activant prophet 21 · 2007-07-24 · advanced demand forecasting system will place item in the...

Activant Prophet 21

Overview of Prophet 21 V11 New Features: Inventory

11.0 New Features suite Course 2 of 3

This class is designed for…

System AdministratorsCompany TrainersInventory ManagersPurchasing Managers

Objectives

Determine how you can use the Inventory New Features at your company

Advanced Demand ForecastingROI EvaluationCombining Special and Stock Purchase OrdersService Level Driven Safety StockSpecific costing for “S” itemsLanded Cost ReconciliationContainer ReceiptsItem Categorization

This course will NOT cover…

V11 New Features: Sales and OperationsV11 New Features: Accounting

Advanced Demand Forecasting

Maintaining accurate forecasts is essential for maintaining proper purchasing decisionsThese decisions directly affect your bottom line in terms of maximizing your inventory service levels and minimizing your purchasing costs


Predicts, based on past activity, what will be sold in the current period10.5 Forecasting

Simple average Manual tasks

11.0 Advanced ForecastingWeight average/best fitAutomation

Demand Patterns

Level DemandDemand remains fairly steady from period to period

Trend DemandDemand exhibits a continuing rise or fall

Seasonal Demand Demand shows a seasonal gain in demand

Seasonal Demand with TrendDemand shows seasonal gain, with a trend (rise or fall)

Demand Patterns

Erratic DemandDemand can be compromised of intermittent sales followed by inactivity, or can be compromised of spikes in activity with large variability

Can not be predicted with as much accuracy because of the erratic demand

Slow MoverSales are too low to separate demand from trend or seasonality. The system treats this as level demand.


System will place item in the demand pattern that is best suited by analyzing item historySystem will apply and test formulas based on its demand pattern to determine future demand and will use the one with the less errorsSystem then tracks the success of the demand forecasting, allowing you to see how well the system anticipates the item’s demand and make any necessary adjustments


Number of Periods to ExamineThe number of periods that an item needs to have consecutive change in usage, to be considered a trend item. The usage change must be in the same direction for all periods.

Average Change per PeriodIf an item does not experience a percentage change in usage equal to or greater than this amount, the system does not consider it a trend item

Demand Pattern Identification

Demand Patterns are assigned in Item Maintenance on Replenishment tab


Inventory > Transaction > Demand Pattern Identification


Works much like Inventory Ranking Classification


System will make recommendations for itemsClick Select to update Demand Pattern in Item Maintenance


Determines the Demand category of your items so system can use the correct formulaSystem will not allow you to assign the seasonal to seasonal trend demand categories to item’s with less then 3 years of historySystem does not allow you to assign the slow, erratic, or trend demand categories to items with less then a year of history


Identification of Slow MoversSystem tests for slow movers

Identification of Seasonal ItemsSystem determines which items are seasonal

Identification of Erratic ItemsSystem determines which items are erratic

Identification of Seasonal/Trend or Trend Items

If the item is not slow or erratic, the system determines if it is a Seasonal/Trend or Trend item


Identification of Level Demand ItemsIf the system has not applied a label, it suggests the Level category

Update the Item/Location with the Identified Demand Pattern

After running the Item Demand Pattern Identification Routine, the system updates the Replenishment tab in Item Maintenance.

Demand Patterns-Item Maintenance

TypeEither manually or have system assign Demand PatternDefaults to Level

Demand Pattern-Item Maintenance

Behaves likeItem can be set to behave like another item or locationBehaves like Lock

Item can behave like other item until the specified period and year

Forecast Formula Maintenance


System stores a series of weighted average formulas and uses the formula with the least amount of errorsFormulas developed by extensive research and by John Schreibfeder


You can add your own formulas

Demand Year Maintenance


Update Demand PatternYou can update demand patterns from here instead of in the Demand Pattern Identification windowDo every 3 to 6 months


Find Best Fit Formula This must be run every time you update Forecast usage. This will run the formulas


Forecast ExceptionsEnter Percentage for Forecast accuracy Test

Recommended to be .70

Forecast Exceptions tab Display items where forecast isn’t accurateMay need to work with formula

Advanced Demand Forecasting: Min/Max Selection

Certain items are well suited for Min/Max as a purchase method

Erratic itemsSlow itemsCustomer Contracts Consigned Inventory

Min/Max Selection

Min/Max Selection

Limit by Demand Pattern or Replenishment Methods

Min/Max Selection

Displays all items that meet the criteriaDemand Filter Tripped

If Demand Filter has been tripped more than twice in the past year, which would make an erratic item, this field will be checked

