# Planning principles

Simulation comprises these steps:
1. Locked operations (in process in status 60 and locked in sequence status 20/21/22).
2. Keep sequenced locked operations (sequence status 15 & 17).
3. Sequence optimization. Simulation can contain sequencing steps.
4. Remaining operations and orders planned according to priority.
5. Pull-up.

Simulation starts the planning operations with the toughest constraints and then steps by step plans all the orders and operations.

## Forward planning and backward planning

Planning allows you to calculate, for each operation and order, the planned start and end, and the latest start and end.

The planned start and end are the plan where orders are planned forward as early as possible. If pull-up is activated, orders are pulled up to the due date or to the latest end.

The latest start and end identify when each order and operation must start, at the latest, to avoid delay. End-item orders are planned backward from the due date with an infinite capacity. Component orders are planned backward from the latest end with an infinite capacity, where the component order inherits the latest end from its parent order with the earliest latest start. The latest start and end are the ideal Just in Time (JIT) plan if it was the only order in the factory. The latest start and end are used for several purposes:

1. Priority of orders
2. Pull-up to the latest end
3. Identify if an order or an operation is delayed or too early
4. Identify the cause of delay, for example, the operation or material at the origin of the delay
5. Identify the required capacity, for example, the resources with overload and their periods

## Planning one order

Orders are planned one at a time. For each order, the operations are planned individually, where the earliest start of the operation is determined.

For example, this information can be used:

• The supply time of materials
• The supply time of the previous operations
• The earliest start that is defined on the operation or the order

If the operation contains a work center with multiple resources, then it is planned on the resource with the earliest end. The primary operation can be connected to secondary parallel operations. In this case, the primary and secondary operations are validated simultaneously.

## Priority

Orders are planned according to priority. Orders are sorted by internal network priority and then by internal order priority. To ensure that component orders are planned before parent orders, component orders inherit priority from the parent orders, that is, +1 in internal order priority. Priority is inherited only if the parent order has a higher priority than the component order.

Three priority methods can be used:

1. Orders

Using the latest start, prioritization is performed at order level.

The latest start is used as internal order priority. This method is used to produce several different end items. The latest start is based on the due date and then calculated backward according to lead time. If several products have similar lead times, the primary due dates control priority. By increasing external order priority, you can increase the priority that relates to specific orders. In this case, an offset in days is defined on the due date. Unless you increase priority for a few specific critical orders by increasing external network priority, internal network priority is not used in this method. Consequently, all orders are planned forward, then pulled up.

2. Few huge networks

Prioritization is performed on the related orders that form a network. Each network is planned as a whole. The highest network is prioritized first and pulled up to make room for the next network. Delays are concentrated on the lowest prioritized network.

Internal network priority and internal order priority are used. This method is used to produce few end items. Each end item is produced by a huge order network. Priority is primarily controlled by external network priority. Priority is secondarily based on the due date of the network end-item order. All orders that deliver to one network are planned forward, then all orders in that network are pulled up. The purpose is to plan the network by itself using all the remaining capacity to ensure delivery on time or to minimize delay. After a network has been planned forward, the network is pulled up to free capacity for the next network. Thereby the best possible delivery is identified for each network in order of priority. In case of delay, as many networks as possible are delivered on time and the delay is concentrated on as few low priority networks as possible. If the order priority method is used on huge networks, all networks are usually delayed instead of just a few networks.

3. Custom

If, during simulation, you deselect the Standard option, you can select this option. This option allows you to set priorities individually.

This method enables a more advanced setup of priority parameters. This method requires a deeper understanding of planning principles. We recommend you to start using the other two methods. Use this method only if the plan is not good enough.

## Pull-up

Pull-up is performed after forward planning. Using forward planning, you can plan orders as early as possible. If an order is planned much earlier than the latest end, use pull-up to re-plan orders closer to the latest end. The first purpose of pull-up is to free capacity for other orders. The second purpose of pull-up is JIT production instead early production, and to avoid stock. If the internal network priority is changed, then pull-up is performed. We recommend you to consider using the priority method and the pull-up method together.

Three pull-up methods can be used:

1. No pull-up.
2. Pull-up. The simulation is conducted with these standard pull-up codes:
• Pull-up code for too early end item orders = Due date
• Pull-up code for delayed item order = Last operation
• Pull-up code for too early component orders = Latest end
• Pull-up code for delayed component orders = Last operation
3. Custom. If, during simulation, you deselect the Standard option, you can select this option. This option allows you to set the pull-up codes individually.

Pull-up in combination with order priority allows you to plan forward all orders. After all orders have been planned forward, they are pulled up. Pull-up is performed in reverse priority order. For example, the order with the lowest priority, which is usually the order with the latest due date, is pulled up first. This operation can free capacity for the order that is pulled up later. With standard pull-up codes, only the orders that are planned too early are pulled up. Orders are pulled up only if they can be planned later without causing delay. In case of a periodic overload in the future, the orders with the lowest priority are pulled up to the due date. When no more free capacity in the period with overload is available, the orders are pulled up as much as possible according to the remaining capacity. The result is that the loading is leveled out from the period with overload and produced earlier instead.

No pull-up horizon in days is an important parameter. If all orders are pulled up, then, on the short horizon, the production could be too low. The orders with the latest start inside the no pull-up horizon are not pulled up. For example, if you specify a no-pull horizon of 14 days, then the orders that must be produced inside the next 14 days at the latest are not pulled up. This parameter ensures production on the short horizon. This rule is based on the latest start and end. If an order with a due date far into the future is planned forward inside the first few dates, for example, on a resource with no other load, then that order is still pulled up. The reason is because the order latest start and end is outside the no pull-up horizon.

Using pull-up with huge network priority, you can plan forward all the orders in a network. When the entire order network is planned, then the next order network has another internal network priority. Because internal network priority changes, all the orders that are already planned are pulled up. The already planned network is pulled up, which frees capacity for the next order network.

If a component order delivers to several networks, then it is planned forward with the highest priority network, but is pulled up with the lowest priority network to which it is delivering. A field on the order header "Lowest Internal Network Priority" controls the pull-up time of a component.

Using the custom pull-up method, you can specify advanced pull-up parameters. This method requires a deeper understanding of planning principles. We recommend you to start using no pull-up or pull-up with the standard codes. Use this method only if the plan is not good enough.

## Booking

Booking must respect available material and available capacity. If a capacity of 100% is planned inside a horizon and new customer orders are accepted inside this horizon, then the feasible plan becomes not feasible. Booking and planning affect each other. Before determining how to determine the best method to handle booking and planning, you must understand the company's planning concept and organization.

Some companies produce many end items and continuously receive customer orders. This configuration usually requires a fast delivery date reply, which can be down to seconds. M3 contains the Available to Promise (ATP) and Capable to Promise (CTP) functionality that provides delivery dates based on M3 information. An alternative approach is to identify available capacity in planning. Based on this information, you can decide a booking horizon, for example, the earliest due date on new customer orders. Some companies produce several product types using different capacity. In this case, booking horizons can be defined for each product type.

Other companies produce huge networks with a complicated BOM and long lead times. This configuration usually do not require a delivery date reply in seconds. Production and delivery of a complicated project usually accepts a delivery date reply in days. In this case, you can perform these operations:

1. Define the order network.
2. Plan the new networks together with the existing networks.
3. Simulate different approaches, for example, subcontracting and increasing capacity.
4. Determine a feasible delivery date.