Time Phased Inventory Reference Manual Prophet 21 FASPAC 5.0

Transcription

1 Time Phased Inventory Reference Manual Prophet 21 FASPAC 5.0

2 Table of Contents INTRODUCTION 5 FUNCTIONAL OVERVIEW 8 Inflow Source Codes 10 Outflow Source Codes 10 TIME PHASED OPERATING PROCEDURES 11 Recommendations 11 TPIM Procedures Screen 12 Entry/Inquiry Screen 12 TPIM Selections 13 Entry/Inquiry Screen 13 TPIM Supply 15 Entry/Inquiry Screen 15 TPIM Demand 17 Entry/Inquiry Screen 17 TPIM Selections 19 Entry/Inquiry Screen 19 TPIM Summary 21 Entry/Inquiry Screen 21 TPIM Detail 23 Entry/Inquiry Screen 23 Average Usage Display Screen 26 TPIM Detail Report 27 Sample Report 27 Inventory AFS Recalculation (TPI/TPIC) 28 PI Entry/Inquiry Screen 29 IM/INQ Entry/Inquiry Screen Two 29 TIME PHASED INVENTORY MANAGEMENT FORECASTING 30 Background 30

3 Inventory History Inquiry (IM/HI) 32 Entry/Inquiry Screen 32 Inventory Maintenance (IM/MAI) 34 Entry/Inquiry Screen 34 Load Usage Definition (TPI/TPLU) 35 Entry/Inquiry Screen 35 Inventory Usage History Calculation (TPI/TPHC) 36 Entry/Inquiry Screen 36 Usage History Inquiry (TPI/TPHI) 37 Entry/Inquiry Screen 37 Usage History Maintenance (TPI/TPHM) 38 Entry/Inquiry Screen 38 Inventory Class Code Assignment (TPI/TPCC) 39 WCS Screen Four 39 Entry/Inquiry Screen 41 Inventory Cost Analysis Detail (TPI/TPCD) 42 Entry/Inquiry Screen 42 Sample Report 43 Inventory Cost Analysis Summary (TPI/TPCS) 44 Entry/Inquiry Screen 44 Sample Report 45 TIME PHASED INVENTORY MANAGEMENT CONTROLS 46 Background 46 Min/Max Controls Update (TPI/TPMM) 47 Entry/Inquiry Screens 48 Sample Report 49

4 The documentation in this publication is provided pursuant to a Sales and Licensing Contract for the Prophet 21 System entered into by and between Prophet 21 and the Purchaser to whom this documentation is provided ( License Agreement ). In addition, the licensed software to which this documentation refers may be supported in accordance with a customer support agreement by and between the same parties ( Support Agreement ). All warranties, conditions of use, transfer restrictions, and other provisions in the License Agreement or Support Agreement which are applicable to Licensed Software, are applicable to this publication. In addition, this publication may include inadvertent technical inaccuracies or typographical errors for which Prophet 21 is not responsible. Changes may be periodically made to this publication; these changes will be incorporated in new editions of the publication. Any questions about the material contained in the publication should be addressed to the Prophet 21 Customer Support Department at by entering a support case. Nothing in this statement amends or extends the terms of your agreement with Prophet 21 including any warranties that may be included in our products. Warranties for such agreements are set forth in your agreement with Prophet 21. Prophet 21 may make improvements and/or changes to the Licensed Software described in this publication at any time without notice. 6/17/05 Prophet 21 Faspac The Prophet 21 system and Prophet 21 Faspacare trademarks of Prophet 21. All other trademarks and registered trademarks are the property of their respective companies.

5 INTRODUCTION The Time Phased Inventory Management System (TPIM) is an exceptions based reporting system designed to report each inventory item that does not operate within a defined set of controls over a specified period of time. The primary controls used by the TPIM system are each inventory item s minimum and maximum stocking levels and a user specified date range for which the TPIM analysis is to be performed. The net stock position of each item is recomputed for each transaction and if at any time it falls outside of the acceptable range, it is included in the exception report. The FASPAC system maintains a minimum and a maximum stocking level for each inventory item in each warehouse. Each time the inventory monthly update process is performed, these values may be updated for every inventory item. The primary factor taken into consideration for the update is each item s usage or demand that has occurred over the past 30 days. (Refer to Volume 2 of the FASPAC user documentation for a detailed explanation of how each of these values is computed). The Time Phased Inventory Management System uses FASPAC s min and max quantity values, or user defined percentage adjustments to either of the values, to establish the minimum and maximum control levels for each item during the TPIM evaluation. When the TPIM process is initiated, the user is asked to specify from and through dates for which the TPIM analysis is to be performed. As shown in the following diagram, these four values, minimum quantity, maximum quantity, and the date range form the boundaries for the acceptable range of values for each item during the TPIM analysis.

