Implementing and Troubleshooting Inventory Management · Review order points and order quantities...

Prophet 21 Acclaim

Implementing and Troubleshooting Inventory Management

Inventory Management suite Course 5 of 7

This class is designed for…

Buyers, Purchasing Agents and Operations Managers that are responsible for maintaining efficient inventory levels

Overview

This course will help you determine the best way to use the basic purchasing functionality in Acclaim to meet you business needs.It will discuss how to verify the accuracy of your data and set up your items with the appropriate purchasing method.

Objectives

Verify data for accuracySet up purchasing methods for itemsReview order points and order quantities for MNMX and OPOQ itemsTroubleshoot the factors that make up the order point for UPTO itemsFine-tune ABC classifications for UPTO items

This course will NOT cover…

Basic Purchasing FunctionalityAcclaim navigation

Getting Started with Inventory Management

Determine the best purchase method for each itemRecord purchase method in Item Location recordRecord purchase class for each item not using UPTOEnter order points and order quantities for fixed control items

Getting Started with Inventory Management

Zero out old order points and order quantities for UPTO itemsCreate Purchase Control Records for each branch, vendor and sub-group combinationSpecify review cycle and lead time sourceSet up safety stock in Item or Vendor record

Getting Started with Inventory Management

Verify usage and costs are accurate on all itemsPrint Item Ranking Report by estimated annual costCreate Item Class records for each purchase classCategorize items into respective classes

Verify Data is Accurate

Two primary areas of concernCost basisAverage Monthly Usage

Cost Basis

Can be one of the followingSTND (standard cost)L-AVG (location moving average)C-AVG (company moving average)FIFO (First In-First Out)

Average Monthly Usage

Can be viewed in the Item-History module# of Months field shows you how long you have been tracking an itemRecommend at least 6 months worth of history before using UPTO

Select Items for Fixed Control Methods

Determine which items should be using MNMX or OPOQAssign purchase class 60-69 in Item Location recordVerify Order Points and Order Quantities

Set Up Order Point for UPTO Items

Set up Purchase Control Records for each branch, vendor and vendor sub-groupSpecify number of days between entering purchase orders

Enter Lead Time Information

Determine whether lead time should be calculated by vendor or item

Enter Lead Time Information

Determine whether lead time should be calculated by vendor or itemEnter Lead Time Factor against lead time

Enter Lead Time Information

Determine whether lead time should be calculated by vendor or itemEnter Lead Time Factor against lead timeVerify Accurate Lead Times

Enter Lead Time Information

Determine whether lead time should be calculated by vendor or itemEnter Lead Time Factor against lead timeVerify Accurate Lead TimesEnter Target Purchase Amount

Set Up Order Quantity for UPTO Items

Rank items by estimated annual costSystem uses the following formula to calculate the estimated annual cost12 x AMU x Cost

Define Classes

Go to Item-Class, select Define purchase

Min $ field should coincide with cost

that represents 80% for Class 1

items.

Ranking Report

Define Classes

Go to Item-Class, select Define purchase

Accept the defaults until you are ready to fine tune these

factors.

Define Classes

Go to Item-Class, select Define purchase

Recommended for Class 1 items to set Order Up To

levels at 1.5 (which represents turning those items 8 times

a year).

Define Classes

Go to Item-Class, select Define purchase

Min $ field should coincide with cost

that represents 96% for Class 10

items.

Ranking Report

Define Classes

Go to Item-Class, select Define purchase

Recommended for Class 10 items to set Order Up To

levels at 4.0 (which represents turning those items 3 times

a year).

