Plan Source

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


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


P2Plan Source2P2
P201Gather Sourcing Demand3P201
P202Gather Inventory & Schedule3P202
P203Calculate Sourcing Plan3P203
P204Publish Sourcing Plan3P204
P205Analyze Source Plan Deviations3P205


DP1Perfect Order Ratio1DP1
DP13Orders On-time Ratio2DP13
DP14Orders In-full Ratio2DP14
RS1Order Cycle Time1RS1
RS11Planning Frequency2RS11
RS14Sourcing Cycle Time2RS14
CO1Supply Chain Costs1CO1
CO11Cost of Goods Sold2CO11
AE1Cash Conversion Cycle1AE1
AE12Days of Inventory2AE12


BOMBill of MaterialsBOM
DRPDistribution Requirements PlanningDRP
DRP-IIDistribution Resource PlanningDRP-II
MRP-IIManufacturing Resource PlanningMRP-II
MRPMaterial Requirements PlanningMRP
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