Master Planning Does Not Work for All Electronic Manufacturers

August 5, 2020

Microsoft Dynamics 365 Finance has some valuable improvements coming for the performance of the existing master planning engine. However, it is somewhat disappointing that it is not addressing the true needs of many discrete manufacturers. The foundation of the new master planning engine is still the basic concepts that were delivered over 50 years ago.

As manufacturing has leaned out waste and coupled production tightly with actual customer order demand, the flaws within the system have become glaring issues that have required incomplete work arounds. Such as:

  1. Capable to promise and shortage inquiries running over the top of previous master planning runs.
  2. Available material is “reserved” during the master planning run on a first come first serve process.
  3. The Master Plan sequence is still low-level code and an item number. This means that items are processed sequentially grouped by their lowest level of existence in any BOM.
  4. Substitutions are virtually non-existent, let alone handling one-way substitutions (for example, you can replace a 10ft board with an 11ft board, but not the opposite) or interchangeable substitutions. If you do utilize substitutions, it is based on a hierarchical list evaluated based on availability. As opposed to evaluating all substitutions and selecting the sub that is company owned inventory AND fills the sales order total requirements, thus avoiding partial substitutions and requesting vendor owned inventory before consuming existing company owned inventory.
  5. With Master Planning, scheduling production to a day and time still treats material requirements as a daily bucket, it does not support vendor managed inventory programs where material requests could be occurring every hour based on the next two hours of the production plan.
  6. Multiple production units that can build the same product – line loading and balancing.
  7. Coordination of the warehouse management work to deliver the components to the line in a timely fashion. And 100% guarantee that the work created can be executed without any errors, these errors could violate the entire wave and cause a re-plan.

At MCA Connect, we work with the largest and the most complex “Mass Customization” global manufacturers leveraging Dynamics 365. Together, we have built an alternative solution called Fixed Interval Scheduling for master planning to resolve these issues.

Our solution will help manufacturers:

  1. Evaluate customer sales order backlog sequenced by company defined priority to determine if you can build the sales order line complete. If you cannot, free up the inventory and evaluate the next priority sales order line. As you evaluate the sales order line, drop down as many levels in the bill of material as required, no more item and low-level code sequencing!
    1. If the sales order must ship complete, and has a shortage, free up all of the material for the sales order and make it available to the next priority sales order.
    2. If the sales order is important enough that you want to hold inventory for it even though it is short components, simply flag the order to hard allocate.
  2. We have created smart substitution logic that will select the component that meets the needs of the organization, not simply use primary and then secondary.
  3. Evaluate and prioritize the entire sales order backlog multiple times a day in order to create a production schedule for a fixed interval of time as short as 1 hour. This means if a very high priority order is entered during the day, it would be evaluated and built in the next schedule release.
  4. You can generate requests for materials from off-site supplier owned inventories multiple times a day, thereby reducing your inventory carrying costs.
  5. You can also generate a substitution aware component shortage analysis for buyer/planners as often as you need by sales order.

Manufacturing has evolved globally over the last 30 years and now is the time to evaluate the planning and scheduling engine from MCA Connect that is built for today. Contact us to discuss what your needs are and how we can work together to meet them.

Author: Doug Bulla, VP of Solution Development


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