Master planning considerations and setup

This unit provides an overview of the main considerations, prerequisites, and setups that are necessary for using the Master planning module. It also contains a summary of the ways in which master planning results are handled.

The following figure illustrates the interaction of information that affects master planning in Supply Chain Management and provides a brief list of the resulting output.

Master Plans in and out

Use forecast planning

One of the first considerations that a company should take is assessing whether forecast planning must be used, because forecast planning is run before you run master planning. Alternatively, a master plan can include a forecast plan.

To include a forecast plan, the company must consider the extent to which it can forecast future orders. If orders can be forecasted with relative accuracy, the Forecast planning process can make sure that all items are purchased and produced when it is necessary, and ensure that enough capacity is available at the appropriate time to meet the delivery dates.

The ability to accurately forecast material and capacity needs can also help in the negotiations of pricing and terms (trade agreements) with vendors.

One or two-master plan strategy

Companies can set up master planning to operate with either a one or two-master plan strategy. The two-master plan strategy uses two independent plans: the static master plan and the dynamic master plan. Whether a company operates with one or two master plan strategies depends on how it deals with order simulations in relation to its daily operations.

With the ability to run fast dynamic plans, companies can quickly respond to market conditions.

Item coverage settings

When setting up master planning, a business must also consider how it handles the level of inventory it maintains. How the inventory is handled influences choices about coverage planning parameters for the master planning process.

Additionally, when setting up master planning, companies can consider inventory levels of each item individually, based on item characteristics that are important to their business. For example, you can manage inventory by stocking certain items or change the default order to production, transfer, or Kanban orders.

Master planning uses item coverage settings to calculate item requirements.

Coverage group

You can create a coverage group that contains settings for all products that are linked to the coverage group. Select Master planning > Setup > Coverage > Coverage groups to create a coverage group.

You can link a coverage group to a product. If the link is specific to a site, warehouse, or product dimension, use the Coverage group field on the Item coverage page. If the link is generic, regardless of the product dimensions, use the Coverage group on the Plan FastTab on the Product details page.

If you do not link a coverage group to a product, master planning uses the General coverage group that is specified on the Master planning parameters page as the default.

Specify coverage settings for a product

You can create coverage settings for a specific product. Select Product information management > Products > Released products and then select the product, and then on the Action Pane, in the Plan tab, in the Coverage group, select Item coverage to open the Item coverage page.

Override coverage

If the product is already linked to a coverage group, you can override the coverage group settings by using the Override coverage group settings field. The coverage settings on the Item coverage page take precedence over the settings on the Coverage group page.

You can specify coverage settings for the following:

  • A product, by using a wizard. The wizard is a step-by-step guide to help you set up the primary item coverage parameters. On the Item coverage page, select Wizard to open the Item coverage wizard. You can learn more about the wizard in Master planning setup wizard.

  • A dimension group. Select Product information management > Common > Released products. On the Released product details page, on the General tab, in the Administration group, select the Storage dimension group link. On the Storage dimension group page, select the Coverage plan by dimension field to create the coverage settings for a dimension in the storage dimension group. All product dimensions, such as configuration, color, size, and style, must have the Coverage plan by dimension field selected.

Minimum keys

You can use minimum keys to handle seasonal fluctuations in demand.

For example, if you want to set up a minimum key that accounts for increased seasonal demand during the spring and summer months, go to Master planning > Setup > Coverage > Minimum/maximum keys and follow these steps:

  1. Create 12 lines and assign a number from 1 to 12 to the lines in the Change field.

  2. In the Unit field, select Months.

  3. In the Factor field, enter the values that are described in the following table.

Line Enter this value Result
1-3 1 Minimum inventory is based on the setting for January to March on the Item coverage page.
4-5 2 Minimum inventory is multiplied by a factor of 2 for April to May.
6-8 2.5 Minimum inventory is multiplied by a factor of 2.5 for June to August.
9-12 1 Minimum inventory reverts to the setting for September to December on the Item coverage page.

