Material Planning Logic (MPLC)

Material planning logic (MPLC) is the built-in logic in M3 that aims to calculate demands based on a number of factors.

MPLC is a central part of material planning in M3. It provides the planner with information on every item and supporting function.

Material planning can use one or several demand sources. Normally, however, material planning uses only the order type that accounts for the largest part of material usage. This work method is called proactive planning, and it requires special settings. Proactive planning in this case is the same as intelligent calculations of future demands.

The general goal is normally to plan stock management so as to avoid tying up capital in stock. Material planning logic is crucial to planning good stock management. The best way to reduce stock is to continually aim to lengthen the decoupling points for customer orders and minimize lead times.

MPLC does not have a capacity limit, which carries a risk for overproduction. The intention is to answer the question: What must be produced to satisfy a specified demand?

Summary of main functions

MPLC supplies a basis for exact material planning and focuses on three planning types for acquisition:

  • Product manufacture
  • Material purchase
  • Item distribution between facilities and warehouses

MPLC supports several different planning methods, which are independent of the order’s entered planning method.

Examples of planning methods are:

  • Time-phased order point
  • Order point (on warehouse or facility level)
  • Order controlled replenishment
  • Manual planning.

Multiple delivery situations

MPLC allows the use of several suppliers as well as several sources for distribution, for example when an order quantity is picked from several warehouses.

Replanning

MPLC supports both continuous net change and batch rescheduling as well as full regeneration for all types of planning cycles.

The main difference between these work methods is how often planning is checked by MPLC. For more information, see Planning Frequency.

Smooth planning

MPLC supports smooth manufacturing planning and material planning. MPLC also distributes both planned and scheduled receipt of goods and material reservations according to daily production and use.

All of these minimize the need to regularly have coverage at facilities. It also leads to a more realistic simulation, which increases the possibility of guaranteed deliveries.

Action messages

Planners are sent messages about problems via MPLC. These are called action messages and come in the form of exception codes.

If the manufacturing and distribution processes work well, only a few items will require daily planning. That means the entered action messages refer to extraordinary order proposals.

Lot-sizing rules

Lot-sizing rules are applied per warehouse unit. Examples of lot-sizing rules are:

  • Periodic order quantity
  • Lot for lot
  • Lowest unit cost
  • To maximum stock quantity
  • Recurring cyclic quantities
  • Wilson’s formula
  • Least and highest order quantity
  • Package multiples

Orders can be released automatically by MPLC, providing that a planner defined it as such.

With MPLC it is possible to check that an order is within normal lead time and that all necessary information has been entered. If the order must be added to or adjusted, it is marked for manual processing.

Planning horizon

Normally all items are included in the planning horizon selected in the material plans (applies only to time-phased processing).

The planning horizon must be at least as long as the longest lead time among the products plus a possible consolidated distribution lead time.

MPLC can handle two dimensions of planning horizons simultaneously; one used daily and another used less often, for example once a week.

Planning policy

Planning policies are defined per basic unit of measure. It is a flexible tool that allows a series of different work methods according to parameters that are set; for example, with regards to delayed action messages and adjustment of order points.

MPLC can control cover time planning, a method that in certain situations is more dynamic than traditional order points.

Time fences

Time fences are used in MPLC to allow a planner to establish further demands and a planning policy within valid planning horizons. The idea is partly to create a realistic picture of demands, and partly to set limits on automatic rescheduling.

Both fixed and dynamic lead times can be used in MPLC, so that the order quantity is considered when reservation dates are automatically set for material and such. To reduce probable risks in date setting, checks are made against both safety stock and safety time.

MPLC is a demand-oriented material planning system, which specifies exact release dates and requirement dates for every demand, scheduled delivery and planned order.

Bi-level master planning

MPLC handles bi-level master planning (2-LMPS). Scheduling is done on two different product structure levels by either using a schedule for a final montage and a master production schedule, or two separate master production schedules.

Bi-level master planning is used primarily at assembly or manufacturing against customer order, since bi-level master planning allows greater control over more complicated assembly and distribution processes. Normally, bi-level master planning is also used if the customer wants final configuration for configured products.

Finally, bi-level master planning can replace planned orders with real material demands, instead of using the item structure’s calculated percent.

Using bi-level master planning makes is possible to use available-to-promise when promising customer deliveries.

Demand flow in MPLC

The demand flow gathers, coordinates and processes all real and potential demands.

The most important demands include the following types of transactions:

  • Customer order
  • Service order
  • Requisition order
  • Manufacturing order
  • Distribution order
  • Forecasts
  • Master order scheduling
  • Stock changes
  • Planned order

The reason the demand flow is a part of MPLC is that the MPLC considers and/or develops the most likely developments of existing or planned future demands that must be filled. This happens either by reducing stock, creating new orders, or replanning the time on existing orders.

By handling the demand flows in a planned manner, unnecessary changes are avoided and variations in the market can be noticed as early as possible.

Capital flow in MPLC

The capital flow is the motor that executes and evaluates item planning.

The capital flow begins with on-hand balance and continues with demand and existing orders being processed in chronological order. Possible deficits are determined by comparing stock development with valid levels for safety stock.

This logic determines whether scheduled deliveries and fixed planned orders will be available in time, if the order must be replanned or if a planned order should be created.

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