In supply chain management, when you have an urgent demand, you want it to be prioritized across your planning system. The ability to enable such a broad, yet flexible factor as prioritization, is now available in Dynamics 365 Supply Chain Management.

Priority-based planning can help businesses optimize their supply chain while increasing service levels and reducing inventory levels. The 2021 release wave 2 includes a public preview of this feature for the Planning Optimization Add-in for Dynamics 365 Supply Chain Management.

Benefits of priority-based planning

This feature adds support for demand-driven planning, which is one of the five steps related to demand driven material requirements planning (DDMRP). With priority-based planning, the optimization of supply to cover demand is based on priorities, not requirement dates, which are used in classic material requirements planning (MRP).

Priority-based planning lets you prioritize replenishment orders to ensure that urgent demand is prioritized over less important demand. For example, a stockout replenishment order will be prioritized over a standard refill replenishment order.

On top of this, the system can automatically split large refill orders into separate, smaller orders, with different priorities assigned to each order. This approach provides coverage of the critical portion of an inventory refill, instead of simply refilling warehouses to maximum with a single supply. This minimizes the risk of stockout by optimizing the use of available supply.

Another benefit of priority-based planning is that priority can be used to compare the importance of relevant orders across products and locations during execution planning.

Broad impact of the planning priority value

The new field, Planning priority, is now available for purchase orders, sales orders, transfer orders, planned orders, and forecast lines. This value is the backbone of priority-based planning; it is used to define the importance of demand and supply.

Planning priority is typically defined by the master planning calculation related to a planned order, or by a default value when manually created. Users can modify the planning priority value when needed. For example, it might be important to adjust the value to honor the importance of a critical sales order. For intercompany orders, the planning priority value is kept in sync between linked purchase and sales orders to ensure transparency of cross-legal entities.

Flexibility with the Priority coverage code

By using the new coverage code of Priority, you can control when Planning Optimization uses planning priority during pegging. This will calculate the derived planning priority on planned orders based on inventory levels and demand priority constraints.

This addition makes possible a flexible approach with a mix of 1) classic date-driven MRP using coverage codes of Min/max, Period, or Requirement, together with 2) item coverage using the new priority-driven approach defined by use of the Priority coverage code.

Planning priority models

The user-defined planning priority models enable a variety of options. One option is to do a standard DDMRP priority calculation, based on projected on-hand supplies as a percent of maximum (see “% of maximum” in the following graphic). However, another option is to use specific planning priority values, based on priority ranges (see “Zone grouping” below).

With priority ranges, you can also choose to split planned orders according to the priority ranges. This ensures that available supply is distributed based on the risk of stockout. With this approach, you seek to fulfill the demand quantity to reach maximum inventory level by creating multiple planned orders, each with individual planning priorities. During firming, it is possible to group planned orders based on priority to limit the number of actual orders to process.

In supply management, sometimes your projected on-hand inventory will reach a critically low level because less important demand orders are repeatedly delayed. Eventually, this triggers a high-importance supply request. When you enable the Consider demand priority setting, a new planned order supply will never be assigned a planning priority that is more important than the demand that triggered the supply. This lets you balance the importance of supply when refilling stock levels in a supply chain with inventory buffers.

How to get started with priority-based planning

• Enable the Planning Optimization functionality. For more information, see Get started with Planning Optimization.
• In Feature management, turn on “(Preview) Priority driven MRP support for Planning Optimization”. For more information, see the priority-based planning documentation.
• Set up your first planning priority model to control the planning priority calculation and the default value of planning priority on new orders and forecast lines.
• Set up a coverage group that includes your planning priority model.
• Ensure that at least one product includes item coverage with coverage code Priority.
• Add the planning priority fields prominently to relevant forms like planned orders.
• Run master planning and try out the planning priority model setup to see the impact on the calculated planning priority on planned orders.

Next steps

Watch this video about the highlights of priority-based planning: Planning optimization support for priority-based planning in Dynamics 365 Supply Chain Management.

The post Optimize your supply chain with priority-based planning appeared first on Microsoft Dynamics 365 Blog.

Manufacturers often have manufacturing execution systems (MES) to control their manufacturing, machine equipment, and personnel, however it can be a challenge to reconcile such systems with enterprise resource planning (ERP) systems like Dynamics 365 Supply Chain Management.

There can be a number of reasons for setting up a custom MES tailored to the specific requirements of a manufacturer, or to the vertical industry that they are a part of. Conversely, many manufacturers have found it difficult to merge such systems with their ERP systems.