Min/Max coverage code

If the coverage code is Min/Max, you can also specify the Maximum inventory quantity that you want to maintain for the item. The value is also expressed in inventory units. If the projected available inventory falls below the minimum quantity, master planning generates a planned order to fulfill all open requirements and brings the available inventory up to the specified maximum quantity. Just like when you set up Minimum, you must define all other planned coverage dimensions before defining the Maximum field.

For example, the minimum quantity is 10, and the maximum quantity is 15. Current on-hand inventory is 4. This gives a minimum quantity requirement of 6. However, because the maximum quantity is 15, master planning generates a planned order for 11 items.

For items that follow seasonal demands, you might need to maintain different maximum levels. To do that, you need to define Maximum keys by going to Master planning > Setup > Coverage > Minimum/maximum keys. Fill in the Maximum key field on the Item coverage page. You can view the information about the safety stock levels, that are defined by minimum keys on the Min/Max tab, on the Item coverage page. You need to make sure that, for a certain period, the minimum and the maximum values are kept in sync.

Safety stock fulfillment for items

Safety stock indicates that an additional quantity of an item is held in inventory to reduce the risk that the item will be out of stock. Safety stock is used as a buffer stock in case sales orders come in and the supplier is unable to deliver the additional items to meet the customer's requested ship date. When safety stock is used to fulfill a sales order, the safety stock will be reduced. You can use Master planning to automatically bring the inventory back to the safety level.

Safety stock is set up as part of item coverage on the Item coverage page under Released products > Plan > Coverage.

In the Minimum field, enter the safety stock level that you want to maintain for the item. The value is expressed in inventory units. If you leave the field blank, the default value is zero. This field is available when you select Period, Requirement, or Min/Max in the Coverage code list. The safety stock level limit applies to the available inventory, which means that reservations and markings might trigger safety stock replenishment before the physical quantity goes below the specified minimum level.


You must define all other planned coverage dimensions before you can define the Minimum field. This prevents an invalid record from being used during master planning. This situation can occur if, for example, a dimension group is extended with an additional planned coverage dimension for which the minimum and maximum inventory quantities are not yet defined.

Fulfil minimum

The Fulfil minimum parameter allows you to select the date or the period during which the inventory level must meet the quantity that you specified in the Minimum field. This field is available when you select Period, Requirement, or Min/Max in the Coverage code list.

If minimum keys are used, select the Minimum periods check box to fulfill the minimum inventory level for all the periods that are set up in the minimum key. If you clear the check box, the minimum inventory is fulfilled for the current period only.

The Fulfil minimum parameter can have the following values:

  • Today's date - The specified minimum quantity is met on the date when master planning is run. The system tries to fulfill the safety stock limit as soon as possible, even though it can be unrealistic due to the lead time. When the Requirement coverage code is used, multiple planned orders are created. It is always a good idea to use either Period or Min/Max coverage for items and materials in frequent demand to bundle the replenishment.

  • Today's date + procurement time - The specified minimum quantity is met on the date when master planning is run, plus the purchase or production lead time. This time includes any safety margins.

    If the item carries a trade agreement, and the Find trade agreements check box is selected on the Master planning parameters page, the delivery lead time from the trade agreement is not considered. Lead times are taken from the item's coverage settings or from the item.

    This fulfillment mode will create plans with fewer delays and planned orders, regardless of the coverage group that is set up on the item.

  • First issue - The specified minimum quantity is met on the date when the available inventory goes below the minimum level, as shown in the following illustration. Even if the available inventory is below the minimum level on the date when master planning is run, First issue will not attempt to cover it until the next requirement comes in.

  • Coverage time fence - The specified minimum quantity is met during the period that is specified in the Coverage time fence field. This option is useful when master planning does not allow available inventory to be used for real orders, such as sales or transfers, in the attempt to maintain the safety level.

