MRP and Planning Overview Dynamics NAV Aggregate info from many sources\blogs

1. RobertoStefanetti, MVPBusinessSolutions- NAV
MicrosoftEducationInfluencer
https://robertostefanettinavblog.com

2. MRP AND PLANNING TOPICS
MRP AND PLANNING TOPICS

3. ERP in Historical Perspective
 MRP
 MRP II
 ERP
 ERP II (or x-ERP)

4. MRP
MRP (Materials Requirement Planning)
 Deciding about material requirement for a production
process
 Using a BOM and the quantity of needed finished
products
 Material requirement leads to purchase proposals and
eventually to purchase orders
 Bike example

5. MRP II
MRP II (Manufacturing Resource Planning)
 Not only raw materials
 Also resources like machines and people (capacities)
 Resources
 MRP II aims at manufacturing control

6. ERP
ERP (Enterprise Resource Planning)
 Enterprise wide
 One integrated system instead of different separated
systems
 One central database
 A way of thinking about dealing with processes, so
process orientation
 EPC’s: Event Driven Process Chains
Chain of activities

7. ERP
 ERP as a package
 standard software package with a very integrated
functionality, which stretches out over all business
processes in an organization.
 ERP as a phenomenon
 enterprise wide integrated planning and steering concept
 Organizational structure and management;
 Products, services and business processes;
 Information technology (computers, communication
infrastructure, systems, internet, e-mail);
 People, competences and culture.

8. ERP II
ERP II (Extended ERP -x-ERP)
 Collaboration between companies to reach a better
position in the Supply Chain
 Intra-enterprise collaboration = ERP
Inter-enterprise collaboration = ERP II
 Possibilities of Internet, EDI
 Web Services

9. SCM
SCM (Supply Chain Management)
 Chain of companies that form a chain from natural
resources to a product that is sold to a final consumer
 Companies want to defend or extend their position in
the Supply Chain
 Supply Chain Management
 See chapters 5 and6

10. PRO & CONTRO
PRO CONTRO
 Integration
 Process orientation
 Simple user interface
 Openness
 One vendor
 State-of-the-art
 International aspects
 Long implementation
periods
 Complexity
 No made to measure
solution

11. BEST INTERNATIONAL PLAYERS
 SAP
SAP Business Suite, All-in-One, Business One
 Oracle
Oracle Financials, PeopleSoft, JD Edwards, Fusion
 Infor
Mapics, Baan, LN, SSA Global
 Microsoft Dynamics
Dynamics NAV, Dynamics AX, Dynamics CRM
 Industry Solutions
 Nationality solutions
 Others

12. SCM
SCM (Supply Chain Management)
 Collaboration: competitors  partners
 Demand Chain versus Supply Chain
 Technology
 EDI
 RFID

13. CODP – Customer Order Decoupling Point
CODP 1
Make-to-stock
CODP 2
Assemble-to-Order
CODP 3
Make-to-Order
CODP 4
Engineer-to-Order
Manufacturing semi finished items
Raw materials Semi finished items
Manufacturing finished items
Finished items
Customer
Vendor

14. TRADITIONAL PRODUCTION SYSTEM

15. MST – Make to Stock
MTS - Make-to-Stock (COPD1)
 Produce entirely on stock
 Customer sales orders do not directly influence the
manufacturing process
 Manufacturing process is based on MPS, which is built
on sales forecast from the market
 Examples:
 Deep freezers
 Off-the-peg clothes
 Sanitary fittings

16. ATO – Assembly to Order
ATO - Assemble-to-Order (COPD2)
 Manufacture components/semi-finished items
according to MTS
 Op base of customer sales orders final assembly:
no MTS!
 Finished items are not manufactured on stock
 Customer has influence on the production process
 Example:
 Furniture with different levels of finishing touch (upholstery
of cloth or leather in a number of colors and qualities)

