Introduction

In the dynamic world of supply chain management, aligning supply with demand is critical for operational efficiency and cost control. Marking is a powerful mechanism in Dynamics 365 Supply Chain Management (D365 SCM) that links specific supply orders to specific demand orders. With the introduction of Planning Optimization, the handling of marking has evolved, offering new capabilities and limitations compared to classic master planning.

What Is Marking?

Marking is the process of explicitly linking a supply transaction—such as a purchase or production order—to a specific demand transaction, like a sales order. This linkage ensures that the supply is reserved for a particular demand, enhancing traceability and enabling more accurate cost tracking. Marking plays a crucial role in pegging, where the system identifies which supply fulfills which demand, and in cost calculation, especially for high-value or custom items.

How Marking Works in D365 SCM

In D365 SCM, marking can be applied manually or automatically to tie supply and demand. For example, a purchase order can be marked to a sales order, ensuring that the received goods are allocated directly to that customer. Similarly, production orders can be marked to specific sales lines, ensuring that the manufactured goods are used for the intended demand. This approach enhances cost accuracy and provides a clear audit trail for inventory movements.

Marking in Planning Optimization

Planning Optimization supports marking in specific scenarios, although it differs from the classic master planning engine. Currently, Planning Optimization does not create new markings during planning runs. Instead, it respects existing markings and includes them in the pegging results. This means that while Planning Optimization can maintain and consider existing markings, it does not generate new ones automatically. As a result, users must manually apply markings where necessary before running master planning.

Step-by-Step Overview of the Marking Process

1. Identify demand requiring marking: Determine which sales or production demands need to be linked to specific supply.

2. Create or identify supply orders: Ensure that the corresponding purchase or production orders exist.

3. Apply marking between supply and demand: Use the marking functionality in D365 SCM to link the transactions.

4. Run master planning: Execute the planning process using Planning Optimization.

5. Review pegging and cost traceability: Analyze the results to confirm that the marked supply is correctly pegged to the demand.

Common Use Cases

- Make-to-order scenarios where each product is built for a specific customer

- High-value or serialized items requiring traceability

- Customer-specific production runs

- Procurement processes where cost accuracy is critical

Conclusion

Marking is a vital feature in D365 SCM that enhances supply chain transparency and cost accuracy. While Planning Optimization does not create new markings, it respects existing ones, allowing businesses to maintain traceability and alignment between supply and demand. By leveraging marking effectively, organizations can improve customer satisfaction, reduce errors, and ensure financial precision.

Marking Process Flowchart