Efficiently Maintain the Right Inventory in the Right Place at the Right Time, Increasing Sales, Accomplishing Customer Service Goals, Minimizing Inventory Cost

Fully integrated with FD7 Forecasting and Demand Planning and FD7 S&OP/IBP, FD7 Inventory Planning, optimizes inventory levels and turns forecasts into optimal replenishment schedules, factoring in the on-hand inventory, current shipments and backlog, DRP and derivative demand, the forecast, lot-sizing factors, lead times, and practical factors that planners need to abide as they drive the system.

Accomplishing customer service goals at minimal inventory cost means more sales, higher fill rates, higher customer satisfaction, fewer stock-outs, fewer backorders, less excess inventory, smoother flow of goods, and fewer surprises. 

The two key advantages of FD7 Inventory Planning are that it is driven by the greater forecast accuracy provided by FD7 Forecasting and that it is uniquely efficient and flexible to set up, operate, and maintain. An example of the level efficiency and productivity afforded by FD7 Inventory Planning -- a $300 million chemical industry customer of McConnell Chase needed only one forecast analyst/supply chain planner to operate its supply chain of 3 plants, 8 sub-contracting tollers, 37 distribution centers, and 812 SKUs -- including handling new product introductions, product supersessions, new markets, and changes to the distribution network.

FD7 Inventory Planning is usually implemented as a solution for Service Parts Planning and/or DRP. Like FD7 Forecasting and Demand Planning, FD7 Inventory Planning includes built-in, comprehensive interfacting to ERP data sources.

Implement and Maintain Your Supply Chain Structure and Data with Speed and Efficiency

Defining distribution locations, redistribution locations, plants, vendors, and what customers should be serviced from what distribution locations is all partially automatic and otherwise straightforward with FD7 Inventory Planning. Defining what items are stocked where, where they are sourced from, what their stocking levels, costs, lot sizing variables, and lead times are is also partically automatic and otherwise straightforward. Importing vendor's volume price breaks, linking items to resources for capacity planning, and managing product supersession are each also straightforward operations. In short, a customer's distribution network/supply chain is set up with speed and maintained with efficiency in FD7 Inventory Planning. FD7 handles scale: fourteen different data structures were tested when the FD7 database was developed so that FD7 could scale to handle millions of SKU-Location combinations. In day-to-day operation for customers, FD7 has indeed handled millions of items with excellent processing times.

Optimize Inventory Levels

Inventory levels are optimized by optimizing forecast accuracy and then incorporating this forecast accuracy into safety stock setting, together with lead time and desired service level. The exercise of optimizing inventory in view of cost starts with inventory managers reviewing reports that show the trade off between customer service and inventory cost. Based on this report and competitive requirements for customer service, decisions are made for what customer service to provide for what items by level of importance, such as ABC classification or strategic standing. After deciding on stocking levels for classes of items in view of cost, summary reports are run and reviewed that show total average inventory by volume and cost by location and by other summary criteria. Summary reports that project the timing of inventory in volume and cost by month are also run and reviewed as part of finalizing stocking level decisions.

Efficiently Plan Replenishment of Service Parts and Finished Goods Across The DRP Supply Chain; Efficiently Support Production and Purchasing; Efficiently Plan Capacity for Service and the Distribution System

Daily or weekly replenishment planning begins with an automatic data import and update of the FD7 database from the enterprise system of current quantities-on-hand by location, open orders, shipments, and open or firm-planned re-supply orders. Other data may be imported as well.

Replenishment planning begins at customer-facing locations and procedes backward in the supply chain to source plants and vendors, with each outer node sending its DRP requirements to its sourcing node.

Analysts review by exception, in triage order. In FD7 Inventory Planning the default triage order is stock-outs first, then below-safety-stock situations, then scheduled releases, then excess inventory. Within stock-out exceptions, those with back-orders and where the whole network is stocked out are prioritized first. Inventory analysts can organize their views by DC, ABC, product type, vendor, or any other criteria. Many management reports can be generated as needed.

After replenishment planning, users or managers check projected loads on DRP resource capacities to see if there are overcomittments or underutilizations, and adjust plans as needed.

Provide Reporting to Analysts and Managers

FD7 provides extensive reporting. Some examples:

  • Safety Stock Evaluation
  • Impact on Inventory (of Management Decisions)
  • Projected Supply and Demand (Inventory Volume and Cost Projections)
  • Pareto
  • Purchasing
  • Purchasing, Open to Buy
  • Purchasing Schedule; Purchasing Schedule By Vendor
  • Supplier Schedule


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