Assign Purchase Classes

Choose Categorize Item Purchase Class from the Item-Class menuEnter 0 in the BR# field to classify items based on company wide annual costsEnter 99 in the BR# field to classify by locations annual costs

Change Purchase Method to UPTO for Specified Items

Fast edit purchase method of items with purchase class less than 60Perform a fixed fast edit on Order Point to 0Verify system calculation

Accurate Net Stock

If net stock is inaccurately inflated, a requirement may not be triggered when it is needed

Keeping Accurate Backorders

Factors influencing the number of backorders in the system

Timing of backorderManually inhibit allocationTransfer backorderBackorder created in Ship-EditItem-adjust quantities into free stock “after the fact”

Finding Open Backorders

Backorder Requirements Report in the material moduleOpen Transfer Backorder ReportAllocate free stock to backorders

Keeping Accurate Free Stock

Use the ITEM-COUNT module to cycle count your inventory

Preparing for an Item Count

1. Confirm and invoice all orders2. Invoice direct shipments3. Determine whether you want to count free stock

or free + allocated stock4. Run QREBITEM

Steps to Performing Item Count

Print Inventory Cards/Report

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Enter/Edit Counts

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Enter/Edit CountsPrint Missing

Inventory Cards List

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Enter/Edit CountsPrint Missing

Inventory Cards ListPrint a Recount List

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Enter/Edit CountsPrint Missing

Inventory Cards ListPrint a Recount List

Print an Over-allocated Items List*

Steps to Performing Item Count

Print Inventory Cards/Report

Perform Physical Count

Enter/Edit CountsPrint Missing

Inventory Cards ListPrint a Recount List

Print an Over-allocated Items List*

Print the On-Hand vs. Physical List & Post

Counts

Keeping Accurate Due-In

PO generated but waiting to meet minimumOld POs expedited

Accurate Order Point

Purchase Method Review ReportIf items are in specific purchase classes – use report to examine order points and order quantities

Erratic items should be assigned a unique purchase class for review

Purchase Method Review Report

Purchase Method Review Report

Order Point Factors - UPTO

The factors that make up the order point MUST be accurate!

UsageSet up Seasonal itemsCatch deviation changesMonitor large salesRecord lost salesBack out mistakes

Review TimeSet up accurate review

cycles that match purchasing performance

Review overdue vendors

Overdue Vendor Report

Overdue Vendor Report

Lead Time

Calculated by the system from the time the PO is generated until the first receipt of the POLots of partial shipments use lead time source on an item by item basis

Safety Stock

Safety stock is based on how erratic an item’s usage and lead time areHigher volume items may need more safety stock

Customer Sale

PTD Usage Accumulator

Item Update Process

Average Monthly Usage

Order Quantity – UPTO

UPTOReclassificationRe-categorizationFine tuning

Fine-tuning Classification

Original ClassificationPurchase

ClassAnnual Cost % of Sales Months

SupplyTurns

A - 1 Over 300 80 1.5 8B - 10 75-299 15 4 3C - 20 5-74 5 12 1D - 90 <5 0 0 0

Fine-tuning Classification

New ClassificationPurchase

ClassAnnual Cost % of

SalesMonths Supply

Turns

A - 1 Over 3000 80 1 12A - 3 1000-2999 1.2 10

B - 12 75-224 4 3

A - 5 300-999 1.5 8B - 10 225-299 15 2 6

C - 20 5-74 5 12 1D - 90 <5 0 0 0

Dead Stock

Steps to Manage Dead StockPreventionIdentification

Aged Inventory Value ReportInactive Item ReportReturn Surplus Stock ReportInventory Aged Analysis Report

Co-OrdinationDisposal

Dead Stock

Steps to Manage Dead StockPreventionIdentification

Aged Inventory Value ReportInactive Item ReportReturn Surplus Stock ReportInventory Aged Analysis Report

Co-OrdinationDisposal

Every dollar removed from inventorythat was dead stock, saves

approximately 30 cents of net profit!

Summary

Verify data for accuracySet up purchasing methods for itemsReview order points and order quantities for

MNMX and OPOQ itemsTroubleshoot the factors that make up the order

point for UPTO Fine-tune ABC classifications for UPTO items

For More Information…

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