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Valogix Inventory Planner - Part One
https://www.youtube.com/watch?v=de44oE_8mkA
Part one in an overview of the Valogix Inventory Planner for SAP Business One. For more information on Balloon One please visit our website http://www.balloonone.com
English Transcript
0:02 in this demonstration we going to show you the logics
0:05 running inside the SAP business one
0:08 he appeal business system if we go into the stock management module
0:14 an open up a product recalled he will use
0:18 this product here we can click on the planning details button
0:25 to see 12 months
0:30 weather forecast now how is that forecast derived
0:35 whatever logics it we can hold up to four years have sales history
0:40 this history could be sales order history could be sales invoice history
0:45 we like to use sales orders so that maybe
0:49 an order that couldn't be fulfilled can be captured
0:52 on your business system and cancelled
0:55 thereby capturing true demand
0:59 even if you couldn't fulfill it so once we have the sales order information
1:04 here you can see we have four years extracted into the system
1:08 the logics on a daily basis
1:11 will be out to review this to come up with a replenishment requirement
1:16 the first step and generate a nap
1:20 replenishment requirement is the generation of a 12-month rolling
1:24 forecast
1:25 he say we're in September highlighted in yellow
1:28 and you'll also see the forecast
1:31 has been created based on a trend now for this particular product
1:37 it's identified that it's trending upwards and you can see the forecast is
1:42 growing at a corresponding right but the logic says many algorithms not
just a
1:48 trend that wear them
1:49 if you look so the data and sees it there's at least two years a history
1:54 and has a seasonal pattern in the data that it will select a seasonal
outdoor
1:59 them
2:00 if it then
2:03 come find seasonality it will turn to the trend out with them like it has
here
2:07 and if it doesn't have a trend
2:10 it will use the average and finally if there's very little information
2:15 it was just a one month forecast all of this is done
2:21 automatically biologics there's no need to extract the sales history into a
2:28 spreadsheet manipulator as you can see on the screen
2:31 is automatically captured it from our SAP
2:34 business one system and then
2:37 turn that into the 12-month forecast now the focus is just the starting
point
2:44 the logics uses this number here
2:48 called the stocking quantity to determine exactly how much stock
2:53 is needed in a planning horizon so what's a planning horizon
2:58 well festival we have the lead time for the product
3:01 in this example 21 days so this product takes 21 days to arrive from the
3:06 supplier
3:07 the planning horizon as a summer this number
3:11 and the second number here called order frequency this is the number of
days
3:16 with in which you will check this product
3:19 and order it again many customers who are new to the logics
3:23 will be reviewing their products may be on a fortnightly or even monthly
basis
3:28 but once they start using the logics and presented with the information
3:33 so quickly they can reduce this order frequency
3:36 obviously reducing the planning horizon by reducing the planning horizon
3:42 we had need to hold less stock so if we look here 21 days plus the order
3:47 frequency
3:48 the planning horizon for this product is 28 days
3:51 this can be different for every single product in the system
3:57 the next step is to take those 28 days and say how much my forecasting to
sell
4:02 in the next 28 days so we look at the forecast here
4:06 and the calculation is made and displayed here
4:10 5600 nine units in the next 28 days
4:15 we can also see above that the amount of sales orders that are due to be
shipped
4:20 so these actually sales orders on the system
4:25 if this number exceeds the forecasted number we will see an amount here in
the
4:29 excess committed
4:32 sofa logics will always respond to demand even if it's a new order that
4:36 exceeds the forecast
4:41 the magic number now is this stock in quantity
4:45 how does the logics arrive at that while it looks at the forecast
4:49 and it takes this service level here we've said it to ninety-nine percent
4:53 the service level indicates how much of the
4:58 history and the spikes in the history do we want to cover
5:03 so for example if a product has very variable demand
5:06 and we set a 99 percent service level we're going to increase the safety
stock
5:11 am considerably to cover those high spikes in demand
5:16 if the product has very low variability in demand
5:19 then we won't be increasing it so much
5:22 here the variability is relatively low and you can say that safety stock
has
5:26 been added
5:27 in about 300 units
5:31 now we have a stocking quantity we can make %uh standard
5:35 requirements calculation we start here
5:38 with the stock level that's currently in the system
5:41 added to that as the open purchase orders
5:45 these a purchase orders they're expected in within the next 28 days
5:49 the planning horizon
5:53 we take from that any sales orders that have been at not yet been delivered
5:58 and also any excess committed I E
6:02 sales over and above the forecast and then finally we subtract
6:06 the stocking quantity the expected sales in the planning horizon
6:12 the mass their lease to assure fall for this product
6:15 %uh 1,591 units
6:22 each product is planned in this way every single day
6:26 looking at sales purchase orders on the system stock transfers between
6:30 warehouses
6:31 you can imagine the amount of calculation should have to do manually
6:34 to keep in touch
6:35 with this number anytime it goes negative
6:39 he will be presented to you in the replenishment plan which will cover next