Overview of the plan supply and replenishment business process part of the forecast to plan process

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Applies to: Dynamics 365 Commerce, Dynamics 365 Supply Chain Management

This article describes the plan supply and replenishment business process area that is part of the Forecast to plan end-to-end process. This process area encompasses the activities of responding to demand and generating proposed inventory supply, based on the policies that are set in the Establish stocking and replenishment policies business process area. In this article, we discuss the stakeholders, benefits, process flow, and next steps for organizations that implement this process area.

Planning supply and replenishment includes activities for planning inventory transfers, production, and purchasing. Most organizations have several planners who are responsible for the process of supplying products. These planners often split ownership by product category or vendor for purchasing, or by manufacturing line for produced goods. Coordination, communication, and a clear split of ownership are key to the success of the product supply.

You can run master planning on an ad-hoc basis. You can also run master planning for a single item, a group of items, or all items in one legal entity or several legal entities.

Plan supply and replenishment should be defined whenever you implement the Forecast to plan process. In larger Dynamics 365 implementation projects, Forecast to plan is often implemented as a secondary phase after the initial go-live. However, it can also be part of the initial process. Plan supply and replenishment is a flexible process that can be changed or updated as the business and its processes grow.

Stakeholders

Many people across the organization should contribute to the decision-making process and design of the plan supply and replenishment area. The list includes but isn't limited to the following roles:

  • Manufacturing and supply chain teams – Responsible for managing the production and delivery of products. They must make sure that the system is properly integrated with manufacturing and supply chain systems, and that data is properly managed.

    • Planning stakeholders – Responsible for ordering the forecasting of materials, the plan for purchasing, and the ordering itself. Examples: Chief Operating Officer (COO), Vice President (VP) of Operations, Supply chain manager, Operations manager, Planning manager, and Planner.
    • Procurement stakeholders – Responsible for working with suppliers to acquire raw materials. Examples: Director of procurement, Buyer, Purchasing agent, Purchasing manager, and Managers.
    • Production stakeholders – Responsible for maintaining and working with resources and schedules to manufacture goods, and for calculating production lead time and capacity planning. Examples: Production scheduler, Production planner, and Production manager.
    • Inventory and transportation stakeholders – Responsible for managing and allocating warehouse capacity and resources for inventory operations and transportation management. Examples: Warehouse manager and Transportation planner.

  • IT department, business analysts, developers – Responsible for implementing technology solutions to support the plan supply and replenishment business processes.

  • Executive leadership – Responsible for overseeing supply chain efficiency and resiliency, and alignment with strategic goals.

Plan supply and replenishment process flow

The following diagram illustrates the plan supply and replenishment business process area. Each solid gray rectangle on the diagram represents an end-to-end business process. The solid blue rectangle represents the business process area. The diagram shows the subprocesses for the business process area. The arrows on the diagram show the flow of the business process in an organization. If a subprocess can lead to more than one other subprocess, the parallel subprocesses are shown as branches.

Flow diagram with steps for the process of maintaining assets that is further explained in the next paragraphs.

  1. Start

    Parallel branches connect to the following processes:

    • Inventory to deliver connects to Maintain inventory levels, which connects to 4, Plan supply and replenishment.
    • Plan to produce connects to Run production operations, which connects to ii, Plan production.
    • Source to pay connects to Procure materials and services, which connects to iii, Plan purchases.

  2. Forecast to plan

  3. Establish stocking and replenishment policies

  4. Plan supply and replenishment

    1. Generate a coordinated plan

      1. Plan inventory transfers and replenishments
      2. Plan production
      3. Plan purchases

    2. Plan for a single item or group of items

    3. React to supply chain signals

  5. End

The flow diagram doesn't show the following connections for the downstream processes:

  • Plan production connects to Plan to produce, which connects to Schedule production operations, which connects to End.
  • Plan inventory transfers and replenishments connects to Plan transportation loads.
  • Process inventory movements connects to End.
  • Procure materials and services connects to End.

Plan supply and replenishment benefits

Many key benefits can be used to monitor and measure the success of implementing Dynamics 365 Supply Chain Management to support the plan supply and replenishment area. The following sections outline the key benefits that an organization might monitor and measure for plan supply and replenishment.

Increase planning efficiency

Dynamics 365 Supply Chain Management includes many capabilities that help organizations streamline and optimize their supply chain operations. Planning Optimization enables planners to quickly view suggestions, based on the business-defined replenishment policies. Therefore, it helps organizations quickly respond to changes in customer demand and reduce the risk of stockouts. The area covers production, purchasing, and transfers between warehouses.

Improve plan accuracy

Constant monitoring and adjustment of the baseline plan helps ensure optimal levels of inventory in the system and helps minimize lead times. Based on real-time data, Dynamics 365 Supply Chain Management ensures that planning is based on the most up-to-date information. In this way, it helps eliminate manual data entry errors, reduces data latency, and provides a holistic view of the supply chain. Therefore, you get better accuracy. Additionally, the solution enables organizations to make real-time adjustments to plans, based on changing conditions and events. For example, if a sudden increase in demand or a supply disruption occurs, Dynamics 365 Supply Chain Management can quickly assess the impact and suggest plan adjustments.

Maximize resources and capacity

Through shifting workloads and task timeframes in manufacturing environments, Dynamics 365 Supply Chain Management enables organizations to effectively plan and optimize the use of their resources. The plans include equipment, machinery, labor, and other production assets. By analyzing production schedules, demand forecasts, and resource availability, Dynamics 365 Supply Chain Management helps organizations efficiently allocate resources. Therefore, it ensures optimal use and reduces idle time.

Optimize inventory spend

In Dynamics 365 Supply Chain Management, organizations can define reorder points and safety stock levels, based on demand variability, lead times, and service level targets. By setting optimal reorder points and safety stock levels, organizations can reduce the risk of stockouts while they also avoid excessive safety stock that ties up working capital. This optimization helps strike the right balance between inventory availability and inventory carrying costs. Too much inventory ties up cash flow, but not enough inventory leads to penalties and lost revenue.

Improve service levels and reduce inventory levels

Dynamics 365 Supply Chain Management includes functionality for demand-driven material requirements planning (DDMRP). This functionality typically achieves inventory reductions of 30 to 45 percent and also maintains high service levels. Learn more about how Dynamics 365 supports the DDMRP methodology at Demand Driven Material Requirements Planning (DDMRP) overview.

Plan as often as needed

Because planning in Dynamics 365 is fast, you can plan as often as needed during the workday. In this way, you can reduce lead times by up to one day. Because you can run multiple plans in quick succession, organizations can react to disruptions within minutes, by finding the best possible solution among multiple simulations. Learn more about the fast planning that is supported by Planning Optimization in Dynamics 365 at Master planning system architecture.

Next steps

If you want to implement Dynamics 365 solutions to help with your plan supply and replenishment business processes, use the following resources and steps to learn more.

  1. Define strategic and operational plans

  2. Establish stocking and replenishment policies overview

  3. Forecast supply and demand

  4. Forecast and plan for intercompany trade

  5. Plan supply and replenishment (the article that you're currently reading)

You can use the following resources to learn more about the plan supply and replenishment process area in Dynamics 365.

Contributors

This article is maintained by Microsoft. It was originally written by the following contributors.

Principal author:

Other contributors:

  • Beatriz Nebot Gracia | Product Manager
  • Rachel Profitt | FastTrack Solution Architect
  • Rich Black | FastTrack Solution Architect
  • Lalitha Chintamaneni | FastTrack Solution Architect
  • Harshad Puthran | FastTrack Solution Architect