ACTIVANT. Prophet 21 ACTIVANT PROPHET 21. New Features Guide Version 11.0 INVENTORY MANAGEMENT NEW FEATURES GUIDE (INV, PUR) Pre-Release Documentation

Transcription

1 ACTIVANT ACTIVANT PROPHET 21 Prophet 21 INVENTORY MANAGEMENT NEW FEATURES GUIDE (INV, PUR) New Features Guide Version 11.0 Version 11.0 Pre-Release Documentation

2 This manual contains reference information about software products from Activant Solutions Inc. The software described in this manual and the manual itself are furnished under the terms and conditions of a license agreement. The software consists of software options that are separately licensed. It is against the law to copy the software on any medium, or to enable any software options, except as specifically permitted under the license agreement. In addition, no part of this manual may be copied or transmitted in any form or by any means without the prior written permission of Activant Solutions Inc. From time to time, Activant makes changes to its software products. Therefore, information in this manual is subject to change, and the illustrations and screens that appear in the manual may differ somewhat from the version of the software provided to you. Created by: Yardley Technical Communication 2006, Activant Solutions Inc. All rights reserved. Activant and the Activant logo are registered trademarks and Activant Prophet 21 is a trademark of Activant Solutions Inc. All other company or product names are the trademarks or registered trademarks of their respective companies. Activant Solutions Inc Southfront Road Livermore, CA Version 11.0 Publication Date: ii

3 Revision History Date: Revision Description: Page: iii

4 Table of Contents WHY THE SPLIT? 6 SUMMARY OF NEW FEATURES 7 INVENTORY 9 Item Master Inquiry Modifications 9 Criteria Tab 9 Cost Tab 10 Substitute Tab 11 Bin Tab 12 Open Orders Tab 12 System Settings 13 Service Level Based Safety Stock 14 System Settings 15 Order Point Calculations in Inventory Management and Purchasing 17 Viewing the Order Point Calculations 23 Purchase Method Review Report 25 Item Service Level Report 25 Pricing Service 25 Fast Edit 25 Provide Flexibility in Assembly Costing 27 Standard Cost or Actual Cost? 27 Rollup Assembly Prices and Costs 29 Advanced Demand Forecasting 31 Setup 33 Use 35 Discontinued Items 49 Item Maintenance 49 Item Fast Edit 50 See All Items in OE Popup 51 Find Item Popup 51 Serial Number Enhancements 53 Use 53 iv

5 Pricing Hierarchy Changes 56 Price Family Import 57 Manufacturing Class Import 57 Modifying Item Maintenance 57 Modifying Item Defaults Maintenance 59 Modifying Item Fast Edit 60 Modifying Item Import 60 Modifying Price Page Maintenance 61 Modifying Sales Pricing Page Fast Edit 62 Modifying Pricing Page Import 62 Modifying Sales Pricing Page Type Search Order Tab 63 Modifying the Sales Pricing Calculation 63 PURCHASING 64 Combining Special and Stock Items on a PO 64 Setting Up This Feature 64 Combining Stock, Non-Stock, and Special Items on a PO 68 Price Break Purchasing Recommendations in PORG 70 Setup 70 Use 72 View Supplier Discount Breaks in Purchasing 76 User Maintenance 76 Purchase Order Entry 77 Purchase Order Requirement Generation 78 Order Entry 79 Inventory Valuation for Special Orders 82 Setup 82 Use 84 Vessel Tracking 89 Setup 89 Use 90 v

6 WHY THE SPLIT? Historically, Prophet 21 s new features were presented in a single document, divided into chapters by module. As the 11.0 New Features Guide continued to grow with additional functionality released in builds following initial release, we decided the guide s size impeded its usefulness. As part of the ongoing initiative of Activant s Technical Communications department to make our documentation more useful to you, we have split the 11.0 New Features Guide into six separate books that divide functionality along general work divisions, thus providing a tighter focus for each manual. The guides and their component modules are: Accounting Accounts Payable, Accounts Receivable, General Ledger Sales Processing Order Processing, Contact Management Inventory Management Inventory, Purchasing Administration System Setup, System Administration, Pricing Service Miscellaneous Production Orders, Secondary Processing, Complementary, Credit Card Setup, EDI, Optional Features, Summary of New Features This is an index book. It lists each feature, and in which book you can find it. 6

7 SUMMARY OF NEW FEATURES This list is organized by module. INVENTORY Item Master Inquiry Modifications (page 9) Item Master Inquiry has received several enhancements across multiple tabs in this release. Because this window is basically a large reporting tool, these enhancements come in the form of additional fields of information. Service Level Based Safety Stock (page 14) - will help you reduce inventory levels while maintaining service levels for items that employ either the Up To or EOQ methods of replenishment. This feature allows you to replace the Prophet 21 system s safety stock days value (an estimated value) with a system-calculated customer service level goal (in terms of a percentage) on an item or supplier level. It appears in the same places, with the same entry, editing, and reporting equivalents. Provide Flexibility in Assembly Costing (page 27) The system s method of costing assemblies has been modified to be more accurate and flexible. Advanced Demand Forecasting (page 31) - a method by which you anticipate your demand for a sale item and model your purchasing appropriately. When forecasting works, it straddles the line between keeping carrying costs low by preventing overbuying while maintaining customer service levels by maintaining sufficient supply to meet customer sales. Discontinued Items (page 49) - allows you to mark an item discontinued. This prevents the item from being backordered or showing up on automatically generated purchasing requirements and purchasing reports while letting you sell out the remaining quantities. See All Items in OE Popup (page 51) - The item popup search windows in Order Entry have been modified such that the window can display all items that exist in the system, even those that are not defined as sellable at the current sales location. This allows you to see all items, reducing the likelihood that you enter a duplicate item when the desired item does not appear on the popup. Serial Number Enhancements (page 53) This feature adds a customer owned status. This status allows you to differentiate between serial numbers that you sell to customers and those you adjust out of your inventory for any other reason. 7

8 PURCHASING Combining Special and Stock Items on a PO (page 64) - enables you to combine special and stock items from a single supplier on the same purchase order in Purchase Order Requirements/Generation. This will help you to meet your supplier minimums and get better freight pricing. Price Break Purchasing Recommendations in PORG (page 70) - allows you to set the application to run an additional calculation when generating suggested purchase quantities in Purchase Order Requirements/Generation. This calculation compares the cost of buying a quantity based solely on your forecasted demand with the cost of buying enough to qualify for the next supplier discount break. View Supplier Discount Breaks in Purchasing (page 76) - provides the ability to see comprehensive purchasing pricing information in several areas of the Prophet 21 system: in Purchase Order Entry, in Purchase Order Requirements Generation, and in Order Entry. Much of the new functionality is accessed via two new Right Mouse Button (RMB) options. Inventory Valuation Option: Specific Purchasing Costing (page 82) - allows you to use specific costing for items with the Special disposition, which sets the PO cost for a special order item as the order cost when the item is received. This lets you calculate the profit percentage for the item based on a specific order rather than the cost basis, which leads to more accurate profit calculations. You can also override this assigned cost on an item-by-item basis. Vessel Tracking (page 89) - expands inventory tracking beyond your warehouse locations. Now, when receiving material from overseas, you can update your purchase order information while the material is in transit, tracking container, updated quantity, and vessel information such as ship name, the date it accepted your cargo, and the date it left port. By receiving stage delivery information, you can adjust your expected delivery dates to be more accurate and better manage your purchasing requirements, and the ship information allows you to see where any delays are for accountability purposes. Combining Special and Stock Items on a PO (page 64) - enables you to combine special, stock, and non-stock items from a single supplier on the same purchase order in Purchase Order Requirements/Generation. This will help you to meet your supplier minimums and get better freight pricing. 8

9 INVENTORY ITEM MASTER INQUIRY MODIFICATIONS The Item Master Inquiry window has received several enhancements across multiple tabs in this release. Because this window is basically a large reporting tool, these enhancements come in the form of additional fields of information. CRITERIA TAB The Criteria tab received the following enhancements: The Criteria tab now includes class information; this includes the five inventory classes and commission class assignments, all of which now appear on this tab. The Extended Description field displays immediately below the Item ID and description. When you make an inquiry from this tab, you no longer have to specify a location; the tab automatically includes all locations within your company. You can select a specific location in the Inventory tab. 9

10 COST TAB The Cost tab is an entirely new tab that displays the historic costs for an item. This cost history begins at the start date you specify on the Criteria Tab. The receipt dates for the item determine what records display. The Cost tab displays the following information: Current moving average cost All open FIFO layers (if the inventory valuation method is FIFO) Standard cost (if the inventory valuation method is standard) Received date. Since this is the receipt date of the PO line, multiple receipts of the same PO line will appear multiple times with different dates. PO number Line number Receipt number Receipt line number Voucher number (if the line was converted to a voucher) Supplier name Unit quantity received Unit of measure Unit price Freight (landed cost per) PR UOM Order date RFQ Complete. This checkbox is checked if the line is fully received, and clear if not. Note: This tab may be altered with DynaChange if you do not want certain people to view information that appears here. 10

11 You can open up drill down windows by clicking on the following fields in this tab. Field: Drill Down Window: PO Number PO Drill Down by PO RFQ Number PO/RFQ Drill Down by PO/RFQ SUBSTITUTE TAB The Substitute tab is unusual in that it received additional functionality instead of information fields in this enhancement. Just as before, the Substitute tab displays a list of item IDs for items that are listed as substitute items for the item entered in the Criteria tab. However, now you can launch an item master inquiry on any of these substitute items just by clicking on them. For example: You look up the item Drill 1 in the Item Master Inquiry window. On the Substitute tab, Drill 2 is listed as a substitute item. You click on Drill 2, and Drill 2 automatically populates the Item ID field in the Criteria tab, and the system runs an inquiry on Drill 2. 11

12 BIN TAB The Bin tab received the following enhancements: Pick lock Put local Full Frozen Primary bin checkbox. This checkbox is checked if the bin is the item s primary bin, and clear if not. OPEN ORDERS TAB The Open Orders tab received the following enhancements: Customer PO number 12

13 SYSTEM SETTINGS The Item Master Inquiry window also has a system setting dedicated just to it. Setting: Days to display in Item Master Inquiry Description: The system subtracts the number entered in this field from the system date. The resulting date becomes the starting date for the Item Master Inquiry window. 13

14 SERVICE LEVEL BASED SAFETY STOCK Service Level Based Safety Stock, a key feature in this release, will help you reduce inventory levels while maintaining service levels for items that employ either the Up To or EOQ methods of replenishment. This feature allows you to replace the Prophet 21 system s safety stock days value (an estimated value) with a system-calculated customer service level goal (in terms of a percentage) on an item or supplier level. It appears in the same places, with the same entry, editing, and reporting equivalents. How does it work? The purpose of safety stock is to protect customer service from unusual customer demand during the lead time or delays in receiving a replenishment shipment. With Service Level Based Safety Stock, you can base the amount of safety stock maintained for each item on the variations in demand and lead time. The greater the variation in demand and/or lead time, the more safety stock will be maintained for the item. This is referred to as the "average deviation method." The New Calculation For Up To and EOQ items configured to use service level based safety stock, the system will use a different calculation for determining their order points. The new calculation is as follows: Order Point =(APU / 30) ((Lead Time * Lead Time Safety Factor) + Review Cycle+ ((1 + (MAPE%/100)) (1.25*Standard Deviation) (Safety Stock Factor))) The bold portion of the equation above uses some abbreviations and terminology that may be unfamiliar to you. The new terms are described below: MAPE% -- or Mean Absolute Percent Error, is the average MAD% for the last completed demand period. The system keeps MAD as a percentage of forecast rather than a number of stock units. For example, an item with a forecast of 50 and a MAD of 4 has a MAPE % of 8% (8% of 50 is equivalent to 4 pieces). Standard Deviation -- An item s demand variability is noted in terms of MAD (Mean Absolute Deviation), which is a statistical method of measuring an averaged amount of variance between forecast demand and actual demand. There is a statistical correlation between the number of MADs of safety stock and the probability of a stock out. There is also a correlation between MADs and the probability of a back order. Essentially, the more an item s actual demand deviates from its forecasted demand, the more safety stock is required in order to maintain the same service level goal. When you enable the Service Level Based Safety Stock feature, you can choose which items in your inventory should use the traditional order point calculation (and use an estimated value for safety stock days), and which should use the new order point calculation, which relies on the statistics and averages described above. What modifications have been made to the system? The Service Level Based Safety Stock feature adds the following to the system: Several new options in the Inventory Management System Settings that allow you to enable and regulate the use of Service Level Goals within the system. Additional fields (Safety Stock In Terms Of, Customer Service Level Measure, and Service Level % Goal) have been added to many of the windows that maintain replenishment data. 14

15 The order point calculation for Up To and EOQ items has been changed for items using service level goals. Right Mouse Button options have been added to the Purchase Order Requirements Generation window to allow users to evaluate the cost of increasing service level goals. The Purchase Method Review Report has been modified to show the new service level information. The Item Service Level Report has been modified to show the new service level information. The new fields related to this feature have been added to the Item Location and Supplier import layouts. Pricing Service will accept the new fields related to this feature, if the system setting for the feature is enabled. The new fields can be edited in Item Fast Edit. Each of these changes is described in detail on the pages that follow. SYSTEM SETTINGS Navigation Path: System Setup > System menu > System Settings > Inventory Management > General Several new options have been added to the General pane in the Inventory Management System Settings. These options allow you to enable and regulate the use of Service Level Goals within the system. When the Service Level Goals feature is enabled, the system will replace the Safety Stock Days fields with Customer Service Level Goals fields in Item Maintenance, Supplier Maintenance, and Purchase Order Requirements Generation. The System Settings you specify determine what service level goals will be accepted in these areas, and what will happen if the goals that are entered that are too high or too low. The sample screen below shows the new options: There are four new fields added to this window for this feature. 15

