In today’s complex manufacturing landscape, one of the biggest challenges for planners is uncertainty. Forecasting demand accurately at the individual product code (SKU) level is often an almost impossible task. Volatile markets, ever-shorter product life cycles and the vastness of catalogues make forecasting at the granular level unreliable and prone to continuous error.
However, companies almost always have budget data or business plans expressed at a higher, more consolidated level: by product families, by markets or by sales channels. How can the gap between this aggregated strategic data and detailed operational planning be bridged?
The answer lies in multi-level aggregate planning, a strategic approach that turns a limitation (the impossibility of predicting the individual) into an opportunity for control and optimisation.
What are Planning Items? The key to planning aggregate
Multi-level aggregate planning starts with a fundamental concept: stop focusing on the single tree and look at the whole forest. Instead of planning each individual product, you create virtual aggregates representing entire product families with similar characteristics.
Here is where the FINITE CAPACITY PLANNING module of the Compass360 suite comes in.. This tool allows you to define and configure Planning Items: real virtual planning objects that group similar finished products together.
To these Planning Items you can:
-
Associate sales forecast data: You use budget data or consolidated sales forecasts and apply them directly to the aggregate.
-
Define planning policies: Stock rules, batches and procurement strategies are established for the entire product family.
From Theory to Reality: Planning Bill and Master Cycle
A Planning Item, by itself, is just a container. To make it an effective planning tool, Compass360 allows two crucial elements to be associated with it:
-
The Planning Bill: This is an “average” or “representative” BOM for the entire product group. Instead of exploding requirements for hundreds of SKUs, the Planning Bill calculates the requirement for critical components and raw materials based on the expected mix percentages within the family. This provides a clear, aggregated view of the materials needed in the medium to long term.
-
The Master Cycle (Master Routing) Similar to the Planning Bill, the Master Cycle is the “representative” work cycle of the Planning Item. It defines the production steps and resources (machines, labour, lines) required to produce a unit of the aggregate.
The Strategic Advantage: assessing feasibility at Finite Capacity
The real power of the Master Cycle is unleashed when it is used for finite capacity planning. Thanks to this tool, the system not only generates a production plan based on forecasts, but also assesses its real feasibility by comparing the required workload with the available production capacity.
This makes it possible to:
-
Support strategic decisions: It is possible to simulate future scenarios (‘What happens if the sales budget for this family increases by 20%?’) and understand in advance whether the production set-up is adequate.
-
Identify bottlenecks: Critical resources that could become saturated in the medium to long term are identified, giving time to intervene (e.g. with investments, additional shifts, outsourcing).
-
Define the optimal capacity set-up: The necessary information is obtained to balance loads and structure production in an efficient and sustainable way.
Synchronise your supply chain: the power of multi-plant planning
Complexity increases when a company operates with several production units. How to decide where to produce what?
Compass360’s multi-plant planning meets this need. The system not only generates production proposals for Planning Items, but is also able to allocate them intelligently between the different plants in the supply chain.
This allocation can take place according to flexible rules defined by the planner, such as:
-
Production cost of each plant
-
Available capacity and saturation level.
-
Production specialisation of a plant.
-
Workload balancing priorities
The result is perfect synchronisation and production integration between plants, turning a chain of production sites into one cohesive and optimised system.
From reactive planning to strategic governance
Managing multi-level and multi-plant aggregate planning means moving from a reactive approach, which chases emergencies, to a proactive and strategic governance of production.
With advanced tools such as Compass360’s FINITE CAPACITY PLANNING, it is possible to transform high-level budget data into feasible operational plans, assess the impact on production capacity and synchronise the entire supply chain. Uncertainty does not disappear, but is governed, allowing the company to make better decisions and build a solid competitive advantage.