Material and Packaging Planning adds another layer of planning that allows companies to easily break down demand forecasts and cost-optimal production recommendations, just like a BOM explosion.
This way, our customers receive the exact amount of material and packaging needed for each product to be produced.
Watch to learn more about our Material and Packaging Planning Module.
The algorithm continuously analyzes current demand forecasts, production plans, bill-of-material structures, inventory levels, shelf life data, and procurement costs. Based on this information, it dynamically calculates material requirements and adjusts replenishment quantities on a regular basis.This ensures that only the materials actually required for planned production are ordered — avoiding unnecessary capital tied up in excess stock.
At the same time, the system safeguards material availability, ensuring that sufficient components are in place to absorb demand variability and prevent production disruptions.
The algorithm improves profit margins by optimizing raw material and packaging inventory levels, thereby reducing tied-up working capital. By aligning procurement quantities precisely with actual production requirements, less capital is locked in excess stock, storage costs decrease, and financial flexibility increases. At the same time, reliable material availability minimizes production interruptions and delivery delays, helping avoid contractual penalties and ensuring on-time fulfillment.
The resulting higher service level strengthens customer relationships and supports repeat business.In addition, the algorithm reduces losses from obsolete or expired materials by incorporating shelf life and turnover dynamics into planning decisions, thereby minimizing write-offs and improving overall supply chain efficiency.