6 If the user requested a TPIM analysis for the period from January 8 through January 29 and an item had min and max quantity values of 14,000 and 45,000 units respectively, the TPIM s acceptable range would be as indicated in the above illustration. The basic function of the TPIM system is to calculate the net stock position of each inventory item throughout a specified date range by taking into account the following three factors: The amount of inventory available on the starting date of the TPIM analysis The inflow quantities and timing of all receipts of each item The outflow quantities and timing of all demands for each item If an item s stock level is above the minimum and below the maximum for the duration of the date range being evaluated, it is operating within the defined set of controls and will not be reported by the TPIM system. However, if at any time the stocking level drops below the minimum control value or goes above the maximum control value, it will be reported. To illustrate this point, assume that the following sequence of events takes place for an inventory item with a minimum quantity of 14,000 units and a maximum quantity of 45,000 units: Date Activity Quantity Net Balance 2-Jan Physical On Hand Quantity Of Item 20,000 20,000 9-Jan Incoming Branch Transfer 10,000 30, Jan Sale 5,000 25, Jan Purchase Order Receipt 15,000 40, Jan Outgoing Branch Transfer 20,000 20,000 6-Feb Sale 10,000 10,000 A plot of the Net Balance value for the date span from January 2 through January 30 would reveal that the net inventory position is within the min and max control parameters at all times. Therefore this item would not be reported by the TPIM system since it is operating within the control limits as shown in the following illustration.

7 However, if the date range is increased another week so it ends on February 6, the TPIM system will report this item as an exception since its net balance value drops below the minimum stocking level as shown in the following illustration. Figures 1 through 3 present the underlying concepts for the TPIM system. If an inventory item s supply and demand requirements remain within the controls established for the item, it is functioning as expected and is not reported. However, if at any time during the date range being evaluated, its net balance position falls outside of the control limits, the item is reported for subsequent analysis and corrective action as appropriate. The next section of this document presents an overview of the various sources of supply and demand for inventory maintained by the FASPAC system. Prior to running the TPIM process, the user is required to identify each source from which product is received into a facility and to identify each source of demand for which product is consumed by or shipped from the facility. This information is used to insure that accurate and timely data is captured by the TPIM system for subsequent analysis. The last section of this document provides the detailed operation procedures for: Working with previously defined TPIM procedures Defining all sources of supply or inflow of product for TPIM analysis Defining all sources of demand or outflow for product for TPIM analysis Saving new TPIM procedures Executing a TPIM procedure Analyzing the results of a TPIM procedure

8 FUNCTIONAL OVERVIEW The time phased inventory management system has been designed to address the Just In Time (JIT) inventory demands that must be met by today s distributor. The time phased inventory management system allows the user to specify all sources from which inventory is received into a facility. As an example, the sources of inflow of inventory may include purchase orders, warehouse transfers, material requisitions, rework orders, completed kits and quotes. In a similar fashion, the user must identify the outflows or demand for inventory items. These demands can originate from customer orders, warehouse transfers, rework orders, kits and electronic data interchange transactions that encompass EDI transaction types 862 and 830. Internal demands such as kitting requirements and product consumed in plating and rework operations must also be taken into consideration. Based on this information, each of the sources of supply and demand is examined in detail according to selection criteria specified by the user. Information is extracted from each of these sources and arranged in chronological order. After the data has been properly sequenced, the Net Balance position of each item is recomputed by factoring in the impact each of the transactions has on the Net Balance value. By using this exceptions based tool, the user can concentrate on those items that require human intervention such that the JIT demand requirements for all items will be fulfilled on a continuing basis. Before each TPIM procedure is executed, the user is provided with the option to refine the controls and filtering criteria used by TPIM. As an example, the min and/or max values can be raised or lowered by operator entered percentage values. The date range to be examined is also user specified. By using these capabilities, the TPIM Acceptable Range window as shown in figure 1 can be expanded or reduced as deemed appropriate. Other filtering refinements are also available including the ability to look at individual product categories, class codes and various material characteristics. The flowchart on the following page diagrams the various sources of supply, sources of demand, and filter criteria selectable by the TPIM system. Once the appropriate criteria have been identified, it can be saved in the TPIM procedure library for future use. The TPIM process extracts all of the detailed transactions for the user-defined sources of supply to determine the time-phased inflow of each inventory item. The detailed item display that is created by the TPIM process contains a column header identifier T-S in the Inflows section of the display. The values displayed in this column identify the various sources of supply for the item. The following is a list of the possible inflow T-S values that may be displayed and their associated sources of supply.

9 Note: TPIM time-sequences the records and looks at a very large number of files. Therefore, the program will take considerable processing time (for example, much longer than invoicing).

10 INFLOW SOURCE CODES T-S Code Source Of Supply P - O Purchase Order PIO In-transit Order Desk Purchase Order W - T Warehouse Transfer R - O Rework Order K - T Kitting Order M - A Authorized Manufacturing Job M - O Ordered Status Manufacturing Job M - R Reserved Status Manufacturing Job TPIM also extracts all detailed transactions for the user-defined sources of demand. The TPIM Detailed Item screen contains a second column header, identified as T-S, in the Outflows section. The values displayed in this column identify the various sources of demand for the item. The following table lists possible outflow T-S values and their associated sources of demand. OUTFLOW SOURCE CODES T-S Code Source Of Demand SO Sales Order SHO Shipped Order W - T Warehouse Transfer K - T Kitting Order 3 - P EDI 830 Planning transaction from SRS (of lower weight than a firm 830) 3 - F EDI 830 Firm Planning transaction from SRS. 6 - P EDI 862 planned Shipping transaction from SRS (of lower weight than a firm 862) 6 - F EDI 862 Firm Shipping transaction from SRS M - F Firm Manual Release forecast from SRS M - P Planned Manual Release from SRS (considered of lower weight than a firm release) M - A Authorized Manufacturing Job M - O Ordered Status Manufacturing Job M - R Reserved Status Manufacturing Job P - D Past Due EDI from SRS P - P Past Due is repopulated

