Master Planning in Dynamics 365 Finance & Operations

The Master planning module in Dynamics 365 Finance & Operations includes so many options and data points that it can be overwhelming, even for experienced users.

However, as a former demand planner, and now as a solution specialist for Finance & Operations, I have found that there are a smaller number of key features and gotchas in Master planning. Grasping these few features will take most users a long way toward using the entire module effectively.

Those key features are planning optimization, dynamic vs static plans, the Net requirements window, and certain tricky terminology.

Table of Contents

• Planning Optimization
• Static vs Dynamic Master Plans
• Net Requirements Page
• Terms: Pegging vs Marking vs Reservation

Note: Even though most customers, commentators, and consultants still call it Dynamics 365 Finance & Operations or D365FO, Microsoft now technically licenses it as Dynamics 365 Finance and Supply Chain Management.

What Is Master Planning in D365 Finance & Operations?

Master planning is the module in Finance & Operations that covers the process your company might call material requirements planning (MRP), demand planning, or resource load planning.

Planning Optimization

Planning optimization in Finance & Operations brings the time needed to run Master planning down from hours to a matter of minutes.

Historically the legacy Master planning batch job consumed a lot of resources and could be problematic, with inconsistent results for products. It also took a lot of time. Planning optimization simplifies the system resources required to run Master planning with what is essentially a microservice that runs MRP separate from the rest of the system.

The benefits of planning optimization are:

• Reduced run time. This means Master planning can be run more frequently and during business hours, allowing users the ability to have the latest MRP data to make decisions throughout the workday.
• By running on its own microservice, it no longer interferes with other batch jobs in the system. This means results will be consistent, more accurate, and less disruptive during the business day.
• It uses the legacy Master planning configurations such as Item Coverage Groups and safety margin days, which means you don’t have to “re-learn” how MRP calculates planned orders.

However, the limitations of planning optimization are:

• Planning Optimization is only available on Cloud-Hosted Environments (meaning, Tier 2 and higher). Although these environments are the most common in F&O implementations, not all companies have them. Check with your system administrator or Dynamics 365 Finance & Operations Partner if you’re unsure.
• It doesn’t have a full 1:1 mapping with the legacy Master planning MRP job. This means that not all the configurations and original Master planning fields are leveraged with planning optimization. It’s constantly being improved, and its current iteration covers 80% of business needs, but there are still some areas where it doesn’t quite line up. It’s not wrong, just different.

To help find these differences, and gauge their impact on your business, we recommend doing a side-by-side comparison of planned orders while transitioning from legacy Master planning to planning optimization to make sure results are as you expect.

Static vs Dynamic Master Plans

Think of the static plan as the long-term operational plan, and the dynamic plan as the day-to-day, short-term plan.

Specifically, the difference between the static and dynamic plans in Dynamics 365 Finance & Operations is that the static plan is only affected by running the Master planning job. So if you were to review the static plan throughout the work day, the values would remain the same. The dynamic plan shows demand as it happens.

For example, if a large sales order is placed during the day, and it creates a spike in demand, a user can expect to see that increased demand reflected in the recommendations made by the dynamic plan, but the static plan would not factor for it until the next Master planning batch job is run.

Static plan:

Dynamic plan:

The point of having both the static and the dynamic plan is to allow users to gauge throughout a given period the impact of current demand, and be able to compare it to the existing plan (the static plan).

It’s a good practice to compare the static and dynamic plan regularly, especially if your business is running promotions or close-out sales, or if there’s anything that might cause an unplanned spike in demand that may require action on the part of the planner.

Most of the time the static plan is sufficient, if the Master planning job is scheduled to run on a daily basis. However, if Master planning is set up to run weekly, a planner may want to leverage the dynamic plan to ensure all demand, including unplanned demand, is accounted for.

Some key differences in the configuration of the dynamic plan and static plan include:

• The Time fence is reduced in the Dynamic plan, because it is considered the short-term plan.
• The Dynamic Plan typically does not include Supply/Demand forecasts, because it is intended to show incoming customer demand, not planned demand.

Net Requirements Page

The Net requirements page is a snapshot of an item that shows an aggregation of information about inventory on hand and transactions pertaining to that item. Because it combines so much info, in my experience, Net requirements is both the most useful and the most infuriating window in the Master planning module.

