Demand & Supply Planning

The AWS SC 3-Step Planning Process

Step 1: Demand Processing

Aggregate demand from statistical forecasts, customer orders, and consensus inputs. Net out committed and allocated inventory, then time-phase demand across the planning horizon with P10/P50/P90 percentiles for uncertainty quantification.

Step 2: Inventory Target Calculation

Calculate safety stock and target inventory levels using four policy types:

• Absolute Level - Fixed quantity targets (simplest)
• Days of Coverage (Demand) - Dynamic targets based on actual demand
• Days of Coverage (Forecast) - Dynamic targets based on forecast
• Service Level - Statistical safety stock with z-score calculation

Hierarchical overrides ensure the right policy applies at the right level: Product-Site overrides Product overrides Site overrides Config defaults.

Step 3: Net Requirements Calculation

Time-phased netting computes gross requirements minus on-hand minus scheduled receipts. Multi-level BOM explosion handles recursive component requirements. Sourcing rules with priorities determine whether to buy, transfer, or manufacture. Lead time offsetting ensures orders are placed when they need to be, not when they're reviewed.

Master Production Scheduling (MPS)

Strategic production planning with rough-cut capacity checks. MPS drives finished goods production at the aggregate level, balancing demand requirements against available capacity and material constraints.

"The shift from deterministic MPS to probabilistic planning is the most significant change in production planning in 30 years. Organizations that master this transition will have a fundamental competitive advantage."

"By interacting with planners, we get all of their knowledge and experience. The planner's implicit knowledge can be made into a standardized, explicit process."

Material Requirements Planning (MRP)

Detailed component requirements exploded from MPS. Multi-level BOM processing with scrap rates, yield adjustments, and configurable lot sizing rules (LFL, FOQ, POQ, EOQ, MIN/MAX).

Capacity Planning

Resource utilization analysis identifies bottlenecks before they become problems. Rough-cut capacity planning at the MPS level and detailed CRP at the MRP level ensure plans are feasible before release.