Plan safety stock replenishment for First Expired, First Out items

At any time, the inventory receipt with the latest expiry date will be used for safety stock to allow real demand, such as sale lines or BOM lines, to be fulfilled in the First Expired, First Out (FEFO) order.


When planning is run, it will cover the first sales order from the existing on-hand inventory and an additional purchase order for the remaining quantity. A planned order is created to make sure that the available inventory is brought back to the safety limit. When the second sales order is planned, the previously created planned order that covers the safety stock is used to cover this quantity; hence, the safety stock is constantly rolling. Finally, another planned order is created to cover the safety stock. All batches expire accordingly, and planned orders are created to refill the safety stock after it has expired.

How master planning handles the safety stock constraint

Safety stock is tracked in the system as a requirement type, just like sales lines or BOM requirements. You can see the safety stock requirement line on the Net requirements page if you remove the default filter on the Requirement type column.

Fulfilling the safety stock requirement is deprioritized if the system determines that it causes delays in the fulfillment of real demand, such as sales lines, BOM lines, transfer requirements, or demand forecast lines. Otherwise, making sure that the available inventory is above the safety stock quantity has the same priority as any other demand types, by ensuring no delays for real transactions and helping to prevent over-replenishment and early-replenishment of safety stock.

During the coverage phase of master planning, safety stock replenishment is no longer deprioritized. On-hand inventory can be used before any other demand types. During the delay calculation, new logic will be added to go over the delayed sales lines, BOM line requirements, and all the other demand types to determine whether they could be delivered on time, provided that the safety stock is used. If the system identifies that it can minimize delays by using safety stock, then the sales lines or BOM lines will replace their initial coverage with the safety stock, and the system will trigger the replenishment of the safety stock instead.

If the plan or the item is not set up for delayed calculation, then the safety stock constraint will have the same priority as any other demand types. This means that there is a reserve of on-hand and other available inventory before other demand types.

Safety stock journal lines

Safety stock journal lines can be created for the items that must be checked. After that, proposals for inventory levels can be calculated in the Item coverage journal page. Minimum inventory journal lines can also be created or updated on the Item coverage journal lines page.

Master planning > Setup > Safety stock journal names

Safety journals


A delayed date is a realistic due date that a transaction receives if the earliest fulfillment date that master planning calculates is later than the requested date.

Master planning can calculate the earliest fulfillment date for a transaction, based on lead times, material availability, capacity availability, and various planning parameters.

If master planning calculates an order date that precedes the current date, the order can't be fulfilled on time. Therefore, the order is delayed. In this case, master planning forward-plans the order from the current date and includes lead times. These lead times start with any lower-level component items. The order then receives a delayed date, which is a realistic due date, based on the current data. Master planning also calculates the number of delay days.

In some situations, you might choose not to calculate delays, such as when users know that they can expedite lead times by selecting alternative modes of delivery.

You can configure how delays are calculated for a coverage group. You can then attach the coverage group to an item later.

On the Master planning parameters page, you can set the start time for the calculation of delays. If an order is fulfilled after this time, a delay of one day is added to the delay date of the order.

Use tracing for explosion

By enabling tracing, you can view information about factors that contributed to the outcome of the explosion of an order. The following examples show how you can use the tracing information:

  • View relations between the actions on planned orders to optimize the supply chain and inventory reservations.

  • View relations to orders that are already approved. You can focus on automatically firming derived requirements and then prioritize orders more accurately.

  • Simulate planning results to determine whether the planning parameters are optimal.

  • Identify how information such as production dates, quantities, and priorities for an order were determined.

You can view details about futures and actions for a selected order. On the Explosion page, tracing information is available on the Explanation tab in the upper pane. Tracing occurs when you explode an order. To start tracing for the order, select Update and then select the Enable trace check box. You can use the Find text field to search the log for specific information. Search results are highlighted in the tree.