Actions

P2

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

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

IDNameLevelx
PPlan1P
P2Plan Source2P2
P201Gather Sourcing Demand3P201
P202Gather Inventory & Schedule3P202
P203Calculate Sourcing Plan3P203
P204Publish Sourcing Plan3P204
P205Analyze Source Plan Deviations3P205

Metric(s)

IDNameLevelx
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

Term(s)

IDNameClearx
BOMBill of MaterialsBOM
DRPDistribution Requirements PlanningDRP
DRP-IIDistribution Resource PlanningDRP-II
F2PForecast-to-PlanF2P
MRP-IIManufacturing Resource PlanningMRP-II
MRPMaterial Requirements PlanningMRP
P-BOMPlanning BOMP-BOM
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