Planning bills are a huge asset to good master schedulers. These planning shortcuts make it easier for master schedulers to maintain the plans without thousands of SKU-level forecasted orders to manipulate. If, for example, in January the forecasted plan for the month of July has 100,000 units and planning bills are used, the requirements driving the material requirements planning (MRP) plan would consist of one BOM (the planning bill) with a quantity of 100,000. The planning bill would take the expected mix and ratio it (see Figure 5.3).

In this example, the common parts are separated from the rest of the possible changing components for product family 123-XXX. This ensures that if some buffer is required for mix purposes, the common parts will not also be buffered at the same level. The S&OP plan already takes this into consideration, and there is no need to double up on buffer stocks. If the top management S&OP plan calls for 100,000 units to be planned, that is all that should be planned no more. Mix components, however, create a different issue. If the S&OP plan calls for 100,000 units in the month of July, there is no further definition of the detail requirements. There could be several different SKUs offered within that one product family (123-XXX). This is where the planning bill comes to the rescue.

Figure 5.3: Planning BOM

Figure 5.4: Unique Components within a Planning BOM

Let s say, to keep it simple, that there are...