16 A closer view of the new fields is shown as follows: Each of these fields is described as follows. Field Name: Allow Service Level % Goal for Safety Stock Calculation Field Description: Determines if the system uses a service level goal or a user-defined number of days worth of safety stock in the purchasing calculation for order point. Setting: On Result: The system uses a service level percent goal to determine safety stock. When this option is enabled, several other options become available beneath it: Minimum Service Level % Goal, Maximum Service Level % Goal, and Action When Service Level Goal is Outside Parameters. Off The system uses a user-defined number of days worth of safety stock in the purchasing calculation for inventory order point. Minimum Service Level % Goal Maximum Service Level % Goal Action When Service Level Goal is Outside the Parameters Represents the minimum service level goal that should be used in calculating the safety stock for inventory replenishment. This field defaults to 90%, but any percent value between 80.0 and 99.9 can be specified. The specified Minimum Service Level % Goal must be lesser than the specified Maximum Service Level % Goal. Represents the maximum service level goal that you would like to be used in calculating the safety stock for inventory replenishment. This field defaults to 98%, but any percent value between 80.0 and 99.9 can be specified. The specified Maximum Service Level % Goal must be greater than the specified Minimum Service Level % Goal. Determines the action the system takes when a user attempt to set a service level goal anywhere in the system that is not within the specified minimum and maximum. The action field can be set to Prevent or Warn. Setting: Prevent Result: The system will prevent users from setting a service level goal outside the minimum and maximum range specified in the System Settings. If a user attempts to do so, a message will display to tell the user if the service level goal entered is too high or too low. The user must edit the goal before continuing. Warn The system will warn users if they set a service level goal outside the minimum and maximum range specified in the System Settings. A warning message will display, but users will have t 16

17 ORDER POINT CALCULATIONS IN INVENTORY MANAGEMENT AND PURCHASING When calculating the order point for an item using the Up To or EOQ replenishment methods, the system looks in several places to obtain either the a) Safety Stock number of days or b) the Service Level Goal to calculate Safety Stock. The application begins looking for this information at the most specific level, and will follow the following hierarchy, stopping when a value is found: Item Location Replenishment tab ABC Class Maintenance Form View tab Supplier Maintenance Purchase tab Purchase Order Requirements Generation Calculation Factors tab Several new fields have been added to these windows, as well as some windows that contain default values and those that allow for fast editing of replenishment data. Each of these windows (shown over the next several pages) now shows a Safety Stock In Terms Of field, a Customer Service Level Measure field, and a Service Level % Goal field. The Safety Stock Days field is still shown on the window, but is only accessible with the Safety Stock In Terms Of field is set to Days. Item Maintenance Navigation Path: Inventory > Item Maintenance menu > Replenishment tab The Item Location Replenishment tab has been modified to include the new fields described above: This area of the screen has been modified for this feature. ABC Class Maintenance Navigation Path: Inventory > System menu >ABC Class Maintenance > Form View tab The ABC Class Maintenance window has been modified to include the same fields: 17

18 This area of the screen has been modified for this feature. Supplier Maintenance Navigation Path: Purchasing > Maintenance menu > Supplier Maintenance > Purchase tab The Supplier Maintenance Purchase tab has been modified to include the same fields: This area of the screen has been modified for this feature. Inventory Fast Edit Navigation Path: Inventory > Maintenance menu > Item Fast Edit The Inventory Fast Edit Location tab has been modified to include the same fields: 18

19 Item Defaults Maintenance Navigation Path: Inventory > System menu > Item Defaults Maintenance > Replenishment Info Tab The Item Defaults Maintenance Replenishment Info tab has been modified to include the same fields: This area of the screen has been modified for this feature. 19

20 Purchase Order Requirements/Generation Navigation Path: Purchasing > Transaction menu > PO Requirements/Generation > Factor tab The Purchase Order Requirements/Generation Factor tab has been modified to include the same fields: This area of the screen has been modified for this feature. A close-up view of the new fields is shown as follows: Each of these fields is described as follows: Field Name: Safety Stock In Terms Of Field Description: Determines how the system computes safety stock for the order point calculation. This field is available on a number of screens throughout Inventory Management. When the system calculates an item s order point, it checks the setting of this field on the Item Maintenance Replenishment tab, the ABC Class Maintenance Form View tab, the Supplier Maintenance Purchase tab, and the Purchase Order Requirements Generation Calculation Tab. The application begins looking for this information at the most specific level, and will check the defined hierarchy (Item Location Replenishment tab, ABC Class Maintenance - Form View tab, Supplier Maintenance - Purchase tab, and the Purchase Order Requirements Generation - Factor tab), stopping when a value is found. Setting: Result: 20

21 Service Level % Goal Days By ABC Class, By Supplier, By Run Criteria The system uses the Service Level % Goal specified in the current window during purchase and transfer requirements generation to calculate an item s order point. When you select this setting, the system allows access to the Service Level % Goal field on the current window. The value entered should be within the range specified in the System Settings. The system uses the number of Safety Stock Days specified on the current window during purchase and transfer requirements generation to calculate an item s order point. When you select this setting, the system allows access to the Safety Stock Days field on the current window. As described above, the application uses the following hierarchy to find the Service Level % Goal or Safety Stock Days to use: Item Maintenance Replenishment tab ABC Class Maintenance Form View tab Supplier Maintenance Purchase tab Purchase Order Requirements Generation Factor tab In the Item Replenishment tab, Safety Stock In Terms Of can be set to ABC Class. This tells the system to use the settings on the next level of the hierarchy, ABC Class Maintenance. In the ABC Class Maintenance window, Safety Stock In Terms Of can be set to Supplier. This tells the system to use the settings on the next level of the hierarchy, the Supplier Maintenance Purchase tab. In the Supplier Maintenance Purchase tab, Safety Stock In Terms Of can be set to By Run Criteria. This tells the system to use the settings on the next level of the hierarchy, the Purchase Order Requirements Generation Calculation tab. 21

22 Customer Service Level Measure Determines if service level is set to guard against stock outs or backorders. This field is only available when Safety Stock In Terms Of is set to Service Level. Setting: Stock Outs Result: The Service Level % Goal guards against the stocking out of an item. The Service Level % Goal defines the percentage of the customer order you would like to fill without going into a stock out. Back Orders The Service Level % Goal guards against customer back orders (net stock below zero). The Service Level % Goal defines the percentage of the customer order you would like to fill without back ordering material. Service Level % Goal Defines the percentage of customer order you want to fill without going into a stock out or back order situation. Set higher goals for those items you should never be out of, and lower goals for those items that are rarely ordered or stocked for a single customer. You can use the system's ranking reports (see Inventory Ranking Classification) to help you to establish goals. The Service Level % Goal must be within the limits specified in the Inventory Management System Settings. The goal defaults to 92% or the minimum specified in the System Settings. Tip! Do not confuse the Service Level % Goal set for safety stock purposes with the Service Level % that is a measure of how often the Order Hit Percentage goal was attained. When you choose to use Service Level % Goals, you must also specify a Customer Service Level Measure to protect against stock outs or backorders. See below for examples of how these fields work together to allow for better management of inventory. For information on changing existing service level goals, see Editing the Service Level % Goal. Examples Underwood Inc., a distributor, uses Service Level % Goals to ensure that, as often as is profitable, customer orders are filled directly from inventory. The following describes four items from Underwood's warehouse: Item A100 is set up in the following way: Safety Stock in Terms Of: Service Level Goal Customer Service Level Measure: Stock Out Service Level % Goal: 99.9% What this means: Underwood Inc. prefers to never (e.g., 99.9% of the time) completely deplete the inventory of item A

23 Item B110 is set up in the following way: Safety Stock in Terms Of: Service Level Goal Customer Service Level Measure: Stock Out Service Level % Goal: 90.0% What this means: Underwood Inc. does not want to completely deplete the stock of item B110 on more than 10% of customer orders. Item C500 is set up in the following way: Safety Stock in terms of: Service Level Goal Customer Service Level Measure: Back Order Service Level % Goal: 80% What this means: Underwood Inc. prefers to stock enough inventory to fill 80% of customer orders for item C500. Item D510 is set up in the following way: Safety Stock in terms of: Service Level Goal Customer Service Level Measure: Back Order Service Level % Goal: 99.9% What this means: Underwood Inc. prefers to always (e.g., 99.9% of the time) be able to fill the entire quantity of customer orders without having to place the item on back order. Editing the Service Level % Goal Item Location Maintenance When you edit the Service Level % Goal, the system calculates the new annualized cost of the inventory and compares it to the original annualized cost of inventory. If the new goal results in an increased annual cost, the system displays a message to this effect. You can choose to continue, using the new goal, or cancel and keep the original goal. For example: You change the Service Level % Goal of an item from 97 to 98. As a result, the item s order point increases from 5 to 6. The item costs $10.00 and the cost to carry it is set at.3. The system calculates the new annual cost at $13.00 more than the old annual cost, and displays a message to this effect. You can choose to continue, in which case the system will use the Service Level % Goal of 98, or cancel, and the system will use the Service Level % Goal of 97. Supplier Maintenance and Item Class Maintenance When calculating a goal for a supplier or an item class, the system excludes any items that have a safety stock value set at a higher level of specificity. For example: You change the Service Level % Goal for item class A. Item ABC is in item class A, and has a Safety Stock Days value set at the item-location level. When the system calculates the dollar impact of the edit, item ABC is excluded from the calculations. VIEWING THE ORDER POINT CALCULATIONS Navigation Path: Inventory > Transaction menu > PO Requirements/Generation > Calculation tab The Calculation tab in PO Requirements Generation shows the computations used to determine the recommended purchase quantity for an item. The Service Level Based Safety Stock feature only affects the order point calculation for items governed by the Up To or EOQ replenishment method AND configured to use service level percent goals. 23

24 The new calculation is shown as follows: There are two ways of calculating order point for Up To and EOQ items, using Safety Stock Days or Service Level % Goals. Depending on the configuration of the system, and on the settings in the item and supplier records, the system uses one of the following calculations: Setting: Safety Stock Days Calculation: Order Point = (APU / 30) (Lead Time + Review Cycle +Safety Stock Days) Service Level % Goals Order Point = (APU / 30) ( ( Lead Time * Lead Time Safety Factor) + Review Cycle+ ( ( 1 + (MAPE%/100)) (1.25*Standard Deviation) (Safety Stock Factor))) The calculation used by the system when using Safety Stock Days has not changed and should look familiar to you. The calculation used for Service Level % goals has two new terms, MAPE% and Standard Deviation. MAPE%, or Mean Absolute Percent Error, is the average MAD% for the last completed demand period. The system keeps MAD as a percentage of forecast rather than a number of stock units. For example, an item with a forecast of 50 and a MAD of 4 has a MAPE % of 8% (8% of 50 is equivalent to 4 pieces). The system uses the tables shown here to find a number of standard deviations to use in the order point calculation of Up To and EOQ items where safety stock values are determined by Service Level % Goal. There are two tables: one for use when Customer Service Level Measure is set to Stock Out, and one for use when Customer Service Level Measure is set to Back Order. Values between those shown in the tables are interpolated by the system. When Customer Service Level Measure is Stock Out Service Level % Goal Number of Standard Deviations 24

25 When Customer Service Level Measure is Back Order Service Level % Goal Number of Standard Deviations PURCHASE METHOD REVIEW REPORT The Purchase Method Review Report has been modified to show: 1. Safety Stock In Terms Of 2. Customer Service Level Measure, only if Safety Stock In Terms Of is Service Level % Goal 3. Service Level % Goal, only if Safety Stock In Terms Of is Service Level % Goal 4. Safety Stock Days, only if Safety Stock In Terms Of is Days ITEM SERVICE LEVEL REPORT The Item Service Level Report has been modified to show: 1. Service Level % Goal 2. Customer Service Level Measure 3. The existing Service Level column has been renamed % Hits PRICING SERVICE Pricing Service has been modified to include these three new fields: 1. Safety Stock in Terms of 2. Customer Service Level Measure 3. Service Level % Goal The system will only allow this data to be imported if the System Setting to Allow Service Level % Goal for Safety Stock Calculation is enabled. FAST EDIT Fast Edit has been modified to allow editing of three new fields: 1. Safety Stock in Terms of 2. Customer Service Level Measure 3. Service Level % Goal 25

26 Import Changes See the New Import Changes topic in the online help for more information. 26

27 PROVIDE FLEXIBILITY IN ASSEMBLY COSTING The system s method of costing assemblies has been modified to be more accurate and flexible. This feature combines several modifications that improve the system s functionality: System Setup has several new options to determine the cost the system uses for assemblies, and how prices and costs are rolled up for production assemblies. Costs roll up for production order that contains assemblies and sub-assemblies. You can use standard costs for assembly costing options. Cost updates are provided in Order Entry for assemblies created on the fly, reducing the losses produced by an increase of estimated to actual costs during production. This documentation describes each of these changes in detail on the pages that follow. STANDARD COST OR ACTUAL COST? System Setup Navigation Path: System Setup > System > System Settings> Production Order > General pane Assembly items typically have several costs to account for: the raw item cost, the labor cost, and possibly a processing cost from an outside vendor. You have an option to always use the standard cost or to use the actual cost from the assembly or processing of the item. If you use standard cost, you will not see an increase or a decrease in costs: the standard cost will be an average you define in the Item Maintenance window on the Costs tab. You enter the average in the Standard Cost field. If you use actual cost, the costs may vary with each order processed based on component cost fluctuation. Whichever method you use, you can have the system show the estimated costs based on the routing with raw material, scrap, and process costs and the actual costs depending on what happens during processing. Costs vary from standard for many reasons: a vendor minimum affects your price, raw material costs increase because a PO is late to the vendor, labor costs increase due to employee overtime, higher-than-usual scrap quantities are the result of bad processing. If you are willing to assemble a quantity of the assembly item for stock, you have the option to increase the order quantity to meet vendor minimums. Or you can run off the remaining raw material to ensure the economic processing quantity is met. In this case, costs would be more accurate. If you choose to use the standard cost and there is a variance, the system posts the variance to an assembly variance account. So for example, if you decide to process an item at a different vendor from the one used to define the standard cost and you pay a higher price, the variance is written to the assembly variance account. Note: The Assembly Variance account is defined in Company Maintenance/Production Order tab when the Use Standard Cost for Assemblies is set to Y. 27

28 You determine how the system costs assemblies, using the new option, Use Standard Cost for Assemblies, in System Setup. The new option is shown as follows: A new option determines how costs are calculated for assemblies. The new option is described in the table that follows: Field Name: Use Standard Cost for Assemblies Field Description: The Use Standard Cost for Assemblies setting determines if the system uses the standard cost of the item (from the item record) or the actual cost calculated based on the production processes. This option overrides the system option for Inventory Cost Basis, but only for assembly items. Setting: On Result: System always uses the standard cost, whether the actual cost is higher or lower than the standard cost. The variance between the actual and standard costs is saved to an assembly variance account. Off System always uses the actual cost of the assembly. Note: If the Use Standard Cost for Assemblies option is checked, the system uses the standard cost from the item record if there is a standard cost in the item record. If the assembly item does not have a standard cost, an error message displays. 28

