Skip to end of metadata
Go to start of metadata

Introduction
Functional Overview
Terminology
Infrastructure
Setup
Execution

INTRODUCTION TO MATERIAL PLANNING

Compiere Manufacturing provides functionality to support the advanced planning requirements of small to mid-sized industries. It was introduced to Compiere in version 3.5.

It includes a robust MRP engine that uses forecasts, customer orders, and inventory levels to create a material plan and automatically generates both purchase orders and work orders. A Planners Workbench provides visibility into gross and net demand based on available inventory, open purchase orders and open work orders.

MATERIAL PLANNING FUNCTIONAL OVERVIEW

Compiere Manufacturing helps companies reduce production costs and improve efficiencies by integrating and automating planning and scheduling, production control, cost management and reporting across discrete manufacturing operations.

MATERIAL PLANNING TERMINOLOGY

Terminology

Plan

Umbrella under which all MRP activities take place. Defines the planning periods and warehouse being planned.

Forecast

Estimate of future demand.

Master Demand

Specifies need for products and their quantities. In Compiere, the material planning engine uses Master Demand instead of a Master Production Schedule.

Plan Run

Refers to running of the material planning engine that converts master demand into planned orders. Also referred to as Plan Execution.

Plan Period Range

Range of periods you wish to plan for. It is defined in the plan.

Plan Run Period Range

Range of periods you wish to run the plan for. It is defined in the Run Plan process parameters.

Bill of Materials

List of components (products) required to assemble a product. Also referred to as BOM.

Gross Requirement

Product requirement from the Master Demand and BOM explosion of the Net Requirement of BOM products.

Expected Receipt

Expected product receipts from purchase or work orders.

Planned Availability

Product quantity available to satisfy the master demand.

Net Requirement

Product quantity that needs to be procured or manufactured to satisfy the master demand. It is calculated as Gross Requirement minus Planned Availability.

Order Quantity

Product quantity that will be ordered when planned orders are released.

MATERIAL PLANNING INFRASTRUCTURE

Product Setup

Product

Mark products as Planned in the Product window indicating that they are available for material planning. If the product is procured, enter a current vendor in the Purchasing tab of the Product window along with the procurement lead time in the Promised Delivery Time field. If the product is manufactured, mark it so in the Product window and provide the manufacturing lead time in the Expected Manufacture Time field.

Bill of Materials Functionality

Bill of Materials

Use the Bill of Materials to specify the components that are required to manufacture the product assembly, and how many of each component are required. You can define Bills of Material with any number of levels.

For more information on Bill of Materials, refer to the Bill of Materials section of the Utilities chapter.

Manufacturing Setup

Manufacturing

If the planned products are to be manufactured, you will need to define a Current Active, Manufacturing BOM and Routing for them. You will also setup related to defining and executing work orders.

For more information on Manufacturing, refer to the Manufacturing chapter.

Material Planning Setup

Plan

Define a plan with key attributes required by the material planning engine. A plan must include a warehouse. Only products in that warehouse may be considered for planning by this plan. You can only have one active plan for a warehouse at any given point in time. The planning engine will only execute the active plan.

Forecast

Optionally enter or import a forecast. Select planned products from the plan warehouse and enter forecast quantities for the planning periods. You can define more than one forecast for each plan.

Master Demand

Enter or import a master demand. You can also consolidate multiple forecasts into a single master demand. Select planned products from the plan warehouse and enter demand quantities for the planning periods.

Material Planning Execution

Run Plan

Run the material planning engine for a Master Demand and period range. The planning engine looks at the Master Demand, open orders, inventory levels and lead times to calculate the net requirement and recommend purchase orders and work orders.

Implement Plan

Search and release purchase orders and work orders recommended by the plan.

Planners Workbench

View details on plan calculations such as Expected Receipt, Planned Availability and Net Requirement. Also, release purchase orders and work orders recommended by the plan.

PLAN SETUP

Plan

First you will need to define a plan in the Plan window accessible from the Main Menu. All material planning activities take place in a plan context.

Verify the Organization selection.

Enter a Name to indentify your plan.

Select a Warehouse. You will only be able to plan for products in this warehouse.

Choose an Implementation Priority of Purchase or Manufacture. If a product can be purchased and manufactured, the plan will use the Implementation Priority to take a make or buy decision.

