How to set up Demand Forecasting in AX 2012 R3(Last Updated On: October 15, 2018)
The module Master Planning exchanges data with other operations inside the ERP software, including logistics, production, trade and CRM, helping you achieve a more organized and streamlined manufacturing process and supply chain.
You can run Master Planning to perform the following tasks.
• Forecast scheduling to estimate aggregate requirements for demand forecast
• Process the futures messages and action messages (created during master scheduling) for planning optimization
• Master scheduling to estimate net requirements for actual demand
• Process the planned purchase orders, production orders, transfer orders and kanbans.
Microsoft added or altered some features in Master Planning in AX 2012 R3.
Let’s take a look at especially one of the new/revised features, Demand Forecasting
Demand forecasting in AX 2012 R3
Demand forecasting is a set of tools that help you generate a baseline forecast or estimate future demands on the basis of historical transaction data.
Here are the steps to use demand forecasting.
Set up demand forecasting
You must configure intercompany planning groups before you start
Select and include items in demand forecast
You first need to select the items you want to include in demand forecast, and assign an item allocation key to each selected item.
Here’s how you can assign an item allocation key;
• Click Inventory management, then go to Setup, then Forecast and select Item allocation key, and click on Assign items
• Now you will find a list of items, and you need to select an item from the list. Now shift the item to Assigned items, using the arrow buttons. Remember you can assign one item to only one item allocation key. Once assigned, the item will no longer show up in the Available items list.
Repeat the above steps to include each selected item
Assign items to a company’s demand forecast
Master Planning calculates demand forecast for all companies in an intercompany planning group. It automatically calculates the demand forecast for all items assigned to all item allocation keys. It calculates forecast for all companies of the group. Your job is to assign item allocation keys to each company.
Here’s how you can assign an item allocation key to a specific member of an inter-company group
• Click Master planning, go to Setup and select Intercompany planning groups. From the list of intercompany planning groups, select a group. Then select a company from that group
• Click Item allocation keys to get a list of unassigned item allocation keys.
• Select a key from the list and move it to the list of Assigned item allocation keys and repeat the aforementioned steps for all the planning groups
Specify the detail level for use in demand forecast
Now define the detail level you require in a baseline forecast. The system uses the by-default forecast dimensions for allocation key along with site and company. However, you can assign additional forecast dimensions, if you need the demand forecast in greater detail.
You are free to adjust the forecast dimensions any time you want by following this:
• Click Master planning, go to Setup, then Demand forecasting and select Demand forecasting parameters then click on Forecast dimensions
• You will find a list of Unassigned forecast dimensions where you need to select a forecast dimension and move it to the list of Assigned forecast dimensions using the arrow buttons.
Set up the parameters
Now you need to specify the parameters to use when generating baseline forecasts. Once the parameters are set, they will apply to all members of an intercompany planning group and the steps to set up parameters are as follows.
- Click Master planning, go to Setup, then Demand forecasting, then the General tab, select Demand forecasting parameters and then specify the demand forecast unit. Specifying the unit is essential because quantities of an item are factored in when generating baseline forecasts. It is also important to define a conversion rule for both the item unit and forecast unit.
Next you need to specify the file path location in the field called Excel demand forecast file path where you can specify what types of historical transactions the system should use when calculating the baseline forecast.
- Now visit the FastTab of the Forecast algorithm parameters, click on the Forecast generation strategy field and click on one of the two options mentioned below.
- Copy over historical demand – that uses historical demand data to reach the baseline forecast.
- SSAS time series forecasting methods – that use the Microsoft SQL Server Analysis Services Time Series algorithm to compute a statistical baseline forecast.
- Depending on the Forecast Generation strategy selected in the previous step, you may now add accuracy fields. Basically selecting between a shorter or longer list of SSAS parameters to be used in the forecast algoritm.
- Now clear any historical data check box with no data or 0 (zero). You can do that by clicking on “Do not allow gaps in historical data” check box.
- If you want to assign some demand forecasting parameters to a specific item allocation key you can use the “Item allocation keys” tab (on the left hand side of the current form).
Forecast reduction for a customer group or individual customer
Now specify whether you want a customer forecast to be included in the overall forecast and allows you to make sure that any items purchased by a specific customer or customer group are also taken into account in the master planning.
• If you choose to include a customer forecast in the overall forecast both the overall forecast and the customer forecast will reduce
• If you choose not to include a customer forecast in the overall forecast it will affect only the customer forecast
Select Start Time for production scheduling
This option allows you to schedule your production orders. You can set the start time from the current time or from the start of a future work day. You will find the current time option in the capable to promise (CTP) and the Scheduling start time field and delivery date control feature and in the Master planning parameters form.
Stay tuned to our blog for more such useful information on Microsoft Dynamics AX and its features.