Overview of Supply Chain Planning Logic (MRP and Supply Chain Planning Help)


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Overview of Supply Chain Planning Logic

Oracle Supply Chain Planning applies the basic planning process (described in Overview of Planning Logic) across multiple organizations. Planned order supply and sourcing information are loaded according to the list of organizations and supply schedules defined for the multiple organization plan.

The supply chain planning process calculates net material requirements by evaluating:

demand and production schedules

sourcing strategies

bills of material

scheduled receipts

on-hand inventory balances

production and transportation lead times

order modifiers

The purpose of the planning process is to derive an MPS, DRP or MRP that meets schedule dates while maintaining inventory replenishment policies.

The netting process:

creates and reschedules planned orders

assigns sources to the planned orders, with split percentages

generates dependent demand across multiple organizations

See: Netting Supply and Demand.

When assigning sources to planned orders (according to the percentage splits defined by the sourcing rules and bills of distribution), planning begins with the organization that is immediately below its shipping percentage target. See: Assigning Sourcing Rules and Bills of Distribution and Assignments Hierarchy.

When generating dependent demand for an organization different from the one in the planned order, planning creates demand for the same item in the other organization and offsets the demand by the transportation lead time.

The following diagram illustrates this planning logic.