# Pegging

> Source: https://netray.co/glossary/mrp-pegging
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Glossary

## Short answer

Pegging links each supply order in MRP to the demand that created it, such as a sales order, forecast or parent job. It lets planners trace a component shortage up to the affected customer order and understand why an order exists.

## Aliases

- MRP pegging
- full pegging
- single-level pegging
- where used demand
- requirements tracing

## Category

manufacturing

## Full Definition

MRP nets demand and supply by item and date, so by default it does not remember which parent caused which requirement. Pegging adds that memory. Single-level pegging records the immediate parent demand for a requirement. Full pegging follows the chain up through every level to the top-level independent demand, such as a customer order.

Pegging has two main uses. Upward, it answers who needs this: if a purchased part is late, pegging shows which jobs and which customer orders are at risk. Downward, it answers why does this order exist: the planner can see that a planned purchase exists because of a specific build or forecast and decide whether to keep it.

Support varies. Infor LN has project and order pegging that ties supply to specific demand, which matters in engineer-to-order work. SyteLine provides order and job tracking views of supply and demand for items. NetSuite and SAP provide where-used and pegging views through supply and demand and requirement reports. Where a system lacks full pegging, planners reconstruct it by hand, which is slow.

Pegging is distinct from allocation. Allocation actually reserves stock to an order. Pegging is an analytic link that may or may not reserve inventory, depending on the system and the planning mode.

## Why It Matters

- It turns a shortage alert into a customer impact statement, which is what sales and management actually want to hear.
- It lets planners cancel or shrink orders confidently when the original demand disappears.
- Order-specific pegging is essential for project and engineer-to-order manufacturing with job costing.
- It is the data an AI assistant needs to answer which customers are affected by this late part.

## In Practice

Example: a bearing is two weeks late. Full pegging shows that it feeds three gearbox jobs, which in turn peg to sales orders for two customers, one due Friday. The planner expedites for the Friday order and re-promises the other. Without pegging, this takes a manual walk through where-used and open orders.

## Faq

### What is the difference between full pegging and single-level pegging?

**Answer:** Single-level pegging links a requirement to its immediate parent. Full pegging follows the chain to the original top-level demand, such as a customer order.

### Is pegging the same as allocation?

**Answer:** No. Allocation reserves stock to an order. Pegging is a traceability link between supply and demand and does not necessarily hold inventory.

### Why is pegging hard in a nettable, multi-level plan?

**Answer:** Because supply is pooled across demands, one order can serve several parents. Systems store explicit links or approximate with rules such as earliest-demand-first.

## Search terms

pegging in MRP, full pegging, single level pegging, MRP pegging report, requirements tracing, pegging vs allocation, demand supply pegging

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