29 Item Maintenance Item Maintenance has a Standard Cost field on the Cost tab, as shown in the sample below: If the Use Standard Cost checkbox is enabled in System Setup, the value in the Item Maintenance Standard Cost field (if there is one) is used. If there is no Standard Cost value here, an error message displays when invoicing an order associated with an assembly. The error message displays in Order Entry when invoicing via OE or Shipping. If the Use Standard Cost checkbox is not enabled in System Setup, the actual cost will be used. ROLLUP ASSEMBLY PRICES AND COSTS System Setup Navigation Path: System Setup > System menu > System Settings > Production Order > General pane The system can be configured so that assembly component prices and assembly component costs are rolled up for the header item. There are two new settings in System Setup that allow you to enable the functionality. One setting is for assembly prices, the other for assembly costs. The new options are shown as follows: New options determine how costs are calculated for assemblies. The new options are described as follows: 29

30 Field Name: Rollup Assembly Prices Field Description: Determines if the system uses a rolled up price for an assembly. A rolled up price is the sum of the prices of all the component items. Assemblies priced by components or by assembly using components will always use rolled up prices regardless of this system setting. This option overrides the price by assembly option and has been implemented so that assemblies created on-the-fly reflect the correct pricing. Setting: On Result: Component prices are summed for the header item for production assemblies. Off Component prices are not rolled up for production assemblies. Note: Assemblies priced by contract are not affected by the setting of Rollup Assembly Prices. Rollup Assembly Costs Determines if the system uses a rolled up cost for the production assembly. A rolled up cost is the sum of the costs of all the component items. If you select the Rollup Assembly Costs option, the system will use the rolled up cost regardless of the pricing method or whether the assembly has been sold. Setting: On Result: Component costs are summed for the header item for production assemblies. Off Component prices are not rolled up for production assemblies. Note: This setting only affects production assemblies where assembly_hdr.process_production_orders = Y. 30

31 ADVANCED DEMAND FORECASTING Demand forecasting is a method by which you anticipate your demand for a sale item and model your purchasing appropriately. Accurate forecasting allows you to straddle the line between keeping carrying costs low by preventing overbuying while maintaining customer service levels by maintaining sufficient supply to meet customer sales. The advanced demand forecasting system uses historical sales data about an item to extrapolate future needs and create appropriate purchasing suggestions. When evaluating an item s history, the system looks at the patterns of use and places it into one of the following categories: Level Demand Demand remains fairly steady from period to period. Trend Demand Demand exhibits a continuing rise or fall. Seasonal Demand Demand shows a seasonal gain in demand. Seasonal Demand with Trend Demand shows seasonal gain, with a trend, rise or fall. Erratic Demand Demand displays intermittent sales followed by inactivity, or spikes in activity with large variability. Important! Because erratic demand often follows no repeatable pattern, it cannot be predicted with as much accuracy as the more cyclical demand patterns. Slow Mover Sales are too low to separate demand from trend or seasonality. The system treats this as a class of level demand. Forecasting takes a relatively long term look at historic demand in order eliminate short term spikes that one or two sales can create for these types of items. Once the system analyzes the item s history and places it in the appropriate category, it uses a series of formulas based on its assigned demand category to determine which formula can best predict future demand. The criteria used to determine the best-fit is the statistical method of measuring the least squares of the errors between forecast demand and actual demand. Using this method, for each given formula, the system looks at how that formula performed in forecasting demand for historic periods. For each measured period, the system takes the square of the difference between predicted demand and actual demand. The best fit formula is the one that produces the lowest sum of the squared differences. The system tracks the success of that demand forecasting, allowing you to see how well the system anticipates the item s demand and make any necessary adjustments. The system maintains these forecasting formulas in an accessible table that you can add to and edit. This enables you to specialize the formulas specialized for your particular businesses. Note: Jon Schreibfeder, a leading inventory management consultant, has a well-written book covering the concept of finding the best-fit formula for an item called Achieving Effective Inventory Management. The best-fit methodology is also referred to as tournament forecasting and focus forecasting. Overview of Item Purchase Methods Order-Up-To A time replenishment method designed to bring an item up to a given level. The formulas react to changes in demand patterns. The calculations are easy to understand, and the supply levels can be used to approximate economic order quantities. The method is good for many items, the exceptions being slow movers and items with erratic demand. 31

32 Economic Order Quantity (EOQ) A time replenishment method designed to maintain item levels at the lowest total cost, balancing cost-to-keep against cost-toorder. The calculations react to changes in demand, but the math can be difficult to understand. The method performs well for many items, except for slow movers, items with erratic demand, and items with a higher than normal risk of obsolescence. To help mitigate the risk of obsolescence, the system provides the ability to set limits by purchase dollar amount and by number of months supply. Min/Max A fixed control replenishment method that uses specified values for the reorder point and the level to bring the supply up to. The supply level can be specified either in exact terms or in multiples of typical units of sale. The method is recommended for items that are slow movers, or have erratic demand, or are new items with no known demand history, or items for which specific customer contracts or commitment levels exist. Order Point/Order Quantity A fixed control replenishment that uses specified values for the order point and the level to bring supply up to. The supply level is specified in terms of an exact purchase quantity, and the system uses whatever multiple of that quantity is required to bring a supply level that passes the order point level. The method is suitable to meet the requirements of vendor minimums or customer commitment levels. As with Min/Max, the method is also suitable for new items, slow movers, and items with erratic demand. 32

33 SETUP Before using advanced demand forecasting, you must prepare the system for this feature as described below: System Settings Navigation Path: Usage System Setup > System menu > System Settings > Inventory Management > Item The Item Usage node in Inventory Management System Settings contains new settings that control how the system uses advanced demand forecasting. This is the on/off switch for the feature These fields become mandatory when you use advanced demand forecasting. Field: Enable Advanced Demand Forecasting Description: When enabled, the system uses weighted average formulas to determine future demand forecast. Otherwise, it uses a straight average. When you enable this setting, the system disregards the Normal/Moderate/Slow fields and instead uses a series of formulas based on an item s sale history to determine future demand. However, the system still uses the velocity level of these fields when calculating ABC class order up to levels, and safety stock factors. Important! Advanced demand forecasting requires you run the Demand Pattern Identification and Best Fit Formula routines (part of Updating Demand Year Maintenance) for your inventory items before it takes effect (see page 45). If you enable this setting but fail to run the routine, the system will continue to use the a straight average when predicting inventory demand, and will continue 33

34 to use that method until you run the routine. Number of Periods to Examine Average Change per Period The number of periods the system examines to determine if an item is a trend item. An item needs to have consecutive change in usage across all these periods to be considered a trend item. This usage change must be in the same direction for all periods. If an item does not experience a percentage change in usage equal to or greater than this amount, the system does not count it toward the number of consecutive periods needed to make the item a trend item. ABC Class Maintenance Navigation Path: Inventory > System menu > ABC Class Maintenance ABC Class Maintenance has some additional fields that establish baselines for the system when it calculates min/max stock levels when using advanced demand forecasting. These fields provide replenishment controls for an entire class of items, while retaining the ability to still use an individual item record to set the controls for a given item or items. Field: Default Max (Erratic Description: Once you establish the default minimum quantity for an ABC class (see page 42), the system multiplies that minimum by the value in this field to 34

35 Items) Default Min (Non- Erratic Items) Default Max (Non- Erratic Items) derive the default maximum quantity. This field supports decimals out to four places. 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. This field supports decimals out to four places. The system multiplies an item s default sales unit by the value in this field to determine the default maximum stock level for an ABC class. This field supports decimals out to four places. USE Once you ve set the system to use advanced demand forecasting, the following functions become available: Demand Pattern Identification Demand Pattern Identification determines the demand category of your inventory items, so that the system can use the proper formula when calculating their future demand. When possible, the system examines an item s history back three years. The system will not recommend or allow you to assign the seasonal to seasonal trend demand categories to items with less than three years of history. Also, the system does not recommend or allow you to assign the slow, erratic, or trend demand categories to items with less than a year of history. When calculating the demand category for an item, the system uses the following process: Step 1: Identification of Slow Movers Using one year s worth of demand, the system first tests the selected items for slow movers. It does this by summing the filtered demand for the last year running, and comparing it to the system setting for moderate velocity items. If the previous year s demand for this item is less than the system setting for moderate velocity items, the system tags the item as a slow mover, and the processing for that item-location is done. Otherwise, the system moves to step 2. Step 2. Identification of Seasonal Items Demand in a given period is composed of trend, seasonal, and random components. To estimate the seasonal indices, the system performs a calculation using the ratio to moving average method to arrive at a value called the seasonal factor. To calculate this, the system first sums the demand for four periods. These four periods don t always coincide with fiscal quarters, as they represent seasons. This is called the centered four quarter moving average. Then the system then takes each of the four periods in the season and one by one divides their demand by the centered four quarter moving average. The resulting value is the seasonal factor. The system treats as seasonal any item that has a seasonal factor of 1.35 in the same quarter for consecutive years. Step 3: Identification of Erratic Items Once the system identifies which items are slow, it further refines its search and determines which of the slow items are actually erratic. It applies the following criteria to all items tagged slow: 50% or more of the periods within each quarter have no demand Demand filters were tripped in two or more periods within the past year 35

36 If either of these conditions test true, the system labels the item erratic. Step 4: Identification of Seasonal/Trend or Trend Items If the system does not label an item slow or erratic, it suggests the trend category if the average change up or down is greater than the trend target percent over the target number of periods. An item can be both seasonal and trend. Step 5: Identification of Level Demand Items If the system has not yet applied a label to the item by this stage in the analysis, it suggests the level category. Step 6: 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. See page 38 for more information. Note: Activant recommends you run Demand Pattern Identification for all your items at least every two years in order to account for any changes in sales activity that might change the item s demand category. Demand Pattern Identification is an option in the Inventory Transaction menu. It has the tabs Query, Form View, and Demand Pattern Identification. Form View Tab The Form View tab in Demand Pattern Identification is effectively a criteria tab for selecting which inventory items the system should analyze and make suggestions for a demand category. Field: Demand Identification Criteria Company ID Location ID Item ID Description: You can save the criteria you enter in this tab, allowing you to recall them and use them again later instead of re-entering them manually every time you want to use them. When you save these criteria, the system assigns the criteria an ID number, which appears in this field. The company for which you want to run the inventory analysis. The range of locations for which you want to run the inventory analysis. The range of items for which you want to run the inventory analysis. 36

37 Product Group Supplier ABC Class Current Demand Pattern Last Evaluation Date Warn if Trend Exceeds % The range of product groups for which you want to run the inventory analysis. The range of suppliers for which you want to run the inventory analysis. The range of ABC classes for which you want to run the inventory analysis. There is one checkbox in this area for each demand category the system uses in advanced demand forecasting. The system will only return items that meet the system criteria for the categories you check here. The system only evaluates items that were last evaluated on this date or earlier. If the item s trend exceeds the percent value entered in this field, the system marks it as a trend exception in the Demand Pattern Identification tab. In short, you can use this setting to flag exceptional demand that should be investigated. Once you enter the criteria in this tab, click the Apply Query button to process your inventory. The system combs through the inventory records as defined by your criteria and displays the results, along with its recommendations, in the Demand Pattern Identification tab. Demand Pattern Identification Tab Once you run a set of demand pattern identification criteria, the system displays all results in this tab. Results appear in alphanumeric order by item ID, grouped together by location ID. Each item appears in its own row, which displays the following information: Item ID Item Description Current Demand Pattern Suggested Demand Pattern Trend Exception the system checks this checkbox if the item s trend percentage is higher than the value entered in the Warn if Trend Exceeds % field in the Form View tab. New Demand Pattern enter the trend category you want to assign this item here. You may not set an item to seasonal or seasonal/trend for an item unless you ve had it in stock for more than a year. Select the New Demand Pattern field only becomes active if you enable this checkbox. 37

38 Item Maintenance The Replenishment tab in Item Maintenance contains a new section dealing with demand. Field: Advanced Demand Forecasting Description: This drop down menu determines how the system assigns a demand category to the item. Setting: Type Description: The item is assigned a demand category based on either the demand pattern identification algorithm, or manual designation. Choosing this setting activates the Demand Pattern field, which defaults to the demand pattern identified by the demand pattern identification algorithm (or Level, if you haven t run the algorithm for this item). Behaves Like The item is assigned the same demand pattern as another item. This might be a different item at the same location, the same item at a different location, or a different item at a different location. Whatever you select, it should be an item/location combination that you expect has the same demand pattern as this item. This setting is helpful for a new item that has no history, but that you expect to track like the demand pattern of a known item. Choosing this setting activates the Location ID and Item ID fields, which become mandatory. 38

39 Demand Pattern Location ID Item ID Behaves Like Lock Lock Period/Year If you set the Advanced Demand Forecasting field to Type, this field becomes active. This drop down menu contains the different types of demand patterns available in the system, and defaults to the one the system deemed the best fit after running the demand pattern identification algorithm, or Level, if you haven t run the algorithm for this item. Though the system defaults a value in this field, you are free to change the suggested demand pattern anytime you like. The demand pattern selected in this field is the one the system uses for anticipating demand and making purchasing recommendations. This field becomes active when you set the Advanced Demand Forecasting field to Behaves Like. Behaves Like tells the system that the demand pattern of one item is close to the demand pattern of the item you entered in Item Maintenance, and that it should use the same demand forecasting method. Location ID is the location that holds that the item the system should look to for demand forecasting information. This field becomes active when you set the Advanced Demand Forecasting field to Behaves Like. Behaves Like tells the system that the demand pattern of one item is close to the demand pattern of the item you entered in Item Maintenance, and that it should use the same demand forecasting method. Item ID is the item the system should look to for demand forecasting information. The item entered here must have its Advanced Demand Forecasting field set to Type; you cannot set an item to behave like an item set to Behaves Like. This checkbox becomes active when you set the Advanced Demand Forecasting field to Behaves Like. When you activate it, you can set a period and year as the last one on which the item will behave like another item. This is useful for new items that don t have enough sales history to make an accurate demand forecast assessment. You can instead make them behave like another, similar item for a time while you accumulate sales history, and then run the demand pattern identification algorithm to generate a demand pattern specifically for that item. These fields become active when you enable the Behaves Like Lock. On the period and year entered here, the item s Advanced Demand Forecasting setting automatically changes from Behaves Like to Type, meaning it no longer mimics another item in determining its demand pattern. Important! The system requires a year s worth of inventory history to accurately determine an item s demand pattern. When you enter a period and year in this field, make sure you allow enough periods to allow the system to collect at least a year s worth of data. You may decide to set a usage lock for 6 months, and then a Behaves Like lock for the next 6 months. 39