17. MTO – Make to Order
MTO - Make-to-Order (COPD3)
 Customer sales order stretches out deep into the
production process
 No stock production
 Standard materials and standard designs
 Longer delivery period
 Example:
 Computers with limited standard configuration possibilities

18. ETO – Engineer to Order
ETO - Engineer-to-Order (COPD4)
 Product specifications are not known beforehand
 First design, than customer specific purchasing, after
that manufacturing
 Sometimes modular design possibilities (‘lego bricks’)
 Costing calculation per order necessary
 Examples:
 Luxurious yachts
 Made to measure clothing

19. MPS – Master Production Schedule
MPS stands for Master Production Schedule
Basic definition:
It is a planning technique based on actual customer
orders and predicted demand.
Indicates when each ordered item will be produced in
coming weeks, and in how much quantity.
It is a plan specifying timing and quantity of production
for each end item.
MPS inputs come from sales and marketing .

20. MRP TOPICS
MRP TOPICS

21. MRP – Material Requirement Planning
MRP stands for Material requirement planning.
Basic definition:
 It is a planning technique which converts master
production schedule of end products into detailed
schedule for raw materials and parts used in those
end products.
 MRP is a means for determining the number of parts,
components, and materials needed to produce a
product

22. MRP – Objectives
Inventory reduction
Determines how many components are needed and
when in order to meet MASTER PRODUCTION
SCHEDULE (MPS)
Reduction in production and delivery lead times.
It helps to meet delivery deadlines by coordinating
inventories, procurement and production decision
Realistic commitments
Improves customer satisfaction.

23. MRP – Fundamentals Concepts
Independent demand:
Demand for the product is not directly related to
demand for other items
Is the demand for finished product.
It needs to be forecasted.
Dependent demands:
Demand for the product is directly related to demand for
some other product.
Is the demand derived from finished product.
Components required for finished product.

24. MRP – Full Structure

25. MRP – Full Structure

26. MRP – Outputs
Primary reports
Work orders / Planned orders - schedule indicating the
amount and timing of future orders.
Order Release - Authorization for the execution of
planned orders.
Action Notices or Rescheduling Notices - which orders
are to be released, revised and canceled during the
current time period.

27. MRP – Outputs
Secondary Reports
Performance control Reports – evaluate system
operations . They aid in measuring deviations from plans,
and also provide information to assess cost performance.
Planning Reports – are useful to forecast future
inventory requirements.
Exception Reports – these help to find the major
discrepancies such as late and overdue orders, excessive
scrap rates, reporting errors, etc.

28. MRP – Benefits
 Keep inventory levels to a minimum.
 Keeps track of inventory that is used.
 Tracks the amount of material that is required.
 Set safety stock levels for emergencies.
 Set up production times among the separate
manufacturing stages
 Plan for future needs of raw materials or components.

29. MRP – Drawbacks
 Inaccurate information can result in mis-planning ,
overstock, under-stock, or lack of appropriate resources.
 The inaccurate master schedule will provide wrong lengths
of time for production . Hence affecting planning.
 MRP systems can be costly and time-consuming to set up

30. MRP – Summarize …MRP is…
MRP is a…..
 Computerized Inventory Control
 Production Planning System
that…..
 Schedules Component Items as Needed
which will…..
 Track Inventory and…..
 Help you in many other aspects of business

31. MRP II - TOPICS
MRP II - TOPICS

32. MRP II – Manufacturing Resource Planning
Manufacturing resource planning (MRPII) is defined as a method
for the effective planning of all resources of a manufacturing
company.
MRP II serves as an extension of MRP (closed loop manufacturing
resource planning, also abbreviated as CLMRP)

33. MRP II – Structure

34. MRP II – Benefits
More efficient use of resources
Reduced inventories
Less idle time
Fewer bottlenecks
Better priority planning
Quicker production starts
Schedule flexibility

35. MRP II – Benefits
Improved customer service
Meet delivery dates
Improved quality
Lower price possibility
Improved employee moral
Better management information

