Planning is a key element in supply chain management. The manufacturing plan consists in creating work and material requirements based on product demand.
Building an accurate plan is vital to satisfy customers’ requirements and reach equilibrium between supply and demand. Accurate plan means accurate forcast and reliable data…
Demand is composed of:
- Sales Orders
- Sales forecast*
*Estimation using combination of historical, statistical, and intuitive forecasting techniques.
When agregated demand is ready, the simulation can start. The Simulation is a long and medium term analysis of all future manufacturing activities leading to purchasing and resource plans.
Simulation activity provides feedback regarding all or part of demand that is feasible for production. The validated demand is firmed for loading to the production plan.
The following diagram depicts overview of forecast to plan process and relationship between simulation plan and production plan.
Please note that lead times play an important role in the planning process. If the lead time is null or blank, the system will assume that all items can be manufactured and procured in no time at all. For more information about the lead times, click here. Click on define lead times if you would like to know how to set up lead times in Oracle eBusiness Suite.
The MRP (Materials requirements planning) is the final step of the planning process. its output are planned production orders, purchase requisitions or planned purchase orders.
In Oracle eBusiness Suite, this process involves the following modules:
- ASCP: Advanced Supply Chain Planning – Recognition of demand, supply chain planning and generation of planning recommendations.
- BOM: Oracle Bills of Material – Definition of product structure (bills of material) and manufacturing processes (resources, routing etc.).
- CST: Oracle Cost Management – Maintaining cost of items & recording cost transactions.
- INV: Oracle Inventory – Definition of all items & storage locations. Performing inventory transactions, replenishment planning etc.
- PJM: Oracle Project Manufacturing – Enforcing project manufacturing rules in manufacturing, procurement, inventory transactions & order management activities.
- PO: Oracle Purchasing – Recording purchasing requisition, purchase order, sourcing related transactions.
- WIP: Oracle Work In Process – Recording manufacturing related transactions (e.g. building of discrete standard / non-standard WIP jobs).
- OM: Oracle Order Management – Recording customer sales orders and internal sales order which places demand on manufacturing.