11 TIME PHASED OPERATING PROCEDURES When the TPIM process is initiated for the first time, the user is presented with a series of five screens through which the TPIM processing selections are specified. Through each screen the user may define new values, modify previously defined values, or have the TPIM process activated using previously specified values. The five screens presented to the user are: Time Phased Inventory Management Procedures Screen Time Phased Inventory Management Item Selection Screen Time Phased Inventory Management Supply Screen Time Phased Inventory Management Demand Screen Time Phased Inventory Management Selection Screen After the TPIM process has been executed, the results are reported in summary and in detail. The two screens used to report this information are: Time Phased Inventory Management Item Summary Time Phased Inventory Management Item Detail In addition to displaying the TPIM analysis information, each of these screens provides the user with the capability to activate secondary displays showing additional information. This information may also be presented in printed form through the used of various function keys associated with each screen. The following pages provide detailed operating procedures for each of the screens in the TPIM system. RECOMMENDATIONS Because of the large number of files and transactions this program looks at, we recommend you do not run TPIM for all items in one production run. Instead, we recommend you run it using approximately 10% of your parts for each production run. You can define this based on a range of item categories and a single ABC code, and save the parameters in the following programs. We also recommend you use Multiview to analyze one segment of your items in one session while creating the TPIM file for another segment in a second session.

12 TPIM PROCEDURES SCREEN The Time Phased Inventory Management Procedures screen is used to list the procedures previously saved by the user. A number identifies each procedure, date and time it was last saved. This is followed by a user-defined title to identify the contents of the procedure that was run. The user has the option to: Run an existing procedure. Modify an existing procedure and save it as a new procedure, giving it a new name. Enter a new procedure. ENTRY/INQUIRY SCREEN Field SELECT Description Select one of the previously recorded TPIM procedures. Function Keys F1-Start F3-Next CMD Display the first page of the list of TPIM procedures. Display the next page of TPIM procedures. Create a new TPIM procedure.

13 TPIM SELECTIONS The Time Phased Inventory Management Selection Screen presents the standard inventory options. ENTRY/INQUIRY SCREEN Field Do You Want To Continue? Whse Description Y Continue in the current program. N Exit the program. Enter the number of the warehouse that contains the items you want to print. To include items from all warehouses, leave this field blank and press Skip. Select Whole File? Item/Shortname/Category Sequence? From Item Number To Item Number Y Include all items from the specified warehouse. N To include only a range of items. I Run the report in item number sequence. S Run the report in short name sequence. C Run the report in Category Code sequence. These fields display only if printing a range of items in item number sequence. Enter the range of item numbers to include in the report. From Shortname To Shortname These fields display only if printing a range of items in short name sequence. Enter the range of short names to include in the report.

14 From Category To Category These fields display only if printing a range of items in Category Code sequence. Enter the range of Category Codes to include in the report. Entries must be valid Category Codes from Category Maintenance (IM/CFM). Select All ABC Codes? From ABC Code To ABC Code Y Print all specified items, regardless of their ABC Code. N Print only those items flagged with specific ABC Codes. These fields display only if N is entered in the Select All ABC Codes field. Enter the range of ABC Codes for which to print. To print for one code only, enter the same characters in both fields. Select All Materials? Only Material Y Include all items that meet the specified parameters, regardless of their Material Code. N Include only those items with a specific Material Code. This field is displayed only if you have not selected all Materials. Enter the Material Code for which to print. To include only those items without a Material Code, leave this field blank. Select All Finishes? Only Finish Y Include all items that meet the specified parameters, regardless of their Finish Code. N Include only those items with a specific Finish Code. This field is displayed only if you have not selected all Finishes. Enter the Finish Code for which to print. To include only those items without a Finish Code, leave this field blank. Select All Specials? Only Special Any Changes? Y Include all items that meet the specified parameters, regardless of their Special Code. N Include only those items with a specific Special Code. This field is displayed only if you have not selected all Specials. Enter the Special Code for which to print (do not include the slash). To include only those items without a Special Code, leave this field blank. This field allows you to double-check your entries before continuing in the program. N Display the next screen. Y Change one or all of your entries. The cursor will move through each field again.

15 TPIM SUPPLY The Time Phased Inventory Management Supply screen is used to identify each source of inflow of items into the warehouse. The user is presented with various sources from which inventory is received and asked to select all of those that are applicable. Based on the responses entered through in this screen, the Time Phased Inventory Management System will extract data from the appropriate FASPAC and manufacturing files. This data is used to identify the inflow quantities and dates for each item. It is also used in calculating the net balance position of each item throughout the date range being evaluated. ENTRY/INQUIRY SCREEN Field Use Requisitions? Include Or Display? Description Y Include the quantities for items on requisition in net balance. N Exclude items on requisition. If you entered Y in the previous field: I Include items on requisitions in net balance. D Display requisitions, but do not include net balance. Use Purchase Orders? Use Reserved Whse Transfers? Include Or Display? UseWhse Transfers? Y Include the quantities for items on order via purchase order in net balance. N Exclude quantities for items in purchase orders from net balance. Reserved for future use. Reserved for future use. Y Include quantities for warehouse transfer incoming product in net balance. N Exclude warehouse transfers in net balance.

