Historically, organizations would run master planning during off hours or overnight, but with this planning optimization functionality, the master planning wouldn’t impact the database or affect the performance of the ERP solution. As such, quick planning runs can be done even during office hours, allowing planners to react with agility to changes in demand.

Stay tuned for more content on the planning optimization add-in feature.

Have any questions about master planning in Dynamics 365? Please contact our distribution industry experts at any time!

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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