40 Min/Max Selection The Min/Max Selection window allows you to search through your inventory for items that meet your specific criteria and adjust their min/max order quantities. You can pull up item records for items that use other replenishment quantities than min/max using this window, and you can change an item s replenishment method to min/max right from here as well. Min/max is an especially good replenishment method for items with either an erratic or slow demand pattern, and since this window allows you to search for items according to demand pattern, it makes it easy to set erratic items to min/max. With erratic demand in mind, the system allows you to determine if you account for large transactions or not. Your options allow you per item to set the min to be: Note: OR Number of transaction per period (the normal transaction size). High order quantity + (number of transactions per period X normal transaction size). Setting an item s replenishment method has ramifications that echo through your business, affecting your available quantities, your carrying cost, and a host of other important areas. You ll note that there is no option in this window to select all. That is deliberate. You should carefully consider the replenishment method of each item individually. For example, you re evaluating the performance of an erratic item over several periods. When you do sell it, it tends to be in groups of 5, occasionally spiking a high as 10, but because the demand is erratic the straight average is 3. If you went with the straight average for an item such as this, you wouldn t have enough on hand stock to fill even your normal small orders. Thus you can use this window to set your minimum quantity to 5, and cover the normal order quantity when orders come in, or you can set it higher to account for the occasional spikes in demand. Min/Max Selection is an option on the Inventory Transaction menu that only appears if you enable the Enable Advanced Demand Forecasting system setting. It contains the tabs Query, Criteria Form View, and Min/Max Selection. Criteria Form View Tab The Criteria Form View tab is where you set the parameters the system uses to retrieve item records for your review. 40

41 Field: Min/Max Selection Criteria Company ID Location ID Item ID Product Group Supplier ABC Class Demand Pattern Current Replenishment Method Description: You can save the criteria you enter in this tab, allowing you to recall them and use them again later instead of re-entering them manually every time you want to use them. When you save these criteria, the system assigns the criteria an ID number, which appears in this field. The company for which you want to run the analysis. The range of locations for which you want to run the analysis. The range of items for which you want to run the analysis. The range of product groups for which you want to run the analysis. The range of suppliers for which you want to run the analysis. The range of ABC classes for which you want to run the analysis. There is one checkbox in this area for each demand category the system uses in advanced demand forecasting. The system will only return items that use the demand patterns you check here. There is one checkbox in this area for each replenishment method the system uses. The system will only return items that use the methods you check here. Once you enter the criteria in this tab, click the Apply Query button to process your inventory. The system combs through the inventory records as defined by your criteria and displays the results in the Min/Max Selection tab. Min/Max Selection The Min/Max Selection tab displays all the item records that matched the criteria you entered in the Criteria Form View tab. Each item displays on its own line. These lines are organized first by location, then alphanumerically by item ID within each location. The item lines display the following information: Item ID Item Description ABC Class Product Group 41

42 Demand Pattern Demand Filter Tripped checked only if the item s demand filter tripped twice in the past year. Current Replenishment Method Set to Min/Max Current Minimum New Minimum Current Maximum New Maximum If you open the RMB menu on the New Minimum field, the system presents you with certain options, depending on if the item is marked erratic. For erratic items, the RMB menu gives you the option Account for high transaction. If you set this to no, the system multiplies the average number of transactions per period by the most commonly occurring transaction size over the course of the last year. It then places that value in the field. If there is not a year s worth of data, the system uses the data it has. When calculating the average number of transactions per period, the system only looks at periods in which there were transactions. If you set this to yes, the system multiplies the average number of transactions per period by the most commonly occurring transaction size, and adds the highest transaction size to that product. Again, the system only uses periods in which transactions occurred to determine average transactions per period. Whenever you adjust the New Minimum field, the system uses the multiplier specified in the Form View tab in ABC Class Maintenance to update the New Maximum field. For non-erratic items, the system offers you the RMB option Suggest. If you select this option, the system multiplies the default purchase unit size by the values specified in the Form View tab in ABC Class Maintenance (see page 34). It calculates both the minimum and maximum quantities using this method and populates both fields. Forecast Formula Maintenance Forecast Formula Maintenance is where you can fine-tune the forecast formulas used to anticipate item demand based on sales history. All formulas in this window use weighted average formulas, allowing you to place weight on different demand periods depending on the type of item. Using this window, you can adjust the weight each period in a year has for each formula, though each formula must contain at least three weighted periods to ensure a reasonable forecast. The number of total weights available for a given formula is 10 times the number of periods in the averaging. For example, if there are six periods averaged in the formula, the total weight must be 60. If there are nine periods averaged in the formula, the total weight must be 90. The formula calculates the forecast by multiplying each period by its respective weighting, then dividing by the total number of weights. Where applicable, the system applies trend or seasonal factors. 42

43 The default weights for the different demand patterns are: Normal Velocity Period 1 Period 2 Period 3 Period 4 Period 5 Period Moderate Velocity Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period Slow Velocity Period Period Period Period Period Period Period Period Period Period Period Period Note: Seasonal Items Since slow items sell infrequently, weighting the periods unevenly would cause distortions. Period 1 Period 2 Period 3 Period 4 Period Trend For level or seasonal items that exhibit a trend, the forecasting calculations apply a trend factor. For level items, the system takes the average percentage change over the last n periods (the number of periods specified in the System Settings for Trend Options, shown on page 34) and adds in that percentage of the forecast to the forecast. For example, if a formula gives a forecast of 100, and the trend for the number of periods is 20%, then the system adjust the forecast to 120. For seasonal items, the system uses a similar calculations, except that it takes the percentage change from the upcoming periods starting from a year ago, and compares it to the same periods from two years ago, in order to reflect the trend for the upcoming season. 43

44 Erratic Demand For items with erratic demand, the system captures the number of transactions per period, the normal transaction size, and the highest transaction size. In calculating the number of transactions per period, the system ignores any period in which there are no transactions. Forecast Formula Maintenance is an option in the Inventory System Menu. It contains the tabs Normal Velocity, Moderate Velocity, Slow Velocity, and Seasonal Items. Formula Tabs All four tabs in the Forecast Formula Maintenance window are exactly the same, except that they apply to a different demand category of item. All of them show the weights given to periods in the formulas used for forecasting demand. While you cannot alter existing formulas in the system, using the RMB menu you can insert new rows in order to create your own formulas. When doing this, the system checks your entered figures to make sure the period weights equal 10 times the number of periods in the averaging. If you attempt to click off a row that does not match this value, the system gives you a warning message. However, you do not need to use all 12 periods in your formula. You may not enter the same period on multiple lines within the same tab, but you may use the same formula across multiple tabs. Setting the Row Status menu to Delete causes the system to delete the formula the next time it attempts to find a formula to fit an item. You can delete most of the canned formulas that come with the system, but you cannot delete the last ditch formula that evenly weighs all periods. The order in which the formulas appear does factor into the system s calculations. If two different lines both fit an item equally well, the system uses whichever line is higher in the list. 44

45 Demand Year Maintenance The Demand Year Form View tab in Demand Year Maintenance contains several new settings that allow the system to monitor the accuracy of the forecasting system, suggest the best fit forecasting formula for each item/location combination, and apply seasonal and trend factors to forecasts. These areas come into use when you enable advanced demand forecasting. Field: Update Demand Pattern Description: When selected, the system evaluates each item/location combination to determine which demand pattern is most appropriate. If you run multiple processes regarding demand, the system performs this evaluation first, so that it has a recent and accurate pattern assignment before assigning formulas and calculating demand. Find Best Fit Formula When selected, the system evaluates each item/location combination to determine which forecasting formula is the best predictor of this item s use at the particular location. This evaluation follows these steps: The system looks at a set of historic periods. For each period, the system compares the forecast that a formula would yield and compares it to the actual demand. The system takes the difference between forecast and actual (i.e. the error), and squares that difference. It accumulates this result for each period in the historic set. The system repeats this process for each formula listed for the item s demand pattern. It compares the results to determine which forecasting formula has the least divergence from actual demand. That formula is deemed to be the most accurate. Until the next time you run this routine, the system uses this formula 45

46 calculate the forecast usage. If you update the forecast and run this routine, the system finds the best fit formula first, so that it uses the most up to date formula to create the forecast. If you update the demand forecast for multiple or historical periods, and also run the Find Best Fit Formula routine, the system uses the most appropriate formula for each period and stores the most recent. For example, if you update the demand forecast for February and April in the middle of October, the system finds the best fit formula for February, adjusts the demand forecast using that formula, then finds the best fit formula for April and updates that month s formula, which might be different from the one used in February. It then stores the formula for April as the best fit formula until the find best fit formula routine is run again. Forecast Accuracy Test Update Forecast This is a measure of how accurately the forecast meets with actual demand, using the most recent six months of sales data. If the number is positive, it means that demand is exceeding your supply. If the number is negative, it means that supply is exceeding your demand. In either case, a value of.7 or greater suggests that demand is statistically outside acceptable forecast parameters, and should be examined for external factors. Enabling this checkbox causes the system to recalculate the demand forecast for the periods you specified. If this item is set to behave like, the system instead uses the demand pattern and assigned formula to calculate demand. When the system is deciding what formula to use, it will use the formula which had the lowest total error, using the least squares measuring method (described on page 31), for the last number of periods specified in system setting for that velocity level. An example is shown below: Number of consecutive historical periods to examine the formula for, from System Settings = 3 Weight for 1 ago 2 ago 3 ago 4 ago 5 ago 6 ago Formula Formula Period Actual Usage Formula 1 Forcast for this period Formula 2 Forcast for this period Formula 1 Error (abs) Formula 2 Error (abs) Formula 1 Error Squared Formula 2 Error Squared Current ago ago

47 3 ago Total error for last three periods 4 ago 7 5 ago 10 6 ago 22 7 ago 13 8 ago 19 9 ago 7 Item History The Usage tab in Item History contains additional fields that contain information on advanced demand forecasting. These fields are all information only; you cannot edit any of them. Field: Advanced Demand Forecasting Demand Pattern Location ID Item ID Description: Shows if the item has been assigned a type of demand pattern, or set to behave like another inventory item. If the item has been assigned a demand pattern, that pattern appears here. If the item has been set to behave like another item, the location of that second item appears here. If the item has been set to behave like another item, that second item appears here. 47

48 Usage Graph The Usage Graph tab provides a graph that tracks three different pieces of information: The red line shows actual historical item usage The blue line shows the predicted item usage of the last formula assigned to the item The green line shows the predicted item usage of the newest (current) formula assigned to the item. Note: The formula represented by the green line wasn t the one necessarily used in the historical periods shown on the tab. Instead, this graph shows how accurately the current formula would have predicted historical demand, even though it wasn t the one used for those periods. 48

49 DISCONTINUED ITEMS Prophet 21 allows you to mark an item discontinued. This prevents the item from being backordered or showing up on automatically generated purchasing requirements and purchasing reports while letting you sell out the remaining quantities. ITEM MAINTENANCE The option to discontinue an item is located in Item Maintenance. In addition to toggling the status of an item, additional options allow you to fine tune the order dispositions allowed for the item once it has been discontinued. Location List Tab Because you can discontinue an item on a location-by-location basis, the Discontinued setting is located in the Location List tab. Discontinued activating the Discontinued checkbox allows you to continue selling the item, but prevents it from ever being backordered or appearing on purchasing requirements. Enabling this setting only discontinues the item at the specific location. To discontinue an item across your entire company, you must enable this checkbox for all company locations. You may not discontinue an item at any location that has an existing backorder quantity or a scheduled release for the item. Note: You may still purchase discontinued items, but you must enter the purchase order manually. When you create the PO, the system will notify you that the item has been discontinued and ask you to confirm you wish to proceed. This is also true of manually entered transfer requests. You may, however, receive discontinued items through RMAs normally and return them to stock. Activating this setting discontinues the item at this location only. 49

50 Location Detail Tab The Location Detail tab has a pair of additional options that become available once you discontinue a sellable item. These options become available when you discontinue a sellable item and allow you to fine tune the available dispositions for these items. Allow Direct Ship Once Discontinued when enabled, you may assign discontinued items the disposition of D. Without enabling this setting, the D disposition is unavailable for discontinued items. Allow Special Order Once Discontinued - when enabled, you may assign discontinued items the disposition of S. Without enabling this setting, the S disposition is unavailable for discontinued items. Note: ITEM FAST EDIT In order for these options to be available, you must enable the Buy, Sellable, and Discontinue settings in the Location List tab. The Item Fast Edit window includes all three new discontinued settings, allowing you to make these adjustments across a large swath of items at one time if you wish. 50

51 SEE ALL ITEMS IN OE POPUP The item popup search windows in Order Entry have been modified such that the window can display all items that exist in the system, even those that are not defined as sellable at the current sales location. This allows you to see all items, reducing the likelihood that you enter a duplicate item when the desired item does not appear on the popup. The following changes have been made to provide this new functionality: A new checkbox option determines whether non-sellable items are shown on the item popup. A new column, Sell, has been added to the item data on the popup window. The Sell column indicates if the items on the popup are sellable or non-sellable. A non-sellable item selected from the popup or entered via the keyboard can be easily added to the sales location and marked as sellable. This functionality is available for line items, assembly components, and lot bill components. FIND ITEM POPUP Two modifications have been made to item popups in the Order Entry windows. A new checkbox, Show Non-Sellable Items, has been added to the header portion of the popup window. A new column, Sell, has been added to the item data display. A sample window is shown below: The Sell column shows whether items are sellable (Y) or non-sellable (N) in the current location. Show Non-Sellable Items is a new checkbox. Show Non-Sellable Items determines whether the popup data shows non-sellable items. The setting of the Item Type Dropdown also affects which items are shown. Setting: On Description: The system will include non-sellable items in the item list. If the item type dropdown is set to: Stock Items Stockable items at the source location display. Non-Stock items, or items not defined at the source location do not display. Non-Stock Items Non-stock items at the source location display. Stockable items, or items not defined at the source location do not display. 51

52 Temporary Items Temporary items defined at the source location display. Temporary items that are not defined at the source location will not display. All Items all items defined in the system display. This allows you to see items defined in all locations. Stock/Non-Stock Stockable and non-stock items at the source location display. Items that are not defined at the source location do not display. Off The system will not include non-sellable items in the item list. An item must be defined and sellable at the sales location and defined at the source location to be included on the popup. Sell indicates if the item is sellable at the sales location. Setting: Description: Y The item is sellable at your location (the sales location). N The item is not sellable at your location (the sales location). Note: If you select an item from a popup or browse that is not sellable at your location, the system displays a message prompting you to make the item sellable for your location. Click Yes to make the item sellable and to add it to the order. Click No to leave the item record as is. You will be returned to the Item ID prompt. The item will not be added to the order. * The item is not defined for your location (the sales location). 52

