Manufacturing & OperationsGlossary

What Is Pegging?

Also known as: MRP pegging, full pegging, single-level pegging, where used demand, requirements tracing

Definition

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.

Pegging Explained

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.

Frequently Asked Questions

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

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?

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?

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.

Related Terms

MRP (Material Requirements Planning)

MRP (Material Requirements Planning) is the ERP calculation that explodes demand through bills of materials, nets it against on-hand and on-order inventory, and offsets by lead time to produce timed purchase and work order suggestions.

BOM (Bill of Materials)

A BOM (bill of materials) is the structured, hierarchical list of components, sub-assemblies, and quantities required to produce one unit of a parent item, and it is the primary input MRP explodes to calculate material requirements.

Project Pegging

Project pegging in Infor LN links demand, supply, inventory and cost to a specific project, element or activity. Pegged material is reserved for that project only and its costs flow to the project budget, which is how contract-driven manufacturers segregate program inventory.

Planned Order

A planned order is a system-generated supply proposal that MRP creates to cover a net requirement. It has a quantity and dates but is not yet a committed job, production order or purchase order, and MRP can delete or reschedule it on every run.

Go Deeper

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SyteLine MRP Health Check

Diagnose why your SyteLine MRP output is noisy or ignored, scoring data accuracy, parameters, and planner behavior across ten dimensions.

Infor LN MRP Planning Configuration Guide

Configure MRP planning in Infor LN with planning parameters, order policies, safety stock rules, and demand pegging for optimal material requirements.

SyteLine MRP Parameters Tuning Guide

Optimize SyteLine MRP parameters including order policies, lot sizing, safety stock, and lead times for accurate material requirements planning results.

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Component Shortage SQL Query Generator (Open Demand vs Supply)

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Generate a SQL query that compares open demand against on-hand and inbound supply and returns the shortage list for buyers.

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Item table

Your item master table

Demand table (open work order components)

On-hand table

Open PO line table

Demand horizon (days)

Minimum shortage quantity to show

Buyer code filter

Generated code

Free, optional. Reopen it on any device.

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Shortage query

-- Component shortage list, horizon 21 days, buyer EL01
-- Table and column names are generic: map them to your ERP schema.
WITH demand AS (
  SELECT d.item_no, SUM(d.qty_required - d.qty_issued) AS open_demand
  FROM wo_component d
  WHERE d.need_date <= CURRENT_DATE + INTERVAL '21 days'
    AND d.qty_required > d.qty_issued
  GROUP BY d.item_no
),
supply AS (
  SELECT p.item_no, SUM(p.qty_ordered - p.qty_received) AS inbound
  FROM po_line p
  WHERE p.status = 'OPEN'
    AND p.due_date <= CURRENT_DATE + INTERVAL '21 days'
  GROUP BY p.item_no
)
SELECT i.item_no,
       i.description,
       i.mpn,
       i.lead_time_days,
       COALESCE(s.qty_on_hand, 0) AS on_hand,
       COALESCE(sp.inbound, 0) AS inbound,
       dm.open_demand,
       dm.open_demand - COALESCE(s.qty_on_hand, 0) - COALESCE(sp.inbound, 0) AS shortage
FROM demand dm
JOIN item i ON i.item_no = dm.item_no
LEFT JOIN item_stock s ON s.item_no = dm.item_no
LEFT JOIN supply sp ON sp.item_no = dm.item_no
WHERE i.buyer_code = 'EL01'
  AND dm.open_demand - COALESCE(s.qty_on_hand, 0) - COALESCE(sp.inbound, 0) >= 1
ORDER BY shortage DESC, i.lead_time_days DESC;

Variant: only parts that cannot be recovered inside lead time

-- Add this condition to the final WHERE clause to show parts whose
-- earliest need date is inside the replenishment lead time.
--   AND dm.earliest_need <= CURRENT_DATE + (i.lead_time_days * INTERVAL '1 day')
-- You also need to add MIN(d.need_date) AS earliest_need to the demand CTE.

Table and column names are generic placeholders, not any specific ERP's schema. Verify joins, status codes, date arithmetic (shown in PostgreSQL syntax; change for SQL Server or Oracle) and how your ERP stores allocated or reserved stock before trusting the numbers. Run on a read replica or reporting copy, never on a busy production database without review.

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TermsProject Pegging MRP (Material Requirements Planning)Demand Planning Low-Level Code MRP Action Messages SAP MD04 (Stock/Requirements List)