Trinity Advanced Inventory Replenishment

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Trinity Advanced
Inventory Replenishment
Bringing powerful demand planning and purchasing
tools to Microsoft Dynamics GP ..
Technology that changes everything
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Introduction
Inventory replenishment is potentially one of the
most complex and time-consuming tasks facing any
distribution business.. .. But also one of the
most important. A distribution business can stand
or fall by its ability to provide timely service
by investing in the right inventory at the right
time whilst also keeping purchasing costs under
control
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Introduction

• The complexities are many including ..
• Managing seasonal products
• Dealing with item supersession ( replacing one
  item with another).
• Recognising trends
• Buying ahead for future demand when purchasing
  against a long lead time.
• Understanding which are your key products and
  your sporadic ones.
• Building in information about unusual activity
  e.g. new contracts or promotions.
• Recognising lost sales and exceptional sales so
  that you look at true demand

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What core Dynamics GP offers
Dynamics GP with its powerful drill down and
business intelligence tools can help the buyer to
formulate decisions and enter purchase orders ..
either via purchase order entry as here ....
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What core Dynamics GP offers
.... or by using the Purchase Order Generator
which will prompt with a suggested purchase
order by comparing item parameters such as
re-order point with current inventory
availability.
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What core Dynamics GP offers
... This screen shows the basic calculation that
is performed by the PO Generator to arrive at a
suggested purchase order quantity .. .. But of
course the resulting suggestion depends upon your
re-order point and order up to level being as up
to date and reliable as possible in the first
place..
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What core Dynamics GP offers
... and these parameter levels are set manually
in Dynamics GP... This involves reviewing them
regularly to reflect changing patterns of demand
or evolving stocking policies. For a distributor
with thousands of items this can be a daunting
task.
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Trinity A.I.R. Intro

• ...In setting these parameters not all items can
  be dealt with in the same way
• Most inventories can be broken into three types.
• Specials not held in stock but purchased to
  order, possibly delivered direct.
• Sporadic movers - sold infrequently and
  erratically to no clear pattern. These items are
  typically restocked based on numerical policies
  e.g. hold 2 in stock, when 1 sells replace it.
• High/ Fast movers the items that you sell most
  frequently and that make up the majority of your
  bin-trips. For these it most likely there will
  be time based rather quantity based policies
  e.g. hold 3 weeks safety stock, 1 week lead time,
  purchase once every 4 weeks.
• We will look at each in turn ....

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Item Ranking Wizard
AIRs item ranking wizard will help you to
categorise your inventory in this way by
subdividing your inventory based on frequency of
sale by site. The wizard can assign ABCDX
category automatically but they can also be
assigned manually and fixed.
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Lets take a look now at how we would deal with
each of these three general categories of
inventory .. First lets look at specials ..
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Specials / non-stocked items
Setting order point and order up to level to zero
means that these items will only be purchased
when there is demand and then just enough will be
purchased to satisfy that demand. NB .. There
are also features in Sales Order Entry and
elsewhere that enable such orders to be placed
back to back and even direct delivery.
(these are standard Dynamics GP features that
do not require Trinity AIR)
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Sporadic Movers
For sporadic movers ..there are tools in the
Trinity solution that allow you to set order
point and order up to level externally e.g. in XL
and review and import them direct into GP.
These are typically where, for example, you
hold 2 in stock and buy 1 when you sell one.
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High / Fast movers
High/Fast movers may only account for a small
percentage of the item count but will almost
certainly account for the majority of bin trips..
.. They typically represent the largest part
of inventory investment and having them in stock
is critical to achieving customer service
levels... Stock policies for these items are
likely to be time based. AIR allows these
policies to be set by item or en masse with
routines such as the one shown here.
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High / Fast movers
These time based policies need to be combined
with the best possible estimate of level of
demand to come up with automatically calculated
order points and order up to levels. .. Example
I estimate weekly demand to be 71. I wish to
keep at least three weeks stock ( 21days) so
safety stock is 21/7 71 213 If my lead time
is four weeks (28 days) then I need to re-order
when my available inventory falls below
(2128)/7 71 497
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High / Fast movers
This brings us to one of the key challenges of
replenishment .. which is trying to come up with
the most reliable possible prediction for that
estimated weekly demand ( or monthly) referred
to in previous slide. We have two main sources
of data to help us with this process ..
Historical Demand knowing what the demand has
been in the past can be a good guide to future
demand .. especially if we choose the best way of
interpreting the data .. Forecasts items
that are driven by forecasts for large customers
or that are subject to major promotion campaigns
would be good examples of where we cannot rely
wholly on historical demand. Lets look at each
in turn ..
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High / Fast movers
This is the AIR Demand Review window. It is the
starting point for the automatic recalculation
of Estimated Period Demand This screen only
shows last six periods demand but the program is
capable of going back far further in its analysis
of historical demand... You will see that items
have differing Calculation Methods for coming up
with this E.P.D. figure. Periods can be
weeks or months
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High / Fast movers
.. By going right back though the demand history
the AIR software tries out all of the thirteen
potential formulae to find the one which ,
historically, has been the most accurate
predictor of demand for that item. In our
example then using three period rolling average
would have meant that on average we would have
predicted to with 7 the actual demand in the
next period. Using this method the software
will automatically detect seasonal, trending and
volatile products and choose the appropriate
formula,
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High / Fast movers
.. By demand of course we dont just mean sales
. AIR will help you identify lost sales and
let you add these in. You can also flag
exceptional demand so that you do not take into
account one off events e.g. a stock
clearance And there are facilities to inherit
demand from another item so that when you bring
on a new item you have ready access to meaningful
history, You can even import data from external
systems via a wizard
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High / Fast movers
We have already seen how the system takes the
resulting E.P.D. and combines it with the time
based stocking policies to automatically come up
with new re-order points and order up to levels
.. .. But for some items a single EPD is not
sufficient. What if the product is trending , or
if I have specific customer forecasts on a period
by period basis,,, ?
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High / Fast movers
For this type of item we would set Estimated
Based on to Projected Forecast. This means
that ... not only will the system come up with
a period by period EPD (ideal say for trending
or seasonal products that are on a long lead
time) ... .. But it will also permit you to
input your own forecasts . As on the next screen
..
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High / Fast movers
Here we can see that the demand projected by the
system is pretty steady at around 160 per period
.. But additional Exceptional forecasts have
been added perhaps because a major promotion is
planned in the run up to Christmas... These
forecasts can be input manually as in the lower
screen here or .... . Reorder point and order
up to level for this type of item can be updated
in the demand review program but also
automatically updated just before you launch the
PO generator. This is because this type of item
is date sensitive. e.g if my reorder point is 7
weeks then I need to look forward through my
forecast and total it for those next 7 weeks to
come up with reorder point.
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High / Fast movers
.. Collated off-line as in this example in a
spreadsheet and then imported as
item/site/period forecasts. The
example shown is for illustrative purposes.
Specific spreadsheet formats may be devised by
customer and will be mapped to AIR as part of
the services of the project.
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Purchase Order Generator

