What is requirements planning?
Requirements planning is a key process step in inventory management.
Requirements planning determines future requirements. This is done either based on specific customer orders or with the help of forecasting methods based on past demand. Other terms for requirements planning are requirements quantity planning, requirements determination or procurement planning.
Requirements planning involves estimating the quantities of raw materials, consumables and supplies, semi-finished products, packaging materials and other goods required to cover demand in the coming economic period. This applies to both manufacturing companies (demand planning for production) and trading companies. The aim is to avoid bottlenecks in the value chain. Purchasing only takes place after requirements planning.
A distinction is made between three types of requirements in requirements planning:
- Primary requirements: the requirement for end products that must be available on a defined date - in other words, the scheduled sales quantity or the agreed output.
- Secondary requirements: The requirement for components and assemblies that are needed to produce the primary requirements
- Tertiary requirements: The requirement for auxiliary and operating materials that are used in production. However, these auxiliary and operating materials are not included in the end product.
