OpenReference

The collection of processes associated with developing a comprehensive plan to source materials, semi-finished products, finished products, and/or services to support the supply chain operations plan. This process determines net requirements, considering on-hand inventories, existing transfers, supplier contracts and existing delivery commitments from suppliers.

A requirements planning process is based on three dimensions:

• Determining demand (e.g. orders and forecasted orders) and demand dependencies (e.g. linearity of demand)
• On-hand inventory and scheduled receipts netting (e.g. scheduled deliveries by suppliers and factories)
• Time phasing of material receipts (e.g. supplier and inspection lead times)

Receiving and storage capacity considerations may be considered as part of time phasing.

Use Cases

• In a Make-to-Stock plant or warehouse: Purchase Order REQ calculation and creation
• In a manufacturing plant: Raw material requirements planning
• In distribution network: Merchandise, product replenishment calculation
• In Retail: Calculate the back room restocking schedule

Notes

Alternative names include: Distribution Requirements Plan (DRP), Material Requirements Plan (MRP), Procurement Planning. Plan Source is part of DRP-II and MRP-II. Perfect Order Ratio Orders On-time Ratio Orders In-full Ratio Order Cycle Time Planning Frequency Sourcing Cycle Time Supply Chain Costs Cost of Goods Sold Cash Conversion Cycle Days of Inventory Bill of Materials Planning BOM Forecast-to-Plan

Hierarchy

ID	Name	Level	x
P	Plan	1	P
P2	Plan Source	2	P2
P201	Gather Sourcing Demand	3	P201
P202	Gather Inventory & Schedule	3	P202
P203	Calculate Sourcing Plan	3	P203
P204	Publish Sourcing Plan	3	P204
P205	Analyze Source Plan Deviations	3	P205

Metric(s)

ID	Name	Level	x
DP1	Perfect Order Ratio	1	DP1
DP13	Orders On-time Ratio	2	DP13
DP14	Orders In-full Ratio	2	DP14
RS1	Order Cycle Time	1	RS1
RS11	Planning Frequency	2	RS11
RS14	Sourcing Cycle Time	2	RS14
CO1	Supply Chain Costs	1	CO1
CO11	Cost of Goods Sold	2	CO11
AE1	Cash Conversion Cycle	1	AE1
AE12	Days of Inventory	2	AE12

Term(s)

ID	Name	Clear	x
BOM	Bill of Materials		BOM
DRP	Distribution Requirements Planning		DRP
DRP-II	Distribution Resource Planning		DRP-II
F2P	Forecast-to-Plan		F2P
MRP-II	Manufacturing Resource Planning		MRP-II
MRP	Material Requirements Planning		MRP
P-BOM	Planning BOM		P-BOM

Workflow

From Input(s)	Process	Output(s) To
wf_process wf_arrow P4 Distribution Plan P3 Production Plan P1 Supply Chain Operations Plan	P2	wf_arrow wf_process Forecast P* Materials Requirements Plan P3 Sourcing Plan P1 Sourcing Plan P4

Plan Source Plan 120000 2 Plan, Planning, MRP, Material, Requirements, Planning, Procurement, Purchasing, Source, Supply Chain Development of the sourcing plan: Materials, goods and/or services to acquire to support the overall supply chain operations plan