Background: Finished Goods Planning
Use the Finished Goods Planning (MFP) program to calculate quantities of finished goods and configured products that you need to meet sales commitments and forecasts and schedule their manufacture or purchase. See Road Map for work flow.
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What is Finished Goods Planning?
Finished Goods Planning calculates and schedules the quantities of finished goods that are required to meet commitments, including both actual customer demand and the forecast. The program plans for a manufacturing branch but includes demand from all branches in the manufacturing branch's demand group.
Finished Goods Planning considers all items that match your Selection options, but does not include items for which the Excl from plan? field is selected in the Branch Item Maintenance (IMB) program. If you entered an order for the item with the Planned Order Maintenance (MOP) program, the program skips it. You must use Planned Order Maintenance to delete the order.
The program gathers all sources of supply and demand for items that have an order code 0. See Planning Data. Based on this data and the options you select, the program projects the quantities of each item needed to meet these commitments.
When an item's projected availability goes below the requirement level, the program plans a manufacturing or purchase order to cover the requirement. The program also can reschedule these orders to accommodate the current supply and demand situation.
The program also updates Available To Promise (ATP), which Sales Order Maintenance (OE) uses to determine the availability of items. ATP is a calculation of the quantity of an item that is available "for sale" by planning period. Finished Goods Planning calculates ATP for each finished good and selected configured product components. If you add, change, or delete planned orders for an item, the Planning Profile Maintenance (MPM) program recalculates ATP. When order processing enters sales order lines, ATP determines whether there is sufficient supply to be able to promise the customer delivery by the date required.
Planning Data
Finished Goods Planning uses supply and demand data from all branches in your supply and demand group, specified in the Branch Maintenance (TBM) program:
Independent forecast demand that you enter manually in Forecast Maintenance (MSF), import from an ASCII file with the Forecast Import (FORC), calculate with Forecast Calculation (MFC), or update with Forecast Update (MFU) from the New forecast field in the Branch Item Maintenance (IMB) program
Family forecast that you enter in Forecast Maintenance (MSF) or update with Forecast Update (MFU) from the New forecast field in the Branch Item Maintenance (IMB) program
Actual demand from unshipped sales orders
Dependent demand from sales of configured product components
Available to promise
Manufacturing orders, including released, planned, and rework orders; however, the program skips requisitions with a blank ECL field unless the Current ECL field in the item's record in the Branch Item Maintenance (IMB) program is also blank. Repair orders are not considered to be supply.
Purchase orders
Quantity on hand and in floor stock; A negative on-hand quantity is treated as demand. Finished Goods Planning either consumes available supply (for example, open purchase or manufacturing orders) and/or creates additional planned orders to net the project on-hand quantity to zero.
Scrap based on the percent entered in the Scrap % field in the item's record in the Branch Item Maintenance (IMB) program
Safety stock entered in the Branch Item Maintenance (IMB) program
Intransit quantities
Manufacturing, purchase, and unassigned requisitions are supply; however, the program skips requisitions with a blank ECL field unless the Current ECL field in the item's record in the Branch Item Maintenance (IMB) program is also blank.
Transfer requisitions are either supply or demand depending on whether the branch is the action (demand) or requesting (supply) branch
Timing
The program considers timing factors in scheduling orders and in giving exception messages, including the review period, cushion, planning period display codes, forecast spread, exclude past due, accumulated lead time, and auto-planning.
Review Period
While Finished Goods Planning always plans based on the login date, you can enter a horizon date, which is the first period date to report. The program combines any earlier order or forecast data into a prior category. Although the program uses the login date for planning, you can adjust the horizon date to provide a detailed view of past and future requirements.
The program reviews forecasts and planned orders for an item based on the review period, which can also be called the production planning time fence. The review period begins on the horizon date that you select.
Cushion
The program adds the cushion days that you enter in the Program options to the accumulated lead time for the item. The cushion is the number of days to hold a current order firm. It is used to extend or decrease the length of the planning time fence.
You can enter a positive or negative number of cushion days. Enter a negative cushion if you have orders that have not been completed prior to the horizon date, and you do not want the program to print messages for them.