• Now that we have brought all of our re-order
  parameters up to date we are ready to run the
  Dynamics GP Purchase Order Generator.
• It as it this point ..even after the demand
  review that has taken place that the buyer is
  looking not just for a suggested order quantity
  but the maximum decision support to enable him to
  confirm or amend suggested quantities. e.g.
• Are there quantity break prices available or an
  imminent price hike from the vendor?
• Have I just tipped over an order multiple when
  maybe I could risk rounding down?
• Does my order fill a container ?
• Have I met the minimum spend threshold for this
  vendor ?
• What other items that are just above re-order
  point could I include in the order to make an
  economic order ?
• To answer all these questions and many more
  Trinity has made extensive enhancements to the
  Dynamics GP Purchase Order Generator seen at the
  start of this presentation.

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Purchase Order Generator
The prompt screen includes a number of new
options that enhance the flexibility of the PO
Generator....
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Purchase Order Generator

• The main PO generator preview screen which shows
  suggested order lines also shows additional
  information including
• Estimated weekly usage
• Available Stock
• No of weeks stock
• Vendor Price alerts
• The example shown has also had cosmetic layout
  changes made using modifier

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Purchase Order Generator

• ..while a new vendor totals screen tracks the
  size and value of the order against vendor
  targets or minimums making it easy to work toward
  filling a container or reaching a minimum spend
  .

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Purchase Order Generator
and there is a wealth of extra decision support
against each item as you scroll down through the
list of items with further drill downs to
detailed information .. For example vendor
prices ...
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Purchase Order Generator

• The Vendor price inquiry
• allows us to check
• Quantity breaks available
• Imminent price changes
• Alternative suppliers
• Price comments
• and remember the vendor price inquiry is just one
  of many drill downs available .

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Purchase Order Generator

• Once you are ready to place the order this can be
  created with a single click ...
• O

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Purchase Order Generator
..and the order notified to the vendor using
standard Dynamics GP functionality
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Data Analysis
There is a wealth of information available to
help the buyer improve every aspect of inventory
management. This XL spreadsheet for example
extracted via smartlists is illustrating how much
above safety stock was held at time of receipt
with the implication of the potential for stock
savings. smartlist builder is a pre-req for
this type of smartlist based analysis
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Conclusion

• This walk-through has not covered every aspect
  of
• Trinity Advanced Inventory Replenishment
• but has hopefully provided a good overview of
  the scope of the product.
• We have seen ....
• Easy categorisation of non-stock, sporadic and
  fast-moving items
• The ability to import fixed reorder point and
  order up to levels for sporadic items
• The ability to set up time based stocking
  policies for fast movers
• The routine that identifies best forecast method
  per item
• Auto-update of re-order parameters based on stock
  policies and estimated demand
• Powerful purchase order generator with easy to
  access decision support
• Vendor price lists with quantity breaks and
  effective dates
• Data analysis tools

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Next Steps

• There is a wealth of additional information at
  the web site
• http//www.trinitypartner.com/products_and_modules
  /add_inv_rep.htm
• Including, brochure, whitepaper, case study,
  short introductory product movie
• Web based demonstrations can be provided by
  Trinity
• alanwilliams_at_trinitycomputers.co.uk
• Evaluation copies of the product available on
  request though we advise introductory training to
  support this process.
• For full implementation we also strongly
  recommend a program of training customised to
  individual company requirements but typically
  approx 16 hours delivered in 8 x 2 hour sessions.
• ( in some cases this training can be provided
  direct by experienced partners )