Planning Optimization in Dynamics 365 Supply Chain
How Planning Optimization replaced the legacy MRP engine — in-memory architecture, scalability, scope, and migration considerations.
Planning Optimization is the modern master-planning engine in Dynamics 365 Supply Chain Management. It replaced the legacy AX-era MRP engine that struggled with large data volumes and long-running planning runs. The new engine is in-memory, parallelised, and dramatically faster — but it has scope differences worth knowing.
Architecture. Planning Optimization runs as a separate Microsoft-managed Azure service, not in the F&O application tier. F&O streams the planning-relevant data (items, BOMs, routings, on-hand, open orders, forecasts, parameters) to the service; the service computes; the results flow back as planned orders, action messages, and reschedules. Because the engine is in-memory and runs in parallel, it can process plans for hundreds of sites and millions of items in minutes rather than hours.
Net change and regenerative. The service supports both net change plans (only items affected by a recent transaction are replanned) and regenerative plans (everything from scratch). Net change makes near-real-time MRP feasible for very large catalogues.
Filtering. Plans can be filtered by site, product, or any combination — useful for running a fast plan on a single site while keeping the global plan unchanged.
Forecast consumption. Forecast plans feed Planning Optimization through forecast time fences and consumption rules. The engine honours both global and per-coverage-group parameters.
Action messages. Output mirrors the legacy engine: New, Increase, Decrease, Reschedule earlier, Reschedule later, Cancel. Planners review and accept through the planning workbench in F&O.
What's not yet covered. Planning Optimization has parity for most AX MRP scenarios, but some specialised features remain on the legacy engine in some implementations: certain co-product / by-product configurations, intercompany advanced features, and some country-specific localizations. Microsoft publishes a feature-parity matrix; check before assuming everything ports cleanly.
Co-existence. During migration, customers can run both engines in parallel against the same data, compare results, and switch once parity is confirmed. This is the standard transition pattern from legacy MRP to Planning Optimization.
Manufacturing scheduling. Planning Optimization handles infinite-capacity material plans. Finite capacity scheduling (gantt-style scheduling on constrained work centres) remains a separate concern — typically run with the Scheduling engine or a partner scheduling product on top of the material plan.
Net result. A four-hour overnight MRP becomes a fifteen-minute job. Planning frequency goes from nightly to multiple times a day, and planners spend less time waiting and more time analysing.
Related guides
- Demand planning in Dynamics 365 Supply ChainMicrosoft's Demand Planning module — statistical forecasting, collaboration, scenarios, and the path from forecast to MRP.
- Master planning groups in Dynamics 365 Supply ChainHow master planning groups configure replenishment behaviour per item in F&O — coverage groups, item allocation keys, and the policies that shape MRP.
- Master planning runs in Dynamics 365 Finance and OperationsWhat master planning actually does in F&O — the regenerative vs net change run, planned orders, action messages, and how the engine produces a supply plan.
- Alerts and notifications in Dynamics 365 FinanceHow F&O's alert framework surfaces important events — alert rules, due-date triggers, change events, delivery to action centre and email.
- Batch jobs and batch groups in Dynamics 365 FinanceHow F&O's batch framework runs background processing — batch jobs, batch groups, schedules, server allocation, and operational monitoring.