time phased inventory management reference manual afs recalculation (tpi/tpic) ... min qty pct...

Time PhasedInventory

ManagementReference Manual

FASPAC 3.5

FPD/203

Faspac Systems, Inc.7590 Fay Avenue, Suite 301La Jolla, CA 92037

Confidential and ProprietaryCopyright 2000 Faspac Systems, Inc.All Rights Reserved

This document is the trade secret property of Faspac Systems, Inc. and is protected bycopyright law and international treaties. Its use by you is strictly governed by a licenseagreement. Unauthorized reproduction or distribution may result in severe civil or criminalpenalties.

Trademarks:FASPAC is a trademark of Faspac Systems, Inc. All other trademarks, registeredtrademarks, names, or product names contained in this publication are the property oftheir respective owners, and Faspac Systems, Inc. neither endorses nor otherwisesponsors any such product or services referred to herein.

Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Functional Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Inflow Source Codes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Outflow Source Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Time Phased Operating Procedures . . . . . . . . . . . . . . . . . . . . . 12

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

TPIM Procedures Screen . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

TPIM Selections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

TPIM Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TPIM Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

TPIM Selections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

TPIM Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

TPIM Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

TPIM Detail Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Inventory AFS Recalculation (TPI/TPIC) . . . . . . . . . . . . . . . . . . . . 34

Time Phased Inventory Management Forecasting . . . . . . . . . . . . . . 36

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Inventory History Inquiry (IM/HI) . . . . . . . . . . . . . . . . . . . . . . . 37

Inventory Maintenance (IM/MAI). . . . . . . . . . . . . . . . . . . . . . . . 39

Load Usage Definition (TPI/TPLU) . . . . . . . . . . . . . . . . . . . . . . . 40

Inventory Usage History Calculation (TPI/TPHC) . . . . . . . . . . . . . . . 41

Usage History Inquiry (TPI/TPHI) . . . . . . . . . . . . . . . . . . . . . . . 42

Usage History Maintenance (TPI/TPHM). . . . . . . . . . . . . . . . . . . . 43

Inventory Class Code Assignment (TPI/TPCC). . . . . . . . . . . . . . . . . 44

Inventory Cost Analysis Detail (TPI/TPCD) . . . . . . . . . . . . . . . . . . 47

Inventory Cost Analysis Summary (TPI/TPCS). . . . . . . . . . . . . . . . . 50

Time Phased Inventory Management Controls . . . . . . . . . . . . . . . 52

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Min/Max Controls Update (TPI/TPMM) . . . . . . . . . . . . . . . . . . . . 54

FPD/203 TPIM - 3

TPIM - 4 FPD/203

TABLE OF CONTENTS

Introduction

The Time Phased Inventory Management System (TPIM) is an exceptions based

reporting system designed to report each inventory item that does not operate

within a defined set of controls over a specified period of time. The primary

controls used by the TPIM system are each inventory item’s minimum and

maximum stocking levels and a user specified date range for which the TPIM

analysis is to be performed. The net stock position of each item is recomputed for

each transaction and if at any time it falls outside of the acceptable range, it is

included in the exception report.

The FASPAC system maintains a minimum and a maximum stocking level for

each inventory item in each warehouse. Each time the inventory monthly update

process is performed, these values may be updated for every inventory item. The

primary factor taken into consideration for the update is each item’s usage or

demand that has occurred over the past 30 days. (Refer to Volume 2 of the

FASPAC user documentation for a detailed explanation of how each of these

values is computed). The Time Phased Inventory Management System uses

FASPAC’s min and max quantity values, or user defined percentage adjustments

to either of the values, to establish the minimum and maximum control levels for

each item during the TPIM evaluation.

When the TPIM process is initiated, the user is asked to specify from and through

dates for which the TPIM analysis is to be performed. As shown in the following

diagram, these four values, minimum quantity, maximum quantity, and the date

range form the boundaries for the acceptable range of values for each item during

the TPIM analysis.

Figure 1

FPD/203 TPIM - 5

If the user requested a TPIM analysis for the period from January 8 through

January 29 and an item had min and max quantity values of 14,000 and 45,000

units respectively, the TPIM’s acceptable range would be as indicated in the

above illustration. The basic function of the TPIM system is to calculate the net

stock position of each inventory item throughout a specified date range by taking

into account the following three factors:

• The amount of inventory available on the starting date of the TPIM

analysis

• The inflow quantities and timing of all receipts of each item

• The outflow quantities and timing of all demands for each item

If an item’s stock level is above the minimum and below the maximum for the

duration of the date range being evaluated, it is operating within the defined set

of controls and will not be reported by the TPIM system. However, if at any time

the stocking level drops below the minimum control value or goes above the

maximum control value, it will be reported.

