D365 | SCM | Planning Optimization | Auto replenishment| Scenario 1 – Coverage Code “MinMax” & Vendor Working Time Calendar

Abstract

In order to run the auto-replenishment process in D365, we need to set up the master planning module. Business users can activate and utilize the magic of "The planning optimization" feature available in D365 Supply Chain Management. I will cover all the business scenarios for the coverage codes options available in the master planning module.

We can create and associate the Vendor working time calendars with the vendor master form. We can define the Vendor working days based on business requirements from Monday to Friday with working time from 10:00 AM till 5:00 PM. The master planning engine will respect the vendor's working time calendar(days and time) and propose the planned purchase orders with delivery dates as specified in the working time calendar.

We can categorize the vendors and associate them with one working time calendar. For example, all Food vendors will deliver the items in the first shift and Non-Food vendors will deliver the items in the 2nd shift. If required, business users can also create the Calendar for individual vendors. Certain Vendors will deliver the items only on Tuesday within a specified time slot.

Introduction

Master planning can be configured to use different replenishment methods. The replenishment methods or lot-sizing methods are the techniques used by the system to determine the batch size for purchased or produced items.

Each replenishment method is assigned one of the following coverage codes:

• Manual?- The lot-sizing method where the system does not suggest purchased, transferred, or production orders for the item. The planner for the item will be in charge of creating the required orders for the replenishment of the item.
• Per requirement?- The lot-sizing method in which the system creates a planned purchase, transfer, or production order per requirement for the item. This is generally used for expensive items with intermittent demand.
• Per period?- The lot-sizing method that combines all the demand for a period into one order for the item. The order will be planned for the first day of the period and its quantity will fulfill the net requirements during the established period. The period starts with the first demand for the item and covers the defined length in time. The next period will start with the next requirements of the item.
• Min/Max?- The lot-sizing method that contains the replenishment of inventory up to a certain level when the predicted on-hand is below a threshold. The replenishment quantity will be the difference between the maximum level and the predicted on-hand level.

Business Scenarios

In this blog series, I will discuss the following three business scenarios

1. Scenario 1 – Coverage Code “MinMax”
2. Scenario 2 – Coverage Code “Requirement”
3. Scenario 3 – Coverage Code “Period”

Auto Replenishment Process Flow

The planning manager or buying department will perform the prerequisite setups and process the auto-replenishment in the master planning module.

Scenario 1 – Coverage Code “MinMax”

Prerequisite Setups and Configurations

Here is the list of prerequisite setups

• Setup Coverage Group
• Create Item Coverage
• Working time calendar for Vendor
• Associate Vendor with Item
• Associate Vendor Calendar with Vendor

Coverage Group

Select the coverage group for an item as “Min Max” on the item setup form in the plan tab.

Path: Product Information Management > Products > Released Products > Click on Item > Plan > Coverage group

Item Coverage

• Define the item coverage for the item.
• Select the site, warehouse, minimum, and maxim quantity.
• Select the coverage group "MinMax"

Path: Product Information Management > Products > Released Products > Plan > Coverage group

In the general tab select the following details

Coverage Group: In the item coverage, we define the item coverage code so that the master planning will create the plan orders according to this item coverage code.

Vendor Account: In the item coverage, we also define the vendor account call. When master planning will be run it will create plan orders according to the below-set vendor.

Note: If we set the primary vendor on the item master form and then on vendor item coverage, the plan orders will be created according to the vendor set on item coverage as per the below screenshot:

Working Time Calendar for Vendors

The vendor calendars will be created in the “Working time calendars” form, this form is available in the organization administration module.

We can create and associate the Vendor wise working time calendar. The Vendor calendar will be associated with the Vendor master form. Based on the Vendor working time calendars, master planning will generate the planned purchase orders. The delivery dates for the vendors will be based on these working time calendars.

Path: Organization Administrator > Setup > Calendars > Calendars

• Click new and create a new calendar:
• Create Calendar “GK”
• Name “Mon to Fri”
• Click “Working Time”
• Select the From and To date
• Select the “working time template”

• Click on “Compose working times”

• Select the calendar, From and To date
• Select the “working time template”
• Based on the Working time template "GK", the master planning will create the planned orders with delivery dates from "Monday to Friday". There will be no delivery scheduled for Saturday and Sunday.

Select Default Vendor For ?The Item

Select the default Vendor for the item, when the master planning will run then the planned purchase order will be created for this vendor.

Path: Product information management > Products > Released products > Item setup > Purchase tab

Working Time Template

Create a working time template for the vendors. This vendor will operate for working days "Monday to Friday".

Path: Organisation administration > Setup > Calendar > Working time template

In the below template, I have defined the working times from Monday to Friday 10:00 AM to 05:00 PM is set. Saturday and Sunday are blanked, which means the vendor will not supply on Saturday and Sunday:

Associate Vendor with Item

On the item setup form, the vendor ID must be set. When the master planning will run then the planned orders will be made against those vendors which are saved on the item setup page as shown below:

Path: Product information management > Products > Released products > Item setup > Purchase tab

Associate Purchase Calendar with Vendor

We need to associate the vendor calendar with the vendor setup form. For this setup, we need to open the vendor setup form. When we will run the master planning, the planned orders will be made according to the calendar saved on the vendor setup. The process is shown below:

Path: Accounts payables > All vendors > Purchase order default > Purchase calendar

Step-by-Step Process

Run Master Planning - Planning Optimization

Now we will run the master planning to generate planned orders. Master planning can be run in batches automatically. But this time we are running it manually to understand the process and logic of D365.

Path: Master Planning > Master Planning > Run > Planning Optimization

Verify Planned Orders

The system has created the planned purchase orders for item 10007. The requirement quantity is 200,000. Since the item on hand is zero that's why the system has proposed the maximum quantity.

Path: Master Planning > Master Planning > Planned Orders

Firm Planned Orders

After running the master planning, we will go to the planned order form to see the system-generated planned orders. The system will generate planned orders according to the configurations of the selected items.

By selecting the planned orders, we will click on the “firm” button then the system will create purchased orders.

Path: Master Planning > Master Planning > Planned Orders

Validate and Confirm the Purchase Orders

Now we will verify the purchase orders that are created as a result of firm-planned orders. We will confirm the purchase orders after validation.

Path: Accounts Payables > Purchase Orders > All Purchase Orders

Conclusion and Recommendations

• Business users usually look to run multiple simulations based on several factors before they conclude and approve the purchase order. Planning optimization improves the overall performance through short runtime.
• Businesses can run the planning optimization as soon as the demand is generated in the system without hurting the application. This will reduce the lead time to fulfill the customer and replenishment orders.
• Business users can create and associate the Vendor working time calendar with the vendors. Master planning will respect the vendor working times and propose the planned orders with delivery dates as specified in the working time calendars.

I hope you like the article, keep connected and?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