36. PLANNING IN DYNAMICS NAV
PLANNING IN DYNAMICS NAV

37. MPS Vs MRP – Dynamics NAV Vision
http://www.archerpoint.com/blog/Posts/difference-between-mrp-and-mps

38. NAV - Basics of Demand, Forecast, MPS & MRP
https://community.dynamics.com/nav/b/technicaltipsandtricksfordynamicsnav/
archive/2016/06/12/basics-of-demand-forecast-mps-amp-mrp
What is MPS?
MPS term is used for Master Production Schedule. It is used to plan items which have direct demand. Like Sales Order,
Service Orders and Forecasts. It is run Weekly based on Orders and forecasts for that period.
What is MRP?
MRP term is used for Material Requirements Planning. It is used to plan items which have dependent demand. Like sub
items used to produce FG or are defined in BOM. It is run Daily to expedit parts required to produce the plan.
What is Forecast?
Forecasting allows your company to create “what if” scenarios and efficiently and cost-effectively plan for and meet demand.
Accurate forecasting can make a critical difference in customer satisfaction levels with regard to order promising dates and
on-time delivery.
The forecasting functionality in the program can be used to create sales or production forecasts, in combination or
independently.
What is Demand?
Calculation is done order-by-order, meaning that the order that includes the demand line with the earliest due date or
shipment date is considered first, and all other demand lines in that production order, irrespective of their individual due
dates or shipment dates, are also calculated for that order. When the calculation is completed, all unfulfilled demand is
displayed as planning lines, sorted by the earliest demand date, with the various quantity fields filled in.
Actual demand is calculated from Sales Order, Service Orders, Components Needed, Job Planning Lines.

39. Manufacturing in NAV
Dynamics NAV: batch oriented manufacturing
 Flexibility in setup and use
 E.g. posting flushing raw materials:
 Manually: post the real consumption of raw material in the
output journal for a specific manufacturing order;
 Automatic forward flushing: automatically post estimated
quantity of raw material when the manufacturing order has
been released;
 Automatic backward flushing: automatically post quantity of
raw material as consumed when the manufacturing order is
completed.

40. Manufacturing in NAV - Preparation
 Master data
 Materials, BOMs, routings
 Available capacities of resources and materials
 Work shifts
 Shop calendars
 Activity centers: work center group, work center, machine center
 Production order status
 Planned
 Fixed planned
 Released
 Finished

41. Manufacturing in NAV

42. NAV – Planning Topics
The Planning Worksheet is the user interface to
running the “Calculate Plan” function and working
with Action Messages (Suggestions)
 Types of Order Suggestions: Purchase Order, Production
Order, Assembly Order, Transfer Order
 Types of Actions: New, Change Qty., Reschedule, Resched.
& Change Qty., Cancel

43. NAV – Planning Topics
Planning functionality is contained in the “Calculate Plan”
Batch Job
 Planning Assignment Table – tracks changes to supply-demand
per Item/Location
 Calculate Net Change Plan – re-plans Items with changes to
supply-demand (Planning Assignment)
 Calculate Regenerative Plan – re-plans all Items

44. NAV – Planning Topics
Planning Starting Date
 All supply and demand before the Starting Date of the
planning period will be considered a part of inventory or
shipped (or already executed).
Planning Starting Date Exceptions
• Projected Available Inventory in frozen zone is below zero
• “Emergency” order – get Avail. Inv. To zero on Planning Starting
Date
• Serial/Lot Nos. required on the back-dated Orders
• Supply-demand set is linked via order-to-order policy

45. NAV – Planning Worksheet Functions

46. NAV – Calculate Plan – Cal. Net Change Plan

47. NAV – Planning Worksheet (output)

48. NAV – Carry Out Action Messages

49. NAV – Order Tracking

50. NAV – Planning Topics
Order-to-Order Link Types:
• Reordering Policy = Order
• Manufacturing Policy = Make-to-Order
• Assembly Policy = Assemble-to-Order
• Sales Order Planning feature used to create Prod. Orders
Impact of Reservations on the Planning System
• Reserved Quantities are included in the Projected
Inventory Profile (determine if Reorder Point has been
met)
• The reserved demand-supply set is excluded from
calculations (the supply is reserved and so cannot be re-
assigned to other demand)