The program perceives that orders that fall within the review period may not be filled due to lack of time and those beyond the review period are feasible.
Planning Period Display Codes
The program bases planning periods on the item's planning period display code, which you specify in the Planning period field of the Branch Item Maintenance (IMB) program. If the item's code is blank, Finished Goods Planning applies the DFAULT planning display code to the item.
However, if you select a code for the Select planning display period code Program option in Finished Goods Planning, the program will apply to all items planned, overriding the item-specific planning display.
Forecast Spread
Forecast spread enables forecasting for longer periods, such as a month or quarter. Without a forecast spread, a period's forecast would be planned to be due on the first day of the period.
You enter forecast spread by item in the Spread forecast field of the Branch Item Maintenance (IMB) program.
It is used to spread the forecast quantity evenly over the forecast period. For example, a forecast spread of 5 spreads the forecast evenly within the period every 5 shop days. This effectively simulates weekly forecasts without forecasting by week. You can set forecast spread to any number; for example, enter 1 for daily increments or 10 for bi-weekly increments.
What if you forecast by the year? Spread forecast first determines a number of increments to place between the start and end dates when a larger forecast period (in this example, a year) is divided into smaller increments. The number of work days between the starting and ending dates is divided by the spread forecast.
The system first calculates the number of spread forecast increments between the start and end dates of the forecast period. The number of work days is then divided by the spread forecast. The integer of the resulting number is the number of spread forecast increments. For example, if the forecast period is a year and the Spread forecast is 21:
Forecast period: January 1, yyyy through December 31, yyyy
Days difference: 365 days - 103 non-work and weekend days = 262
Spread forecast: 21
Spread forecast increments: INT(262 / 21=12.47619) = 12
A second calculation uses the number of spread forecast increments to determine the forecast quantity for each increment. An accumulated floating point calculation then balances the spread quantity evenly throughout the increments.
For example, if the forecast quantity is 160:
Period |
Forecast quantity |
Calculation |
1 |
14 |
160 / 12 = 13.33333 TEMPQTY = 13 FLOAT = 0.33333 + 0 IF FLOAT GT 0 TEMPQTY = 13 + 1 FLOAT = (0.33333 - 1) = -0.66667 |
2 |
13 |
160 / 12 = 13.33333 TEMPQTY = 13 FLOAT = 0.33333 + (-0.6667) = - 0.33334 |
3 |
13 |
160 / 12 = 13.33333 TEMPQTY = 13 FLOAT = 0.33333 + (-0.33334) = -0.00001 |
4 |
14 |
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5 |
13 |
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6 |
13 |
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7 |
14 |
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8 |
13 |
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9 |
13 |
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10 |
14 |
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11 |
13 |
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12 |
13 |
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Total |
160 |
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Exclude Past Due
Finished Goods Planning also looks at the Excl past due? field in the Branch Item Maintenance (IMB) program only if you entered a number of days in the Spread forecast field. When Excl past due? is selected, any forecast period prior to the login date is considered excess forecast and not included in the plan.
Accumulated Lead Time
Finished Goods Planning uses lead time to assign due dates to planned orders. Lead time is the number of shop days required to build an item, from the time it is ordered until the time it is placed in inventory. If the item has an order code of 0, Finished Goods Planning uses the accumulated lead time.
Accumulated lead time is the longest lead time at each level of an item's bill of material. You can set accumulated lead time automatically by selecting I or E for the LT update field in the Branch Item Maintenance (IMB) program and running the Accumulated Lead Time Calculation (MLT) program.
If the Accum LT field in the Branch Item Maintenance (IMB) program is 0, then the program calculates the lead time for the parent item, which is Order prep LT + Mfg LT + Put-away LT.
Due date
The shop calendar governs manufacturing orders. Sales, shipping, purchasing, and receiving are not limited to the shop calendar. If the due date for a manufacturing order is a non-shop calendar date, Finished Goods Planning moves the order to a date on the shop calendar.
When calculating due date, day 1 is the day after the start date. For example, if the start date is the 10th, which is a Monday, and the lead time is 10 days, the due date will be the 24th.