16 Use Rework Orders? Use Reserved Kits? Use Kits? Y Include the quantities for rework orders quantity in net balance. N Do not include rework quantity in net balance. Reserved for future use. Y Include the quantities for kits in net balance. N Exclude the quantities for kit quantity from net balance. The following fields are displayed only if the manufacturing module is active. Use Mfg. Quotes? Use Mfg. Reserved? Include Or Display? Y Include the quantities for manufacture items with status of quote in net balance. N Do not include quote items in net balance. Y Include the quantities for manufacture items with status of reserved in net balance. N Do not include items with status of reserved in net balance If you entered Y in the previous field: I Include items with reserved status in net balance. D Display items with reserved status but do not include net balance. Use Mfg. Ordered? Use Mfg. Authorized? Y Include the quantities for manufacture items with status of ordered in net balance. N Exclude manufacture items with status of ordered from in net balance. Y Include the quantities for manufacture items with status of authorized in net balance. N Exclude manufacture items with status of authorized from in net balance. Function Keys F1 Next F3 New Use values currently displayed and proceed to next screen Enter new outflow selections

17 TPIM DEMAND The Time Phased Inventory Management Demand screen is used to identify the sources of demand or outflow for the selected inventory items. These demands can include customers, warehouse transfers, rework orders, kits and various EDI transactions. ENTRY/INQUIRY SCREEN Field Use Customer Orders? Display Mode Description Y Include the quantities for customer orders as demand in the net balance. N Exclude customer orders from net balance. Select the method by which to display the orders. By selecting an option, you determine whether to display specific orders for a particular Ship To and Date (1) or a less specific group of orders for the customer by date, week, or month (2,3,4). 1 Ship To/Date 2 Cust/Date 3 Cust/Week 4 Cust/Month Use Reserved Whse Transfers? Include Or Display? UseWhse Transfers? Use Rework Orders? Reserved for future use. Reserved for future use. Y Include the quantities for outbound warehouse transfer in the net balance. N Exclude outbound warehouse transfers from net balance computation. Y Include the quantities for rework orders in the net balance computation. N Exclude the quantities for rework orders from net balance computation.

18 Use Reserved Kits? Use Kits? Use 862 s? Use 830 s? Firm, Plan Or Estimate? Display Mode Reserved for future use. Y Include the quantities for demand for kitting in net balance. N Exclude the quantities for demand for kitting in net balance. Y Include the quantities for 862 EDI transactions in computing net balance. N Exclude the quantities for 862 EDI transaction from computing net balance. Y Include the quantities for 830 EDI transactions in net balance. N Exclude the quantities for 830 EDI transaction from net balance. Reserved for future use. Select the method by which to display the orders. 1 Ship To/Date 2 Ship To/Week 3 Ship To/Month 4 Group/Date 5 Group/Week 6 Group/Month Note: The Group option (Group/Date/Week/Month) allows Manufacturers to display orders for several Bill-To Customers at once. By selecting a Group that has been previously set up in the Buyer Contract System, manufacturers can view orders for all Bill-To Customers that are part of this group - by date, week, or month. Function Keys F1 Next F3 New Use values currently displayed and proceed to next screen. Enter new outflow selections.

19 TPIM SELECTIONS The first Time Phased Inventory Management Selection screen is used to define filter information to be used by the Time Phased Inventory Management system to allow the user to zero in on specific reporting requirements. Filter criteria entered through this screen includes customer number, date range and adjustments to the min and max control values for each inventory item. In addition, the user is allowed to adjust the minimum and maximum for each item by specifying percentage changes. ENTRY/INQUIRY SCREEN Field From Customer Thru Customer Description Enter the range of customers to be included. For all customers, leave these fields blank. Information for the following three fields is defined in the FASPAC Scheduled Release Subsystem Module. Leave the following four fields blank if this module is not active. EDI Group EDI Cust EDI Ship To Buyer Group From Date Identify the EDI group for which the Time Phased Reporting Selections are to be made. If the EDI group is left blank, enter the EDI customer to be reported. If the EDI customer number has been entered, an EDI Ship To address can be entered to identify the specific location. Leave blank or enter Buyer Group code as defined in the Scheduled Release Subsystem. This date is used to identify the first day for which Time Phased Inventory Management information will be evaluated.

20 Thru Date Warehouse Item Type Any Item Not Reviewed For 000 Days This date is used to identify the ending day for which Time Phased Inventory Management information will be evaluated. Reserved for future use. Reserved for future use. Reserved for future use. Ignore Minimum? Y Report only those items that have a balance below 0. N Report items that have a net balance value that are below the minimum quantity values. Percentage To Increase/Decrease By Enter 0 if the current minimum value is to be used, enter a plus if the minimum value is to be increased. Enter a minus if the minimum value threshold is to be decreased. Ignore Maximum? Percentage To Increase/Decrease By Y Do not report items with net balance above the max value. N Report items with net balance value greater than maximum. Enter zero if maximum value is to be used. Enter plus if the maximum value is to be increased. Enter minus if the maximum value is to be decreased. Sort By (S) hip Date, (D)ue Date Or (E)stimulated End Date? Std Cost Whse Source The Same As Whse Selected? Warehouse Specify how manufacturing jobs are sequenced. S Ship Date D Due Date E Estimated End Date Reserved for future use. Reserved for future use. Function Keys F1 Next F3 New Use values currently displayed and proceed to next screen. Enter new outflow selections.

