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Optimize Your Supply Chain with Priority-based Planning

Updated: Jul 26


In supply chain management, prioritizing urgent demands across your planning system is essential. Dynamics 365 Supply Chain Management now offers this capability through priority-based planning, which helps optimize the supply chain, increase service levels, and reduce inventory. The 2021 release wave 2 introduces a public preview of this feature for the Planning Optimization Add-in.



Benefits of priority-based planning


This feature introduces support for demand-driven planning, an essential component of demand-driven material requirements planning (DDMRP). Unlike classic material requirements planning (MRP), which relies on requirement dates, priority-based planning optimizes supply based on demand priorities. This ensures that urgent replenishment orders are prioritized over less critical ones. For instance, stockout replenishments will take precedence over standard refill orders.


Furthermore, the system can automatically split large refill orders into smaller ones with varying priorities, enhancing supply coverage by focusing on the critical portions of an inventory refill. This strategy reduces the risk of stockouts by optimizing available supply.


Priority-based planning also allows for the comparison of the importance of relevant orders across different products and locations during execution planning. This ensures that the most crucial demands are met efficiently, improving overall supply chain management.



A group of people busy planning.



The extensive influence of prioritizing planning values


The new Planning Priority field is now accessible across purchase orders, sales orders, transfer orders, planned orders, and forecast lines. This parameter serves as the cornerstone of priority-driven planning, determining the significance of both demand and supply.


In the realm of master planning calculations, the Planning Priority is typically assigned to planned orders or can be set by default during manual creation. Users have the flexibility to adjust this value as necessary. For instance, it may be crucial to modify the priority to reflect the importance of a critical sales order. In cases involving intercompany orders, the Planning Priority value remains synchronized between linked purchase and sales orders to ensure transparency across legal entities.



Flexibility with the Priority coverage code


With the introduction of the new Priority coverage code, you can manage when Planning Optimization incorporates planning priorities during pegging. This feature calculates the derived planning priority for planned orders by considering inventory levels and demand priority constraints.


This enhancement offers a flexible approach combining:


  1. Traditional date-driven MRP using coverage codes like Min/max, Period, or Requirement, and

  2. Item coverage utilizing the new priority-driven method defined by the Priority coverage code.



Planning priority models


The user-defined models for planning priorities offer a range of options. One approach involves standard DDMRP priority calculation based on projected on-hand supplies as a percentage of the maximum. Alternatively, another option utilizes specific planning priority values categorized into priority ranges (refer to "Zone grouping" below).


With priority ranges, you can allocate planned orders according to these ranges, ensuring available supply is distributed based on the risk of stockouts. This strategy aims to fulfill demand quantities up to maximum inventory levels by generating multiple planned orders, each assigned individual planning priorities. During firming, there's the option to group planned orders by priority to streamline the number of actionable orders.


In supply management scenarios, there may be instances where projected on-hand inventory levels become critically low due to delays in less urgent demand orders. This can trigger requests for higher-priority supplies. Enabling the "Consider demand priority" setting ensures that new planned order supplies are never assigned a planning priority higher than the demand that prompted the supply request. This capability helps maintain a balanced approach to replenishing stock levels across the supply chain, especially concerning inventory buffers.




Image showing a woman making a list.



How to get started with priority-based planning


  1. Begin by activating the Planning Optimization feature. Detailed instructions can be found in the "Get started with Planning Optimization" guide.

  2. Navigate to Feature Management and enable "(Preview) Priority driven MRP support for Planning Optimization". Refer to the priority-based planning documentation for further details.

  3. Establish your initial planning priority model to manage how planning priorities are calculated and set as defaults for new orders and forecast lines.

  4. Configure a coverage group that incorporates your newly defined planning priority model.

  5. Ensure that at least one product includes item coverage using the coverage code "Priority".

  6. Integrate the planning priority fields prominently into relevant forms such as those for planned orders.

  7. Initiate master planning and test the setup of your planning priority model to observe its impact on the calculated planning priorities for planned orders.


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