2. PLANNING ENGINE Presented by: Dave Parker Sr. Business Analyst

3. Agenda Overview of Planning Process Net Change vs. Regenerative Planning Planning Triggers Explained Avoiding ‘Clutter’ Typical Planning Cycle Curveballs Q&A

4. Overview Independent Demand = Forecast or Sales Order Line Infinite Capacity Planning Model MPS (Master Production Schedule) Prioritize (Color, Allergens, Setup, etc.) Heel-to-Toe Schedule Dependent Demand based off MPS; also Component Forecasts Infinite Capacity Planning Model MRP (Material Requirements Planning)

5. Balance Supply vs. Demand Demand Supply

6. MPS Inputs MPS Calculation Planning “Triggers” Sales Orders Production Forecast (Sales) Inventory Stock Levels Open Documents (Backorders)

7. MPS Outputs FG Production FG Purchases FG Transfers MPS Suggestions

8. MRP Inputs MRP Calculation Planning “Triggers” Production Forecast (Component) Demand from MPS Inventory Stock Levels Open Documents (Backorders)

9. MRP Outputs WIP Production RM/PKG Purchases RM/PKG Transfers MRP Suggestions

10. Net Change vs. Regenerative Net Change Plan – Direct changes to the demand requirements Ex: Change in forecast, sales order, production order – Changes to standard data or planned supply Ex: Change to BOM, safety stock, inventory, purchase order – Saves time and system resources Only re-plans items with demand or supply changes since last plan

11. Net Change vs. Regenerative Regenerative Plan – Plans for ALL items Starts by deleting all ‘planned’ supply orders that are currently loaded Consumes more time and system resources to execute – Necessary if there are changes to capacity or standard data that would affect the total plan Ex: Change to shop calendar, overall safety lead time

12. Planning Policies Blank – do not include in planning Maximum Inventory – what is needed to get to value of Maximum Inventory Order – separate supply per demand instance Fixed Reorder Quantity – when need is identified, always suggest value of Reorder Qty. Lot-for-Lot – whatever supply is needed within the Reorder Cycle

13. Planning Triggers Vendor Lead Times – “No matter WHAT I buy from this vendor, it takes x days.” Item Lead Times – “No matter WHO I buy this item from, it takes x days.” Vendor Item Catalog – “Item A from vendor A takes x days. Item B from vendor A takes y days.” Safety Lead Times (Manufacturing Setup, Item Card) – Added to any other lead times - Lead Times

14. + Lot Acc. Per. (6D) Looks out 6 days past the first demand date and suggests 25 cases. Planning Triggers - Lot Accumulation Period

15. + Lot Acc. Per. (7D) Looks out 7 days past the first demand date and suggests 30 cases. Planning Triggers - Lot Accumulation Period

16. Planning Triggers - Lot Accumulation Period

17. - Reorder Point vs. Safety Stock Reorder Point – Reactive response to an inventory level Safety Stock – Proactive response to an inventory level Planning Triggers

18. Reorder Point Inventory Lead Time Replenishment (Reorder Quantity) Time Quantity

19. Safety Stock Inventory Lead Time Replenishment Time Quantity

20. - Order Quantity Manipulators How to ensure orders are at least a full batch (or full pallet)? – Minimum Order Quantity How to ensure orders are in full batch (or full pallets) increments? – Order multiples How to ensure orders are split into standard run sizes? – Maximum Order Quantity Planning Triggers

21. Avoiding ‘Clutter’ If this is all you do, it’s not enough! Now you’ve doubled your supply – and the Cancel will be back again next time!

22. Avoiding ‘Clutter’ Scenario: Cancel one date, New order for another WHY does this happen? A) Demand changes (unavoidable!) B) The new supply needed is further away from original supply than the Reorder Cycle.

23. Avoiding ‘Clutter’ – How? Planning Flexibility – Any supply can be set to ‘None’ and the plan will leave it alone

24. Avoiding ‘Clutter’ – Planning Flexibility option Purchase Lines Transfer Lines Prod. Order Lines Req. Worksheet Planning Worksheet

25. Avoiding ‘Clutter’ – How? Planning Flexibility Dampeners – Plan only suggests change outside of a ‘tolerance’ (date or qty) – In 2013, these are at Item / SKU level, not overall Manuf. Setup

26. Avoiding ‘Clutter’ - Dampeners

27. Avoiding ‘Clutter’ – How? Planning Flexibility Dampeners Rescheduling Period – Plan will use ‘Reschedule’ if within the period (as opposed to Cancel + New)

28. Avoiding ‘Clutter’ – Rescheduling Period For NAV 2013, Reorder Cycle split into two fields: - Lot Accumulation Period - Rescheduling Period

29. Planning Engine What does a typical planning process look like?

30. STEP 1 – Plan FG Production Filter for which FG to include Dates - Longest lead time component 1.1. MPS Firm plan next week Plan everything else 1.2 Carry Out Action Shortage report / meet with purchasing Early detection of packaging issues 1.3 Shortage Analysis

31. STEP 2 – Schedule FG Production Primary work center/machine center Sort by Item Scheduling Property Throughput based on routing setup/run times Heel-to-toe prioritizing 2.1 Capacity Task List

32. STEP 2 – Schedule FG Production Heel-to-toe prioritizing 2.1 Capacity Task List

33. STEP 2 – Schedule FG Production

34. STEP 3 – Plan WIP Production Dates - Longest lead time component Suggestions align with FG schedule 3.1 MRP (WIP) Firm plan next week Plan everything else 3.2 Carry Out Action Shortage report / meet with purchasing Early detection of component issues 3.3 Shortage Analysis

35. STEP 4 – Plan RM/PKG Dates - Longest lead time component Suggestions align with FG/WIP schedule 4.1 MRP (RM/PKG) Create PO for order date of today/tomorrow Ignore everything else 4.2 Carry Out Action Shortage report / meet with purchasing Double check plan 4.3 Shortage Analysis

36. - Planning Make-to-Order Environment – Will need to combine MPS and MRP Co-pack / Subcontracting Environment – Will need to insert Subcontracting Worksheet into the process – Links a production order and a purchase order Multi-location Environment – Transfer order suggestions may not represent your reality Curve Balls

37. Schedule WIP instead of FG – Production Order Linking WIP Requirement is Line Specific – May need to use variants to trigger production suggestions by line Batch Sizes Change by Line – Alternate Routings (or versions) with different batch UOMs Routing or BOM Changes Based on Production Location – Routing versions by Location Curve Balls- Scheduling

38. Characteristics of successful implementations Maintain accurate data input – Forecasts, orders, inventory levels, BOMs, routings Proper treatment of expedited orders – Additional resources, multiple lines Close collaboration between sales/marketing and production – The forecast is a key contributor to successful planning Accurate and timely shop floor feedback and tracking

39. Questions?

40. Thank you!