Openbravo and frePPLe advanced planning concepts

© 2016 Openbravo Inc. All Rights Reserved. 1

Openbravo Advanced Planning with FrePPLe

June 2016


Index3

Business Benefits

Advanced Planning


Index3From the Financial perspectiveWorking Capital optimization• WC =AR+IN-AP (current assets – current liabilities)• WC-Ratio =AR+IN/AP (above but close to 1 is good)A good Indicator of Operational Efficiency

Business Benefitsof Planning

From the Commercial perspectiveIncreased Turnover & Customer satisfaction by less stock-outsFrom the Operational perspectiveReduced costs by Reduced Excess & ObsoletesReduced costs by Optimized Transport and WHse Utilization


Index3From the Organizational perspective• Planning is a high-value activity.• At best it is executed at a Central or DC level.• A planner is well connected to other functions.• Planning streamlines other activities in the Organization.

• The FrePPLe engine calculates an Optimized Supply Chain.

• The Openbravo Commerce suite allows to execute lean.• The combination allows to move from people-

dependency to system-dependency.

Business Benefitsof Planning


Index3FrePPLe• Supply Chain Planning engine• Shop-floor Scheduling engine• Powerfull, Versatile and EfficientOpenbravo• Web-native Wide&Deep Enterprise functionality for mid-

sized to large Retailers• Back-end and Front-end nurtured from same DB• Intuitive and Productive User-Interface

The Perfect Matchand a

Winning Combination

Business Benefitsof FrePPLe / Openbravo Combination


Index3

Business Benefits

Advanced Planning


Index3Advanced PlanningComponents

Main Components of Advanced Planning• Forecasting

1. Demand Forecasting2. Forecast Analysis and Review 3. Forecast Consumption

• Inventory Planning1. Inventory Parameters Optimization2. Inventory Planning Review

• Replenishment Planning1. Replenishment Modeling2. Initial Replenishment plan Review3. Export approved plan


Index3Advanced PlanningForecasting

1. Demand Forecasting1. Auto-Select and Auto-Tune between best forecast algorithm:

• Moving average – flat forecast• Single exponential – flat forecast• Double exponential – trending demand• Winters – seasonal demand• Croston – intermittent demand

2. Outlier detection and Correction

• User can interfere/force at any level and moment

Sales history Expected

future sales



2. Forecast Analysis & Review1. Review the forecast and edit it with extra information

• Product Life Cycle approach• Add forecast values for new products (fade-in)• Reduce or remove forecast for old products (fade-out)

• Adjust forecast on agregated level / family item-level• Add promotions• Exclude exceptional one-off sales from the demand history

2. Review at product, location, customer and time dimension• Region: Sales manager• Customer: Account manager• Product Range: Product manager• Overall: General manager



3. Forecast Consumption1. Short term demand consists primarily of customer sales orders.2. Longer term demand consists primarily of sales forecast

The forecast consumption algorithm reconciles both short- and long-term demand into a Consolidated Demand Signal that is consistent and complete across the chosen horizon.

The start&end, curve&angle and length of the line that separates Open Orders from Forecast is different per industry, sector, geography and product-type.


Index3Advanced PlanningInventory Planning

1a. Inventory Parameters Optimization• Dynamically computes inventory parameters per warehouse

• Users can override the values per period

Inventory Parameter Calculation options

Safety Stock The safety stock parameter is derived from the Desired Service Level, taking into account the Supplier lead-times and the Supplier delivery accuracy.

a) Computed suggestion

b) Fixed Quantity

c) #Days of Forecast

Reorder Quantity The ROQ is derived from the Economic Order Quantity (Wilson formula), taking into account the Item costs, the Order costs and the Holding costs.

a) Computed suggestion

b) Fixed Quantity

c) #Days of Forecast



1b. Inventory Parameters Recommendation• Stores, Outlets

• Number of products * outlets requires Agile Approach.• Fixed Period with different periods per ABC classification.• Periodical automated ABC-reclassification, f.i. monthly.

• Distribution Centers• Volumes allow for an elaborated, Economical Approach• Economic Order Quantity as General Guideline for matured products• Exceptions:

• Deterioration products (expiry dates)• Beginning of LifeCycle products (fade-in)• End-of-LifeCycle products (fade-out)• …

• Detect and Alerts for Outlier-Orders • Outlier-Order = >50% of QtyAvailable + Inside Supplier LeadTime• To be treated as exception by planner• Dynamic Sourcing allows to bypass EOQ when demand urges

satisfaction



2. Inventory Planning Review• Management by Exception: Calculated Stock-out Risk

• FrePPLe calculates the risk of stockouts per SKU, per Warehouse. This provides an excellent starting point for the planner to fine-tune parameters, expedite orders or alternative sourcing.

• Planners to review the Safety Stock to:• Make sure the service levels associated to a SKU are appropriate and don’t

generate too much or not enough stock• Set fixed quantities for SKUs where there is not enough demand history to

fully rely on the forecast• Set fixed periods of forecast for fast movers to make sure no stockout will

occur• Planners to review the ROQ to:

• Make sure not to order too frequently from a supplier.• Ensure the ROQ are not too high generating unnecessary stock.


Index3Advanced PlanningReplenishment Planning

1. Replenishment Modeling• Bill of Material – From Supplier to Product• Bill of Distribution – From Product to Customer• All resources, All suppliers• Generation of constrained or unconstrained plans

• Dynamic SourcingSource material by rules like “Cheapest source unless…”


Index3Advanced PlanningReplenishment Planning

2. Exception based Replenishment Review • Late Order Analysis

• Drill down into a late order; Review its delivery plan and the causes for the delay

• Critical Purchase/Distribution review• Understand for which open purchase orders the planner should

contact the supplier to expedite the delivery• Excess inventory / safety stock violations

• Identify inventory outside the expected limits

3. Planned Orders to be exported to Openbravo• Purchase orders• Distribution orders


Index3Advanced PlanningConnector

Openbravo and FrePPLe ConnectorBi-directional propagation in the supply chain• FrePPLe input from Openbravo

• Sales History• Inventory• Pending Orders (SO, PO, DO)• Bill of Material, Bill of Distribution• Product/Whse planning parameters

• FrePPLe output to Openbravo• Purchase Orders• Distributions Orders• Recalculated Planning Parameters


Thank you

Web: www.openbravo.com/contactEmail: [email protected] Office: +34 932 725 947India Office: +91 33 4004 7358Mexico Office: +52 559171 1841

Thank you very much for your attention


Disclaimer

This document outlines Openbravo’ s product direction and should be considered as a statement of intentions. It should not be relied on in making a purchase decision. Openbravo has no obligation to deliver any functionality mentioned in this presentation. The forward-looking statements in this document are subject to various risks and possible future developments may change for several reasons, including but not limited to market changes and Openbravo development team workload. Openbravo assumes no responsibility for any inaccuracy or omission in this material.

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Openbravo and frePPLe advanced planning concepts