- Maximizes Customer Service
- Improves Inventory Turnover
- Minimizes Distribution and Production Costs
This module provides management with the ability to effectively define and implement the following objectives of the company business plan.
- The average projected value and composition of finished goods inventory.
- The level of customer service required to achieve the above finished goods inventory.
Through easy-to-use, on-line parameter setup screens, management can define which items or groups of items to include in the IM process and which calculation methods to use to generate the forecast and inventory management information.
Using sales history information automatically aggregated by the system via the Order Entry and Inventory modules, the IM module projects forecasts using a series of simple-to-use statistical techniques controlled by various parameters which are pre-defined by management. As management becomes more experienced in using the system, additional calculations can be introduced for increased control and accuracy.
Automated Management Adjustment
Several management forecast adjustments to the system-generated forecast can be automatically incorporated for items or groups of items. These adjustments include seasonality, trends and scaling factors pre-defined through parameter setup screens. For purchased items, an adjustment can also be included for anticipated vendor shutdown periods.
Enhanced Product Grouping Criteria
One of the most significant features of the IM module is that it allows management to easily apply the parameter controls that drive the IM process at group levels. Although parameters can be defined specifically for an item, establishing forecast group parameters enables the execution of the IM process with a minimum amount of parameter periods.
Enhanced Management Adjustment
One of the most significant features of the IM module is that it allows management to easily apply the parameter controls that drive the IM process at group levels. Although parameters can be defined specifically for an item, establishing forecast group parameters enables the execution of the IM process with a minimum amount of parameter setup.
Forecast group parameter controls can be defined for the following IM calculations:
- Forecast Projection
- Management Scaling Adjustment
- Vendor Shutdown Hedging
- Safety Stock
Management can define one set of parameters that will drive the safety stock calculation for all items within a division and site and a second set of safety stock parameters can be defined as an override to only the A items within that division and site. If necessary, another set of safety stock parameters can be defined for a specific market class within the ABC class and within that division and site. Forecast groups are established according to a hierarchical scheme consisting of one or more of the following elements:
- ABC Class
The ABC inventory valuation class: Specific ABC classes within the above division and site can have unique IM parameters defined.
ABC Class/Market Class: A measure of the degree of market competitiveness of an item. Items belonging to specific market classed within specific ABC classes can have unique IM parameters defined.
ABC Class/Market Class/Product Code: A means of assigning items with similar characteristics to a common product family. Parameters can be setup for product code values as another element to the hierarchical process defined above.
Product Code: Parameters can be defined for specific product codes to override the hierarchical structure. In this latter case, parameters can be defined for all items belonging to a specific product code regardless of the ABC and market class values for those items.
Parameters can also be defined for specific items to override any grouping.
Economic Order Quantity Calculations
The IM module can determine multiple EOQ values for each item according to different EOQ calculation methods through group/item parameter setup, management can decide from which of these EOQ values the system is to choose from when automatically updating the ordering policy used in the planning process for each item. This would be he method most consistent with the average inventory value objectives (inventory turn goals) established by management.
Safety Stock Calculations
In a manner similar to the EOQ calculation, multiple safety stock values can also be determined for each item defined in the IM module. Safety stock is directly related to the level of customer service specified by management via the group/item parameter setup screens. This value is expressed as a safety stock factor that relates to the percentage of time an item is to be available in inventory whenever it is ordered.