Combine Make-to-Stock and Make-to-Order

Supply planning was designed for a production company which has multiple distribution centers and production facilities. The company delivers many products from stock while for other products a predefined lead-time is used. This customer order lead-time allows to assemble products to order, to make the complete product to order or even procure-to-order. The supply planning process cascades independent demand (sales orders, forecast and safety stock targets) from distribution centers to assembly plants. The assembly plants generate demand for (sub) modules to production facilities further upstream. Both production stages can include subcontracting. The generation or supply for pure make-to-stock and pure make-to-order products is relatively straightforward. For the products with ‘on-order’ stages this is more challenging. It is important to have complete demand for assemblies in an assemble-to-order situation and complete demand for purchased parts in a make-to-order situation to have these products available when the customer order is placed so that the predefined customer order lead-time can be met. Therefore also planned receipts for the on-order stages were generated against forecast for the end products. To prevent unwanted early execution, only the planned receipts for on-order stages which ultimately were related (pegged) to sales orders could be converted to orders.