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
10 |
11 |
12 |
13 |
14 |
17 |
18 |
19 |
20 |
21 |
24 |
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Auto-Planning
Finished Goods Planning can selectively perform automatic planning by item. If you selected the Auto planning? field for an item in the Branch Item Maintenance (IMB) program, Finished Goods Planning:
Automatically plans it during the review period.
Automatically reschedules orders that fall beyond the review period if the Mfg order firm field in the Manufacturing Order Maintenance (MIM) program is blank. This includes released orders that have not been completed.
Will not reschedule orders that fall beyond the review period if you selected the Mfg order firm field in the Manufacturing Order Maintenance (MIM) program. The program never reschedules firm orders.
Deletes all non-firm planned orders, including past due planned orders, and then re-plans the item.
If the Auto planning? field is blank for an item, Finished Goods Planning:
Prints exception messages when it perceives scheduling problems for firm planned orders during the review period.
Deletes all non-firm planned orders that past due or beyond the review period and then re-plans the item.
Quantities
The quantity that Finished Goods Planning specifies for a planned order is controlled by the Max plan period (maximum number of days), Min order qty (minimum order quantity), and Lot size fields in the Branch Item Maintenance (IMB) program.
When Max plan period is 0 or 1, the quantity ordered is the net requirement for the day on which the order is scheduled. When Max plan period is n, where n is greater than 1, the quantity ordered is the net requirement for n days beyond the date on which the order is scheduled.
You can modify the quantity ordered using this logic:
For a |
The quantity ordered is |
Minimum order quantity greater than the net requirement |
The minimum order quantity |
Lot size of 0 or 1 |
The net requirement or the minimum order quantity |
Lot size greater than 1 |
A multiple of the lot size, so that the quantity ordered will be equal to or greater than the net requirement and the minimum order quantity |
Reschedule Assumption
Finished Goods Planning uses the rescheduling assumption in its planning. If the available quantity drops below zero, the program looks in the future for replenishment orders to be moved in rather than to create new planned orders.
If an order is designated Firm, the program will not reschedule or cancel it. If an order's status is not firm, this occurs:
Order type |
Possible action |
Planned Order |
Reschedule |
Planned Purchase Requisition |
Reschedule |
Released Order |
Reschedule |
Released Purchase Requisition |
Not Rescheduled |
Note
If the demand order for the requisition or transfer is a sales order then
the requisition is considered "Firm" and cannot be moved.
Messages
Finished Goods Planning displays message to indicate action (for example, when an order is rescheduled or cancelled) or recommend manual rescheduling or cancelling of orders when you have inhibited automatic re-planning.
If you enter a number of days for the MFP - move in message suppression and MFP - move out message suppression options in the System Options Maintenance (XM) (Manufacturing Options) program for your manufacturing branch, you limit the number of move in and move out messages. The program skips move in and move out messages for immediate supply items:
The Create immediate supply order option in the System Options Maintenance (XM) program (Inventory Control Options) is set to Y or I.
The entry in the Item code field in the Enterprise Item Maintenance (IM) program matches the entry for the Immediate supply item code option in the System Options Maintenance (XM) program (Inventory Control Options).
If you enter a number of days for the MFP - days order due for release option or leave the MFP - print order release message? option blank, you limit or exclude the "Planned order due for release" messages.
The program skips the Demand exceeds supply message if all of these conditions are met:
The Create immediate supply order option in the System Options Maintenance (XM) program (Inventory Control Options) is set to Y or I.
The entry in the Item code field in the Enterprise Item Maintenance (IM) program matches the entry for the Immediate supply item code option in the System Options Maintenance (XM) program (Inventory Control Options).
The Make/Buy/Kit field in the Enterprise Item Maintenance (IM) program is set to M, and the item has a standard bill of material.
The demand is from a past due forecast.