Optionally enter a Description and Comment.

Compiere 3.6 and later: Check the Prioritize Orders over Demand checkbox to plan for product order quantities instead of master demand numbers if orders exceed demand.

Compiere 3.6.2 and later: Check the Consolidate PO checkbox to consolidate Purchase Orders for the same vendor, product, and order date.

Select a Calendar and then enter a planning period range in the Period From and Period To fields. The range of periods can cover a maximum of 366 days. You can choose any calendar defined in Compiere. It can be different than the calendar used elsewhere in Compiere say for order management or purchasing. The periods can be weekly, monthly or custom. You can only run the plan for the current period and onwards. i.e. if today's date is Feb 01, 2010 and your period range is from Jan-Dec 2010, you can only execute the plan for Feb, 2010 or any later period.

Enter default values that the plan will use to release purchase orders and work orders. For work order creation, enter a Work Order Class and Delivery Locator in the plan warehouse. For purchase order creation, enter a PO Document Type and purchase Price List.

The Date Last Run value shows you the date and time of the most recent plan execution, also called as plan run.

Once all material planning setup as detailed in the next few sections is complete, you can click on the Run Plan button to begin the plan execution. Remaining tabs in the Plan window are discussed in a later section called Plan Execution - Run Plan.

Forecast

Optionally enter a forecast to provide estimates of product requirement. To enter a forecast, select the Forecast window from the Main Menu.

Verify the Organization selection.

Select a Plan for which you want to enter a forecast.

Enter a Name to indentify your forecast.

Optionally enter a Description and Comment.

The Frozen checkbox indicates if the forecast is frozen or not. If it is frozen, you cannot add, delete or make changes to the forecast.

Clicking the Freeze button marks the forecast as frozen. A forecast is automatically frozen if you consolidate it into a Master Demand.

If the forecast is frozen, you may unfreeze it by clicking the Unfreeze button. If the forecast has been previously consolidated into a Master Demand, you will no longer be able to delete lines from it even though it is now unfrozen. Also, you can only add or change forecast lines for the current period and onwards.

Click on the Line tab to enter the forecast details for your Forecast.

Select a Product using the search option. Products available for selection are restricted by the forecast's organization. Products must be marked as Planned and must be either Manufactured or Purchased or both. If the product is marked as BOM, the BOM must be verified.

Select a Period that falls in the plan period range.

Enter the forecast number in the Quantity field.

Select a valid UOM.

Repeat this data entry for all the forecast details you want to create. You cannot create multiple forecast lines for the same product-period combination.

Master Demand

Enter a master demand to provide product requirements that should be planned for. You can create a master demand even if you have not created a forecast. You can define multiple master demands if you want. However, each plan execution looks at a single Master Demand. So, if you are using multiple Master Demands that products not be duplicated across them.

To enter a master demand, select the Master Demand window from the Main Menu.

Verify the Organization selection.

Select a Plan for which you want to enter a master demand.

Enter a Name to indentify your master demand.

Optionally enter a Description and Comment.

The Frozen checkbox indicates if the master demand is frozen or not. If it is frozen, you cannot add, delete or make changes to the master demand.

Clicking the Freeze button marks the master demand as frozen. A master demand is automatically frozen if you use it in a Plan Run (plan execution).

If the master demand is frozen, you may unfreeze it by clicking the Unfreeze button. If the master demand has been previously used in a Plan Run, you will no longer be able to delete lines from it even though it is now unfrozen. Also, you can only add or change master demand lines for the current period and onwards.

Click on the Create Demand From button to consolidate forecasts into this master demand. In the parameters, select the forecast you want to consolidate. You can optionally choose to adjust the forecast numbers up or down during consolidation by entering a Percent Adjustment. Click this button multiple times to consolidate multiple forecasts into the master demand. If this master demand has been previously used in a Plan Run, only master demand details for the current period and onwards will be updated during consolidation.

Click on the Line tab to enter the master demand details for your Master Demand.

Select a Product using the search option. Products available for selection are restricted by the master demand's organization. Products must be marked as Planned and must be either Manufactured or Purchased or both. If the product is marked as BOM, the BOM must be verified.

Select a Period that falls in the plan period range. Products are marked as required on the first date of this period if being procured and by the last date of the month if being manufactured.

Enter the master demand number in the Quantity field.