53 SERIAL NUMBER ENHANCEMENTS USE Note: Portions of this feature reference service orders. While portions of this feature integrate with service order functionality, you to not need to enable service order functionality to use this feature. Serial numbers can now receive a customer owned status when you ship or manually assign them to a customer. The status customer owned allows you to differentiate between serial numbers that you sell to customers and those you adjust out of your inventory for any other reason. This also allows you to track serial numbers in greater detail by extending the audit trail further, associating a particular serial number with the customer who purchases it. Finally, this enhancement allows you to create serial numbers on the fly in Service Order Entry, immediately associating the new number with the customer that owns it. You do not need to modify your system s setting or activate any options to engage this feature; it is available automatically without any changes required. The out of stock status remains reserved for serial number transactions that involve inventory adjustments. However, the system automatically assigns a serial number the customer owned status whenever you ship a serialized item to a customer. Upon doing so, the system also links that serial number to the customer record listed on the sales order, allowing you to search for serial numbers using customer IDs as a filter. This additional level of tracking also allows for greater precision in certain transactions, such as RMAs and service orders. Important! Item Maintenance When you first implement this feature, the system runs a one-time script that analyzes all the serial numbers currently in your database. This script determines if a serial number is currently in stock, or if it has shipped to a customer. If it s in stock, the script leaves the serial number unaltered. If it shipped to a customer, the script automatically updates the serial number s status to customer owned and links it to the customer ID on the sales order. The Track Serial Numbers checkbox has changed to a drop down menu. Track Serial Numbers determines under what conditions the item tracks serial numbers. 53

54 Setting: Yes No Service Only Description: The item tracks serial numbers, meaning you must note the serial number of each item of this type whenever you perform an action that adjusts the on hand or allocated quantities. The item does not track serial numbers for any type of transaction. The item does not track inbound or outbound serial numbers (i.e. for purchase order receipts and sales orders), but does track serial numbers for service orders. This means the system notes the item s serial number at service order entry, and builds a service history record against that serial number. Serial Adjustments The Serials tab in Serial Adjustments includes a field that shows the status of all serial numbers that appear on this tab. In addition, the tab also displays the customer ID and name associated with all customer owned serial numbers. When the serial number status is set to Customer Owned, both the Current Status and Customer ID fields become editable. If Service and Maintenance is enabled and you edit the customer ID associated with a customer owned serial number and the item has an active warranty, the system provides a popup window that gives you the following options: Setting: Transfer to [customer name] and cancel warranties Description: The system transfers ownership of the serial number to the new customer, but cancels all existing warranties for that item. Transfer to [customer name] and honor warranties The system transfers ownership of the serial number to the new customer and maintains all existing warranties for that item. Serial Number Utility Maintenance Serial Number Utility Maintenance allows you to change the serial number identified on specific transactions. If a customer owned serial number from a transaction, the system changes its status to in stock. If you adjust a serial number on a transaction, the system assigns the new number the customer owned status and links it to the customer record on the transaction. 54

55 RMA Entry and RMA Receipts When you search for a serial number in these two windows, the search window allows you to limit the returned results to those serial numbers specifically tied to the customer on the RMA. When you enable the Show Serial Numbers Owned by Customers Only checkbox, the system filters the returned results to only include customer owned serial numbers linked to the customer on the RMA. Even if you enable this checkbox, you are free to enter a serial number that does not appear in the returned results, or to enter one on the fly. RMA Receipts and Inventory Adjustments If you enter a customer owned serial number while making an inventory adjustment, the system asks for confirmation that this is the correct serial number. If you confirm that the serial number is correct, the system breaks the link between serial number and customer, and adjusts the serial number s status to in stock. On the other hand, since customer owned serial numbers do not count toward your available inventory, you cannot adjust them out of stock; they are already out of stock. You cannot make an inventory adjustment or receive a serialized, customer owned item as part of an RMA receipt if the item is part of an open transaction, such as a service order or RMA. You must first complete and close the transaction. Inventory Drill Down by Serial Number The system displays the customer ID and name for any customer owned serial numbers that appears in the Inventory Drill Down by Serial Number window. 55

56 PRICING HIERARCHY CHANGES To provide more advanced pricing level control, negotiated pricing, and finer resolution in POS classification, the manufacturer Rockwell Automation has decided to add an additional pricing group level to the information sent to their distributors. Their pricing updates will use this new pricing level within the pricing update that is sent to their distributors in August With this version of Prophet 21, you can utilize this new pricing group level, which is similar to a new discount group level, and accurately reflect sales pricing requirements. The new level is entitled Price Family and has been added to the item and item default areas. The system also provides additional functionality within the price page to handle this new level. Associated imports and fast edits have been changed to support the new modifications. Price Family Maintenance Navigation Path: Inventory > System menu > Price Family Maintenance The Price Family Maintenance section of Prophet 21 was created to define the new price family groups that make up the new grouping level of Rockwell Automation s pricing updates. These pricing families are very similar to discount groups, giving you another level on which to fine tune your customer/item pricing. When you select the Price Family Maintenance option, the following window appears: The following fields make up the Price Family Form View tab: Field Name: Price Family ID Price Family Description Status Description: A user-defined code that identifies the price family grouping by an ID code. Explains the price family ID in more detail. Indicates whether this price family group is active or inactive. Setting: Active Result: This record is available to choose from searches and can be used in applicable areas of the system. Inactive This record does not appear in searches but can be accessed through maintenance windows. You normally cannot choose this group for assigning to items. 56

57 The Query tab consists of the following fields: Price Family ID, Price Family Description, Status, Date Created, Created By, Date Last Modified, and Last Maintained By. For more information on using this tab, refer to the Query Tab topic in the online help. PRICE FAMILY IMPORT Navigation Path: Imports/Exports > Import menu > Inventory option > Price Family You can import Price Family records into the Prophet 21 system. For more information on this process, refer to the Import Price Families topic in the online help. MANUFACTURING CLASS IMPORT Navigation Path: Imports/Exports > Import menu > Inventory option > Manufacturing Class Importing Manufacturing Class records into the system can now be accomplished. For more information on this process, refer to the Import Manufacturing Classes topic in the online help. MODIFYING ITEM MAINTENANCE Navigation Path: Inventory > Maintenance menu > Item Maintenance You now see two new price family fields in the Item Maintenance section of the system: The Default Price Family ID field on the General tab The Price Family ID field on the Location Detail tab 57

58 By using the new price family ID fields on the Item record, you can assign another pricing group layer, similar to adding another discount group category, to an item for further fine tuning your pricing of items to customers. Default Price Family ID Field You can enter a Default Price Family ID for an item on the General tab in Item Maintenance. This value is then used to populate the Price Family ID field on the Location Detail tab. All locations for this item would then be assigned this price family ID. If you edit the Default Price Family ID field, you are prompted if you want to change the price family ID for the locations: Field Name: Do you want to change the Price Family ID for the location records? Description: Determines whether a new default price family ID value should also become the price family value for your locations. Setting: Yes Result: The Default Price Family ID field is updated to all Location Detail tabs. No The Default Price Family ID field is updated on the General tab, but not on the Location Detail tabs. Note: When creating items on the fly, enter the default price family value into the Price Family ID field of the item record. However, if you create an item in Item Maintenance, the Default Price Family ID field is not populated with the price family ID value found in Item Defaults Maintenance. For more information on the new Price Family ID field found in Item Defaults Maintenance, refer to the following section, Modifying Item Defaults Maintenance. Price Family ID Field You can override the value of the Price Family ID field on the Location Detail tab for your individual locations. 58

59 MODIFYING ITEM DEFAULTS MAINTENANCE Navigation Path: Inventory > System menu > Item Defaults Maintenance You can access the new Price Family ID field on the General tab of the Item Defaults Maintenance window: The system assigns this price family ID value to the on the fly items created in Order Entry. 59

60 MODIFYING ITEM FAST EDIT Navigation Path: Inventory > Maintenance menu > Item Fast Edit The Price Family field has been added to Item Fast Edit. These new fields are now displayed on the Query tab: Field Name: Price Family Description: Enter a price family ID to search for all Item records that have this value. Leaving this field blank allows the system to search for results that are not limited to one Price Family value. Price Family Description Location Price Family Location Price Family Description Entering a value allows the system to search only for results for this specific price family description; leaving the field blank permits the system to search for results not limited to any price family description. You can either enter a specific value to return records only with this location price family ID, or leave the field blank to return records not limited to any one location price family. Submit a specific price family description to fast edit the Item records assigned this description Leaving this field blank allows the system to search for results that are not limited to one location price family value. MODIFYING ITEM IMPORT Navigation Path: Imports/Exports > Import menu > Inventory option > Item The Item Master Import and the Item Location Import files have been modified to hold the new fields for Price Family ID. For more information on the changes to these import files, refer to the New Item Import Changes topic in the online help. 60

61 MODIFYING PRICE PAGE MAINTENANCE Navigation Path: Order Processing > Maintenance > Sales Pricing Maintenance then select the text Price Pages in the left pane of the Sales Pricing Maintenance window. Next, select the New Page button, or if you are searching for a page, highlight it, and select the New Page or Edit Page button. The system now offers two new values, Price Family and Supplier/Price Family, for the Price Type field in Price Page Maintenance. When you choose Price Family as a value for the Price Type field, a searchable Price Family ID field is displayed at the bottom of the window. 61

62 When you select Supplier/Price Family as the value, both a Supplier field and a Price Family field appear at the bottom of the window. MODIFYING SALES PRICING PAGE FAST EDIT Navigation Path: Order Processing > Maintenance menu > Sales Pricing Page Fast Edit In Sales Pricing Page Maintenance, you can access the Price Family field in the Sales Pricing Page Fast Edit function. The values of Price Family and Supplier/Price Family have been added to the drop down menu of the Price Type field. MODIFYING PRICING PAGE IMPORT Navigation Path: Imports/Exports > Import menu > Order Processing option > Price Page The Price Family field has been added to the Pricing Page Master Import file, as well as the new values of Price Family and Supplier/Price Family for the Price Type List field. For more information on the changes to this import file, refer to the New Import Changes topic in the online help. 62

63 MODIFYING SALES PRICING PAGE TYPE SEARCH ORDER TAB Navigation Path: System Setup > System menu > Company Maintenance option > Sales Pricing Page Type Search Order Tab You can set the Price Type to the two additional values of Price Family and Supplier/Price Family in the Sales Pricing Page Type Search Order Tab of Company Maintenance. The Price Type field is followed by a Used in Pricing checkbox. Field Name: Used in Pricing Checkbox Description: When this checkbox is checked, the Price Type value appears in the page type drop-down menu in Sales Pricing Maintenance when you create a sales pricing page. MODIFYING THE SALES PRICING CALCULATION The addition of the Price Family price type has caused some changes to the Sales Pricing calculations. The pricing functionality is similar to the functionality that exists for Discount Group; it merely adds another level of discount to the calculation. All other functionality related to Sales Pricing calculations remains the same. 63

64 PURCHASING COMBINING SPECIAL AND STOCK ITEMS ON A PO This feature enables you to combine special and stock items from a single supplier on the same purchase order in Purchase Order Requirements/Generation. This will help you to meet your supplier minimums and get better freight pricing. SETTING UP THIS FEATURE Before you can combine special, stock, and non-stock items on a PO, you must: Enable the correct setting in System Settings Set up the desired suppliers in Supplier Maintenance Set up supplier/location combinations in Location/ Supplier Maintenance (optional) Enabling the Feature at the System Level In the General node of Purchasing in System Settings, check the Combine Stock, Non-Stock, and Special per Supplier checkbox to enable this feature. 64

65 Navigation Path: System Setup > System menu > System Settings Put a checkmark in the Combine Stock, Non-Stock, and Special per Supplier checkbox to enable this feature Setting: Checked Unchecked Result: Combines special, non-stock, and stock items from a single supplier into one purchase order. All other fields for this feature will be available in the system. This is effective for any supplier or supplier/location combination that you have set up to combine purchase types. Disables your ability to combine special, non-stock, and stock items from a single supplier on one purchase order. All other fields for this feature will not be available in the system. Note: The Process Multiple Requirement Types per PO Requirements/Generation checkbox must be checked before you can check the Combine Stock, Non-Stock, and Special per Supplier checkbox. The difference between the Process Multiple Requirement Types per PO Requirements/Generation checkbox and the new Combine Stock, Non-Stock and Special per Supplier checkbox is that the Process Multiple Requirement Types per PO Requirements/Generation checkbox will not combine specials with stocks and nonstocks. Enabling the Feature at the Supplier Level After you enabled this feature at the system level, you must select the suppliers for which you want to combine special and stock items. You will do this on the Purchase tab in Supplier Maintenance (Supplier Maintenance can be found on the Maintenance menu in the Purchasing module). To enable the feature, open Supplier Maintenance and open the record for the supplier for which you want to combine items. Check the Combine Stock, Non-Stock, and Special checkbox on the Purchase tab and save the record. 65

66 Navigation Path: Purchasing > Maintenance menu > Supplier Maintenance Enable the Combine Stock, Non- Stock, and Special checkbox to combine purchase types for the supplier Setting: Checked Unchecked Result: Combines special, non-stock, and stock items for the current supplier into one purchase order. This can be overridden at the supplier/location level and when you generate your purchase requirements. Disables your ability to combine special, non-stock, and stock items for the current supplier into one purchase order. 66

67 Enabling the Feature at the Location/Supplier Level In addition to or instead of applying your combine special and stock item preferences at the supplier level, you can specify preferences at a specific location and supplier combination using Location/Supplier Maintenance. To enable the feature, open Location/Supplier Maintenance and open the records for the location and supplier for which you want to combine items. Select the appropriate option from the Combine Stock and Special drop-down field in the Location/Supplier Form View tab and save the record. You can use the Query tab to set up this feature for multiple location/supplier combinations simultaneously. Navigation Path: Purchasing > System menu > Location/Supplier Maintenance Select the appropriate setting for the current supplier / location combination Setting: By Supplier No Yes Result: Defers to the supplier-level settings to determine if special, non-stock, and stock items will be combined on a single PO for this location/supplier combination. This is the default value. You can override your selection when you generate your purchase requirements. Disables your ability to combine special, non-stock, and stock items into one purchase order for the current location and supplier. Combines special, non-stock, and stock items for the current location and supplier into one purchase order. 67

