Demand Forecasting of Sales and Requisition of low-level Components

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Posted on by DG-09071510-0

Hi All,

I've seen several posts with similar questions, but based on lack of definitive answers, I will assume that this function is not supported as I (and others) imagine it.

Sales is on an assemble-to-order basis for all level 0 products. -> this means that planning worksheets will only suggest assembly order when sales order exists, right?

If I add a demand forecast for the finished goods (sales or component), this will not suggest assembly order, because a sales order does not exist, right?

Therefore, planning will not suggest assembly/purchase orders for the components based on finished goods forecast. This would be fantastic, but it doesn't seem to trickle down like that.

But what everyone is interested in is the projected demand on BOM lower level components. We would like to forecast finished goods sales, and use that to plan component and sub-assembly demand in time for the forecasted sales.

If I place a component demand on these components, then I will get the suggestions from the planning that I need. That's nice, but the rub is, how do I determine these component forecast quantities?

I have found the sales analysis view, which gives historical data to easily use when generating forecasts. However, this is only sales data; I have not found a way to view consumption of low-level components in a manner that allows easy generation of component forecasting based on historical data.

Is there a way of generating such a consumption analysis view?

Is there a way of configuring the planing/forecast to look use sales forcast of finished goods to drive requisition of BOM components?

Thanks!

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Dynamics 365 Business Central

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DG-09071510-0 26 on at

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Demand Forecasting of Sales and Requisition of low-level Components

Hi Ben,

Thanks for your response. It confirms my suspicions.

I realize I was hoping the system could make the jump from forecasted finished goods sales to a projected forecasts of BOM components without actually creating the assembly orders. This purely because historic sales data of finished goods is easy to extract and transform into forecasts, whereas historic consumption of components plus individual sales is not easy to extract.

As you suggest, chosing assemble to stock policy for finished goods would fill the missing link by creating an assembly order. I would have to rethink our entire production if we were to physically assemble to stock. Otherwise, it might be possible to delete the assembly orders in an organized manner after the component demand is procured and before the sales order is received. This would be quite tricky.

Thanks,

Darrell
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Ben Baxter 4,964 Super User 2024 Season 2 on at

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Demand Forecasting of Sales and Requisition of low-level Components

Great question, but you are asking for two separate things.

First a clarification point, the Planning Worksheet is not used for making an Assemble-to-Order Item. As soon as you enter the Sales Line Quantity the system will create the Assembly Order in the background.

Now regarding the forecasting and demand, if your Finished Goods are Assemble-to-Order it means you run a lean inventory and you only make them when you need them (first of two separate things). I would imagine your raw materials are similar in nature, in that you don't want to have a lot of stock for demand that doesn't exist. Yet, you are asking if the system can generate demand as if the sales (and assembly orders) do exist (second of two separate things).

If you are wanting the system to suggest Assembly Orders based on Forecasted sales, and likewise suggest Purchase Orders for the related raw materials, you should consider using an Assemble-to-Stock policy. Especially if you are already looking at your historical trends to make the forecast (some people don't even do that). The system will treat the forecast as demand and build inventory (Assembly Orders) to fulfil that demand when it occurs.

The beauty of the Forecasting is that the Sales count against the Forecast first, it isn't until your sales exceed the forecast that it becomes additional demand. You do run the risk of over-producing Items that are not meeting their forecast, but if you manage your forecast entry (spread entries over the weeks instead of lumped per month) you can hopefully mitigate that issue.

The other option (not recommended) is creating a Component Forecast, but now you're drastically increasing the data entry and maintenance of your forecast when the Assemble-to-Stock policy would do the same thing.

Forecasting can be a great discussion opportunity with your partner, and I would encourage you reach out to them to dive deeper into it.

P.S. Please always test these types of changes in a Sandbox and NOT in your Production environment.

Best Regards,

Ben Baxter

Accent Software Inc