Min/Max Selection

Non-erratic itemsClick RMB on Min and Max Quantity for system to suggest amountSuggestions are derived from settings set in ABC Class Maintenance

ABC Class Maintenance


Erratic ItemsDefault Max

You will have the ability to enter in a default minimum qty for an ABC ClassThe system will multiply the minimum by the value in this field to derive the default maximum quantityRecommended to be 1 or 2 times the minimum


Non-Erratic ItemsDefault Min

The system multiplies an item’s default sales unit by the value in this field to determine the default minimum stock level for an ABC class

Default MaxThe system multiplies an item’s default sales unit by the value in the field to determine the default stock level for an ABC class

Min/Max Selection

Erratic Items- MinimumsAccount for high transaction- Yes or No

Min/Max Selection

Account for High Transaction- NoSystem multiplies the average number of transactions per period by the most commonly occurring transaction size over the course of the last year

Account for High Transactions- YesSystem multiplies the average number of transactions per period by the most commonly occurring transaction size, and adds the highest transaction size to that product

Combine Special and Stock PO

Allows you to combine special order items and stock items made to the supplier in the same purchasing session to be combined on one purchase order Useful when you have minimum purchase requirements with supplier or ability to receive free shipping if certain amount is purchased

Default when generating purchase orders


Determine by location for each supplier how setting will default


By SupplierSystem will look to the supplier record to determine if GPOR should default to combine

YesSystem will default for this Supplier/Location to be combined

NoSystem will default this Supplier/Location to NOT combine


Requirements will still be on appropriate tabs (Item and Special) Supplier Summary tab will combine

Click Right mouse Button to see Breakdown


Breaks out Specials and Non-StocksAvailable even if not combining


Specials and stock items will all print on the same purchase order Specials will print on a separate line then the stock line


Increase ROI

Allows you to see if the next break offered by your supplier is more cost effectiveThe system will look at the ROAI% field and the Cost to Carry field to determine if it is desirable to purchase at the next breakThe system will determine an “actual” cost

For each quantity, the corresponding discount is used to determine the “nominal” cost (the discounted cost). To arrive at the “actual” cost, the system factors in the carrying cost.

Carrying Cost default is setup in Purchasing > System > Company Purchasing Maintenance

Increase ROI

New System SettingsPurchasing Folder > General Note- Reorganization

GeneralGroup Purchasing

Evaluate ROI

Evaluate ROI NoneNext Break Buy Ahead

Evaluate ROI

NoneThe system will not evaluate.

Next BreakThe system will look at the next break in the Purchase Pricing Library

Buy AheadExisting functionality

10.5- Factor tab in PORG

Used for when there is an anticipated price increase

Discount Percent, ROAI Percent and Number of Periods

Evaluate ROI

ROAI PercentGoal for return on investment Specifies the percentage return on additional investment required for the system to suggest either a buy ahead quantity or purchase at the next discount break

ROAI Cutoff Options

Determines the maximum quantity the system will suggest when calculating additional quantities for ROAI purchaseFields work in conjunction with each other

Cut off Measure

Period SupplyThe system will use the period supply specified as the maximum qty of additional stock to purchase to meet the ROAI goals

Enter Period Supply

DollarsThe system will use the dollar value specified as the maximum qty of additional stock to purchase to meet ROAI goals

Enter Dollar amount

Cut off Measure

MinimumThe system will use the lesser of the Periods Supply, and Dollar value as the maximum quantity of additional stock to purchase

Maximum The system will use the greater of the Periods Supply and Dollar value as the maximum qty of additional stock to purchase

NoneThe system will not apply a limit to the qty of extra stock available for purchase

Factor Tab

Can be changed on the Factor tab at PORG

Default can be changed on Factor Tab during

PORG

Factor Tab

Buy Ahead

Discount Percent Holds the Vendor Price increase percentage

If an item’s price is due to be raised from $1.00 to $1.17, the discount percent would be 17%

Number of PeriodsHolds the number of periods (if any) between the date you run the Requirements report and the date you intend to raise your prices

In most cases, this will be 0

ROAI Calculations

View Supplier Discount Breaks in PORG: Price Tab

After selecting to purchase item on Item tab, Price tab will be activated.

