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.
- 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
Sourcing Cycle Time
Supply Chain Costs
Cost of Goods Sold
Cash Conversion Cycle
Days of Inventory
Bill of Materials
Plan Source Plan 5120000 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