Material Planning — Materials Disposition in the ERP
Material planning (materials disposition) is the planning and control of material procurement: it ensures the right material is available in the right quantity at the right time — without building up excess stock. Material planning is a core task of material management and is highly automated in the ERP.
Tasks of material planning
- Requirements determination: what is needed, when and how much?
- Stock control: monitoring stock levels and reorder points
- Order triggering: generating purchase and production proposals
- Date and quantity optimisation: economic lot sizes and delivery dates
Planning methods
Two basic methods are distinguished:
- Demand-driven planning: requirements derived from concrete orders and bills of materials (MRP). Precise but data-intensive — suited to high-value A-items.
- Consumption-driven planning: orders triggered from past consumption and fixed order points (reorder point). Simple and robust — suited to low-cost C-items.
The ABC analysis helps choose the right method per item.
Key planning parameters
- Reorder point: the order trigger
- Safety stock: reserve against fluctuations
- Lead time: from order to goods receipt
- Lot size: economic purchase/production quantity
- Planning method: set per item
In the ERP, planning mostly runs automatically: the planning run creates purchase and production proposals that the planner reviews and releases. Modern systems use forecasting and partly AI to factor in patterns and seasonality.
Related topics
Frequently Asked Questions
What does material planning mean?
Material planning is the planning and control of material procurement: ensuring the right material is available in the right quantity at the right time, without building up unnecessary excess stock.
What is the difference between demand-driven and consumption-driven planning?
Demand-driven planning derives requirements from concrete orders and bills of materials (MRP) — precise but data-intensive. Consumption-driven planning triggers from past consumption and order points — simple and robust for low-cost items.
Which parameters control material planning?
The most important are the reorder point, safety stock, lead time, lot size and the planning method, which is set per item.
How does the ABC analysis help with material planning?
It ranks items by value. High-value A-items are usually planned precisely via MRP, low-cost C-items via simple order points — saving planning effort.
Does material planning run automatically in the ERP?
Largely yes. The planning run automatically creates purchase and production proposals that the planner reviews and releases. Modern systems factor in forecasts and partly AI for seasonality.