FACTS has been enhanced to implement the Advanced Inventory Management (AIM) procedures as defined by Grant Howard. The new AIM model includes differences in usage storage, definition of Order Point (OP) and Line Point (LP) calculation, and required changes to the IC, MC, PO, SA and SO modules.
The major areas of Inventory Control enhancement include:
Replenishment Parameters—New Replenishment Parameters group the settings into the following areas: Alerts, Order Point, Order Quantity, Frozen Controls, Usage, Rank, Review Cycle, Safety Stock and Lead Time.
Cost Discrepancy—Cost Discrepancy processing provides a way to identify an inventory receipt document with an incorrect cost, enter the correct cost, and then have that corrected cost update down to the disbursements and past documents that were filled by that receipt.
Some examples of cost discrepancies are:
Multiply Buying UM Options—Item UM Entry has been enhanced to allow selecting alternate buying unit of measures for the Buyers Control Center (BCC). The quantities entered in the BCC will be converted to the appropriate default buying UM on the Purchase Order line.
Changes to Item setup via Item File Maintenance (Item F/M) was enhanced to include an option for “Use ROQ”. This option rounds up the recommended order quantity for the item in the Buyers Control Center. The unit of measure to use is based on an available buying unit of measure for the item. If a quantity needs to be applied to the specified UM it can be indicated. The default quantity is 1 and must be an integer value for rounding. Additionally, the ROQ can be applied for warehouse transfers or ignored.
Implementation of Rank instead of Movement Class—Movement Class for an item by warehouse has been replaced with Rank. An item’s Rank is determined by the number of ‘hits’ the item incurs during a number of periods at the document level. An item’s ranking will be updated during the Daily Sales Register (DSR). Therefore, the parameters determining an items’ Order Point / Line Point will be updated to reflect current system requirements. An item’s Rank also determines the number of periods to apply a slope percentage when calculating Average Daily Usage (ADU).
Ranking for an item is performed for stocked items that are flagged as Replenish for a warehouse. If a non-replenished item is changed to a replenished item, the system utilizes the usage information captured for the item to calculate the appropriate rank.
Tending of Usage Data—Usage data is collected daily for all stocked items in the system. This allows for accurate calculation of ADU for Order Point and Line Point. The extrapolated data points for seasonal usage will employ a T-Backward usage calculation. The usage for an item will be examined for 12 periods in arrears, backing up a number of periods based on an items Rank. The number of periods utilized for trending will be based on an item’s Rank. The higher the activity Hits for an item, the higher the Rank and thus a smaller the window to be utilized for trending. An “A” ranked item will have a 3 month backward and forward trend and require 15 months of history. A “B” ranked item will have a 4 month trend window and require 16 months of history, and so on.
Trending for a non-seasonal item employs either a Backward or Forward ADU calculation. For Backward trending, an “A” ranked item will look at the prior 3 periods of usage to calculate the ADU. A Forward “A” ranked item will go back 12 periods and use the 3 Forward periods for the ADU calculation. The trending type for an item can be configured at the Warehouse / Item level.
Replenishment Parameters Overview
Replenishment Parameter Details