Master planning and planned production orders
Master planning acts as the planning engine for Supply Chain Management along with the Production control module.
Master planning calculates what to produce based on general demand, such as:
- Sales orders and sales quotations
- On-hand inventory
- Transfer orders
- Production lines
- Minimum inventory requirements
- Kanban lines
- Projects
Master planning calculates when to produce based on, for example, delivery dates for sales orders, and also calculates how much to produce based on the need to fulfill sales orders, maintain safety stock, and cover requirements that derive from production orders.
Additionally, Master planning calculates the net requirements of what is needed in a production order. Usually, a plan is run as an overnight batch process in most companies so that the list of requirements is updated with changes and additions every morning.
In simple terms, when requirements are not met by current inventory, a planned production order is issued that specifies what is needed and when. This specification provides the planner with an updated picture of what is missing and allows decisions to be made about how to meet these requirements.