68 COMBINING STOCK, NON-STOCK, AND SPECIAL ITEMS ON A PO After you have set up the system to be able to combine stock, non-stock, and special items, you can indicate if you want to take advantage of that capability on the Factor tab in Purchase Order Requirements/Generation. Navigation Path: Purchasing > Transaction menu > PO Requirements/Generation Enable the Combine Stock, Non-Stock, and Special per Supplier option to combine stock, non-stock, and special orders on the same purchase order To combine stock, non-stock, and special orders in the same PO (for suppliers and locations that allow this feature), make sure the Combine Stock, Non-Stock, and Special per Supplier checkbox is enabled before you run your purchase order requirements. After you generate your requirements, you can look at the Supplier Summary tab to look at the breakdown of special/stock items on the order. To view the breakdown, right-click on the desired supplier and select the Special/Stock Breakdown option from the shortcut menu. 68

69 The Supplier Summary tab has an additional capability: you have a final opportunity to determine if you will include specials and stocks in the same PO. The Combine checkbox for each supplier enables you to determine if the PO will be a combined PO. Setting: Checked Result: Combines special, non-stock, and stock items for the current supplier into one purchase order. Unchecked Disables the ability to combine special, non-stock, and stock items for the current supplier into one purchase order. 69

70 PRICE BREAK PURCHASING RECOMMENDATIONS IN PORG This feature allows you to set the application to run an additional calculation when generating suggested purchase quantities in Purchase Order Requirements/Generation. This calculation compares the cost of buying a quantity based solely on your forecasted demand with the cost of buying enough to qualify for the next supplier discount break. Increasing the buy quantity to obtain a greater discount lowers the cost per unit, but increases the carrying cost because it takes time to sell the additional quantity. By factoring in an item s carrying cost, the system arrives at an actual cost. It then compares the actual cost of the item at the straight replenishment quantity to the actual cost of the item when at the price break quantity to determine if if the increased buy quantity meets an acceptable return on investment. SETUP Before using this feature, you must make the following adjustments to your system: System Settings Navigation Path: System Setup > System menu > System Settings > Purchasing > General To use this feature, you must first turn it on in the system. The master switch, along with the options that allow you to configure the system s tolerance levels and specific behavior when recommending inventory buy ups for price breaks, are all found in the General Node of the Purchasing system settings. 70

71 Field: Evaluate ROAI Description: This drop down determines if and how the system makes recommendations for additional purchasing for price breaks. Setting: None Description: The system does not make recommendations above inventory forecast requirements. Next Break Buy Ahead The system looks at the quantity required to qualify for the price break immediately above you re the one you d get for purchasing your normal inventory forecast requirements. It only examines the next price break up. This option is only used for popular items that face an impending price increase from the supplier. The system calculates if an additional purchase prior to the price increase is cost effective, and if so, in what quantity. ROAI Percent Cut Off Measure The percentage return on investment required for the system to recommend purchasing additional inventory quantities. When calculating this percentage, the system factors in the carrying cost of the item and the estimated amount of time you d have to carry the additional quantities based on demand. This drop down menu allows you to select an option that limits the maximum amount of inventory the system suggests you purchase above inventory replenishment requirements. Setting: Periods Supply Description: The system will not recommend a quantity greater than a given number of period s worth of material. Dollars Min Max None The system will not recommend a quantity that costs more than a given amount of dollars. The system examines both the dollar cost and the number of period s worth of material and uses the limits established for both criteria when making recommendations, suggesting the lesser of the two. The system examines both the dollar cost and the number of period s worth of material and uses the limits established for both criteria when making recommendations, suggesting the greater of the two. The system has no limit when suggesting additional material purchases. Period Supply Dollars The system will not recommend purchasing additional material in excess of the quantity required to keep it in stock for this number of periods. This field is unavailable unless you set the Cut Off Measure menu to Period Supply, Min, or Max. The system will not recommend purchasing additional material in excess of 71

72 this cost in dollars. This field is unavailable unless you set the Cut Off Measure menu to Dollars, Min, or Max. USE Once you ve set your system to use this feature, the following functionality becomes available: Factors Tab The Factors tab in Purchase Order Requirements/Generation has the same settings found in System Settings. While they default to the values established in System Settings, you can adjust them as you need for each set of purchasing criteria. ROAI Calculations Tab The ROAI Calculations tab shows the method the system uses to calculate any suggested additional purchase quantities. It only lists information if the system suggests you purchase quantity in excess of your standard inventory demands. When set to evaluate the next price break, the system makes the following calculations. Note: Important! The system only performs these calculations when you enable the Stock Including Back Orders option in the requirement Types section on the Criteria tab. 1. Calculate the requirements as normal. 2. Price the item. Pricing information comes from the buying locations, while the usage (demand forecast) is from all of the locations in the group if using group purchasing. 3. Divide the item s net stock by the demand forecast to find the number of periods that this net stock provides. 72

73 Example: 4. Divide the recommended quantity to order by the demand forecast to find the number of periods that the suggested buy quantity provides. 5. Add the number of periods supply in step 3 and step 4. This is the total number of periods it will take to sell the entire quantity. 6. The system now calculates the carrying factor by halving the number of periods supply given in step 3 to account for the material being sold at a steady rate during the number of periods it takes to sell the entire quantity. This means that the carrying cost does not apply to the entire quantity of stock for the entire period, since it is being sold steadily during the course of the period. The system multiplies this adjusted amount by the carrying cost percentage specified on the Factor tab, divided by the number of periods in a year. This result is the carrying cost factor. The item s actual cost is the discounted item cost plus the discounted item cost multiplied by the carrying cost factor. 7. If the item has an additional level of discount, the system calculates the additional buy quantity needed to reach the next break. 8. The system divides the additional buy quantity by the demand forecast to the number of additional periods of supply given by the additional quantity. If the additional quantity does not exceed the ROAI Cut Off, the system continues. If it does exceeded the ROAI Cut Off, the system stops. 9. The system adds the number of periods supply in step 8 to the number of periods supply in step 5 to find the total number of periods it will take to sell the entire quantity. 10. The system takes the number of periods supply in step 9 and calculates the carrying factor described in step 6 (but uses the number of periods supply in step 9 as a basis, rather than the number of periods in step 5). The actual cost of the item is calculated using the carrying factor and the discounted cost, similar to step The system finds the percentage difference between the actual cost in step 10 and the actual cost in step 6. It then annualizes that percentage, multiplying by the number of periods in a year and dividing by half the number of months in step 9. The system then compares the result to the ROAI %. If it s equal or greater than the ROAI %, the additional investment meets the corporate goal, and the system suggests the additional quantity. 12. The application continues to examine the next break up the chain until it finds the optimal quantity. Your system has the following settings: ROAI% 10% Carrying Cost 30% Demand Period ROAI Cut off Measure Periods Supply 3 1 month (12 per year) Period Supply The item you are purchasing has the following specifications: Item: Hand Saw List Price $10.00 Demand Forecast 50 73

74 Net Stock 25 The item is below order point, and has a suggested buy quantity of 150, which gives a discount of 20%. You need to buy an additional 50 to reach a discount level of 25%. Having generated standard purchasing recommendations and pricing, the system moves on to analyzing the buy up quantity. Step 1: The system divides the net stock of 25 by a one period forecast of 50, giving.5 period supply of net stock. Step 2: The buy quantity of 150 is divided by the forecast of 50, giving a 3 period supply Step 3: This gives us a total period supply of.5 (from step 1) and 3 (from step 2). Adding them together, gives 3.5 month s supply. Step 4: The system calculates the carry cost by first dividing the 3.5 months in half, giving 1.75 months. Then it multiplies 1.75 months by the carrying cost percentage of 30% and divides by 12 periods (periods in a year). The result is a carrying cost % of 4.375, which is a factor of The actual cost at the suggested buy level is $10.00 less 20% plus ($10.00 less 20% times.04375), which gives a cost of $8.35. Step 5: There is an additional quantity of 50. Step 6: The system divides the 50 by the forecast of 50, giving a 1 month additional supply. This is lower than the ROAI cutoff, so the system continues. Step 7: The system adds the 1 month supply in step 6 to the 3.5 months supply in step 3 and arrives at a total supply of 4.5 months. Step 8: The system generates the carrying factor by first dividing the 4.5 months in half, giving 2.25 months. It multiplies 2.25 by the carrying cost of 30% and divides by 12 months, giving a result of 5.625%, which is a factor of The actual cost at the higher quantity is $10.00 less 25% plus ($10.00 less 25% times.0625), which gives a cost of $ Step 9 The percentage cost difference between the actual cost in step 4 and step 8 is 4.46 (100*(( )/8.35), which the system annualizes as follows: 4.46*12/(.5*4.5)=23.79%. The result is a 27.79% return that easily exceeds the target of 10%, so the buy makes sense, and the system recommends it. 74

75 Items Tab The system marks those items for which it recommends additional purchase quantities above normal replenishment amounts. It does this by placing a checkmark in the ROAI field. 75

76 VIEW SUPPLIER DISCOUNT BREAKS IN PURCHASING The View Supplier Discount in Purchasing feature provides the ability to see comprehensive purchasing pricing information in several areas of the Prophet 21 system: in Purchase Order Entry, in Purchase Order Requirements Generation, and in Order Entry. Much of the new functionality is accessed via two new Right Mouse Button (RMB) options. In addition, this feature adds a setting in User Maintenance that determines whether each individual users will have access to the purchase pricing information during Order Entry. USER MAINTENANCE Navigation Path: System Setup > System menu > User Maintenance > User Tab The User Tab in User Maintenance now includes an option to View Purchase Pricing Information in OE. A new option has been added to User Maintenance. 76

77 The new field is described below: Field Name: View Purchase Pricing Information in OE Field Description: Determines if the employee has access to the RMB option in Order Entry to see purchase pricing break data. Setting: On Result: The user can use the RMB option in Order Entry to view Purchase Pricing information for an item. Off The user cannot use the RMB option in Order Entry to view Purchase Pricing information for an item. PURCHASE ORDER ENTRY Navigation Path: Purchasing > Transaction menu > Purchase Orders > Price Tab The Price Tab in Purchase Order Entry contains two new RMB options: Recalculate and Purchase Pricing Breaks. To see the new options, position your cursor in the New Unit Price field or the Extended Price field and click the right mouse button. A menu similar to the following displays: Recalculate When your cursor is in the Net Unit Price field or the Extended Price field, the Recalculate RMB option is available. If the price has been edited and the Price Edit check box has been checked by the system, you can use the Recalculate RMB option to revert back to the default pricing. Once the recalculation is performed, the system clears the Price Edit checkbox. 77

78 Purchase Pricing Breaks Just like the Recalculate option, the Purchase Pricing Breaks option is only available when the cursor is focused on either the Next Unit Price or the Extended Price fields. The Purchase Pricing Breaks RMB popup is a read only display that looks similar to the following: The upper portion of the popup shows details from the purchase pricing book. The lower portion of the popup shows the actual pricing breaks. The top of the popup window shows the Item ID and Description, and the following details from the purchase pricing book: Calculation Type Totaling Basis Totaling Method, Pricing Unit Expiration Date Beneath that will display for each level of break. For each break level, the popup shows: Break Break Unit Calculation Value Net Unit Price The values shown are the current values associated with the pricing book used to price the item. Note: If a purchase order is priced via a certain pricing page and the page is subsequently marked as deleted or expires, the popup still draws data from that page. PURCHASE ORDER REQUIREMENT GENERATION Navigation Path: Purchasing > Transaction menu > PO Requirements/Generation > Price Tab The Purchase Order Requirement Generation window now contains a new Price tab. The Price tab in PORG is the same as the Price tab in Purchase Order Entry. It shows the pricing calculations that determined the Unit Price for the item that is highlighted on the Items tab. The RMB options to 78

79 Recalculate and to view Purchase Pricing Breaks (described in this feature documentation starting on page 78) are also available from this new tab. The Item ID and Description are shown at the top of the tab. The top row on the tab shows the item s Order Quantity, Unit of Measure, and Unit Size. The result of the calculation described below is shown in the Net Unit Price field on the second row, along with the Pricing UOM and Pricing Unit Size. The Extended Price of the item is calculated by multiplying the Net Unit Price and the Order Quantity. The Combinable checkbox shows whether this item can be combined with others on the order to achieve a discount. The Price Edit checkbox shows whether the prices shown here have been edited by a user. The settings of these fields are maintained by the system and cannot be modified. Tip! Users with security clearance are permitted to edit the Calculation Value, Net Unit Price, or Extended Price. Editing any of these recalculates the other two, and marks the Price Edit checkbox. Items with edited prices are not eligible for combinable discounting. The Base Unit Price is either the source price or the actual price on which the item s price is based, depending on the supplier s pricing setup. The Calculation Type that is being applied to the Base Unit Price is shown underneath the Base Unit Price. This field can be set to Difference, Multiplier, Mark-Up, or Percentage. The Calculation Value, which is applied to the Base Unit Price using the method in the Calculation Type field, is also shown. If an item is priced using a Purchase Pricing Page, the Effective Date of the page is shown. If quantity breaks are defined on the Purchase Pricing Page, the quantity needed to achieve the next break (Next Break) and the unit price at the next break (Next Unit Price) appears as well. The Supplier ID, Discount Group ID, and Contract Number are shown at the bottom of the tab. RMB Menu Activate the RMB menu to use two other options available from this tab: Recalculate and Purchase Pricing Breaks. Tip! If your RMB menu shows the Purchase Pricing Breaks option but you are unable to select it, there are two possible reasons: The current item does not have purchase pricing breaks Your User ID is not configured to use the Purchase Pricing Breaks RMB option. ORDER ENTRY Navigation Path: Order Entry > Transaction menu > Order Entry > Costs Tab The new RMB option to view Purchase Pricing Breaks has been added to the Costs tab in Order Entry. The option is available if your User ID is enabled to view purchase pricing data in Order Entry, (see page 76 of this documentation), and focus is in the vicinity of the PO Cost field on the Costs tab. The option is only available for items that are priced via pricing breaks. 79

80 To access the new option, go to the Costs tab in Order Entry and place your cursor in or near to the PO Cost field. Click the right mouse button to display the RMB menu: Select the Purchase Pricing Breaks option. The system displays a popup window similar to the following: Update PO Cost is only available when the PO Cost is available for edit. The top of the popup window shows the Item ID and Description, and the following details from the purchase pricing book: Calculation Type Totaling Basis Totaling Method, Pricing Unit Expiration Date Beneath that will display for each level of break. For each break level, the popup shows: Break Break Unit Calculation Value Net Unit Price 80

