Supply Planning Glossary

A

Actual Demand

This Master Production Schedule (MPS) term represents sales order demand. This includes sales orders and transfer orders for the following Firm, open, and Pending Fulfilment statuses.

Adjusted Available Balance

When a planned order is included, this Master Production Schedule (MPS) and Material Requirements Plan (MRP) calculation represents the projected quantity available for an item. In other words, this figure shows the quantity after these orders are released.

Assembly item

An assembly item is an inventory item made of several components (defined by a Bill of Materials) but is identified as a single item. Assemblies are manufactured by combining raw materials you stock.

You create assembly item records to define the members of an assembly, then NetSuite enables you to track both the raw materials and the assembled items separately.

B

Bill of distribution

A Bill of Distribution (BOD) specifies how a product is distributed within your enterprise after being received from a supplier or manufacturing, before being passed on to the customer.

Bill of materials

A Bill of Materials, or BOM, lists raw materials, assemblies, sub-components, parts, and quantities needed to manufacture a product. A BOM can be used to communicate between manufacturing partners, multiple facilities within the organization, or with a single manufacturing plant.

Bill of resources

A Bill of Resources (BOR) is a list of resources, such as labor, needed to complete a saleable product. It is used in capacity planning to prioritize and schedule work in manufacturing, by highlighting critical resources.

C

Capacity requirements planning

Capacity Requirements Planning (CRP) is an accounting method used to determine the available production capacity of a company.

Computer Planned Order

A Computer Planned Order, or planned order, refers to a planned order (work, purchase, or transfer order), generated by MPS or MRP to resolve a negative balance for the item’s projected available quantity.

Cumulative lead time

The total lead-time needed to produce an item. This assumes that all sub-assemblies have to be built and all purchased components have to be ordered and received), so that all lead-times are added together in linear fashion.

D

Demand planning

Demand planning focuses on future demand for products from various sources, such as customer sales orders or spare parts for customer service, to create a projection of demand, or forecast.

Demand time fence

Time fences are boundaries between different periods in the planning horizon. The Association for Supply Chain Management (APICS) defines a demand time fence as “that point in time inside of which the forecast is no longer included in Total Demand.” In other words, within the demand time fence, only sales orders are included in total demand and therefore used in other calculations involving total demand.

Demand driven MRP

Demand Driven Material Requirements Planning is a formal multi-level planning and execution method for planning material needs enabling a company to build more closely to market requirements.

Dependent demand

Demand for sub-assemblies or components based on the Bill of Materials and, so is dependent on demand for the item being manufactured.

Discrete manufacturing

The production of distinct items such as automobiles, appliances, or computers.

E

Engineer to order

This is a manufacturing process in which a product is designed, engineered, and finished after an order has been received. The product is engineered to meet the specifications desired by the received order.

Exception message

An MPS or MRP Exception Message is generated by the system to alert the scheduler or material planner that a situation requires some action be taken or a decision be made.

Execution system

The ERP system where business transactions are executed. This includes Sales Orders, Purchase Orders, and Manufacturing Work Orders.

F

Firm planned order

This is a planned order that has been firmed by the Master Scheduler (MPS) or Material Planner (MRP). After a planned order is firmed it can no longer be erased prior to a new planning run. The order will persist until it is released or canceled by the Master Scheduler or Material Planner

Forecast consumption

Forecast consumption replaces forecasted demand with sales order demand. Each time you create a sales order line, you create demand. If demand is already forecasted, the forecast demand must be reduced by the sales order quantity to avoid counting the same demand twice.

Forward and backward forecast consumption days

Forward and backward forecast consumption days create a forecast consumption period, called a “window,” that consists of the backward and forward consumption days added to the sales order line schedule date.

In other words, the consumption days define a forecast entry period. Consumption days are used when an exact match between the sales order date and the forecast date is not found, or when a match is found, but there are not enough items to cover the sales order quantity.

G

H

I

Independent demand

This is typically demand for a finished product. It is demand for an item that is unrelated to the demand for other items. For example, demand for finished goods, parts required for destructive testing, and service parts requirements.

Inventory item

A NetSuite Inventory Item is an item for which the quantities and other information (for example, cost) are tracked in the Inventory system.

Item

An item listed in inventory is the product or part that is being tracked. In NetSuite it is possible to have a non-inventory item, which still can be counted on a list and associated with a cost/price (such as a service), but it does not have a physical quantity to be tracked.

Item definition

A NetSuite Inventory Item Definition is comprised of a name, description, and attributes that control how the item is used within the system.

Item demand plan

Records the expected future demand for an item based on previous or projected demand.

Item forecast

An item forecast displays the predicted future demand for an item.

J

K

L

Last_Update_Date

Last_Update_Date is a system-assigned date value associated with a record in the database, designating the most recent date that the record was updated.

Lead-time

This is the time between the beginning of a process and when the results appear.

