Supply Planning - Prioritization from multiple sources

Seeking a solution for supply planning problem where advanced warehousing is not used.


Two sources of supply for a given item. The first is a company-owned supply (RED) for which common items are purchased and kept for fulfillment. The second is the supplier (VENDOR). All customer fulfillment passes through a fulfillment center (BLUE).

All order fulfillment is done per-order, either supplied from RED or purchased to order from VENDOR. No items are stocked at BLUE; it is almost a cross-dock/break-bulk operation. Hard reservations are used to ensure customer orders ship only when complete (and to prevent stock sitting in BLUE from being allocated to new customers).

The business process is as follows:

  1. Customer places order

  2. Order planning happens

a. If stock available in RED, transfer it to BLUE

b. If stock not available at RED, order from VENDOR and ship to BLUE

c. If some stock available in RED, transfer all available in RED to BLUE and purchase remaining requirement from VENDOR

  1. Consolidate items at BLUE and ship to customer

As I understand the planning system, SKUs allow default supply from a single source; that is, there is no ability to prioritize and automatically calculate order planning to result in process step 2c.


  1. Do I understand order planning correctly in that it cannot automatically do step 2c?

  2. Can anyone recommend a solution for this?

Using Stock Keeping Units you can only define whether to supply through purchase or transfer. So it cannot be transfer if possible to supply, or else purchase. I would suggest always to transfer from RED to BLUE and also to use transfer from VENDOR to RED when there is demand.