Standard Item Planning Formula
If you are planning standard items (make to stock), these definitions apply:
Term |
Definition |
Forecast variance |
The difference between the forecasted demand for this item (including a family forecast) and the quantity that was actually consumed. Forecast variance is the value displayed in the Fcst variance field in the Forecast Maintenance (MSF) program, which can be in the negative. Thus when demand is greater than the forecast, the system uses demand for planning. |
Other requirements |
Demand data that is supplied directly from order entry programs and from material usage by manufacturing orders. Other requirements represent unshipped sales of the item and actual manufacturing demand for the item. The Planning Profile Inquiry (MRD) and Planning Profile Maintenance (MPM) programs take into account other requirements. |
Available quantities |
Finished Goods Planning calculates avail qty as: Quantity on-hand + Floor stock + Quantity intransit - Obligated quantity - Safety stock + Planned and released orders - Other requirements - Forecast variance |
Other supply |
Released orders + Purchase requisitions + Purchase orders |
Planned quantities |
Firm and non-firm planned orders. The program calculates these quantities to meet the requirements schedule based on demand for any given date. The program can reschedule or cancel existing non-firm orders. The program cannot reschedule orders that are firm, but it can generate exception messages if you want. |
Available To Promise (ATP) |
The program uses these quantities to calculate ATP for the horizon date: Quantity on-hand + Floor stock + Quantity intransit + Planned and released orders - Other requirements In subsequent periods, the program calculates ATP as: Preceding period's ATP + Planned and released orders - Other requirements |
Planning Formulas for Configured Products
If you are planning configured products (build to order items), these definitions apply:
Term |
Definition |
Sales |
Independent sales for the forecast period |
Forecast variance |
The difference between the forecasted independent demand for this item and the quantity that was actually consumed through independent demand from the Forecast Maintenance (MSF) program for the configured product plus family forecast. |
Other requirements |
Dependent demand for this item due to forecasted demand for its parent item. The program calculates: Non-cumulative ATP for each parent x Popularity and usage factor of the component The sum of the resulting value for all parents is the component's production forecast. It includes the safety stock that entered for the configured product at a higher level. The calculation is the same as for standard items, except that there is no manufacturing demand. It also includes a way of establishing safety stock demand for configured product components according to popularity. |
Available quantities |
Finished Goods Planning calculates them as: Other supply + Planned orders - Other demand - Forecast variance |
Other supply |
Existing released orders + Manufacturing orders |
Planned quantities |
Reflect the automatic planning done by the program to meet quantity and scheduling requirements for the configured product. These values are the quantities of the configured product that must be assembled each day to fulfill forecast and actual demand. |
Available To Promised (ATP) |
The program uses these quantities to calculate ATP for the horizon date: Quantity on-hand + Planned and released orders - Other requirements In subsequent periods, the program calculates ATP as: Preceding period's ATP + Planned and released orders - Other requirements |
Finished Goods Planning Report
The program reviews all families and configured products when calculating the dependent demand imposed on the finished goods items being planned.
The report that Finished Goods Planning outputs can be quite extensive. One way to save paper is to output it to a spooler, email, or PDF file.
The report includes this header information:
Horizon date
Selection criteria: Your choice for the Select sort option Program option and your Selection option range or ALL if blank
The report includes this information for each item listed:
Item number and description
Item code
Planner selected for this item in the Branch Item Maintenance (IMB) program
Buyer selected for this item in the Branch Item Maintenance (IMB) program
Product class selected in the Enterprise Item Maintenance (IM) program
Number of days the current plan should be held firm, which you entered in the Cushion Program option in Finished Goods Planning
Stocking unit of measure
Group on hand: Quantity in on hand inventory in branches in your inventory group
Safety stock quantity specified in the Safety stock field in the Branch Item Maintenance (IMB) program
Manufacturing lead time entered in the Mfg LT field of the Branch Item Maintenance (IMB) program
Scrap percent entered in the Scrap % field in the Branch Item Maintenance (IMB) program
Branch on hand: Quantity in on-hand inventory in your login branch
Quantity short entered in the Qty short field in the Branch Item Maintenance (IMB) program