Select a valid UOM.

Repeat this data entry for all the master demand details you want to create. You cannot create multiple master demand lines for the same product-period combination.

PLAN EXECUTION

Run Plan

Verify that the periods you are planning for are Open. If not, open them. You can do this in the Calendar Year and Period window.

Now that the master demand is in place, you can run your plan by clicking on the Run Plan button in the Plan window. This will execute the material planning engine that looks at the Master Demand, open orders, inventory levels and lead times to calculate the net requirement and recommend purchase orders and work orders. You can only execute the plan for active plans. Note that you can only have one active plan per warehouse.

In the Run Plan parameters, select the Master Demand you want to plan for. Choose a From Period to indicate the period range for which the plan should be executed. The valid values for From Period are all periods in the planning period range that are equal to or later than the current period. The plan is executed for all periods starting with the From Period selection till the end of the planning period range as defined in the Plan. Optionally enter a Back Order Period to ask that the plan execution consider open orders in the period range between the Back Order Period and the From Period.

After the plan completes execution, you can view details about it in the Run tab of the Plan window.

This tab includes the Run Plan parameters, Master Demand, Period From and Back Order Period. It also shows you the date and time of that plan execution.

Click on additional tabs to view audit information. The Actual Inventory, Expected Orders and Expected Work Orders tabs are only visible if your User Preferences are setup to allow you to view Advanced tabs. These tabs show you information the material planning engine used in its calculations.

The Actual Inventory tab shows you the On Hand inventory quantity for the plan products at the time the plan was executed. The material planning engine considers the on hand quantity in its calculations.

The Expected Orders tab shows you order line details for all open (unfulfilled) Sales Orders and Purchase Orders with a promise date in the period range between the Back Order Period and the end period in the plan period range. If Back Order Period is not specified the From Period is used. Return transactions are not included in this list of orders. Only Sales Orders of type Standard Order, Web Order or Phone Order are considered. The material planning engine considers all such unfulfilled sales orders and purchase orders that are either Completed or Closed.

The Product identifies the product in the order line along with its UOM. The Date Expected is the expected date of delivery or receipt of this product. The Quantity Expected is the quantity remaining to be shipped or received for this order line. The Order and Order Line fields give details on this order line. If the Sales Transaction checkbox is checked it indicates his order line is from a Sales Order. Otherwise it is from a Purchase Order.

The Expected Work Orders tab shows you details on all In Progress Work Orders. The Work Order's Actual Date From or Scheduled Date From along with the manufacture lead time are used to determine when products will complete assembly. This date is used as the Date Expected and it should lie in the period range between Back Order Period and end period of the plan period range. If Back Order Period is not defined, the From Period is used. The material planning engine considers all in progress work orders that still have un-assembled product assemblies.

The Product identifies the product assembly in the work order along with its UOM. The Date Expected is the expected date this product will complete manufacture. The Quantity Expected is the quantity remaining to be manufactured for this work order. The Work Order field identifies the work order. The BOM field indicates the BOM being used for manufacture of this product.

Planners Workbench

Review and implement plan results in the Planners Workbench window accessible from the main menu. The result lines are for each master demand product-period combination and also include separate lines for exploded BOM components per period.

Select Planners Workbench from the Main Menu to bring up the Planners Workbench window.

Select the Plan you want to review results for.

Now select the Plan Run you want to review results for.

Click on the Result tab to view the plan result lines.

In Grid View, the Product By Level displays the product being planned in this plan result line. It could be the master demand product or a BOM component in case the master demand product is a BOM parent. It is prefixed by hyphens depending on the BOM level. E.g. If the master demand product is Garden Shed composed of first level BOM components Wood Panel, Door and Roof, you will see 4 plan result lines with Product By Level values of Garden Shed, -Wood Panel, -Door and --Roof. If the product is on the third BOM level, you will see ---ProductName.

In Single Record View, the Product displays the master demand product or a BOM component in case the master demand product is a BOM parent.

The Period indicates the plan period in which this product is required. Products are marked as required on the first date of this period if being procured and by the last date of the month if being manufactured.

The Master Demand Product displays the product that was entered in the Master Demand. In case the plan result line is for a BOM component, this field will display the BOM parent from the master demand this component is associated with.

The Immediate Parent Product and Level No display the immediate BOM parent and BOM level in case the plan result line is for a BOM component.

