D365 Master Planning | Priority Base planning |Priority calculation method |Percent of Maximum inventory quantity | Part#1

Hello everyone and welcome to my new blog.

In this blog, we are going to have an overview of priority base planning and how it work.

Microsoft has recently added a new feature “Priority-based planning” in D365 for master planning.

This feature will help the planner to prioritize the replenishment order on the basis of priority rather than requirement dates.

Let’s have a business scenario here to understand where we can use this feature.

The company has three warehouses. One is the main warehouse where all inventory receives from vendors. The main warehouse is responsible to replenished inventory to another warehouse.

Considering this setup, WH2 and WH3 will trigger planned transfer orders from WH1 and if on hand level of WH1 is below the reorder point then System will generate a purchase planned order as well.

This scenario can also work without a priority feature but by enabling this feature, the Planner will have a visibility of priority because in WH3 the on-hand stock is below than min quantity whereas in WH2 hand stock is not below to min quantity.

Pre-requisite.

There is four pre-requisite setup that needed to be in place for using this functionality which is mentioned below:

1.?????Enabling the priority feature.

2.?????Setup Priority model.

3.?????Setup a new coverage group.

4.?????Assign Coverage group to item with min and max information.

Step 1: Enabling the priority feature.

First of all, we have to enable priority base planning features in our environment.

Step 2: Priority model setup

The next step is to set up Planning priority models.

Go to Master planning > Setup > Planning priority models

1.?????Click on New.

2.?????Enter Name and Description.

3.?????Select the Priority calculation method “Percent of Maximum inventory”. This method will Calculate the planning priority value as a percentage, based on the projected inventory level over the maximum inventory quantity.

4.?????Defined the default priority as per your requirement.

Step 3: Coverage group Setup:

The next step is to create a new coverage group.

To set up a new coverage group follow the below steps.

1.?????Go to Master planning > Setup > Coverage > Coverage groups.

2.?????Click on New.

3.?????Enter Coverage group ID and Name.

4.?????Select Calendar.

5.?????In the coverage code drop-down, A new coverage code is added by enabling this feature. Select Priority in the coverage code dropdown.

6.?????Select the Planning priority model which we set up in second steps.

Step 4: Assign Coverage group.

The next step is to assign the coverage group to an Item and defined the min, max, and reorder values.

Go to Product information management > Products > Released products > Plan tab > Item coverage

Here:

1.?????Warehouse “10PORT” or “WH1” is the main warehouse and its planned type is a purchase order. it means the planned purchase order will be generated if the on-hand quantity is below the threshold.

2.?????Warehouse “11PORTFR” or “WH2” is the secondary warehouse and its planned type is transfer order. It means the planned transfer order will be generated if the on-hand quantity is below the threshold.

3.?????Warehouse “12POLIRAW” or “WH3” is the secondary warehouse and its planned type is transfer order. It means the planned transfer order will be generated if the on-hand quantity is below the threshold.

Scenario Result:

After completing this setup, I created a sales order to enter the demand for this item with 100 quantities in warehouse “10Port” which is our main warehouse for this demonstration.

Now if you look at the on-hand inquiry against this item, you will see that the Main warehouse has 700 on hand where 100 quantity allocated against of sales order so I have 600 on-hand inventory left that can be transferred to another warehouse.

But as a planner, I also need to have visibility of priority so that I can plan accordingly. I will use the net requirement screen to generate the plan and see the priority.

Go to Plan tab > Requirement > Net Requirement.

Click on Master planning to generate the plan order.

Select the master plan “Dynamic” and click to run the job.

This batch job will generate a plan order along with the priority percentage of each line as well once it’s complete.

Here you can see systems have associated a priority percentage against each line. Let’s see how is calculated.

• For the sales order line, we have given the default priority percentage “5” in our priority model.

Since we configured the % maximum inventory priority model, systems calculate the priority percentage for transfer orders by using this formula. (Max quantity – Required quantity) *100 / Required quantity.

• For warehouse WH2, We have 400 on hand so we need 600 more to reach to the max quantity so if we put this value in the n formula (1000-600) *100 / 1000 = 40%
• For warehouse WH3, We have 80 on hand so we need 920 more to reach to the max quantity if we put this value in the formula (1000-920) *100 / 1000 = 8%

That's all for the day.

I hope you guys will like this blog. If you have any feedback feel free to share

Regards

Muhammad Shoaib Hussain

D365 Supply Chain Management | Production | Retail | Finance Consultant.

Contact # +44 7513826768

Email # [email protected]