Accumulated lead time from the Accum LT field of the Branch Item Maintenance (IMB) program
Quantity booked this year
Quantity shipped this year
Forecast spread: The number of days entered in the Spread forecast field of the Branch Item Maintenance (IMB) program
Quantity in floor stock
Lot size quantity entered in the Lot size field in the Branch Item Maintenance (IMB) program
Put-away lead time entered in the Put-away LT field in the Branch Item Maintenance (IMB) program
Quantity booked last year
Quantity shipped last year
Planning period code entered in the Branch Item Maintenance (IMB) program or DFAULT if blank
Minimum order quantity entered in the Min order qty field in the Branch Item Maintenance (IMB) program
Maximum days to be covered by a single order from the Max plan period field of the Branch Item Maintenance (IMB) program
If you selected F (full planning report) or I (include a planning profile report only for those items that have exception messages) for the Select report type Program option, the report includes this information for each item:
Date: The start date of the period. The first period is always PAST DUE **
Days: The number of days in the period
Sales: The quantity committed for customer sales orders but not confirmed shipped
Fcst var: The difference between the forecast quantity and sales: Forecast - Sales
Other req: Material usage, outgoing transfers, safety stock
Available = Quantity on-hand + Floor stock + Intransit - Obligated - Safety stock + Planned and released orders - Other requirements - Forecast variance
Other supply: Quantity on hand, quantity released to the shop, incoming transfers
Planned: Quantity on orders that the system planned for the period
A.T.P.: Available To Promise, which is uncommitted inventory and planned production to support the forecast for sales orders
The system calculates ATP for the horizon date as: Quantity on-hand + Planned and released orders - Safety stock - Other requirements
In subsequent periods, the program calculates ATP as: Preceding period's ATP + Planned and released orders - Other requirements
Message: The messages that display depend on options set in the System Options Maintenance (XM) (Manufacturing Options) for your manufacturing branch or enterprise. These are example messages:
Cancel Mfg [manufacturing order number]
Cancel TrnReq [transfer requisition number]
Cancel Trn [transfer number] [line number]
Cancel P/OReq [purchase requisition number]
Cancel P/O [purchase order number] [line number]
Demand exceeds Supply
Move firm [order number] OUT to [date]
Move Planned Order IN for Past Req
Move Planned Order OUT to [date]
Planned Order Cancelled
Planned order due for releaseTotal sales, forecast variance, other requirements, other supply, and planned orders
If you selected E (generate a listing of all advisory messages for each item) for the Select report type Program option, the report includes this information for each item:
Messages: The messages that display depend on options set in the System Options Maintenance (XM) (Manufacturing Options) for your manufacturing branch or enterprise. These are example messages:
Cancel Mfg [manufacturing order number]
Cancel TrnReq [transfer requisition number]
Cancel Trn [transfer number] [line number]
Cancel P/OReq [purchase requisition number]
Cancel P/O [purchase order number] [line number]
Demand exceeds Supply
Move firm [order number] OUT to [date]
Move Planned Order IN for Past Req
Move Mfg [order number] OUT to [date]
Planned Order Cancelled
Planned order due for release
If you selected the Pegging? Program option, Finished Goods Planning also prints the Requirements pegging report:
Due date
Requirement type: Customer orders, Unconsumed forecast, Transfer out, Requisition, Scrap allowance, Safety stock, Floating shortage
Quantity required for this type
Sub-total for this requirement type
Manufacturing branch
Source: Customer sales order number followed by the line on which this item was ordered
Item no: Number of the item to be transferred or on the requisition
ECL: Engineering Change Level for the bill of material
Supply order no: Manufacturing order number, purchase order, requisition, transfer number
Firm:
F: This order cannot be rescheduled.
Blank: This order can be rescheduled.Lead time
Demand type: S/O: Sales order
Supply type: MFG: Manufacturing order, P/O: Purchase order, REQ: Requisition, TRN: Transfer
Total required
At the end of the report, this information appears:
Runtime exceptions if you select S or L for the Select exception report type Program option. Runtime exceptions are also set to the E-mail for mfg order notification specified in System Options Maintenance - Manufacturing Options.
Start time, print time, and end time
Reprinting
If you select F (full) for the Select report type, you can subsequently reprint the report, using a different Select sort option as long as you did not select the Erase work files? Program option. For example, you may print the report sorted by planner code and then want to print the same report by product class.
** Reprint ** appears in the header of a reprint.