unconstrained & Constrained planning

In the unconstrained planning, we take into consideration that we have enough material (on-hand) and enough resources to manufacture,so that the demand is satisfied on the specified date. This is where the compression days come into affect.

In the constrained planning, the planning engine will tell us that with the available resources and the available on-hand these are the dates that the demands can be satisfied, here we see the Days late. The demand will be satisfied on a later date than the SSD that we give in the sales order because there might be some delay either by the Supplier or there might be some delay in manufacturing certain items in-house (resources).

But in real scenarios there are some companies where we see that though they go for constraint planning and the planning engine says that the demand can be met on a later date, still they were able to satisfy the demand on the SSD in the sales order. This happens of inaccurate datas in the item attributes, routings etc etc... Had they got the correct data's in place i am sure that the planning engine will be perfect.

Overview of Constraint-Based Planning

Constraint-based planning and scheduling is an approach for balancing material and plant resources while meeting customer demand. It takes into account constraints at the enterprise and plant levels. Material and capacity constraints are considered simultaneously. Capacity constraints include factory, distribution, and transportation resources. This complete picture of the problem provides instant and global visibility to the effects of planning and scheduling decisions throughout the supply chain.

There are two types of constraint-based planning--with and without optimization. This section first describes constraint types that are applicable to both types, and then describes constraint-based planning without optimization. Constraint-based planning with optimization is described in Optimization.

Constraint Types

You can define constraints for materials and resources in your plan. You will also be able to specify the level of importance of these constraints depending on your business needs and the planning horizon. You can generate plans using the following scenarios for each planning bucket type (days, weeks, periods):

·         Plan considering material constraints only

·         Plan considering resource constraints only

·         Plan with respect to both material and resource constraints

Overview of Optimization

In optimized supply chain plans, Oracle ASCP uses a combination of traditional linear programming and constraint programming techniques.

You can choose to optimize your plans to meet one or more of the following objectives:

·         Maximize inventory turns

·         Maximize plan profit

·         Maximize on-time delivery

The plan objective is derived by combining and weighting chosen objectives. Optimization determines the best possible sources of supply, considering all your material, resource, and transportation constraints.

Optimized plans automatically choose (on the basis of minimizing plan objective cost) the following:

·         Alternate bills of material

·         Alternate routings

·         Alternate resources

·         Substitute components

Constrained plans with decision rules also select alternate bills of material, routings, and resources; however, they do not do so on the basis of maximizing plan objectives.

Optimized plans do not select an alternate bill of material unless it has an alternate routing specified and do not select an alternate routing unless it has an alternate bill of material specified.

Optimized plans will override the rankings and sourcing percentages provided in sourcing rules and bills of distribution as necessary in order to minimize the plan objective cost.

You cannot plan repetitive items in optimized plans.

Optimization Objectives

Multiple optimization objectives can be met by assigning weights to each. This is done using the Optimization tab.

For more information on the Optimization tab, see Defining Plans.

Following are descriptions of the various optimization objectives:

Maximize Inventory Turns

This objective is achieved by minimizing the total inventory for the plan duration.

Maximize Plan Profit

·         The following are considered:

o    Item cost

o    Resource cost

o    Inventory carrying cost

o    Transportation cost

Other penalty costs are considered, such as demand lateness, resource over utilization, etc.

Maximize On-time Delivery

This maximizes on-time delivery by trying to ensure that all demand is met on time. Penalty factors specify the relative importance of demands when maximizing on-time delivery.

Setting Penalty Factors

Oracle ASCP depends a great deal on data related to costs, penalties, and priorities above and beyond what is available from the ERP system. You can set penalty factors at different levels using flexfields, plan options, or profile options. Flexfields let you set penalty factors at the most discrete level. For example, you can set the Penalty Factor for Late Demand at the Demand, Item, or Org level using flexfields. Plan options and profile options let you set the same penalty factor at the Plan level and Site level, respectively.

Warning: Penalty costs are different from penalty factors. Penalty costs are the product of the penalty factor and some other parameter such as list price, item cost, resource cost, or transportation cost.

For all of the steps related to setting penalty factors, please log in as Manufacturing and Distribution Manager, unless otherwise noted. You must run the Create Planning Flexfields program beforehand for the flexfields used for setting penalty factors to be operational. Please see Oracle ASCP Flexfields for additional details. Finally, please refer to Choosing an Objective Function for help with setting actual penalty costs.