Requirements Explosion for Make Items
When you run a supply plan or a supply and demand plan, one of the processes that take place is requirements explosion for make items.
The supply planning process reviews the supply chain item structure to ensure that there is enough supply on hand and on order to meet demand. The shortage of one item creates a demand for the items one level below it in the supply chain item structure. This process of analyzing the demand of individual components that make up an item and creating a demand for those components is known as requirements explosion.
The planning process uses the work definition of make order items to determine component requirements. The planning process makes suggestions accordingly to replenish the components that are in low supply to make the supply of the make order item easier.
Settings that Affect Requirements Explosion for Make Items
Supply planning respects component effective dates. The planning process determines a new date for the planned make order after it takes into consideration the following:
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The components that are part of the work definition
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The operations that are part of the work definition
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The component effective dates for the make item on or before the order start date of the planned order
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The operation effective dates for the make item on or before the order start date of the planned order
How Requirements Explosion for Make Items is Calculated
Consider the following scenario:
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Item A is a make order for which there is a sales order of 100.
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It takes two of item B and three of item C to make one of item A.
The planning process explodes the demand to a component level and creates a demand of 200 for item B and 300 of item C. The demand quantity on an item is the shortage of its parent item multiplied by the usage of the child component in the parent item.