Purchase Pricing Breaks

Click Right Mouse Button in Price Tab to see actual breaks.

Purchase Pricing in Order Entry

Defaults to unchecked

Cost Tab in Order Entry

Click Right Mouse button in Costs Tab in Order Entry/Front Counter window

Purchase Breaks in Order Entry

Update PO Cost

Ability to update PO cost where PO cost is available for edit

Specific Costing

Ability to update Order Cost with the PO Cost from “S” Disposition itemsAbility to determine true profits on orders with items that are specially orderedInventory Value and General Ledger Postings will also reflect the true cost of a specific item that came from the specific PO that it was cut

System Setting for Specific Costing

Company Maintenance

Company Maintenance

Special Inventory Account Asset account that holds the inventory value of items that are ordered on purchase orders as a result of “S” dispositions on customer orders

Lot Bill Clearing AccountOnly appears if Lot Billing is enabledLiability account that maintains the value of all lot bill shipments whose cost is determined at the header level

Specific Costing Item Setting

Indicate if an item is set to track specific costingAutomatically UN-checked if system setting is turned onCannot be tracked for Lot Costed items

Order Entry

Order Cost = Purchase Order Cost

Specific Costing Example

ABC Supply uses FIFO Costing Basis2 Hammers are received at a cost of $10.00ABC enters another customer order for a Hammer with an “S” disposition and a PO Cost of $20.00The PO is cut and the $20.00 Hammer is receivedOrder is invoiced

Specific Costing Example

If Specific Costing is NOT in effect for the item:

The Order Cost for the item is set to $10.00, the oldest FIFO layer and profit is based on that cost

If Specific Costing is in effect for the item: The Order Cost for the item is set to $20.00, the specific cost on the PO linked to that Order Line

Specific Costing-Special Inventory

A “Special Inventory” will be tracked for items ordered using “S” Dispositions

Dated Specific Cost Layers are used similar to FIFO layers

Includes Item Cost, Received Quantity and Unit Cost Normal FIFO or MAC update will not occurLast received PO Cost will not be updated if specific cost is used

When item is removed from stock, quantity will be removed from specific cost layer

Specific Costing-Special Inventory

FIFO or MAC Layer will be created if:Quantity is cancelled or de-allocated for any reason other then shipmentItem is over-receivedSpecific costing is disabled

If item is over shipped, excess quantity will come from oldest FIFO layer or will use MAC

Specific Costing-Inventory Value Report

Inventory > Reports > Specific Cost Inventory Value

Specific Costing-General Ledger

PO ReceiptDebit Special Inventory Account for items ordered with “S” dispositionDebit Asset account for over-received itemsCredit Inventory Receipts Clearing account


Invoice Creation Debit Cost of Sales accountCredit Special Inventory account for “S” disposition itemsCredit asset account for over-shipped items


De-Allocation of “S” Disposition itemsDebit Asset account for de-allocated itemsCredit Special Inventory account for de-allocated items

Service Level Based Safety Stock

Safety Stock is component of Order Point calculation for UPTO and EOQ ItemsPrior to 11.0, it was expressed as a explicit number of days – now it can either be days or a service level goalPrior to 11.0, it was set at item, supplier or PORG level- now it can be set at ABC Class level as well


New System Setting


Minimum Service Level GoalAllows for entry of any percent between 50.0 to 99.9%Represents the minimum service level goal

Maximum Service Level Goal Allows for entry of any percent between 50.0 to 99.9%Represents the maximum service level goal Must be higher than the minimum


Action when Service Level Goal is outside parameters

PreventWill receive message if try to set service goal outside parameters and will not be able to continue until is within parameters

WarnWill receive message but will be able to continue


System will look to three places and will follow this hierarchy

Item Location Replenishment TabABC Class MaintenanceSupplier Maintenance

Safety Stock in terms of Days OR Service level

Item Maintenance- Replenishment Tab

Safety Stock can be set in terms of ABC Class, Days or Service Level

Item Maintenance-Replenishment Tab

Stock OutThe Service Level Goal % will guard against stocking out of an item

BackordersThe Service Level Goal % will be set to guard against having to backorder an item on a customer order

Service Level- ABC Classes

Service Level-Supplier


A statistical table is used to determine the Standard Deviation value for the order point formula Revised safety stock calculation for Order Point:

((1+(MAPE%/100))(1.25*Stnd Dev)(Safety Stock Factor))