21 TPIM SUMMARY Upon completion of the TPIM process, each inventory item that did not have a net balance value within its minimum and maximum control values for the duration of the date span being evaluated is listed in the Time Phased Inventory Management Item Summary screen. The user may examine each of the items in detail by entering the appropriate selection number. The screen also provides the user with the capability to print TPIM details for a selected group of items. After an item is selected, the TPIM Item Detail screen is displayed as explained in the next selection. ENTRY/INQUIRY SCREEN Field SELECT Description Enter the number in the SEL column to designate the item that is to be examined in detail. Function Keys F1-Start F3-Next F5-Change Display Sequence Display the first 18 items in the Time Phased Inventory Management Summary screen. Display the next 18 items. Change the sequence in which items are displayed: I Display in item number sequence. S Display in item short name sequence. C Display in category code sequence.

22 F7-Print Print items or notes: I Print item notes. N Do not print item notes. From Itm/Cat/Shortname = Enter first item number, category, or short name (depending on how the report was run) to be printed, or leave the field blank for all. Thru Itm/Cat/Shortname = Enter last item number, category, or short name to be printed, or leave the field blank for all. Print New Heading Between Items? (Y/N) Print Toggle Dsp? (Y/N)

23 TPIM DETAIL After an item has been selected for a detailed analysis, the Time Phased Inventory Management Item Detail display screen is presented as shown in the following example. ENTRY/INQUIRY SCREEN The user can evaluate the current status of the item by examining the time-phased sequence of inflows and outflows and the net balance value after each transaction. The user can quickly ascertain when the net balance value for the item is above the maximum control value, within the max and min control limits or below the minimum control value by looking at the character displayed in the right most column of the detail section. If a * is displayed, the net balance is above the maximum quantity and if is displayed, the net balance is below the minimum quantity. If neither character is displayed the net balance value is within the minimum and maximum control limits. A time-phased plot of the information displayed in the above example is presented on the following page. As the plot revels, on October 10th the net balance value of 46,695 units for item.10j3500bhfez is below the minimum stocking value of 55,378 units. On October 26 an inflow quantity of 28,921 units is receive from source M-A (manufacturing authorized jobs) raising the net balance value to 65,491 units which is above the minimum level. On November 20 and additional 190,000 units is received from source M-O raising the net balance value above the maximum stocking level which is 264,277 units. Finally, on December 5 an outflow of 2,250 units to source P-D (EDI Past Due Shipment) brings the net balance value down to 263,693 units which is within the min and max control limits.

24 Using the information presented in this screen the user can take a proactive position by dealing with only the exceptional items, that is, those that are not performing in accordance with the predefined set of controls. Thus the user can initiate the necessary replenishment or disposition action as deemed appropriate. Information displayed in detail screen and additional capabilities available through this screen are defined as follows: Field Item Whse Item Sorted by Description ABC Description The item s name, short name, and description are displayed Warehouse identification number. Item number currently being evaluated. Short name of item currently being evaluated. This entry refers to the method by which manufacturing jobs are sorted. Description of item currently being evaluated. ABC classification code for item being evaluated. 3 Mth Avg Usage Average of most recent three months usage. Minimum On hand Maximum LN Date Qty Minimum quantity threshold value. Quantity of item currently on hand in designated warehouse. Maximum quantity of item to be on hand in warehouse. Line identification number of transaction Date of transaction. Quantity of item in transaction. Inflows T-S See the list of possible inflow T-S values on page 6. Job Line Outflows/Qty Job number of transaction. Line number of transaction for the job. Quantity of item shipped.

25 SRC for source Cust Ship Net Balance Status The standard costing system for manufacturing jobs. Number of customer receiving product. Ship to address number for customer receiving product. Running balance of quantity of item on hand. * = You have gone over your maximum You have gone under your minimum blank = You are within the appropriate range. Function Keys F1-Start F3-Next F5-TOG Display F6-Usage Return to first transaction for this item. Display Time Phased Inventory Management Detail for next item. Display customer name. Display 3, 4, 9, 12 months average usage values for item. F7-Print Print detailed transactions for selected item(s). See page 19. F8-Notes F9-Item F11-Delete F12-Next Item F13-Previous Item F14-Recalc F15-HI Add/Edit note associated with this item. Return to Time Phased Inventory Management Summary Display. Delete this item from Time Phased Inventory Management Summary Display. Display next item from Time Phased Inventory Management Summary Display. Display detailed information for previous item. Recalculate current inventory item detail based on most recent transaction. Display history inquiry screen. If function key F6 is pressed, the monthly average usage for the past four quarters is displayed as shown in the following example.

26 AVERAGE USAGE DISPLAY SCREEN Field 3 Months Usage 6 Months Usage 9 Months Usage 12 Months Usage Buy History Description The figure in each of these fields represents the average usage for the specified time period (the past 3, 6, 9, 12 months). Each figure is calculated based on the information in the usage history file. This information can be viewed through the Time Phased History Inquiry (TPI/TPHI) screen. Displays the vendor, PO date, quantity ordered, and unit cost.