51. NAV – Planning Topics
Sequencing and Prioritization
 The planning system in Microsoft Dynamics NAV is demand-driven.
 Plan low-level Locations first (remote whse)
 Planning is done using Low Level Code (top down)
 The blanket order is a
customer-specific
forecast on top of
the unspecified forecast
as illustrated below.

52. MRP – Routing Link Codes
 Assigned to BOM Lines and Routing Lines to link the
component demand to a specific operation, allowing
“Due Dates” to be set based on the actual operation
Start/End Dates instead of the Production Order Start/End
Dates
Routing Link Codes
https://www.archerpoint.com/blog/Posts/using-routing-link-codes-mrp-planning-microsoft-dynamics-nav

53. MRP – Planning Parameters Overview
Planning Parameters Overview (you can translate from Italian Language)
https://robertostefanettinavblog.com/2016/06/23/parametri-di-pianificazione-in-
nav-2016/
https://www.archerpoint.com/blog/Posts/new-and-changed-item-setups-mrp-planning-dynamics-nav-2013
https://www.archerpoint.com/blog/Posts/understanding-order-reordering-policy-microsoft-dynamics-nav
https://www.archerpoint.com/blog/Posts/7-factors-consider-material-resource-planning-mrp

54. NAV BEST LINKS
NAV BEST LINKS

55. MRP – Best Links for NAV - MSDN
Operation Planning Guidelines
https://msdn.microsoft.com/en-us/library/hh173020(v=nav.90).aspx
How to: Run MPS and MRP
https://msdn.microsoft.com/en-us/library/hh173804%28v=nav.90%29.aspx?f=255&MSPPError=-
2147217396
Perform Master Planning
https://msdn.microsoft.com/en-us/library/hh173769(v=nav.90).aspx
Perform MRP
https://msdn.microsoft.com/en-us/library/hh173254(v=nav.90).aspx
Forecast
https://msdn.microsoft.com/en-us/library/hh173219(v=nav.90).aspx

56. MRP – Best Links for NAV – Olof Simren Blog
Best blogs about MRP and Planning (my opinion)
Olof Simren Blog https://www.olofsimren.com tag filter #MRP
Guide to successfully MRP Implementation
https://www.olofsimren.com/guide-to-successful-mrp-implementation/
Schedule MRP
https://www.olofsimren.com/schedule-mrp/
Archerpoint Blog https://www.archerpoint.com tag filter #MRP
https://www.archerpoint.com/blog/Posts/7-factors-consider-material-resource-planning-mrp
https://www.archerpoint.com/blog/Posts/difference-between-mrp-and-mps
https://www.archerpoint.com/blog/Posts/mrp-vs-mps-whats-difference-and-when-do-you-use-them-b

57. MRP – Best Links for NAV – others links
http://www.sikichtech.com/insights/top-ten-tips-for-successful-material-requirements-planning/
https://robertostefanettinavblog.com/2016/06/23/parametri-di-pianificazione-in-nav-2016/
https://ksdconsultancy.blog/2016/06/12/basics-of-demand-forecast-mps-mrp/
https://ksdconsultancy.blog/2016/06/12/how-inventory-is-calculated-in-navision-2016
https://community.dynamics.com/nav/b/fenwicksoftware/archive/2017/08/29/managing-your-shop-
floor-with-nav-manufacturing-and-production-scheduler
https://community.dynamics.com/nav/b/technicaltipsandtricksfordynamicsnav/archive/2016/06/12/
basics-of-demand-forecast-mps-amp-mrp

58. RobertoStefanetti, MVPBusinessSolutions- NAV
MicrosoftEducationInfluencer
https://robertostefanettinavblog.com