Master Planning: Use a static and dynamic Master Plan or use one plan?

Dynamics AX 2012 - Master Planning

 A guideline for the static and dynamic plan functionality

All ERP systems have the concept of a “plan”, which is the foundation of the planning logic. All planned orders are tied to a specific plan. The reason is of course the need to do simulations. One plan is typically the “real” plan that runs the business. Other plans are just for testing and simulating. It has been this way for decades in the ERP world.

Dynamics AX extends this functionality with the option to use two plans that are both “real” and are both official plans. They are called the static and the dynamic master plan.

                       

The thinking behind the idea of a dynamic plan

The “two-plan – MRP” idea is designed for businesses that are Make-to-Order or Assembly-to-Order, where a new sales order triggers lower level demand.

If your business is 100% make-to-stock or repetitive manufacturing, one plan is the way to go and you can stop reading now.

The two-plan option was developed from the very beginning to protect the planner/buyer from seeing new sales orders and all kinds of dependent demand appearing in the Net Requirements screen during the working day. (Net Requirement screen is shown below)

Without a dynamic plan, a new sales order shows up immediately in the Net Requirement screen. That by itself may not be such a problem.

The bigger issue is the consequence that comes from the enhanced capability in Dynamics AX  to run an explosion on a specific sales order line, which is essentially the same as running CTP (Capable-to-Promise). Without the dynamics plan, this means that a potentially large number of planned orders will show up for a large number of part numbers on lower BOM-levels. It would disrupt the daily routine of the planner/buyer, adding new orders to the “to be firmed” list and adding new action messages.

This was the reason to introduce the dynamic plan that forms a “buffer” and picks up all the changes during a business day while the static plan remains blissfully uninformed until the next day.

When we run the official MRP, using the static plan, a “Copy” checkbox will make sure the static plan will have all the new demand from the dynamic plan so at the start of the next day the plans are equal again.

 

Using a static and a dynamic plan, how does it work?

The regular MRP run is using the Static plan.

All demand that is in the system at the moment of running will of course be seen by that static plan. When MRP is not running, and new Sales orders or new manual production orders are created,they ONLY appear in the Dynamic plan, and they appear immediately. No explosion is needed. Also, all new transactions that are created manually are only “seen” by the dynamic plan. When explosions are run in Sales order lines or for Production orders, they will be for the Dynamic plan only. (The system takes the dynamic plan from the Master Planning parameters.)

With the “Copy” checkbox checked (and I see no situation where you would not check that box), the plans are synchronized the next time the MRP – static plan runs again.

 

With two master plans, our list of planned orders and action messages does not change throughout the day.

With one master plan, we would copy that list to Excel.

Working with two plans, PRO/CON

PRO – Planner/buyer works from a stable list of planned orders and action messages

PRO – Sales / customer service can use CTP as much as needed without affecting the workload of the planner/buyer directly (the roles are effectively decoupled. When MRP runs nightly, the decoupling lasts exactly 1 business day.

CON – Planner/buyer is not aware of the latest changes (sales order bookings and their consequences on lower BOM-levels)

CON – it is making the work more complicated. One has to pay attention to be in the right plan. Because nothing stops a user from firming planned orders in the dynamic plan (both plans are “live” and run the business), it can get confusing.  Example: firming a planned order in the dynamic plan results in a production order that will NOT be visible in the static plan until after the next MRP – run.

Working with one plan, PRO/CON

PRO – Work procedure is straight forward. There is only one “live” plan and other plans are for simulation only.

PRO – No issue with the wrong plan defaulting in the Net Requirement screen.

PRO –   If you firm all “Planned Orders” (Production, Purchasing and Transfer) as a rolling one to two weeks, before the Order/Start date, the planner can react to anything that comes up as new demand within that one to two week window

CON – Potential for last minute changes in the planned orders and action messages for the short term, but most users work with an export to Excel to create a stable list and changes will not be seen until the next export.

Conclusion

-          We see very few situations where working with two plans, a static and a dynamic one, is really necessary. Even if order promising is used frequently, the sales order requested ship date is not necessarily that tight that the explosion would severely modify the list of planned orders and action messages for the short term. In the short term, our orders should be firm.

-          The user can easily make his own snapshot to create the desired stability in the ‘to do ‘ list using Excel export or a report

Addendum: Using Simulation plans

The user can create as many plans as are necessary, keeping in mind that discipline is required to never firm anything out of these plans. WARNING: the system does not really “know” that your plan is a simulation. Because these plan codes are not mentioned in the parameters, the net requirement or planned order screen will never default to any of them but the functionality for a simulated plan is identical to that of any plan. Firming from any simulation plan is a real danger.

Otherwise the procedure is simple. The user starts with making a copy of the current “real” plan and then adds forecasted sales for the future period (a quarter or a year). Then MRP is run for that simulation-plan and we can check different outputs, hours loaded on resources, total dollars of purchase expenses, and more. This fits perfectly in an S&OP procedure. When the simulation is finished, the plan can be deleted (probably a good idea).  It is a best practice to give the simulated plan(s) a very distinct code and name so they stand out.