D365 SCM |Let's Talk Production Control |Discrete Manufacturing |Sales Quotation & Master Planning | Part 4

Abstract

?A quotation is basically a request by a customer for a particular product at a specific price and quantity, in this Production Control blog series we are using the finished good item “M-mobile”. ??

?While running the master planning, business planning users prefer to factor in the sales quotations which are either created, sent, or confirmed by the customers. The master planning engine will propose and simulate the planned production and planned purchase orders for these items. ?

?Master planning will propose the delivery dates for the finished good items which we need to produce and the raw material items which we need to procure from the vendors.?

In this article, I will cover the following two scenarios

• Demand from existing sales orders?- Sales orders are one of the primary sources of information for deriving purchasing requirements. Depending on your type of business, this might drive direct purchases for distributed goods or direct purchases for raw materials that are required to assemble or produce another item.
• Demand from existing sales quotations?- We will select the sales quotation in the master planning setup, this will include the sales quotations which are already created, sent, and confirmed with inventory transaction status "Quotation sent".

The above two scenarios are applicable for Make-To-Order business strategies.

Here is the high-level agenda for today

Agenda

• Create sales quotation for the finished good item
• Run master planning for the finished good item
• Send and confirm the quotation
• Sales order created from the sales quotation
• Process the production orders
• Job scheduling and Gantt Chart resource view?

Step by Step Process

Create a Sales Quotation

• Sales quotations can be created for the prospector for the customer.
• Path: Sales and marketing > Sales quotations > All quotations
• If the sales quotation is for the prospect, at the time of quotation confirmation, the prospect will be converted to the customer, and the sales quotation will be converted to the sales order.
• The system will maintain the reference for all the sales orders created from the sales quotation. ?

Sales Quotation Created

• The sales quotation is created for the finished good item(M-Mobile) with quantity (100). This item is not available in the inventory.
• Once the sales quotation is created, we can update the delivery dates for the sales quotation.
• The quotation status is created.
• Now, at this stage, if we run the master plan, the master planning engine will simulate the following
• Planned production order for Finished good item
• Planned purchase orders for the raw material items
• Based on the availability of the production resources, delivery dates will be proposed for the production order
• Based on the vendor lead time, delivery dates will be proposed for the planned purchase orders??

Inventory Transaction Status

Once the sales quotation is created, the inventory Issue status is “Quotation issue”. Physical and financial dates are not updated at this stage.

Inventory On hand

• There is no on-hand inventory available in the warehouse for the finished good item “M-Mobile”.
• Also, there is no inventory for raw material items required to produce the finished good.

Setup Master Plans

In the master plans form, make sure to enable the following parameters

·???????Include on-hand inventory

·???????Incldue inventoyr trasnactions

·???????Include sales quotation

·???????Scheduling method “Operations scheduling”

Based on the above selection, the system will factor the on-hand inventory, inventory transaction for the item, and all the sales quotations which are created or sent to the customers.

Master planning will perform the “Operation scheduling” for the production resources. This will be helpful for the business to simulate the production orders. The system will perform the capacity reservation for the resources once the planned production order will be firmed.??

Run Master Plan

·???????The next step is to run the master plan for the finished good item.

·???????Master Planning> Run master plan

·???????Filter the finished good item “M-Mobile”.?

Planned Orders Generated by Master Plan

Since we don’t have any on-hand inventory for the finished goods and raw material items, master planning has generated the proposal for planned production orders and planned purchase orders.

Based on the availability of production resources, master planning has proposed the delivery date for the finished goods and raw material items.

The raw materials will be procured from the default vendor specified at the item master.

Once the planned orders are created, the planning manager can split or group the orders. The planning manager can also change the reference, for example, if the raw material item is available in another warehouse, the planning manager will change the planned purchase order to planned transfer order.?

Planned Production Order

Master planning has generated the planned production order. The order is scheduled from 14th March till 20th April.

In the pegging section, we can see the reference is “Quotation”. This is the reason why Master planning has generated the planned production order.

The requirement quantity is -100, which means there is no on-hand stock available for the finished good item.

The status of the order is unprocessed, the next step is to approve and firm the order.?

Planned Purchase Orders

Since we don’t have the raw materials in our inventory to produce the finished good item “M-Mobile”, the system has proposed the planned purchase orders.

In the pegging section, we can see that the reference for the planned purchase order is “BOM line”. This is the BOM line item that we need in our production/raw material warehouse before we start production.