Location

A Location defined in NetSuite. In supply planning, a location could be warehouses, manufacturing plants, distribution centers, and any other locations where inventory is tracked.

Lot size

The amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process.

M

Make to order

Make to Order means that manufacturing starts only after a customer's order is received. Make to order is a business production strategy that enables consumers to purchase products that are customized to their specifications.

Make to stock

Make to Stock is a production process where products are finished before receipt of a customer order. Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks.

Manufacturing and logistics data repository

This is a repository of data that is extracted periodically from the NetSuite ERP system. The repository acts to filter daily transactions in the execution system and enables the Master Scheduler and the Materials Planner to control the frequency of updates to the repository. This ensures that the system is reading a consistent view of the data, while processing a plan.

Manufacturing calendar

A Manufacturing Calendar designates annual operating days in advance, in each company or factory.

Master production schedule

The Master Production Schedule (MPS) is the build schedule for items designated as MPS items. Typically, these items represent independent demand from a forecast. For example, a demand plan. The Master Scheduler maintains this schedule which then becomes a set of planning numbers that drives Material Requirements Planning. It represents what the company plans to produce expressed in specific configurations, quantities, and dates.

Master production schedule MPS matrix

This is a table used to represent the Master Production Scheduling process. It display each step of the process and the results of these calculations. It's used in most of the feature documentation for Master Production Scheduling.

Master scheduler

A Master Scheduler is responsible for balancing supply and demand for end items, service parts, and other critical resources. They also manage the Master Production Schedule, which in turn, drives Material Requirements Planning.

Material planner

The Material Planner manages the flow of materials to ensure that their organization never runs out of necessary manufacturing materials.

Material requirements planner

Material Requirements Planning (MRP) uses bills of materials data, inventory data, and the master production schedule to calculate requirements for materials. MRP makes recommendations to release replenishment orders for material.

Material requirements plan matrix

This is a table used to represent the Material Requirements Planning process. It display each step of the process and the results of these calculations. It is used in most of the feature documentation for Master Production Scheduling.

N

Negative balance

When the Projected Available Balance calculation displays a negative balance, demand for an item is greater than its supply. The Master Scheduler or Material Planner must then take action to restore item supply and demand balance.

Net change

Refers to any changes made to planning related data items and locations since the most recent extraction from the execution system to the manufacturing and logistics data repository.

Net requirements

Net requirements are defined by the Projected Available Balance calculation. This calculation subtracts total demand from supply for the period. If this calculation produces a negative balance, then the value required to counter this negative value and bring the projected available balance to zero or greater, represents the net requirements.

Non-inventory item

An item that does not represent physical inventory, but still represents something of value. For example, a service that is provided to customers.

Non-inventory part

An item you sell but do not keep in stock, such as an item that is custom made.

O

On-hand quantity

The amount of inventory available for a particular item.

Option forecast

Option forecast represents dependent demand for an item. Typically, the item is an optional component of a Model Bill of Material for an item and is dependent on the forecast for the item. Percentages are used with the end-item forecast to estimate the mix of optional components and generate the option-level forecast.

Order fulfillment

The steps and processes through which an order passes, typically between the moment it is approved and when it is delivered to the customer. The steps in the order fulfillment process can include acknowledging a fulfillment request for an order, preparing and packing the items in the order, shipping the order to the customer, and recording the item fulfillment in NetSuite.

Order quantity

The quantity on order for a given period for an item.

P

Past due forecast days

A preference that controls the number of days the system will consider a forecast quantity for consumption, after the period has passed.

Period

A specific period of time in the planning process. For example, a specific day, week, month, or year.

Plan definition

Is the definition of a supply plan, which includes a name and the parameters to be referenced by the system, that will control the system’s behavior. This plan also serves as a reference for accessing the results of a supply planning run, so that multiple plans can be generated, compared, analyzed, and so on.

Plan type

There are two plan types, the Master Production Schedule (MPS) and the Material Requirements Plan (MRP). Plan type is part of the Plan Definition.

Planned order

A Planned Order is a work order, purchase order, or transfer order suggested by the planning process. Planned orders can be in firmed or released status. Firmed Planned Orders are not deleted by a subsequent planning run. Released Planned Orders are transformed into work orders, purchase orders or transfer orders in the NetSuite.

Planning horizon

The Planning Horizon is the length of time that the planning system considers during a run. The planning horizon is designated in the plan definition as several days. The system calculates the start date as the current date, and the end date as the current date plus the number of days from the plan definition. For example, if the plan start date is June 1 and the horizon is 30 days, the end date will be June 30.

Planning repository

The Planning Repository stores related planning information that enables you to control how often NetSuite updates planning inputs. The repository refresh process accumulates the most up-to-date data from NetSuite to use for supply planning. The planning process calculates projected available quantity, generates supply orders, and action, and exception messages.

