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New make-to-order (MTO) automation capabilities available with the October 2022 release of Dynamics 365 Supply Chain Management streamline order-taking and related downstream processes. Supply chain planners can benefit from improved capable-to-promise (CTP) accuracy with plan-specific delay tolerance, keep supply available for last-minute orders, and automatically populate external order information during intercompany trade.
Impact of make-to-order
With MTO, production only starts after a customer places an order for a specific product. The main benefits of MTO are that you can accommodate customer-specific products and you don’t need to keep inventories of finished goods with the related risk of wastage. However, with MTO, your delivery time includes the production lead time and depends on the availability of resources and raw materials. This often leads to the need for CTP, close tracking of resource capacity, and flexibility for last-minute orders.
Until now, supply chain planners had to monitor and adjust supply levels and current demand manually. With the new automation capabilities in Supply Chain Management, planners can automate these tasks. The system takes informed actions based on parameters they set.
Benefits of make-to-order automation
Let’s take a closer look at the benefits of six improvements we’ve made for make-to-order scenarios.
Delay tolerance control
Delay tolerance represents the number of days beyond the lead time that you’re willing to wait before you order new replenishment when existing supply is already planned. It helps you avoid creating new supply orders if the existing supply will be able to cover the demand after a short delay. With the new Negative days option for delay tolerance control, you can determine whether it makes sense to create a new supply order for a given demand. The ability to control delay tolerance at the master plan level gives you more flexibility between the static plan and the dynamic plan used for CTP calculations. Automating the process ensures that CTP calculations don’t allow delays. You can optimize refill orders on the static plan to use existing orders, even it causes a bit of delay.
Use latest possible supply
The Use latest possible supply option lets you keep products available for last-minute orders. It optimizes the use of existing supply by pegging the latest possible supply to a demand instead of using the first possible supply.
Marking links supply to demand for the purpose of cost allocation. It resembles pegging, which indicates how master planning expects to cover demand. However, marking is more permanent than pegging because it’s respected by later planning runs. Now you can limit inventory marking to a single level when firming planned orders. That allows you to keep component assignments flexible for production orders after firming.
Order-specific fulfillment policy
You can already set a global default fulfillment policy and then override it for specific customers. Now you can view which default policy applies directly on the order and override it for individual orders. Previously, the order taker had to manually change the policy on the sales order. Now this step is automated, giving more control to the order taker and enabling flexible order processing.
Delivery terms, mode of delivery, and external item numbers are critical information to track when one company receives a customer sales order, and another company ships the goods to the customer. Now purchase order lines are updated automatically to include this information from the intercompany sales order. This improvement enhances intercompany information exchange. It ensures that detailed demand information flows to the supplying company and that companies meet their customer commitments.
User-defined period on Capacity load page
We’ve added a field to the Capacity load page. The new Number of days field allows you to define a custom period over which to view the capacity load of a resource, enabling long-term evaluation.
Learn more about make-to-order automation
To learn more about MTO automation in Supply Chain Management, read the documentation: Make-to-order supply automation | Microsoft Learn.
For more information about the delay tolerance impact, read Delay tolerance (negative days) | Microsoft Learn.
For more information about the impact of marking when firming planned orders, read Inventory marking with Planning Optimization | Microsoft Learn.
Brought to you by Dr. Ware, Microsoft Office 365 Silver Partner, Charleston SC.