The requirement date for the planned purchase order is 14th March.?

Sales Quotation – Sent

The next step is to send the sales quotation to the customer. The status of the quotation will be changed from created to “Sent”.?

Sales Quotation Print

The business user can view the sales quotation print on the screen.?

Confirm Sales Quotation

• The next step is to confirm the sales quotation.
• Follow up> Generate> Confirm
• Specify the Reason and press ok

Sales Quotation Confirmed

• In the below SS, we can see that the quotation status is “Confirmed”.
• It means a sales order is created for the sales quotation.
• In the related information group, “System has maintained the link of sales order with the sales quotation”.

Sales Order Created

The system has created the sales order for the customer from the sales quotation. The business user can also view the related sales quotation for the sales order.?

Sales Order Created – Inventory Transaction

In the inventory transaction, we can validate that the sales order is created with the Issue status “On order”. Since the finished good inventory is not available in the warehouse, the issue status is on order, otherwise, the status will be “reserved physical”.?

Firm the Planned Orders

The next step is to firm the planned orders. Select the “standard” in the update marking field. Enable the group by vendor and group by period(date) fields. ?Press ok

Purchase Order Created

Master planning has created the approved purchase order for the raw material items.

Since the vendor and delivery dates are the same for all the items, the system has created one purchase order.?

PO Item Registration - Item Arrival Journal

We will register the items against the PO using the item arrival journal.

Inventory management> journals> Item arrival

Create a new item arrival journal, in the reference field select the “Purchase order”, in the number field select the purchase order. Press ok and create the journal.?

Item Arrival Journal Lines

Click “Functions” and create the lines for the item arrival journal. This feature will create all the lines in the item arrival journal for the selected purchase orders. Create the batch number for each line item. Select the batch and enter the register quantity.

Finally, validate and post the item arrival journal. Once the item arrival journal is posted, the inventory transactions receipt status will be “Registered”.?

Production Order Created

Master planning has created the production order, the production order status is “Scheduled”.

When we run the master plan, only a sales quotation was created. The pegging for the planned production order was “Quotation”, the system has not updated the reference type “Sales order” with the production order. Based on the availability of production resources, the delivery date for the production order is 20th April.?

Production Order – Schedule Jobs

We have seen in the last blogs that once the planned production order is Firmed, the system has created the production order with the status “Scheduled”, while the scheduling status was “Operations Scheduled” based on our step in the master planning parameters. The production order is created with the status “Operation scheduled”. We will explore the job scheduling feature in this blog. Click “Schedule jobs” and select forward from today’s date. The scheduling status is updated to “Job scheduled”.?

Gantt Chart – Resrouce View

The Gantt chart resource view feature will only support the Job scheduling.

Since we have selected the Job scheduling, the system has scheduled the resources by start and end date with start and end time.

The start date for assembly operation 10 is 14th March(Time 9:00) and the End date is 31st March(Time 10:00).

Once the assembly will be finished, the packing process will be started on 31st March(Time 10:00) and Ended on 20th April (11:00).

Production Route

The jobs are scheduled based on the operations defined for the Production route. The primary operation 10 is for the Assembly resource, once this operation will be finished the next operation will be stated that is 20 for the Packing. Both Assembly and packing are performed by machines.?

Conclusion & Recommendations

• The Sales quotations which are created, send, or confirmed will be factored by the master planning engine.
• The planning engine will propose the planned production order for the finished good item and planned purchase orders for the raw materials.??
• If the sales quotation is created and sent to the customer, the pegging reference for the finished good item will be “Quotation”.
• If the sales quotation is confirmed, and a sales order is created for the quotation, the pegging reference for the finished good item will be “Sales order”.
• The planning manager can also change the reference, for example if the raw material items are available in some other warehouse, the planning manager will change the reference from planned purchase order to the planned transfer order.
• Based on the production route system has scheduled the assembly for 100 items, once these 100 items will be produced only then the packing will be started. We can also use the Priority feature in the route. We can create the Packing operation as Priority “Secondary 1”. This feature will help us to schedule the assembly and packing resources in parallel. The assembly will be performed by the machine while packing will be performed by the Human Resource.?

Stay tuned for the next article, In the meantime,?Walk the Talk.

Feel free to share your feedback in the comments section.?

Truly Yours,

Ali Danish?

ERP Microsoft D365FO Solution Architect | Corporate Trainer

M: +971554912688