When I train users on Master planning, I spend most of the time explaining how to read the Net requirements page. Understanding what you’re seeing is most of the battle in Master planning, but Net requirements will be your friend.

From this window you can drill into any transaction to see more details, and drill back out to the Net requirements page. This is helpful if you need to investigate something for an item without having to jump around to a bunch of different modules.

Don’t forget to select the right plan (static or dynamic) when viewing the results; the plans can vary quite a bit, so this is important.

Also, something to note: you can execute Master planning directly from this window for the item you are drilled into. This is particularly helpful if you’ve made a change, and you need to see the result of that change, but you don’t need to run the entire batch job for all items. Click ‘Update’ in the upper left-hand corner.

Upper Section of Net Requirements Page

In the upper section of the Net requirements page for an item, you’ll see any Warehouses associated with or used for this item. If a warehouse doesn’t appear here, it doesn’t mean that it isn’t used; it just means that in this current snapshot, there weren’t requirements, transactions, or inventory to be displayed.

Keep in mind that this is a snapshot view and will be updated when a batch planning job runs overnight.

Lastly, an important note: the row selected here will affect what you see in the lower section of the Net requirements Form.

Lower Section

In the lower section of the Net requirements window you will see detailed transactions based on the row selected above, or per Warehouse. This section has a cumulative column so you can see the net total for this item.

Each tab in the lower section provides helpful information for the planner, when evaluating the current snapshot for a particular item.

• Overview: In the Overview Tab, you can see the Warehouse, Site, Minimum, Maximum, Coverage Group, and Production Order Type columns. Generally these will be specified when the item is initially set up and will not need to be changed later.
• Item Coverage: This will show detailed configurations for the Item Coverage group for this specific SKU, for the warehouse row that is selected. These are coverage parameters used to calculate the results that appear in the Net requirements form. They can be changed for specific items depending on the requirements but are generally set up for groups of items that have the same planning needs.
• Summary: This section gives you the totals for the various categories such as On Hand Inventory, Purchase Orders, etc. Again, this is for the Warehouse Row selected in the Overview tab.
• Period: This section displays an inventory snapshot for a given period, in this case, weekly.

Pegging

The purpose of the system’s planning process is to match demand with supply to meet requirements. This process of “matching up” is called Pegging.

Pegging can be found in the bottom section of the Net requirements window. Expand the Pegging section of the Net requirements window and select the Sales Order row.

The information you are seeing is directly tied to the row selected in the Overview, which, of course, is tied to the section selected in the Warehouse at the top. Select different items to see which each line is pegged to.

Different types of lines, or references, will be pegged to different kinds of demand. For example, a BOM line can be pegged to a planned Purchase order, a Purchase order can be pegged to a Production line, and so on.

See Microsoft’s examples of calculations.

Special Terminology in Master Planning in Finance & Operations: Marking, Reservation, and Pegging

Within Finance & Operations Master planning, I find that there are three special terms that users tend to get stuck on most often. Pegging, Marking, and Reservation, are all similar but function differently. Each has its own use for a planner.

Pegging: Pegging is the system’s association between supply and demand. Pegging essentially ties up the demand and provides the corresponding supply; if there isn’t sufficient supply, it will suggest more is provided.

Marking: Like Pegging, Marking is used to show how demand is expected to be covered in Master planning. But Marking is more permanent than Pegging, and can be manually marked by a user. (Pegging happens entirely by the system.)

Reservation: Reservation is a ‘hard link’ between supply and demand. It is the most permanent of these 3 options, and will supersede Pegging or Marking. Users can put a Reservation against a specific sales order for an inbound Purchase Order. Even if, under normal circumstances, the system’s planning algorithm might not prioritize it, Master planning will consider the Reservation a priority.

Master Planning in D365 Finance & Operations: Watch the Webinar

For a complete overview of Master Planning in Dynamics 365 Finance & Operations, check out my recorded webinar:

If you’re looking for training, support, and guidance tailored to your specific situation, learn more about our Finance & Operations support services. As a Dynamics 365 Finance & Operations Partner, Encore is here to help you get the most from your Dynamics 365 solutions.