Reordering and planning

Without a reordering policy the item is not planned

The planning system only includes items that have a value in the Reordering Policy field. If the field is empty, the item must be planned manually, for example on the Order Planning page. Start by deciding which items are to be planned, and which policy each group gets.

The four policies

According to Microsoft Learn they work like this:

• Fixed Reorder Qty.: the order quantity is at least the reorder quantity and can be raised to cover the demand. Often used together with a reorder point.
• Maximum Qty.: the order is calculated so that the stock reaches the maximum inventory. Do not use the time interval with this policy.
• Order: each individual demand is covered by its own supply, and the two stay linked until the order is completed.
• Lot-for-Lot: the quantity covers the sum of the demand that falls due within the time interval.

When and how much

Reorder point, safety stock and safety lead time control when to order. Set a default safety lead time of at least one day in Inventory Setup, because planning knows the date but not the time of day of the demand. Otherwise the item can arrive too late.

Order modifiers adjust the quantity: minimum, maximum and multiple. The quantity is first reduced if it exceeds the maximum, then raised to the minimum and finally rounded up to the multiple. The period fields Rescheduling Period, Lot Accumulation Period and Dampener Period limit the noise. The rescheduling period only works with Lot-for-Lot.

Run the planning worksheet

Open Planning Worksheets and choose Calculate Regenerative Plan. Here you set the start and end date of the planning horizon and filter by item or location. The end date must reach further than the longest lead time, otherwise items with a long lead time are ordered too late. The regenerative plan first deletes the planned supplies that are loaded and replans all items. The net change plan only takes the items where demand, supply or planning parameters have changed.

From suggestions to orders

The worksheet shows action messages: New, Change Qty., Reschedule, Resched. & Chg. Qty. and Cancel. Review them, select Accept Action Message on the ones you want to use, and run Carry Out Action Message. Here you choose to create purchase and transfer orders directly or copy the suggestions to a requisition worksheet for later processing. Lines that have been processed are deleted from the worksheet.

Checklist

• Is the reordering policy set on the items that are to be planned?
• Are lead time and safety lead time realistic?
• Is the planning horizon longer than the longest lead time?
• Who reviews the worksheet, and how often?

Good habits in practice

Planning is only as good as the master data. If the lead time is wrong, the suggestions will be wrong, whichever policy you choose. Therefore review reorder point, safety stock and lead time for the items with the highest turnover first.

Let one person own the worksheet. Many suggestions are noise, for example small reschedulings. The dampener period exists precisely to hide them. If you change parameters, run a net change plan and see what moves before you accept the suggestions.

Be aware that BC assumes infinite capacity in planning. The suggestions do not take into account whether the vendor can actually deliver, or whether the warehouse has room. The planner must therefore always assess the suggestions before they become orders.

Next steps

Addverk builds its own apps for Business Central, but they are not on Microsoft AppSource yet. On the apps page you can see what we are working on. If you want help with the setup in standard BC, you will find the services and the open prices on the prices page.