In this post, we’re going to look at the most common challenges of integrating the two systems and learn how integrating them can give you visibility into the production floor.

Common integration challenges

Integrating an MES with an ERP system, such as Dynamics 365 Supply Chain Management, can present a number of challenges.

• Cost: The integration effort usually takes a long time, meaning a lot of development expense. This cost might be more than the client was expecting.
• Debugging and traceability: When two different systems are connected, it is usually cumbersome to debug and troubleshoot any issues. There might be unclear error messages when specific data is not synced or if any validation fails.
• Persona-targeted notifications: In case of any integration issues, it can be difficult to notify the appropriate person or team. Even though a single person might have overall responsibility for the integration, there could be a delay before the correct party is identified for a specific issue.
• Archive and replay signals: When there is a failure in incoming or outgoing data, you usually need to replay a signal. This can be difficult to do if it is not implemented in the integration.
• Out-of-order deliveries or multiple deliveries: Each system has its own set of deliveries and releases. Delivery updates can come at different times, and updates in one system should not affect the other. Such synchronization can be a challenge for an integration.
• Spikes: It is the nature of work on the production floor for there to be spikes in signals, such as many reports being finished within a short time frame. It is essential for the integration to be able to handle such spikes.
• Limited reusability: Once the integration is completed, it is usually specific to the two systems. When another production site is involved, a whole new integration implementation might be needed.
• Data silos: Data is likely to exist in both systems, but the data might not be in sync. This consistency is needed to give an accurate view of production orders and their state on the shop floor.

Keep data current in an integrated solution

In an integrated solution, data exchange is fully automated and near real time, which keeps data current in both systems and eliminates the need for manual data entry.

For example, when material consumption is registered in the MES, the integration ensures that the same consumption is also registered in Dynamics 365 Supply Chain Management. This means up-to-date inventory records are available to other processes, such as planning and sales.

To help customers with these integration challenges by building a true connection, we’re releasing a fundamental tool for building this integration. To learn more, see the Supply Chain Management documentation, Integrate with third-party manufacturing execution systems. The following screenshot shows a monitoring dashboard for messages in Dynamics 365 Supply Chain Management.

These integration components are generic and can be used with any MES provider. Currently, both Aegis Factorylogix and Oqton provide integrations to Dynamics 365 Supply Chain Management. Let’s hear from them on the advantage for manufacturers to having both systems integrated.

Jason Spera, CEO and co-founder of Aegis Software states:

With Dynamics 365 supporting modern Smart manufacturing from the ERP perspective, Aegis’ FactoryLogix, as a fully complementary MES solution, provides the real-time, surgical precision required for visibility and execution of manufacturing, synchronized through Microsoft’s API-based Smart supply-chain interface.

Aegis’ IIoT-based MES platform orchestrates execution of ERP work-orders in real-time, across highly complex and technical assembly, test and inspection stations, with exact material, product and process traceability that satisfies the most stringent quality assurance requirements. The feedback of live operational data enhances ERP by providing detailed, accurate and timely information related to completions, material consumption and much more.

Oqton supports manufacturers with the optimization of their end-to-end workflows and continues to demonstrate that it can meet the challenges of any production processes, including additive manufacturing and post processing. The Oqton platform has been successfully deployed in demanding vertical sectors such as dentistry, healthcare, biotech, aerospace, and automotive. Agnostic in terms of hardware and software, the Oqton platform works across the entire ecosystem, while being modular in nature and interoperable with other systems. This is why it integrates so well with Dynamics 365 Supply Chain Management to offer a comprehensive solution for users.

According to Oqton CEO, Ben Schrauwen:

The integration of Oqton and Dynamics 365 offers a high level of production management, efficiency and productivity for manufacturers. The automation capabilities enabled and optimized by Oqton for the production workflow complements Dynamics 365 Supply Chain Management to ensure manufacturers are in complete control, which is more important now than ever before.

Gain visibility into your manufacturing

When you are able to integrate your MES and ERP systems, you can enhance the visibility into your manufacturing floor The new manufacturing execution systems integration from Dynamics 365 Supply Chain Management helps you to address the challenges of such an integration and break down your data silos.

Next steps

If you are planning on building an integration between Dynamics 365 Supply Chain Management and your MES, or you want to improve your existing one, learn more in the documentation.

The post Break down data silos with an integrated manufacturing solution appeared first on Microsoft Dynamics 365 Blog.