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Where an organisation has multiple warehouses, its often a requirement to store products based on the storage location capacity. Whilst you can get MRP to recommend transfer orders for moving stock between locations to ensure safety/min stock levels are met, this is more of a replenishment management approach rather than a capacity management approach.

For example if a master planning demand means that the expected supply of a product that exceeds the available storage capacity at the expected arrival location, then the planned order(s) should split and create an additional planned order for the balance looking for the next nearest location based on its capacity and sequence in the warehouse hierarchy thereby planning and maximising the use of the available storage capacity geographically, rather than having the planned order delivered to a single central point and using transfer orders to move the stock to other warehouses.
Category: Planning
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Comments

A

Yes, DRP is "hard to model" and I'm sure that every large organisation tries to solution DRP with available tools, but inevitably there are omissions and gaps that make the planning solutions imperfect.

To balance resources across a large organisation with National and Regional Distribution Centres and local warehouses is challenging and requires automation. Optimising cost of inventory, the supply chain, warehousing and logistics, assets and human resources is the nirvana for many such organisations. The ability to respond to change, be it organisational, product or supply chain related, in this environment, requires serious technology assistance.

In order to attract such organisations, who have the desire to get closer to nirvana, to the MS D365 suite, MS will need to address some complex aspects of planning.

Pooling non-stocked demand from local warehouses into regional DCs where the demand level could warrant inventory (for the item) is essential to optimising distributed inventory cost with delivery lead times.

Category: Planning

A

True DRP is a very hard problem to model.
Firstly you have to set what your distribution strategy is (do I optimise for distance, delivery time, total fulfilment time... etc.), you also have to model your operational setup (are you a network warehousing system, a hub and spoke system, a node-satellite system). Then you have to define fulfilment rules: which warehouse to look in first, do I pick partial quantity or not, what happens if that warehouse has an order coming in, do I consider it or not?

As you can see it is an engine of its own, and attempting to write a functionality without considering all these values might mean we have a functionality that doesn't cater for most real life scenarios which means it won't be used.

I thought I'd shed some light on the complexity here, but I think we really lack a proper DRP function in D365SCM.

Category: Planning