Overview

Master planning is a supply chain planning discipline that creates high-level production, purchase, and distribution plans based on the demand plans.

The purpose of master planning is to provide quantitative structures that allow you to roughly plan the capacity requirements of vendors, production facilities, warehouses and transport, as well as capacity change planning.

The master planning scenario describes a flow of processes where master planning consolidates the received internal and external demand plans, then tries to supply products based on real capabilities of its own plant, and only then consider options for attracting external sources of supply. The scenario treats production and purchase as a constraint rather than a directive allocation of demand. Master planning also includes meetings to balance sales and operations plans.

Master planning is often done iteratively, digging into detailed plans, for example from the global level to the regional and/or local level.

Master planning also provides an opportunity to be aligned with financial planning.