27 TPIM DETAIL REPORT If you press F7, the system creates a printed copy of the information displayed in the TPIM detail screen for each of the selected items. Refer to the Time Phased Inventory Management Detail Display screen for a description of each of the values listed in the report. The following is an example of a Time Phased Inventory Management Report. SAMPLE REPORT

28 INVENTORY AFS RECALCULATION (TPI/TPIC) The Time Phased Inventory Available For Sale Calculation (TPIC) program provides an alternative procedure for calculating the AVAILABLE quantity maintained by FASPAC. In previous releases of FASPAC, the value of the AVAILABLE quantity displayed in PI and INQ for each inventory item was the net inventory position after all demand for the item was taken into consideration, regardless of when the demand must be met. The value was calculated as follows: AVAILABLE = On Hand Quantity + Rework (If SYS/IMS option 10 is Yes) Committed (Orders + transfers + rework) As an alternative, a new AVAILABLE FOR SALE (AFS) value can be computed by the system when the TPIC process is run. The TPIC process determines the minimum stocking level over a specified date range. The minimum level is determined by taking into account each item s on-hand quantity, inflow of product and outflow of product for the specified date range. The starting date for the all items is the system s current date. The ending date for each item is the starting date plus the sum of the vendor lead time and review cycle for the item as specified in the warehouse master file. As an example, if the system date was January 1, the item has a lead time (LT) of 15 days and a review cycle (REV) value of 30 days, the ending date for the item is February 15th. However, if the LT and REV values are both 0, the item s AVAILABLE header and quantity will be displayed rather than the AFS header and quantity value since the date range to be examined can not be computed. The prerequisites required to activate this functionality are: In the SYS/IMS screen, set the Display Available For Sale Qty setting (option 14) to either Y or R. Confirm that valid lead times have been established for the required items. If items are being review on a periodic basis, appropriate review cycle values should also be entered for each item. After these steps have been completed, the TPIC process should be run at the end of each day for each warehouse. It re-computes the AFS quantity for each item by taking into account the beginning stock position, inflows and outflows of product for the specified period of time. After the TPIC process has completed, the Part Inquiry (PI) and Inventory Warehouse Inquiry (IM/INQ) screens will display the AFS quantity for each item as shown in the following two examples.

29 PI ENTRY/INQUIRY SCREEN IM/INQ ENTRY/INQUIRY SCREEN TWO

30 TIME PHASED INVENTORY MANAGEMENT FORECASTING BACKGROUND One of the most important predictions a distributor makes is how much of a stocked item will be used in the future. Used, for inventory control purposes, means all withdrawals from stock at a specific warehouse for sales to customers, replenishments of other branches, and internal requirements such as components for a kit, or the raw stock for a plated item. Traditionally, in FASPAC, usage has been associated with Sales Quantity only. The TPI module allows the definition and tracking of usage to be expanded to cover all sources of demand. An alternate procedure for establishing Min and Max controls is also used to set this control based on total usage demand rather than just sales. The following situations must be considered to determine usage for each item in a warehouse: Company policy may be to replenish remote branches from a central warehouse. If so, warehouse transfers to the remote branch should be considered as usage by the central warehouse. This is the normal path of flow for supplying the remote branch. A similar argument could be used for kitting and rework operations within a facility. At a remote branch, replenishment may be from a central warehouse and/or purchased locally (presumably at a higher price). Therefore a history of ALL sources of inflow for a product should be kept. In many companies it is common to buy the plain part and then plate it. To ensure correct ordering for the plain part, the usage into rework and other areas such as kitting is important to determine the total usage for the item.

31 The TPIM module is capable of building a new usage history file for each item using information captured during FASPAC s normal processing functions that have taken place prior to the development of the TPIM applications. This usage includes transactions recorded over the past several months or years. The following TPIM programs are provided to assist in building, maintaining and displaying usage history for each inventory item. IM/MAI define usage by item within warehouse TPI/TPLU load item/warehouse usage by category TPI/TPHC build the new usage file TPI/TPHI view the new usage information TPI/TPHM maintain usage information

32 INVENTORY HISTORY INQUIRY (IM/HI) The FASPAC system captures usage history for all of the basic types of demand for each inventory item. These types of demand include: Normal sales to customers (regular usage) Replenishments for satellite branches from central warehouse stocks (transfer usage) Material withdrawn to be converted into another item through a rework operation Material use as components for kitting and assemblies In IM/HI each of the basic types of usage demand is captured and displayed. The first screen shows sales usage. ENTRY/INQUIRY SCREEN F5 toggles the screen to display REWORK, TRANSFERS, and IN PROCESS information.

33 When F5 is pressed, the second screen displays the other sources of usage that may include branch transfers, rework operations and components for kitting operations: F5 toggles the screen to display SALES and CANCELED figures.