Planning rule

Planning Rules are designated in the Plan Definition. They define how an item is sourced, whether it is made at a manufacturing plant, purchased from a supplier, or transferred from another plant. This information is critical for multi-location planning.

Planning scope

Planning Scope is designated in the Plan Definition. It determines which locations will be included in the plan and the demand sources for each location.

Planning time fence

A point in time in the planning horizon that acts as a boundary. Within this boundary, any changes to the schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost. Within the planning time fence, the planning system will not create planned orders. Instead, Exception Messages will be created to inform you that a projected negative balance exists within the time fence.

Process manufacturing

Process manufacturing is a production process that adds value by mixing, separating, forming, and performing chemical reactions. For example, process manufacturing items can include food, chemicals, beauty products, and pharmaceuticals.

Product family

A group of products or services that pass through similar processing steps, have similar characteristics, and share common equipment prior to shipment or delivery to the customer. Can be from different overlapping product lines that are produced in one factory and often used in production planning (or sales and operations planning).

Projected available balance

An inventory balance projected into the future. It is the running sum of on-hand inventory minus requirements plus scheduled receipts and planned orders.

Projected gross requirements

The total of independent and dependent demand for a component before the netting of on-hand inventory and scheduled receipts, projected into the future.

Purchase order

A purchase order (PO) is a document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.

Q

Quantity available

Quantity On Hand less Quantity Committed.

Quantity back ordered

Quantity committed to sales for which there is no stock to fill the order.

Quantity committed

The number of units of an item reserved by unfulfilled sales orders.

Quantity on order

Quantity on approved purchase orders pending receipt from the vendor.

Quantity to order

Preferred Stock Level less Quantity Available.

R

Release planned order

The planning system generates planned orders which are suggestions to the planner to resolve a projected negative balance in the supply plan. The planner can release the planned order, which transforms it from a planned order suggested by the planning system into a work order, purchase order or transfer order.

Reorder point

The point at which you should place an order to restock an item. If you select Inventory Level Warnings from Set Preferences on the Home page, NetSuite notifies you automatically when your inventory reaches the reorder point.

Replenishment method

A preference on the item, which designates how the item is to be replenished in Inventory. For example, order point, MPS, or MRP.

Rough cut capacity planning

Rough Cut Capacity Planning (RCCP) is a long-term capacity planning tool used to balance required and available capacity and to negotiate changes to the schedule and available capacity.

S

Safety stock

This is a measure of the amount of stock you want to keep on hand to account for variations in demand so that you do not run out. It is a buffer amount of an item you prefer to keep in stock at all times so that you do not run out.

Sales order

A sales order is a transaction that records a commitment to sell items or services to a customer. Sales orders have no accounting impact until items are shipped or services are completed.

Scheduled receipt

An open order that has an assigned due date. An open order can be a released manufacturing order, purchase order, or an unfilled customer order

Sub-assembly

A unit assembled separately but designed to be incorporated with other units into a larger manufactured product.

Supply planning

Supply planning is the component of supply chain management that determines how to best fulfill the requirements created from the demand plan. The objective is to balance supply and demand in a manner that achieves the financial and service objectives of the enterprise.

Supply planning workbench

The Supply Planning Workbench enables planners to view information supply and demand orders within the supply plan. After reviewing the results, you can then take action to adjust your supply plan to ensure that customers receive their orders complete and on time. The workbench essentially, helps to guides planners on how they will execute their supply plans.

Supply required by date

To efficiently match supply with demand, you must know the required shipping date for the product. For these calculations, you identify a Supply Required By Date on demand order lines. Then, you can calculate allocation to determine which supply sources should be used to meet the demand on specific orders by the required date. This applies to demand created from customer orders, as well as demand from transfer orders and work orders.

T

Time-phased

The technique of expressing future demand, supply, and inventories by time period. Time phasing is one of the key elements of a planning system.

Total demand

The sum of all demand less item forecast (independent demand), option forecast (dependent demand), and demand (sales orders). This is one of the calculations used within the MPS process.

Transaction – supply planning

An exchange or transfer of goods, services, or funds. In the context of planning, there are key transactions that must be extracted from the NetSuite execution system, to properly execute a supply plan. For example, sales orders, purchase orders, or work orders.

Transfer order

An order requesting the transfer of goods from one location to another.

U

Unconsumed forecast

The total forecast quantity remaining in past periods, that has not been offset by sales orders.

Unfulfilled sales order

A sales order that has been created in the execution system, but has not yet been shipped.

V

Vendor bill variances

The Advanced Receiving feature enables you to enter vendor bill variances and generate journal postings to variance accounts. These variances can be based on quantity, price, or exchange rate discrepancies.

W

Work order

A work order is a task or a job, that can be scheduled or assigned to someone. In the context of planning, a work order is an order requesting the production of a quantity of product, to be completed on a specific date.

X

Y

Z

General Notices