Latest Features Released for the Planning Optimization Service for D365 Supply Chain Management

Microsoft has been releasing new planning features and functionalities this year for their flagship Microsoft Dynamics 365 Finance and Operations ERP planning engine. In the October release update 10.0.28, two highly anticipated capabilities have been added to D365 Master Planning.

Demand Driven Material Requirements Planning (DDMRP)

DDMRP planning methodology is added to the classic group of other planning Coverage codes available. The DDMRP methodology allows the planner to identify points in their product’s supply chain where buffer inventory can be managed more intelligently. D365 calls these decoupling points, and they are used to manage a buffer inventory using intelligent min-max quantities, reorder quantity and trigger levels for manufacturing, purchase and transfer order types. These settings provide a disconnect from the downstream demand that can often cause a more volatile butterfly effect on the entire supply chain. DDMRP has become popular for manufacturing, retail and distribution companies to reduce customer lead times to below the cumulative supply chain lead times.

DDMRP requires the Planning Optimization engine to be enabled in the Dynamics 365 Master planning setup. Planning Optimization is an Add-in for D365 Supply Chain Management and no additional licensing is required. The supply chain will need the decoupling points identified. For each product’s decoupling point, a buffer profile and quantities are set. Other event parameters can be configured for the buffer to dynamically adjust these settings when needed. Master Planning will generate DDMRP planned orders for maintaining the coverage on decoupling point buffers. The results will be reduced lead times, prevent over-stock and eliminate stock run-outs.