34 INVENTORY MAINTENANCE (IM/MAI) Each item in a warehouse has an identifier used to define its valid sources of demand. This identifier is displayed by selecting the F- Forecasting screen, as shown in the following example. ENTRY/INQUIRY SCREEN By entering 01 with the cursor positioned at the Select prompt, the user can specify the sources of demand for the item by entering a value between 1 and 4 and follows. Field SELECT Description 1 Sales usage 2 Sales usage plus warehouse transfers usage 3 Sales usage plus rework usage plus in process usage 4 Sales usage plus warehouse transfers usage plus rework usage plus in process usage

35 LOAD USAGE DEFINITION (TPI/TPLU) Usage definitions may be loaded en masse, by warehouse and category within warehouse. One of four methods is used to define the sources for usage. ENTRY/INQUIRY SCREEN Choose the method that represents the most appropriate sources of usage for the specified category in the designated warehouse. Field SELECT Description 1 Sales usage 2 Sales usage plus warehouse transfers usage 3 Sales usage plus rework usage plus in process usage 4 Sales usage plus warehouse transfers usage plus rework usage plus in process usage

36 INVENTORY USAGE HISTORY CALCULATION (TPI/TPHC) This one-time program creates a new true usage file based on the usage definition previously established for each item. Activation of this program requires a password provided by FASPAC. Please call your FASPAC representative to proceed. As part of the month-end process, the usage history in this file is rolled forward similar to that done in the IM/HI. ENTRY/INQUIRY SCREEN Caution! Log a case with Prophet 21 Customer Support before running this program.

37 USAGE HISTORY INQUIRY (TPI/TPHI) This function is used to view the monthly usage history for each item. The usage history file can contain usage history for the last 60 months for each item. ENTRY/INQUIRY SCREEN Function Keys F1 Start F3 Next Whse F5 Toggle Reset this screen to reflect Warehouse data. Scroll through each Warehouse, including a display of All Warehouse data. Toggle this display from displaying the names of each month, to displaying XX monthly periods, with period 1 being the most current.

38 USAGE HISTORY MAINTENANCE (TPI/TPHM) Item usage history information can be modified using this function. If an item has an unusual demand for a given month or the item is out of stock, a manual correction to reflect what the normal demand would have been can be made using this screen. The next time the average monthly usage is calculated, the corrected value is used to calculate the new average. ENTRY/INQUIRY SCREEN Function Keys F1 Start F3 Next Whse Reset this screen to reflect Warehouse data. Scroll through each Warehouse, including a display of All Warehouse data. F5 Toggle Toggle this display from displaying the names of each month, to displaying 60 monthly periods, with period 1 being the most current. To edit an entry, use F3 to find the correct Warehouse, and Select the period, 1, 2, etc., even when the month names are displayed.

39 INVENTORY CLASS CODE ASSIGNMENT (TPI/TPCC) This function provides the capability to assign a ranking code to each inventory item in each warehouse. The ranking code is based on total dollars of usage, at cost, over the past 12 months. Each item s total annual usage dollars is compared to all other items in the warehouse after items that do not pass the dead stock criteria have been excluded. Each item is assigned an item class code that has a value between 0 and 12. A value of 0 denotes items with the most usage dollars. A prerequisite to running this program is to establish the criteria for ranking all of the items that have not been flagged as dead stock. In addition, an entry is required to define the Dead Stock Threshold. The dead stock threshold is a dollar value that each item s annual dollars of usage must exceed to be defined as an active item. As an example, if the threshold value is set to twenty dollars, all items that have an annual usage in dollars (annual usage quantity times unit cost) equal to or less that twenty dollars are assigned a class code of 13 which denotes dead stock. The Warehouse Control Specifications fourth screen is used to define the thirteen percentage values associated with each of up to thirteen class codes. The Dead Stock Threshold value is also entered in this screen as shown in the following example. WCS SCREEN FOUR After the ranking criteria and dead stock threshold values are defined, this process can be run to reclassify all of the items. First each items total dollars of usage is calculated. The usage values are obtained from the Item Usage History file. (The usage quantities for each item can be viewed through the MFHI screen.) The dollar value of each item s usage is computed by multiplying the total usage quantity over the most recent 12 months by the item s unit cost. The cost base used is that defined by the Cost Used Before Adjustment entry in the SYS/WCS screen. If the item s usage and quantity on hand values are both zero (the item is just a computer record), the item is removed from the analysis and not reported as a dead stock item. Next, the item is then

40 checked to see if its annual usage dollars is equal to or below the dead stock threshold. If this condition is true, it is assigned a class code of 13. A classification code is assigned to each of the items that are above the dead stock threshold as follows. All of these items are sorted in descending order by total dollars of usage. Items having the most usage dollars are at the top of the list and items with the smallest total usage cost are at the bottom. Finally, an Inventory Classification Code (CLS) is assigned to each item. The CLS code assigned is determined by the item s position relative to the other items in the ranking. For instance, if a warehouse contained 10,000 items that are above the dead stock threshold value, using the example listed in the Warehouse Control Specification shown in the previous section, the top 400 items (4.0%) would be assigned a class code of 0. The next 800 items, (items 401 through 1200) which would represent a cumulative 12% of the total number of items, would be assigned a class code of 1. The next 8% (items 1201 through 2000) would be in class 3. The bottom 8% (those below the cumulative 92%) will be assigned a class code of 12. Using this scheme each of the 10,000 active items is assigned a class code value between 0 and 12 depending on its ranking. The last step in the ranking process is to calculate a new Economic Order Quantity (EOQ) value for each item. This value is obtained by multiplying the item s average monthly usage times the item s newly assigned class code, or: EOQ = AMU * CLS If the item has a CLS value of 0, the EOQ value will be computed as follows: EOQ = AMU * 0.5 If the Inventory Cost Analysis Detail (TPI/TPCD) report is run immediately after the TPIC process, all of the item s listed in the ICAD report reflect the results of the ranking just performed. The rightmost two columns of the report list the previous and current class code for each item. When the TPCC selection is made, all items associated with each warehouse in the current company are reclassified. This process, which is typically run as part of a month end procedure, should be performed prior to running the TPMM process. In this manner, the new Min and Max values calculated by the TPMM process take into account the results of the new EOQ value computed for each item. When the Assign Class Codes selection (TPCC) is made, the following screen is displayed.

