Introduction
Demand management is used to handle planned independent requirements and their interaction with real customer requirements. The demand program is the starting point of the production planning and serves as input for material requirements planning.
Basic Types of Requirements
There are two basic types of requirements that refer to a plant and one type that has a cross-plant behavior. Let’s get to know these types using our Bike Company example:
- Planned Independent Requirements (PIRs):
Planned independent requirements are stock requirements and might initiate procurement or production without waiting for sales orders.
- Sales Orders:
Sales orders are customer requirements entered by the sales department for a delivery plant.
- Stock Transfer Requirements:
Stock transfer requirements are requirements from other locations in your own network (e.g. from distribution centers). .
Planning Strategies
The main task of planning strategies is defining the relationship between planned independent requirements and customer orders. The following main planning strategies are predefined supporting general business scenarios.
- Make-to-Stock Production Strategies:
If you use make-to-stock planning strategies, the system takes into account both kind of demands, PIRs as well as existing sales orders.
- Subassembly Planning Strategies:
Make-to-stock production can also be executed on assembly level. In this case, the required assemblies are procured, rather than finished products being produced to stock. A sales order triggers the final assembly.
- Make-to-Order Production Strategies:
Production/procurement is only initiated when an actual sales order is received.
Specific planning strategies always have their own advantages and restrictions. The choice of strategy mainly depends on the nature of the product.