The idea behind the primary features of Reverse Planning

Reverse planning in Business Central is a set of tools that help you handle supply problems from the demand side instead of only adjusting your supply orders. You use it to find critical items, replenish manually, move demand dates when supply cannot keep up, identify overstock, and break sales forecasts down into purchase items.

The reverse planning solution has five primary functions: Simple MRP, direct replenishment, move demand date, identify overstock inventory, and breaking down a future sales forecast.

The Simple MRP worksheet only creates new orders for critical items that drop below zero in inventory. You run it first thing Monday morning to see whether you have a problem to solve.

The move demand date function suggests moving your demands forward when your supply situation does not improve, instead of moving supplies back in time the way a normal planning engine does. It traces the cause through the whole low-level hierarchy up to the sales orders, so you can tell customers you cannot fulfil their demand on the original date.

The forecast breakdown ignores inventory and existing orders. It only looks at the forecast and breaks it down into supplies on specific dates for each item.

Simple MRP for finding critical items

The Simple MRP function is an MRP planning worksheet, but it only creates new orders. It comes with many templates and flexible ways to calculate, so you can be as rigid or as relaxed as you need.

The simplest template finds the very critical items, the ones that drop below zero on inventory. This is the first thing you do Monday morning to figure out whether you have an issue that needs solving. From there you can run other templates that are less rigid as you work through your planning.

Direct replenishment for manual ordering

Direct replenishment has access to more or less the same functionality as the Simple MRP, but the point is that it is simpler to use. It looks simpler, has its own templates, and is much easier for the user to understand. It includes all items and works like a manual replenishment.

You select a template, for example to select purchase items, and look at a specific vendor number on a specific location. It takes all the items set up with that vendor on that location, and you can either use a suggested quantity or set it manually. From there you create purchase orders, production orders, or transfer orders for that vendor.

This is the most manual the tool gets without actually creating the orders for you. You can also enter an order directly, key in the item, and decide whether you want to purchase it or transfer it from another location. It is a very simple tool for manually creating, for example, a transfer order instead of a purchase order.

Move demand date when supply cannot keep up

The move demand date function is meant for situations where things do not get better on the purchase or supply side. When your supply will not improve, a normal planning engine would suggest moving supplies back in time. This function does the opposite and suggests moving your demands forward.

For example, a firm planned production order needs to be moved from one date to another. If you look into the supply changes, you can see the cause. In this case a delayed purchase item is causing it. The function scrolls up through the whole low-level hierarchy until it reaches the sales orders.

From there you can transfer the affected sales orders into a sales handling journal, where you tell your customers that you cannot supply those items or fulfil their demand on the original date, so the dates need to move.

Identify overstock inventory

The overstock inventory tool lets you set up parameters to determine which inventory is too high or too low. You can search for items with higher or lower inventory value than a given threshold, and you can test against average inventory value, highest inventory value, safety stock, reorder point, or other parameters.

This way you can find items where you have too much on inventory and need to reduce it. If you use expiration dates, you can also search for items that are expiring. You can use the remaining shelf life percentage to figure out whether you need to sell items out before they expire.

Break down a sales forecast into purchase items

The forecasting function ties back into the reverse planning worksheet. You create a sales forecast and then break it down into purchase items. For example, you take a forecast template for April next year, select a sales forecast for that month, and break it down on your production location.

The function creates the planning lines and moves them automatically into your reverse planning worksheet. You then run a forecast template that works only on those planning lines and breaks them down further into the reverse planning worksheet with the resulting dates and quantities.

The whole idea is that it ignores inventory. It does not look at existing orders or anything else. It only looks at the forecast and breaks it down. The forecast quantities from April are broken down into supplies on specific dates across all the items involved.

You can filter on your purchase items, select all of them, and if you have the Flexible Forecast app, convert the result into a forecast, for example a transfer forecast. If you run this twelve times, once for each month next year, you have broken the sales forecast all the way down into purchase items you can use for planning.

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