Mixed‑Mode Planning in Dynamics 365 Supply Chain Management

Introduction

Manufacturers rarely operate under a single production philosophy. Real‑world operations often blend make‑to‑stock (MTS), make‑to‑order (MTO), configure‑to‑order (CTO), batch production, and lean/Kanban execution. Dynamics 365 Supply Chain Management (D365 SCM) supports this reality through mixed‑mode planning, allowing organizations to run multiple production models simultaneously while maintaining a unified planning and execution framework.

This blog provides a clear, structured overview of mixed‑mode planning and how it enables flexible, efficient manufacturing.

What Is Mixed‑Mode Planning?

Mixed‑mode planning refers to the ability to use multiple manufacturing methods within the same environment, item, or production flow. D365 SCM supports:

• Discrete manufacturing (BOM + route)

• Process manufacturing (formula + batch)

• Lean manufacturing (Kanban + flows)

• Project‑based production

• Make‑to‑order and make‑to‑stock combinations

This flexibility allows companies to choose the best execution model for each product, customer, or scenario.

Why Mixed‑Mode Planning Matters

Modern supply chains require agility. Mixed‑mode planning enables organizations to:

• Support diverse product portfolios

• Combine standard and custom production

• Run high‑volume and low‑volume operations together

• Optimize cost, speed, and flexibility

• Align production with customer demand patterns

It ensures that planning reflects real operational needs rather than forcing a single rigid model.

How Mixed‑Mode Planning Works in D365 SCM

Mixed‑mode planning is enabled through a combination of:

• Item coverage settings

• Production type selection (e.g., BOM, Kanban, batch order)

• Master planning logic

• Planning Optimization

• BOM and route configurations

• Kanban rules and lean flows

• Project operations integration

The system determines the correct production method based on item setup and demand characteristics.

Supported Production Models

D365 SCM supports several manufacturing modes that can be mixed as needed:

1. Make‑to‑Stock (MTS)

Produce based on forecast or inventory targets.

2. Make‑to‑Order (MTO)

Production triggered by specific sales orders.

3. Configure‑to‑Order (CTO)

Customer‑specific configurations drive production.

4. Batch/Process Manufacturing

Formula‑based production with co‑products and by‑products.

5. Lean Manufacturing

Kanban‑driven replenishment and flow production.

6. Project‑Based Production

Production linked to project budgets and WBS structures.

Mixed‑mode planning allows these models to coexist and interact seamlessly.

Key Capabilities

• Combine multiple production strategies in one environment

• Use different production types for different items or scenarios

• Support multi‑level BOMs with mixed execution models

• Integrate lean, discrete, and process manufacturing

• Enable flexible planning through Planning Optimization

• Improve responsiveness to customer‑specific demand

Step‑by‑Step Overview of Mixed‑Mode Planning

Step 1: Define Item Coverage and Production Type

Set each item to the appropriate production model (BOM, Kanban, batch, etc.).

Step 2: Configure BOMs, Routes, Formulas, or Flows

Define the structure and operations required for each production method.

Step 3: Run Master Planning

Planning Optimization determines the correct production strategy based on demand.

Step 4: Generate Production, Batch, or Kanban Orders

The system creates the appropriate order type automatically.

Step 5: Execute Production

Shop floor workers follow the correct execution model.

Step 6: Track Costs and Variances

Each production type posts costs according to its model.

Common Use Cases

• Companies producing both standard and custom products

• Manufacturers combining batch and discrete operations

• Organizations using Kanban for subassemblies and BOM production for finished goods

• Businesses with project‑based and inventory‑based production

• High‑mix, low‑volume environments

Conclusion

Mixed‑mode planning is one of the most powerful capabilities in Dynamics 365 Supply Chain Management. It allows organizations to blend multiple manufacturing strategies, optimize operations, and respond quickly to customer and market demands. By supporting discrete, process, lean, and project‑based production in a single system, D365 SCM delivers unmatched flexibility and control.

Mixed‑Mode Planning Flowchart

graph TD
    A[Start] --> B[Identify Demand Type]
    B --> C{Production Model?}
    C -->|MTS| D[Create Standard Production Order]
    C -->|MTO| E[Create Sales‑Linked Production Order]
    C -->|CTO| F[Generate Configured BOM/Route]
    C -->|Batch| G[Create Batch Order]
    C -->|Lean| H[Trigger Kanban]
    C -->|Project| I[Create Project‑Linked Production]
    D --> J[Execute Production]
    E --> J
    F --> J
    G --> J
    H --> J
    I --> J
    J --> K[End]