Purchasing and Inventory Control Techniques

Activant Stanpak

This class is designed for…

Experienced users interested in taking full advantage of Stanpak’s Purchasing and Inventory Management capabilities

This class will NOT cover…

Inventory processing and Purchasing procedures

Managing Inventory

Using the best information and software available

Stanpak tools available to better manage your purchasing and inventory

Where Do You Begin?

Become familiar with all of the programs available Explore all of the resources available to you and your purchasing teamPut procedures in place to optimize your return on your investmentLet Stanpak’s advanced purchasing forecasting software work for you!

Establish Routine Maintenance Procedures

USE MIN/MAX Stock Calculation to your advantage

Run MIN/MAX with different parameters for your larger vendorsLet the system calculate your minimum re-order point numberRun your MIN/MAX program based on desired turnsDocument this information for each vendorRun program as part of month end

Vendor # Min/Max Calc665715 14 daysADVANC 10 days201040 10 days3M 21 days

Establish Routine Maintenance Procedures

Determine your vendors required lead time Include transportation time in this numberAdd that extra day for appointments for deliveryRun program ICL to change field #11 in IM for the entire line

Maintain VM (Vendor Master) field #59 with the lead time required

Due date in QFW or QE calculated based on this infoMake sure that your supplier understands your expectations, and that changes must be communicated to you

Establish a schedule for ordering your fastest moving lines

Communicate this information with your suppliers

Establish Routine Maintenance Procedures

LSR - Low Stock Report

Buyer, All buyers, Vendor, All vendorsDisplays all items that have fallen below the minimum quantity or the reorder point

Determine when to place an order or review a lineUseful in alerting your buyers of a potential problem

Run several times during the day

OT - Out List for Substitution

Depleted itemsSuggestions for substitution

if this information has been loaded in Field #10 in IM.

Alert you when an item stocked for a specific customer has been committed to another orderQuantities and due date for items currently on order from your supplier

Large Order Report

Prints as part of program OR (Order Register)User-determined parameters

Includes all items which have been committed to customer and have fallen within these parameters

Identify unexpected hits that may deplete your inventory of an item

ABC Inventory Tracking

Run IBC on a regular basis and at month end Determine the most important items, and dead or slow moving stock

Using the exclusion optionEliminate items that don’t belong in the calculationMake the percentage of sales much more meaningful

Machines, service department parts, downloaded lists of special order lines

Exclude items by vendor, category or Special Order Flag (second position of the buying code)

QFW - Purchase Forecasting

Let the software work to your advantage!Display purchase order lines on screen in qic/mode style with sequence numbers

Select a line to view expanded detailUse filter option to view only item selected for purchaseYou can access all functions found in IQInsert changes in quantity ordered as neededRecalculating purchase order will take into account changes and adjust totals accordingly

QFW – Generating Purchase Orders

Calculates the combination of items that will produce correct order size in cubes, weight, units, dollars or daysAssembles a worksheet that will automatically be converted to a Purchase OrderOption to round items based on tier or pallet quantitiesResult – balanced inventories that will maximize turns, fill rates, and improve customer satisfaction

Item inquiry

IQ (item inquiry) features are now available from purchase screen

Maintenance ScreenPricing screenItem information screenOpen order by itemOpen back order by itemWho Buys (BC)Purchase HistoryTransaction listing

Purchase Order Requirement Calculation

Purchase order requirements are based on Average salesInventory on handLead timeOrder size requirements of vendorMin/Max calculation

Safety factorDesired days of inventory turnsDesired days can also be set by vendor or by item

Understanding Inventory Forecasting

Other calculations/factors used ABC item trackingReorder point Maximum levelDays-to-turnSafety factorSafety reserve stock

All of these are used to calculateReorder Quantity = Reorder point + maximum –quantity on hand – quantity on order

Forecasting Inventory Requirements

Two steps to forecasting inventory requirementsUsing historical sales to calculate a usage number used to reliably predict future salesBuilding a purchase requirement based on