MAPE-Mean Absolute Percent Error

Landed Cost

Increased Landed Cost DriversLanded Cost Reconciliation

Ability added to update inventory value when there is a difference between the estimated landed cost and the actual landed cost

Landed Cost Drivers

New Landed Cost Drivers

Landed Cost Drivers

Item IDCarrierCarrier/Product GroupCarrier/SupplierCarrier/LocationManufacturing ClassManufacturing Class/Product GroupManufacturing Class/Supplier

Landed Cost Drivers

Manufacturing Class/LocationManufacturing Class/CarrierLocation to Location

Enables the application of landed cost when material is transferred between locations Should be reserved for material that is shipped from a dock warehouse (non-selling warehouse) to a stocking and selling warehouse

Supplier/Item ID

Landed Cost Drivers

Landed Cost Drivers

When material is received, system will perform a currency exchange based on rate in effect on date of receipt

Landed Cost- Company Maintenance

The new Drivers have been added to the Landed Cost Driver Search Order in Company Maintenance

Landed Cost- Company Maintenance

Do you want to update inventory value when there is a difference between the estimated landed cost and actual?

Landed Cost- Purchase Orders

Displays proper allocation of landed cost across the affected items

Landed Cost- PO Receipts

External Reference Number

Used to tie multiple lines from multiple purchase orders together to properly account for landed cost applied to a container or multiple purchase order linesIf left blank, the system will automatically populate with the Receipt number Helps in locating landed cost receipt when vouchering

Costs Tab

View Landed Cost Percentage of the last Received PO Cost

Unvouchered Landed Cost

Accounts Payable > ReportsUsed to reconcile Landed Cost Clearing account

Convert Landed Cost to Voucher

Accounts Payable > Transaction > Convert Landed Cost to Voucher

Convert Landed Cost to Voucher

Vessel Receipts

Lines from multiple purchase orders and partial lines from multiple purchase orders may be received into a containerVessel details may be added to the systemVessel details can be viewed throughout the system

Vessel Receipts- System Setting

Activate by turning System Setting on

Vessel Receipts- Company Maintenance

Vessel Receipts- Company Maintenance

Inventory in Vessel AccountAsset AccountHolds the value of the inventory on the vessel

Purchase order cost plus landed cost

Inventory in Transit Clearing AccountLiability Account Holds the value of the purchase order cost only

Vessel Receipts

Purchase orders are created When supplier receives the purchase order and is placed in container, vessel information is entered in Vessel ReceiptsInventory > Transaction > Vessel Receipts

Vessel Receipts

Vessel Receipts

Apply landed costs for the application point of vessel receiptsLink documents and indicate Documents received

Vessel Receipts

Vessel Receipts- GL Postings

Debit Inventory on Vessel AccountPO Value plus Landed Costs

Credit Transit Clearing Account PO Value

Credit Landed Cost Clearing AccountLanded Cost Value

Inventory in Vessel Value Report

Inventory > Reports This should balance to the Inventory in Vessel General Ledger account

Vessel Report

Purchasing > Reports > Vessel ReportProvides info about the vessel such as what is on the vessel, arrival dates, if documentation was received

Vessel Receipts

Vessel Details are viewable in Order Entry

Vessel Receipts

View vessel details on Purchase Order

Container Receipts

Material is received in Container ReceiptsInventory > Transaction > Container Receipts

Container Receipts

Container Receipts

Debit Inventory Account PO Cost plus all Landed Costs for all application points

Debit Transit Clearing AccountPO cost when received into vessel

Credit Inventory in Vessel AccountPO Cost plus Landed Costs for application point of Vessel receipts

Credit Inventory Receipts Clearing Account

Container Receipts

Credit Landed Cost Clearing Account Landed Cost with a PO Receipts Application point

Item Categorization

Search Tool in P21 SearchesMaster Product Categories provide for linking of Images, Descriptions and Links by CategoryEliminates need for B2B users to maintain category information in spreadsheets

Item Categorization

FloorsHardwood

Item ID- Dark WoodItem ID- Light Wood

VinylItem ID- White VinylItem ID- Dark Vinyl

Item Categorization

Item Categorization

Specify Default Image/ Thumbnail Image

Item Categorization

Item Categorization

Inventory > Maintenance

Item Categorization

Root CategoryFirst Category

Item Categorization

Click RMB to keep adding categories and sub-categories

Item Categorization

Final level add items

Summary

Determine how you can use the v11.0 Inventory new features

For More Information…

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