81 The values shown are the current values associated with the pricing book used to price the item. The Update PO Cost button is used to update the system s PO cost with the price shown. The button is only shown when the PO cost is available for editing. 81

82 INVENTORY VALUATION FOR SPECIAL ORDERS This feature allows you to use specific costing for items with the Special disposition, which sets the PO cost for a special order item as the order cost when the item is received. This lets you calculate the profit percentage for the item based on a specific order rather than the cost basis, which leads to more accurate profit calculations. You can also override this assigned cost on an item-by-item basis. SETUP In order to use this feature, you must make the following adjustments to the system: System Settings Navigation Path: System Setup > System menu > System Settings In order to use any of the functionality describes in this section, you must first activate a setting in the General focus in the Inventory Management node. This checkbox is the master on/off switch for the feature. Use Specific Costing for Special Disposition Items activating this setting allows you to assign item costs on an order-by-order, item-by-item basis for all items assigned the Special disposition. Without activating this checkbox, the system uses the standard inventory valuation method to determine special items cost. 82

83 Company Maintenance After you activate the system setting for this feature, the system recommends you set up an account for specially priced items for all your companies. This account can be found in the Inventory tab of Company Maintenance. The Special Inventory Account is an asset account that stores the inventory value of all special order items. Additionally, if you use lot billing, the Lot Bill Clearing Account appears directly under the Special Inventory Account. This liability account maintains the value of all lot bill shipments when their cost is determined at the header level. 83

84 Item Maintenance Once you set the system to allow for special costing, you can override this setting on an item-by-item basis in Item Maintenance. The General tab in Item Maintenance contains a checkbox that overrides the special pricing for a single item. USE Override Specific Costing when you enable this checkbox, the system uses the item s standard cost basis for determining the profit percentage on orders, including special orders. This checkbox only appears if you enable the Use Specific Costing for Special Disposition Items system setting, and defaults to disabled. If you use lot costing for this item, the system automatically enables this checkbox and does not allow you to clear it. Conversely, the system does not allow you to enable lot costing for this item unless this checkbox is also enabled. Once you make the proper adjustments in the system settings, the system uses the following process when dealing with special order items: When you create a customer order in Order Entry or Front Counter Orders with a line item marked with the Special disposition, the system creates a purchase order for that item. With this feature, the system assigns the item s purchase order cost as its order cost when you receive the item. If you wish, prior to receiving the item you may manually enter a purchase order cost in Purchase Order Entry, but you must do this before receiving the item, since you cannot edit the purchase order cost of a received item. Note: Until you either enter a cost or receive the item, the system uses the standard costing method to determine the order cost, but will immediately replace this value as soon as you either receive the item or manually edit the cost yourself. As soon as the system establishes an order cost, it recalculates the extended cost and profit percentage using the new order cost. Important! If the system uses this method to determine the order cost for an item, and you later enable the special costing override, the system will not recalculate the costs using standard costing methods. The system uses standard costing methods for all subsequent orders, but existing orders do not change. Any item that uses lot costing is automatically excluded from this sort of cost calculation and cannot use this option without first ceasing to use lot costing. Note: By existing functionality, the system already uses the cost listed on the invoice to assign order cost to items on RMAs instead of using cost basis. Thus RMAs already follow this pattern. 84

85 Inventory Value The system takes note of all items using special costing, and uses an inventory valuation method that takes into account their special costs. For all these items, the system creates special cost layers, similar to FIFO layers, that are used only for special cost items. The system creates one layer for each special cost item upon receiving it, and marks the inventory value equal to the PO cost. This way, when you later invoice that item, the system reduces your inventory value by the actual cost of the item, instead of its standard cost. When using this method, the system does not update the moving average cost. For example, you special order a drill for $50; it normally costs $100. When you invoice it, the system reduces your inventory value by the $50 you paid to acquire the drill, instead of the $100 you normally pay. If you over-ship the item, the system only uses the special cost for the amount on the PO. It values any quantity in excess of this using the standard method, and updates the moving average cost appropriately. Because the system already uses the cost listed on the invoice to assign order cost to items on RMAs instead of using the cost basis, RMAs already follow this pattern. Last Received PO Cost Last Received PO Cost is a field on the Cost tab in Item Maintenance. The system automatically updates this field with the cost of the item as it appeared on the most recently received purchase order. However, because special order items often have unusual prices not representative of standard pricing trends, it does not update the field when you receive items with special costing. Only items costed with the standard methods update this field. GL Postings The GL postings made for special cost items vary depending on the transaction. PO Receipts When you receive a special order item, the system: Debits the Special Inventory account (excess quantities received in over-receipts debit the assigned inventory asset account) Credits the Inventory Clearing account In both cases, the posting is equal to the PO cost of the item. Deallocating a Special Order Item If you deallocate a special order item from an order for any reason, the system: Debits the item s assigned asset account Credits the Special Inventory account Invoice In both cases, the posting is equal to the special cost of the item. When you create an invoice, the system: Debits the Cost of Sales account Credits the Special Inventory account (excess quantities shipped in over-shipments credit the assigned inventory asset account) In both cases, the posting is equal to the special cost of the item. 85

86 Production Order When you complete a production order, the system: Debits the assembled item s asset account Credits the Special Inventory account for all special order components Credits the asset account for all regularly costed components The system uses the unit cost for all regularly costed components, and the special cost of the specially costed components. Convert PO to Voucher When you convert a PO to a voucher, the system makes all the regular postings unless there is a variance and you have the Post Variance to Inventory Cost system setting activated. In that case, if the item hasn t shipped yet, the system updates the item s cost with the cost entered on the voucher. Disable Specific Costing When you activate the Override Specific Costing setting for an item with open quantities that have special costs assigned, the system: Debits the item s asset account Credits the Special Inventory account In both cases, the posting is equal to the sum of all the item s special costs across all open transactions. Item Fast Edit The Override Specific Costing field appears in the Item Fast Edit, allowing you to search for records based on this setting, and to edit this setting for numerous records as a batch. Like the checkbox in Item Maintenance, if an item is set to use lot costing, the system enables this field and does not allow you to disable it. Also, it will not allow you to use lot costing for an item unless you first enable this setting. Lot Bill Items The system handles special cost lot bill items differently, depending on if the lot bill derives its cost from its component items or its header. Component Cost If you place a lot bill header item on special order, and the lot bill cost is derived from its line items, the system totals the purchase order costs for all component items under the header and uses this as the order cost for calculating the profit percentage of the lot item. In all other ways, the system treats lot items just as regular items, including using the standard costing method until either you enter one or receive the item. Inventory Value For lot bill items with an itemized price basis, the system posts the PO cost to the inventory value when you receive the components. It doesn t matter if you receive the components in multiple shipments, as the system updates the inventory value with each PO receipt; the fact that they re component items has no impact in this case. 86

87 Header Cost If the lot bill item derives its cost from the header, however, the system uses a different procedure. When you receive the item, the system makes no postings and does not update the value of the item. Instead, the system waits until you ship a portion of the lot bill item. When that happens, the system debits the Cost of Goods Sold account and credits the Lot Bill Clearing account. When you ship the items, you designate the percentage of the total lot shipped, and the system posts that percentage of the total lot value to the accounts. Once you vouch the vendor invoice, the system debits the Lot Bill Clearing account and credits the Accounts Payable account, with differences between the PO and voucher posting to the Inventory Cost Variance account. Inventory Value For lot bill items that derive their cost from the header item, the system does not associate cost with PO receipt. When you receive components for this lot, the system posts a value of 0.00 to your inventory value, but increases component stock levels and allocates to the customer order as normal. When you convert the PO to a voucher, however, the system updates your inventory value using the special cost associated with the lot bill header item. Convert PO to Voucher When vouching special order lot bill items that derive their cost from the header, the Convert PO to Voucher window does not display any component detail, only header information. The system calls this header item Lot Bill Amount, gives it a value of 0.00, and a quantity of 1. When you place your focus on a lot bill header item in the Items tab, another tab called the Lot Bill Item PO tab becomes available. Field: Item ID Description: The item ID assigned to the lot bill header selected in the Items tab. You cannot edit this field. 87

88 Purchase Order Number Total Lot Bill Amount Previously Vouched Amount Remaining Amount The purchase order you re converting to a voucher. You cannot edit this field. The order cost of the lot bill header as it appeared on the PO. If this amount is different on the voucher, you may change it. The total of any prior vouchers created against this same header item and PO. The total amount minus the previously vouched amount. Production Order Items When using special costing, the system uses the same method to determine the cost of production order items as it does lot bill items that have their cost derived from the component items: it totals the order cost of all the component items to arrive at the cost for the production order item. If a production order has some component items that use special costing and others that use standard costing, the system computes their costs separately, adds them all together, and uses this total as the production order cost. Inventory Value When you complete a production order, the system normally reduces the inventory value by each of the components consumed in the process, and increases it by the value of the completed item. In the case of specially costed production order items, this process is the same, but the cost used is the special cost for both the components and the finished item. Inventory Value Report The Inventory Value Report includes a parameter that allows you to filter results based on if an item was assigned a special cost for an order. For more information on this report, see Journal Modifications in the 11.0 Accounting New Features Guide. 88

89 VESSEL TRACKING This feature expands inventory tracking beyond your warehouse locations. Now, when receiving material from overseas, you can update your purchase order information while the material is in transit, tracking container, updated quantity, and vessel information such as ship name, the date it accepted your cargo, and the date it left port. By receiving stage delivery information, you can adjust your expected delivery dates to be more accurate and better manage your purchasing requirements, and the ship information allows you to see where any delays are for accountability purposes. SETUP In order to use this feature, you must first establish the following settings in your system: System Setup Navigation Path: System Setup > System menu > System Settings > Inventory Management > Receipts The Receipts focus in the Inventory Management node contains a new checkbox: Container Receipts. Container Receipts When enabled, the system allows you to receive multiple lines from multiple purchase orders into a single container and ultimately receive that container into the purchasing location. 89

90 Company Maintenance The Inventory tab in Company Maintenance contains a pair of new accounts: Inventory In Vessel and Inventory In Transit Clearing Account. USE Inventory in Vessel Account an asset account that records the value of material in a container when it is loaded onto a vessel. Transit Clearing Account a liability account that the system credits when you receive material at your order location that was transported via vessel. Once you set the system to use this feature, the following additional functionality becomes available. Vessel Receipts The Vessel Receipts window tracks material ordered on a purchase order by two means. First, the window tracks the containers holding ordered material. The window tracks what containers hold what PO lines, even if a given PO is spread across several containers, or if multiple POs reside within a single container. Second, the window tracks the vessels that carry these containers. Using this window, you can update the PO record with estimated dates. Because this window allows you to track when a vessel receives the containers holding your material, you can keep the estimated dates more accurate by updating them with in transit information and apply landed costs as they occur. Vessel Receipts is an option on the Inventory Transaction menu. It contains these tabs in the header: Vessel Receipt, Containers, Vessel Notes, Landed Cost, Document Links, and Audit Trail. It contains 90

91 these tabs in the footer: Items, Extended Info, Vessel Line Notes, Landed Cost, Orders, and Timestamp. Vessel Receipt Tab The Vessel Receipt tab is where you create, edit, and update vessel records. Field: Receipt Number Company ID Location ID Vessel Name Departure Date Loading Port Loading Country Discharge Port Discharge Country Port Arrival Date Estimated Date Available for Ship Freight Terms Description: A system-generated number that identifies a receipt against a purchase order. In this window, it refers specifically to the vessel s receipt of the containers holding your material. The code that identifies your business. The location that placed the order being shipped. The name of the ship receiving your inventory. The date the ship leaves port. Since this can be edited at any time, you can use this field to enter an estimated date of departure, and update it later with the actual date should it differ. The name of the port at which the vessel receives the containers. The country in which the loading port is located. The name of the port at which the vessel unloads the containers. The country in which the discharge port is located. The date at which the vessel docks at the discharge port. The date the material should be in your warehouse and available to ship to customers Displays the fiduciary responsibility of freight. This field is informational only. Delivery Method How the container will ultimately be delivered to the receiving location (i. e. truck, rail, etc.). 91

92 Currency ID Documents Received Status Period Year The currency used for all the purchase orders in this shipment. Important! Though you can view multiple POs in this tab, all the purchase orders in a single group must use the same currency. If multiple POs that use different currencies are loaded into the same container or vessel, you must still track them separately (creating a separate receipt record). When you import material form overseas you receive documents from the freight forwarder. These documents are essential for the shipping process; this checkbox tracks if you ve received all necessary documents from your freight forwarder. This drop down menu determines if the receipt is approved or not. The fiscal period the vessel receives the containers. The fiscal year the vessel receives the containers. Containers Tab The Containers tab contains information on all the containers that hold line items for the POs transported by the vessel selected in the Vessel Receipts tab. You must define a container in this tab before you can use it in any of the footer tabs in this window. Note: Although you can load multiple POs into the same container, all purchase orders placed in the same container must share the same purchase location ID. Field: Container Name Date Expected Description: Note: The label you assign the container for identification purposes. This name becomes part of the External Reference Number in Purchase Order Receipts. This name must be unique. Because you can only group POs that use the same currency together in this window, you must create a separate container number for each PO of a different currency that is received into the container. This means that the same container might have several different names, one for each currency it contains. The date you expect the material in the container to arrive at your order location. 92

93 Container Capacity Current Volume Seal ID Comments Status The total capacity, expressed in volume, of the container. The amount of used space within the container. Note: The system uses the Item Package Volume in the Package Type Tab in Item Maintenance to calculate and maintain this value. Because of this, you should define the purchase unit of measure as a package type for items that you need shipped on cargo vessels and assign them an item package volume so that the system can properly calculate container capacity as material is received into the container. The seal is a security closure on a container. It is required by the United States Homeland Security A free text field that allows you to enter any notes about the container directly on the container s information line. This drop down menu determines if the receipt is approved or not. Vessel Notes Tab This tab allows you create, edit, delete, and view notes about the vessel carrying your cargo. This tab functions identically to notes tabs found throughout the system. Landed Cost Tabs There are two Landed Cost tabs in the Vessel Receipts tab, one in the header, one in the footer. In form they are nearly identical. However, the header tab shows the total landed cost while the footer tab shows the amount of landed cost that was prorated over the received item. Field: Landed Cost Driver Landed Cost Driver Description Multiplier Description: Landed cost drivers assigned in the header tab apply to all items on the order, while those in the footer apply only to the item selected in the Items tab. While you can edit the landed cost drivers and amounts in the header tab, these values are uneditable in the footer. A brief text description of the landed cost driver. The factor by which the base unit cost is multiplied to determine the item s landed cost. 93