The Gross Requirement is the quantity of the product that is required based on the Master Demand and BOM explosion. If the product in the Master Demand is not a BOM product, the master demand number is copied over as the Gross Requirement. If the product in the Master Demand is a BOM product, it is recursively exploded into its component lines. The Gross Requirement is calculated by multiplying the BOM component quantity by the parent product's net requirement. E.g. The Master Demand product Garden Shed is a BOM parent product that requires 10 Wood Panels, 1 Door and 1 Roof for manufacture. If the Gross Requirement for Garden Shed in January is 100 and the Net Requirement is 90, then the Gross Requirement for Wood Panels is 90 * 10 = 900. The material planning engine tries to procure just enough BOM components needed for manufacture.

The Expected Receipt is the quantity of products you expect to be received or manufactured through open purchase orders or work orders. You can view a list of these orders in the audit tabs in the Plan window.

The Planned Availability is the quantity of products available to satisfy the master demand. It is calculated by adding this period's Expected Receipt to any carried over Planned Availability from the previous period. E.g. In January, Net Requirement for Wood Panels is 900 and Planned Availability is 1200. So, there are 300 extra wood panels in January. In February, the Expected Receipt of Wood Panels is 200. Hence, the Planned Availability of Wood Panels in February is 200 + 300 = 500.
The Net Requirement is the final product quantity that needs to be procured or manufactured to satisfy the master demand. It is calculated as Gross Requirement minus Planned Availability. E.g. If Gross Requirement for Wood Panels in January is 900 and Planned Availability is 1200, the Net Requirement is 0. In February, if Gross Requirement of Wood Panels is 1000 and Planned Availability is 500, the Net Requirement is 1000 - 500 = 500.

The UOM field indicates the UOM for all the product quantities in the fields described above.

The Order Type field indicates the type of the planned order that will be released when you implement this plan result line. The value could be either Purchase Order or Work Order.

The Vendor indicates the vendor with whom the purchase order will be placed.

Once the plan is implemented, the Purchase Order or Work Order fields will hold details about the order placed.

The Order Quantity and Order Date indicate the product quantity ordered and the date on which the order was placed.

The Implemented checkbox indicates if an order has been released for this plan result line.

The Implement Order button lets you release an order for the plan result line. You can only release orders for master demand products and not for BOM components. Orders for BOM components are automatically released when you implement the parent product. This button is only available if the plan result line has not already been implemented.

Implement Plan

Search for and implement plan results in bulk mode using the Implement Plan window accessible from the main menu. You can only implement the latest plan run.

Enter search criteria to return a list of summary plan results. Plan results from BOM explosions are not displayed here. To view those, you need to use the Planners Workbench.

Select one or more operations or enter a number in the Process Rows field to select the first n result rows. Click Process to implement the plan results and release orders.

Work Orders released are automatically prepared to be In Progress. They use the default BOM and Routing that you have setup for the product assembly. The Quantity is populated from the Net Requirement. The Scheduled Date From is populated based on the manufacturing lead time and period the product is required in. The Work Order is frozen against update of many values and is released to the shop floor for processing.

Purchase Orders released are automatically prepared to be In Progress. They use the current vendor from the Purchasing tab of the Product window. The purchase order line quantity is populated from the Net Requirement and it is reserved in Inventory. The Date Ordered and Date Promised are set based on the BOM definition and procurement lead time specified in the Promised Delivery Time field for the current vendor in the Purchasing tab of the Product window. E.g. Assume procurement lead time for Wood Panels is 3 days. If Net Requirement for Garden Shed in February is 90, a Purchase Order for 900 Wood Panels will be placed with a Date Ordered of Jan 29 and Date Promised of Feb 1. The Work Order for Garden Shed will have a Scheduled Date From of Feb 1.

Note: In version 3.6.2 and later, the Purchase Order Quantity will use the Minimum Order Quantity for the Vendor, Product.

Planning Cycle

You can re-run the plan at any time. The plan can be run for the current period and beyond.

The material planning engine will look at the latest inventory levels and unfulfilled orders during execution. You can update the forecast, master demand and consolidate forecasts into the master demand between plan runs. However, you can only make changes to numbers in the current period and beyond.

When implementing, you can only release orders based on the most recent successful plan run.

Labels
  • None