Planning Optimization Optimize integrated supply chain network planning processes with the functionality of Microsoft Dynamics 365 Supply Chain Management.
The Essence of Integrated Supply Chain Network Planning
Integrated planning ensures the alignment of demand and supply across all areas of the supply chain network — from supply sources to production and distribution of finished goods, guaranteeing efficient resource allocation, optimization of manufacturing processes, and meeting customer needs.
The goal of the integrated supply chain network planning process is
- providing goods for actual demand;
- ensuring the supply of raw materials and components (for manufacturing companies);
- optimizing production plans and capacities;
- optimizing inventory levels according to market dynamics;
- optimizing goods supply processes.
As a rule, planning in organizations is divided into several levels: long-term, medium-term, and short-term (operational) planning. The long-term planning level determines the company’s plans for a year or more. Medium-term planning is focused on overall sales goals, while operational planning is aimed at fulfilling daily tasks. The result of medium-term planning is a plan for a month or a quarter. The result of operational planning is the adaptation of the medium-term plan to the actual level of product shipments on a daily or weekly basis.
In addition, different planning scenarios can be supported depending on various parameters such as seasonality, Lead Time, supply method, promotions, etc. One of the most popular scenarios is What If.
The integration of planning processes is the foundation of supply chains, providing organization, including operational processes, and increasing efficiency and predictability in achieving the company’s set goals.
- Demand Planning
- Supply Planning
Demand planning is the ability to forecast future demand dynamics for products based on the following approaches:
The main components of production planning are Upstream, Production, and Downstream.
Overview of the Planning Optimization Module Within Microsoft Dynamics 365 Supply Chain Management
The Planning Optimization module is designed to automate planning processes and enhance the efficiency of supply chain processes, ensuring interaction between finance, sales, operations, and supply networks.
Rapid changes, large volumes, and data diversity require automation of data collection, processing, and supply plan calculation.
Accuracy
plans must meet business needs, taking into account all factors and events.
Detailing
covering the lowest levels: product – counterparty – day.
Timeliness
up-to-date plans for all horizons: day, week, month, year.
Transparency
analytics of accuracy, factor impact, and identification of overlooked factors.
Efficiency
minimizing costs while ensuring the required quality level.
Planning Optimization
is a technologically advanced module of Master Planning in the system that enables real-time supply chain planning functions.
Key features of the Planning Optimization module
- Calculation of material requirements based on orders, both actual and forecasted demand.
- Automatic creation of procurement and production orders..
- Inventory optimization and ensuring timely material supply.
To ensure efficient inventory management, reduce procurement costs, and prevent material shortages.
- Adaptation to real-time demand fluctuations
- Use of buffers to determine inventory levels, enabling quick response to changes in demand.
- Planning focuses on actual demand rather than just forecasts.
To improve customer service by better inventory management and reduce order fulfillment time.
Key features
- Supply planning between different warehouses and distribution centers
- Calculation of product requirements to ensure even distribution of inventory.
- Consideration of seasonal fluctuations and other demand factors for different points of sale.
To reduce supply delays and optimize inventory levels in the distribution network.
- Calculation of optimal safety stock levels for each product.
- Automatic replenishment of safety stock based on demand fluctuations and lead time.
- Use of safety stock to prevent supply disruptions.
To improve customer service levels and reduce the risk of stockouts.
- Calculation of material and capacity requirements (Scheduling Planning) for production orders.
- Planning of production orders considering capacity and resource constraints.
- Synchronization of production plans with supply and demand plans.
- Analysis of available inventory in warehouses.
- Consideration of expected receipts from confirmed orders.
- Updating product availability.
To determine shipment dates based on available stock and expected receipts.
- Consideration of raw material delivery time from suppliers.
- Consideration of production capacities for manufacturing the product.
- Optimization of the order execution schedule.
To determine shipment dates considering inventory availability and factoring in production and logistical constraints.
- Global planning to determine requirements.
- Automatic order reconciliation.
- Optimization of production and procurement planning.
- Automation of document exchange between companies.
To optimize planning between companies within the group, ensuring synchronization of orders, inventory, and supply between interconnected legal entities.
- Seamless integration with operational modules in D365FO.
- Ability to build integrations with external systems of various classes (APS, MES, TMS, WMS, etc.) using tools like Data Management Framework (DMF), OData and API, Azure Logic Apps, and Power Automate.
To facilitate data exchange within processes both inside the system and with external systems.
Planning Optimization Implementation Scenarios
Enhancement of D365FO
Enhancing the existing ERP system Microsoft Dynamics 365 Finance and Operations Applications (Dynamics 365 Finance, Dynamics 365 Supply Chain Management, Dynamics 365 Human Resources, Dynamics 365 Commerce) with the Planning Optimization functionality.
Migration to D365FO
Migrating from an old version of the ERP system to Microsoft Dynamics 365 Finance and Operations Applications by initially implementing the Planning Optimization module.
Strengthening the Existing IT Ecosystem
Expanding the capabilities of the existing IT ecosystem with the functionality of the Planning Optimization module, considering its easy implementation and seamless integration with the existing IT environment.
Impact on Operational Metrics Due to Automation of Supply Chain Planning Processes in the Planning Optimization Module
Inventory Levels
KPI: Average inventory level, days of inventory, inventory turnover ratio
Impact: Optimized inventory levels to reduce excess stock and ensure timely replenishment of inventory
Storage Costs
KPI: Total storage costs, cost per unit of stored goods
Impact: Reduced storage costs by optimizing inventory levels
Production Cycle Duration
KPI: Average time from order receipt to production completion
Impact: Reduced production time through improved planning
Adherence to Production Plan
KPI: Percentage of the production plan completed, number of deviations from the plan
Impact: Improved accuracy of production plan execution
Order Fulfillment Time
KPI: Average order fulfillment time, percentage of on-time orders
Impact: Reduced order fulfillment time due to more efficient planning
Labor Productivity
KPI: Output per unit of labor, workforce efficiency
Impact: Increased labor productivity through optimized planning
Customer Satisfaction
KPI: Customer satisfaction level, number of complaints
Impact: Improved customer satisfaction due to more accurate order fulfillment and timely delivery
Service Level
KPI: Percentage of orders fulfilled completely and on time
Impact: Improved service levels due to better planning and management of the supply chain
Features of the Planning Optimization Module for Enhancing Financial Planning and Control in Your Organization
Speed and Performance
By leveraging cloud technologies, Planning Optimization substantially reduces the time required for complex planning calculations, especially when compared to traditional on-premises solutions.
Scalability
The module can effectively process large volumes of data and scale according to business needs, ensuring stable performance even with a significant increase in transaction volumes.
Near Real-Time Data Updates
Planning Optimization allows for receiving updated data for decision-making almost in real-time, ensuring the relevance and accuracy of planning and a quick response to changes in demand or supply.
Flexible Planning Scenarios
The system supports various planning scenarios, including make-to order production, mass production, inventory planning, and more. This allows businesses to customize their planning processes according to their specific tasks.
Integration with Other Modules
Planning Optimization easily integrates with other modules such as Warehouse, Production, Finance, Sales, Procurement, and others, creating a unified environment for managing all business processes.
If you have any questions, you can request a consultation or receive additional materials
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