41 ENTRY/INQUIRY SCREEN

42 INVENTORY COST ANALYSIS DETAIL (TPI/TPCD) This report is similar to FASPAC s Inventory Sales Analysis report. However, in this report each item s ranking is based on the total dollars of usage rather than just the quantity sold as reported in the ISA report. The information presented in the TPCD is designed to report each item s ranking and contribution to total warehouse activity and cost. The total usage, which can include warehouse transfers, kitting, plating/rework, etc is taken into consideration. The report also indicates each item s current stock value and contribution to the warehouse s total carrying cost. ENTRY/INQUIRY SCREEN Field Whse Description Enter the number of the warehouse. To include items from all warehouses, leave this field blank and press Skip.

43 SAMPLE REPORT Information printed in each column in the detailed section of the report is: Seq No Sequential number of each item reported Item Number FASPAC part number Usage Quantity Most recent 12 months total usage for the item Unit Cost Unit cost for the item. (Cost method used determined by SYS/WCS setting) UM Unit of measure Extended Cost Usage quantity times unit cost Cum Cost Cumulative cost from previous line plus extended cost from current line Cum Pct Cumulative cost divided by total cumulative cost for the warehouse On-hand Quantity Current quantity on hand Extended Cost On Hand Quantity times Unit Cost Cum Cost Cum Cost from previous line plus extended cost from current line Cum Pct Cum Cost divided by Total Cum Cost for the warehouse Class From Item s class code before reclassification * Asterisk printed if Class FM and Class TO are not equal Class To Item s new class code Information printed in each column in the totals section of the report is: Seq No Total number of items in current class Turn Rate The classes total extended usage cost divided by total carrying cost Usage Quantity Most recent 12 months total usage for all items in the class Extended Cost Total extended cost for all items in the class On-hand Quantity Total quantity on hand for current class Extended Cost Total cost of on hand inventory for current class Cum Cost Cumulative cost from previous line plus extended cost from current line

44 INVENTORY COST ANALYSIS SUMMARY (TPI/TPCS) The Inventory Cost Analysis Summary (TPCS) report is designed to present an accurate picture of where a distributor s inventory dollars are tied up. What is the investment in active stock, dead stock and total stock? How is the inventory turning in total and by class code? The information in this report is a summary of that presented in the Inventory Cost Analysis Detail (ICAD) report. If detailed information is required to identify each items class code and how it was derived, the ICAD report should be run. Note: This program is the same as the Inv. Cost Analysis Summary Rpt (IMR/IMRP/ICAR) program. ENTRY/INQUIRY SCREEN Field Whse Run For Class Or ABC Code Costing Method To Use Description Warehouse for which Inventory Cost Analysis report is to be run C Report totals by inventory class code. A class code of 13 is used to identify dead stock items A Report totals by inventory ABC code. An ABC code of Z is used to identify dead stock items A Warehouse average cost C Corporate average cost R Replacement cost

45 SAMPLE REPORT

46 TIME PHASED INVENTORY MANAGEMENT CONTROLS BACKGROUND The goal of all distributors is to provide the best possible service at the lowest practical cost. The most demanding challenge in managing a fastener operation is inventory control. In the 90 s the success of a distributor will depend on his ability to manage his assets. Level of service is based on when replenishment is initiated and distributor cost is based on how much is ordered. These phrases can be found in the latest texts on inventory control and inventory management. The purpose of implementing the inventory class coding scheme is to give the FASPAC system user the best and most efficient and understandable tools available to manage his inventory and optimize the investment in that inventory. The primary function of the class code is scheme is to allow a distributor to achieve a maximum return on his inventory investment. Class 0 and 1 items represent high usage dollars and should achieve an annual turn rate of at least 12. The class 11 and 12 items represent low usage dollars. Typically and annual investment in each of these items is less than $10. So each items class value is the key to determining how much should be replenished or the Economic Order Quantity (EOQ). As previously documented, for each stocked item, its EOQ is computed as follows: EOQ = AMU * CLS If a class 2 item has an average monthly usage of 1,000 units, its EOQ is 2,000 representing a two months supply at current usage rates. Remember that the class code assigned is based on the total dollar value of inventory over the past 12 months. So the class code is an indicator of dollars flowing through the warehouse and not just quantities. As an item s usage rises or falls, the average monthly usage (AMU) is recomputed to take into account this change. Each item s class code is also reassigned taking into account the change in demand. When the item drops to or below to the dead stock threshold value, it is assigned a class code