This supply planning solution was designed for a production company operating multiple distribution centers and manufacturing facilities. The company delivers many products directly from stock, while others follow predefined customer‑order lead times. These lead times enable assemble‑to‑order, make‑to‑order, or even procure‑to‑order fulfillment strategies.
The supply planning process cascades independent demand (sales orders, forecasts, and safety stock targets) from distribution centers down to assembly plants. The assembly plants, in turn, generate demand for modules and sub‑modules at upstream production facilities. Both production stages may involve subcontractors.
Planning for pure make‑to‑stock and pure make‑to‑order products is relatively straightforward. The challenge lies in products with intermediate “on‑order” stages. In assemble‑to‑order scenarios, complete demand for assemblies must be available; in make‑to‑order scenarios, complete demand for purchased parts must be secured. This ensures that when a customer order arrives, the predefined customer‑order lead time can be met.
To achieve this, planned receipts for the on‑order stages were generated based on the forecast of the finished products. To avoid premature execution, only those planned receipts ultimately pegged to actual sales orders were eligible for conversion into real production or purchase orders.