Usage numberInventory on handLead time Order size requirements of the vendor

Accurate forecasts depend on having an dependable average sales per day calculation

Forecasting Sales by Item

Using sales history to forecast purchase requirements varies depending on the pattern of salesSelect the appropriate month to use in this calculation based on sales patterns

Steady usage, take 12 months usage Shorter periods for items with changing usageMore volatile items may need to be weighted

Weighting Patterns

Use weighting patterns to select the months to use in calculating average sales

Weighting pattern flag is set in IM, field 126Weighting pattern will default to 12 months sales for any item not setSet weighting pattern for seasonal items or any items with changing sales activity

Setting Weighting Patterns

In IM, enter a ? in the fieldThe system displays all of the patterns you have set up Select the one that is appropriate for the item

For seasonal items Putting the most weight on those months calculates your needs based on those months

For fast changing itemsUse a weighting pattern that would put an emphasis on the most current months

Trending Seasonal Items

We have provided you with a tool for trending your average for seasonal activity

Sales trend is calculated by comparing the last two month sales to the prior two month sales a year agoTrending should be used specifically for seasonal items that do not look at current periods for forecastingThere is default trending flag associated with each weighting patternTrending flags can be overridden and locked by dateIf no trend is used, MMC will calculate automatically

Smoothing

An average calculated from 12 months of sales a few months of unusual sales activity may throw off our averageSystem deals with these by using smoothing

Set smoothing flag (field 128 in IM) to “Y”In calculating the average, the system excludes months with

Sales activity more than 5% higher than the next highest

More than 5% lower than next lowest months

Additional tools for unusual activity

In IM, fields 142 through 154 allow you to manually

Identify months to ignoreFlag a month of unusual usage for identification purposes – not currently used in calculationsEnter an override quantity in a particular month of unusual sales activity Enter override quantities to allow your average to be calculated base on new, higher usage

Useful if you have lost or gained a large piece of business

Demo screen

See how forecasting numbers are generatedAllows instant re-calculation of monthly and Min/Max after you change variablesAllows you to see how changing variables will effect the forecasting of an item

Inventory Control

Archive Purged Purchase ordersProgram QX allows access to purged purchase orders. Run program QF on a regular basis to minimize the amount of detail in cost deviation reports, QT (item on order) etc…

Auto entry of items from Open to BuySelect one item or all items to include in purchase order entry. QM now will also all entry of items from Open to Buy

Inventory Control

Special Order ItemsOpen to BuyProgram IAGE

Provides a report by vendor of all items in stockItems aged 30/60/90/120 days from date of purchasePurchase order numberQuantity purchasedAges the inventory

Additional Reporting

ITER – Turn and Earn reportMeasure the productivity and profitability of your vendors and itemsDetermine a minimum turn and earn ratio

TIP! If an item falls below this level either increase the ratio by increasing the profit margin

or consider making it a special order item

INXS – ITEM EXCESS STOCK REPORTLists items that are over the expected days of turn

Items with available inventory greater than the maximum stocking quantity

Buyer, Vendor All or selected buyers, All or selected vendors

Sorted and totaledBuyerVendorDollar value of overstock

More Management Tools

New Inventory Tools

IUURUnusual usage report

ISURSporadic usage report

VLTA Vendor lead time audit

IMUUMonths with unusual usage report

ISFR – Item Stock For Report

Tracking items stocked for a salesman and customer

In IM, set stocking information in fields 122, 123, 124 and 125Items stocked with quantity, extended value, sales and marginsPrinted by salesman with a new page for each salesmanRun by purchasing and reviewed with the salesperson, and sales management

Prevent new items from becoming dead items

Cost Change Program

Automates the process of vendor price increasesAllows you to set up the increases in advance

New prices will become effective on the date specified

Summary

Inventory and Purchasing Tips/TricksGet the most R.O.I. out of your Stanpak application!

For More Information…

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