Design Details - Prioritizing Orders

Within a given SKU, the requested or available date represents the highest priority; the demand of today should be dealt with before the demand of next week. But in addition to this overall priority, the planning system will also suggest which type of demand should be fulfilled before fulfilling another demand. Likewise, it will suggest what source of supply should be applied before applying other sources of supply. This is done according to order priorities.

Loaded demand and supply contribute to a profile for the projected inventory according to the following priorities:

Priorities on the Demand Side

  1. Already shipped: Item Ledger Entry
  2. Purchase Return Order
  3. Sales Order
  4. Service Order
  5. Production Component Need
  6. Assembly Order Line
  7. Outbound Transfer Order
  8. Blanket Order (that has not already been consumed by related sales orders)
  9. Forecast (that has not already been consumed by other sales orders)
NOTE

Purchase returns are usually not involved in supply planning; they should always be reserved from the lot that is going to be returned. If not reserved, purchase returns play a role in the availability and are highly prioritized to avoid that the planning system suggests a supply order just to serve a purchase return.

Priorities on the Supply Side

  1. Already in inventory: Item Ledger Entry (Planning Flexibility = None)
  2. Sales Return Order (Planning Flexibility = None)
  3. Inbound Transfer Order
  4. Production Order
  5. Assembly Order
  6. Purchase Order

Apart from priorities given by the type of demand and supply, the present state of the orders in the execution process also defines a priority. For example, warehouse activities have an impact, and the status of sales, purchase, transfer, assembly, and production orders is taken into account:

  1. Partly handled (Planning Flexibility = None)
  2. Already in process in the warehouse (Planning Flexibility = None)
  3. Released – all order types (Planning Flexibility = Unlimited)
  4. Firm Planned Production Order (Planning Flexibility = Unlimited)
  5. Planned/Open – all order types (Planning Flexibility = Unlimited)

See Also

Design Details: Balancing Demand and Supply
Design Details: Central Concepts of the Planning System
Design Details: Supply Planning


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