94 Calculation Method Dollar Amount Estimated Landed Cost Edited This field determines how the system uses the value entered in the Multiplier field to determine the item s landed cost. For example, when you set the field to Extended Cost, the system multiplies the line s extended cost by the value in the Multiplier field to get the landed cost. When you set it to Receipt, the system applies the value in the Multiplier field for each $X you receive, where X is the receipt amount defined in the Dollar Amount field. Some calculation methods require you to establish a dollar interval for calculations. The calculation method Receipt, for example, applies the multiplier once for every dollar interval on the receipt. If you entered 50 in this field, the system would divide the line s receipt amount by 50, and multiply the value in the Multiplier field by that amount. For example, if you wanted to apply a $1.00 landed cost for every $50.00 of received material, you would enter 1 in the Multiplier field, Receipt in the Calculation Method field, and 50 in the Dollar Amount field. This field allows you to view the estimated landed cost per driver for the current quantity before saving, should you want to edit the information in the window before it is saved to the system. This checkbox automatically enables if you manually edit the values in this tab. It is controlled by the system and cannot be manually edited. Document Links and Audit Trail Tabs These two tabs are identical to the Document Links and Audit Trail tabs found throughout the system. Items Tab The Items tab in Vessel Receipts displays information on the items loaded onto the vessel selected in the Vessel Receipt tab. Field: PO Number PO Line Number Release Item ID Description: The purchase order number of the purchase order this item belongs to. The line that this item occupies on the PO. The item s release number, which indicates the order the item appears on a scheduled order. The item you ordered. 94

95 PO Quantity Available PO UOM Container Name Unit Quantity Container UOM Status Complete PO The open amount left on this purchase order. The system calculates this value by using the formula: (quantity ordered quantity received quantity already on vessels)/unit size. The purchase unit of measure. The name of the container that holds this item. The quantity of item, expressed in its base unit UOM, held within the container. The unit of measure by which the item was loaded into the container. Displays the status of this line on the PO. It can be set to Open or Complete. If you enable this checkbox before receiving the total ordered amount, the system under-receives the line and cancels the open balance. The system automatically enables this checkbox when you receive the full amount ordered. Extended Info Tab The Extended Info tab contains more detailed information on the item you selected in the Items tab. Field: PO Number PO Line Number Description: The purchase order number of the purchase order this item belongs to. The line that this item occupies on the PO. 95

96 Release Number Item ID Item Description Supplier Name PO Date Required PO Quantity Available PO UOM Container Name Unit Quantity Container UOM Status Complete PO Line The item s release number, which indicates the order the item appears on a scheduled order. The item you ordered. A short text description of the item. The name of the supplier to whom you submitted the purchase order for this item. The date by which you told the supplier you need the item delivered to your order location. The open amount left on this purchase order. The system calculates this value by using the formula: (quantity ordered quantity received quantity already on vessels)/unit size. The purchasing unit of measure for this item. The name of the container that holds this item. The quantity of item, expressed in its base unit UOM, held within the container. The unit of measure by which the item was loaded into the container. Displays the status of this line on the PO. It can be set to Open or Complete. If you enable this checkbox before receiving the total ordered amount, the system under-receives the line and cancels the open balance. The system automatically enables this checkbox when you receive the full amount ordered. Vessel Line Notes This tab allows you create, edit, delete, and view notes about the item on board this vessel. This tab functions identically to notes tabs found throughout the system. 96

97 Supplier Maintenance The Purchase tab in Supplier Maintenance allows you to establish and adjust the carrying capacity of containers, both in terms of volume and weight, used by the supplier. Field: Use Containers Container Weight Container Volume Description: This checkbox determines if the supplier uses containers when shipping material to you. When enabled, the system provides the Container Weight and Container Volume fields. The estimated maximum carrying capacity of the container. This is an information only field that allows you to see how many containers an order fills, allowing you to adjust your order quantities according to container load, and by extension your shipping charges. The system displays this information in both Purchase Order Entry and Generate Purchase Orders/Requirements. The estimated maximum cargo space of the container. This is an information only field that allows you to see how many containers an order fills, allowing you to adjust your order quantities according to container load, and by extension your shipping charges. The system displays this information in both Purchase Order Entry and Generate Purchase Orders/Requirements. 97

98 Purchase Order Entry Purchase Order Entry sees modifications to existing tabs and a whole new tab to accommodate vessel tracking functionality. Totals Tab When you order from a supplier that uses containers, the system provides you with an estimate of how many containers an order uses if you provided the estimated capacity of those containers. These estimates appear on the Totals tab in Purchase Order Entry. Field: Total Volume Containers Filled Description: The volume of the entire order, generated by multiplying the unit volume by the order quantity for each line and summing the results. The number of containers it will take to ship the entire order, generated by dividing the order s total volume by the container s volume as defined in Supplier Maintenance. The system displays this value out to two decimal places. Commitment Schedule Tab The Commitment Schedule tab contains a new field. Quantity in Vessel the total amount of the item the vessel transporting it has received. This quantity is still included in the quantity due until such time as it is received at the purchasing location. 98

99 You can drill into this field, causing the system to open the Vessel Details tab in Purchase Order Entry with the details of this particular vessel receipt displayed. In addition, when a vessel receives material it affects a scheduled release in the following ways: The receipt creates a release. The receipt date becomes the release date. The receipt quantity becomes both the release quantity and the quantity in vessel. The system subtracts the quantity the vessel receives from the last release of the schedule. Vessel Details Tab The Vessel Details tab displays information on the line item s cargo vessel. This tab automatically updates anytime information on the shipment changes in Vessel Receipts, meaning that this tab always provides the most up to date information available in the system. Field: Item ID Item Description Vessel ID Vessel Name Vessel Receipt Number Container ID Departure Date Port of Discharge Estimated Arrival Date Description: The item you placed your focus on in the Items tab. A brief text description of the item. The system code for the vessel that is carrying your item. The name of the vessel that is carrying your item. A system-generated number that identifies a receipt against a purchase order. In this tab, it refers specifically to the vessel s receipt of the containers holding your material. The label you assign the container for identification purposes. This name becomes part of the External Reference Number in Purchase Order Receipts. This name must be unique. The date the ship leaves port. Since this can be edited at any time, you can use this field to enter an estimated date of departure, and update it later with the actual date should it differ. The name of the port at which the vessel unloads the containers. The date the vessel is expected to arrive at the port of discharge. 99

100 Estimated Date Available for Shipping Quantity in Container Location ID UOM Unit Size Port of Loading Country of Loading The date the material should be in your warehouse and available to ship to customers. The amount of material in the container. The location that placed the order. The order UOM of the item. The size of the order UOM, expressed in terms of the base unit. The port at which the vessel receives this item. The country in which the port of loading is located. Purchase Orders Requirements/Generation The Cube and Containers Filled fields also appear in the Supplier Summary tab in Purchase Orders Requirements/Generation. The system uses and calculates these fields exactly the same as it does in Purchase Order Entry. Container Receipts When you receive a shipment that was transported by ship, you receive the entire container it traveled in. Container Receipts provides a way to accept purchase orders by container, streamlining the process of receiving these orders. In addition, this window provides you the ability to update your orders if the amount you receive is not the same as the vessel receipt. You must receive containers one at a time, but because a single container can hold line items from multiple purchase orders, you may accept multiple POs at one time using this window if they all have line items in the container you are receiving. However, because you receive by container, you can only receive the lines that were placed into the container you are receiving. All purchase orders must use the same currency in order to be batched this way. If two purchase orders with two different currencies reside in the same container, you must receive them separately. Also, this window can only call up purchase orders that were shipped by vessel. Container Receipts is an option in the Inventory Transaction menu. It contains the following header tabs: Container Receipt, Vessel Information, Vessel Notes, Container Notes, and Timestamp. It contains the following footer notes: Items, Extended Info, Vessel Line Notes, Container Line Notes, and Timestamp. 100

101 Container Receipt Tab The Container Receipt tab is where you define what container you are receiving to your purchase location. Field: Receipt Number Company ID Container Name Vessel Receipt Number Vessel Name Date Received Period Year for Period Row Status Flag External Reference Number Description: A system generated number that identifies this receipt. The system automatically creates this number when you successfully save the container receipt. The company that is receiving the container. The container being received. A system-generated number that identifies a receipt against a purchase order. In this tab, it refers specifically to the vessel s receipt of the containers holding your material. The name of the vessel that carried the container. The date you are receiving the container to your purchase location. The period you are receiving the container to your purchase location. The year you are receiving the container to your purchase location. This drop down menu determines if the receipt is approved or now. This is used to locate the receipts in Convert Landed Cost to Voucher. The system generates this number unless you enter one. 101

102 Vessel Information Tab The Vessel Information tab displays information about the vessel that transported the container. It is the same as the Vessel Receipts tab in Vessel Receipts, except this tab is information only; you cannot edit any of the fields in this tab. Field: Receipt Number Company ID Location ID Vessel Name Departure Date Loading Port Loading Country Discharge Port Discharge Country Port Arrival Date Estimated Date Available for Ship Freight Terms Description: A system-generated number that identifies a receipt against a purchase order. In this window, it refers specifically to the vessel s receipt of the containers holding your material. The code that identifies your business. The location that placed the order being shipped. The name of the ship receiving your inventory. The date the ship leaves port. Since this can be edited at any time, you can use this field to enter an estimated date of departure, and update it later with the actual date should it differ. The name of the port at which the vessel receives the containers. The country in which the loading port is located. The name of the port at which the vessel unloads the containers. The country in which the discharge port is located. The date at which the vessel docks at the discharge port. The date the material should be in your warehouse and available to ship to customers. Displays the fiduciary responsibility of freight. This field is informational only. Delivery Method How the container will ultimately be delivered to the receiving location (i. e. truck, rail, etc.). 102

103 Currency ID Documents Received Apply Container Landed Cost Status Period Year The currency used for all the purchase orders in this shipment. Important! Though you can view multiple POs in this tab, all the purchase orders in a single group must use the same currency. If multiple POs that use different currencies are loaded into the same container or vessel, you must still track them separately (creating a separate receipt record). When you import material form overseas you receive documents from the freight forwarder. These documents are essential for the shipping process; this checkbox tracks if you ve received all necessary documents from your freight forwarder. If you enable this checkbox, the system adds a container landed cost line to the Landed Cost tab in Vessel Receipts. This is a per receipt landed cost that defaults to $0.00. This drop down menu determines if the receipt is approved or not. The period the vessel receives the containers. The year the vessel receives the containers. Vessel Notes Tab, Container Notes Tab These tabs allow you to create, edit, delete, and view notes that deal with the entire vessel or container. In form and function, they are identical to the notes tabs found throughout the system. Timestamp Tabs The Timestamp tabs in the header and footer track when the records were first created, last modified, and who was responsible for both. In form and function, they are identical to the timestamp tabs fund throughout the system. Items Tab The Items tab displays all the items contained in the container you are receiving. These items might belong to several different purchase orders if that is how they were packed, however this tab only displays line items for purchase orders that use the same currency. Field: PO Number PO Line Number Description: The purchase order number of the purchase order this item belongs to. The line that this item occupies on the PO. 103

104 Release Item ID Item Description Vessel Quantity Unloaded Vessel Quantity Remaining Container Quantity Received UOM Status The item s release number, which indicates the order the item appears on a scheduled order. The item you ordered. A brief description of the item. The quantity of item that was unloaded in this container at the port of discharge. This might be different from the amount that was loaded onto the vessel because of damage in shipping, shrinkage, or similar reasons. Also, the total quantity ordered for a line item might not fit into a single container, meaning that the quantity unloaded is not the total quantity shipped or ordered. The quantity shipped on this vessel that you still haven t received. This is likely because your line item shipped in multiple containers. The quantity of item received to your purchasing location from this container. The unit of measure by which the item was loaded into the container. Displays the status of this line on the PO. It can be set to Open or Complete. Extended Info Tab The Extended Info tab provides more in depth information about the PO line selected in the Items tab. 104

105 Vessel Line Notes Tab, and Container Line Notes Tab These tabs allow you to create, edit, delete, and view notes that deal with one line item on the vessel or in the container. In form and function, they are identical to the notes tabs found throughout the system. Item Master Inquiry Several tabs in the Item Master Inquiry window display vessel and container information. Inventory Tab The Inventory tab shows the quantity of item currently loaded onto a vessel, in transit to you. This is the total amount loaded onto a vessel, which might be spread across several containers and several purchase orders. You may drill into this field to bring up the Vessel Information tab (see below). Note: The system subtracts the value in the Quantity on Vessel from the Quantity on Purchase Order. With these two fields displaying, the Quantity on Purchase Order field represents order quantities that have not yet shipped, while Quantity on Vessel are quantities in transit that the supplier has already shipped. 105

106 Vessel Details Tab The Vessel Details tab provides information on the ship that is carrying your items. The tab lists all the vessels carrying quantities of your selected item. Each vessel displays on its own line, which contains the following information: Vessel ID Vessel Name Container Number: Quantity in Container UOM Unit Size Port of Loading Country Port of Discharge Departure Date Estimated Date of Arrival Estimated Date Available for Shipping 106

107 Open PO Tab The Open PO tab displays the quantity of item currently loaded onto a vessel, in transit to you. It shows this amount for both scheduled POs and standard purchase orders. In both cases, the value in this field is the total amount loaded onto a vessel, which might be spread across several containers. You may drill into this field to bring up the Vessel Information tab (see above). Note: The system subtracts the value in the Quantity on Vessel field from the Quantity Remaining and Quantity Open fields. 107

108 Replenishment Tab The Replenishment tab displays the quantity of item currently loaded onto a vessel, in transit to you for your next expected PO. The value in this field is the total amount loaded onto a vessel, which might be spread across several containers. You may drill into this field to bring up the Vessel Information tab (see above). Note: The system subtracts the value in the Quantity on Vessel field from the Quantity Remaining and field. Commitment Schedule Tab The Commitment schedule tab displays the quantity of item currently loaded onto a vessel, in transit to you. The value in this field is the total amount loaded onto a vessel, which might be spread across several containers. You may drill into this field to bring up the Vessel Information tab (see above). Order Entry Numerous tabs in the Order Entry window display vessel and container information. This allows you to see what stock quantities are en route and about when they should be ready to ship to customers, providing an additional level of detail beyond simply knowing if an item is in stock. 108