What is the difference between Planning and Replenishment?

This is what happens in the video

If you work as a planner in Business Central, you need to understand the difference between planning and replenishment. Planning determines when you need an item and in what quantity. Replenishment determines how you get that item.

You find both areas on the item card or the stock keeping unit (SKU) card, where they are separated into two distinct sections.

The planning engine always runs in a fixed order. It first calculates the quantity and the date using the planning parameters. Then it looks at the replenishment settings to figure out how to supply the item.

The replenishment system determines which lead time the planning uses. A production order uses the routing. A transfer order uses the transfer routings. A purchase item uses the lead time on the item card.

The difference between planning and replenishment in Business Central

When you work as a planner in Business Central, one of the first things to get straight is the difference between planning and replenishment. The two concepts are closely related, but they answer different questions.

Replenishment is about how you get your item. Planning is about when you need your item. If you open the item card, or a stock keeping unit card, and scroll down, you will find these as two separate areas: one for replenishment and one for planning.

How the planning engine processes input and output

Think of the planning engine, whether that is MRP or the planning worksheet, as a small machine in the middle of the process. It takes a number of inputs: demands, supplies, inventory, master data and so on. It does a lot of calculating, and then it produces output in the form of proposals for production orders, purchase orders and transfer orders.

All of this planning depends on the item’s replenishment system. The date you need the item depends on the way you supply it.

How planning calculates date and quantity

When the planning runs, it first looks at all the fields on the planning tab, including the reordering policy and the other planning parameters. From those parameters it works out planning per location, per variant and per item. The result tells you which day you need the item replenished and in what quantities.

So the first pass gives you two things: the quantity and the date.

How replenishment determines lead time

Once planning has the quantity and the date, it moves on to the replenishment tab to figure out how to replenish the item. The method decides which lead time applies:

• Production order: the routing is used to calculate the lead time.
• Transfer order: if you are on the SKU card, the transfer routings are used.
• Purchase item: the lead time field on the item card is used.

The key takeaway is the sequence. The planning runs first, finishes, and produces the data on quantity and date. Only then does it move to replenishment to determine how you get the item.

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