To illustrate this point, assume that the following sequence of events takes place

for an inventory item with a minimum quantity of 14,000 units and a maximum

quantity of 45,000 units:

Date Activity Quantity Net Balance

2-Jan Physical On Hand Quantity Of Item 20,000 20,000

9-Jan Incoming Branch Transfer 10,000 30,000

16-Jan Sale 5,000 25,000

23-Jan Purchase Order Receipt 15,000 40,000

30-Jan Outgoing Branch Transfer 20,000 20,000

6-Feb Sale 10,000 10,000

TPIM - 6 FPD/203

INTRODUCTION

A plot of the Net Balance value for the date span from January 2 through

January 30 would reveal that the net inventory position is within the min and max

control parameters at all times. Therefore this item would not be reported by the

TPIM system since it is operating within the control limits as shown in the

following illustration.

Figure 2

However, if the date range is increased another week so it ends on February 6,

the TPIM system will report this item as an exception since its net balance value

drops below the minimum stocking level as shown in the following illustration.

Figure 3

FPD/203 TPIM - 7

INTRODUCTION

Figures 1 through 3 present the underlying concepts for the TPIM system. If an

inventory item’s supply and demand requirements remain within the controls

established for the item, it is functioning as expected and is not reported.

However, if at any time during the date range being evaluated, its net balance

position falls outside of the control limits, the item is reported for subsequent

analysis and corrective action as appropriate.

The next section of this document presents an overview of the various sources of

supply and demand for inventory maintained by the FASPAC system. Prior to

running the TPIM process, the user is required to identify each source from

which product is received into a facility and to identify each source of demand

for which product is consumed by or shipped from the facility. This information

is used to insure that accurate and timely data is captured by the TPIM system for

subsequent analysis.

The last section of this document provides the detailed operation procedures for:

• Working with previously defined TPIM procedures

• Defining all sources of supply or inflow of product for TPIM analysis

• Defining all sources of demand or outflow for product for TPIM analysis

• Saving new TPIM procedures

• Executing a TPIM procedure

• Analyzing the results of a TPIM procedure

TPIM - 8 FPD/203

INTRODUCTION

Functional Overview

The time phased inventory management system has been designed to address the

Just In Time (JIT) inventory demands that must be met by today’s distributor.

The time phased inventory management system allows the user to specify all

sources from which inventory is received into a facility. As an example, the

sources of inflow of inventory may include purchase orders, warehouse transfers,

material requisitions, rework orders, completed kits and quotes.

In a similar fashion, the user must identify the outflows or demand for inventory

items. These demands can originate from customer orders, warehouse transfers,

rework orders, kits and electronic data interchange transactions that encompass

EDI transaction types 862 and 830. Internal demands such as kitting

requirements and product consumed in plating and rework operations must also

be taken into consideration. Based on this information, each of the sources of

supply and demand is examined in detail according to selection criteria specified

by the user. Information is extracted from each of these sources and arranged in

chronological order. After the data has been properly sequenced, the Net Balance

position of each item is recomputed by factoring in the impact each of the

transactions has on the Net Balance value. By using this exceptions based tool,

the user can concentrate on those items that require human intervention such that

the JIT demand requirements for all items will be fulfilled on a continuing basis.

Before each TPIM procedure is executed, the user is provided with the option to

refine the controls and filtering criteria used by TPIM. As an example, the min

and/or max values can be raised or lowered by operator entered percentage

values. The date range to be examined is also user specified. By using these

capabilities, the TPIM Acceptable Range window as shown in figure 1 can be

expanded or reduced as deemed appropriate. Other filtering refinements are also

available including the ability to look at individual product categories, class

codes and various material characteristics.

The flowchart on the following page diagrams the various sources of supply,

sources of demand, and filter criteria selectable by the TPIM system. Once the

appropriate criteria have been identified, it can be saved in the TPIM procedure

library for future use.

The TPIM process extracts all of the detailed transactions for the user-defined

sources of supply to determine the time-phased inflow of each inventory item.

The detailed item display that is created by the TPIM process contains a column

header identifier T-S in the Inflows section of the display. The values displayed

in this column identify the various sources of supply for the item. The following

is a list of the possible inflow T-S values that may be displayed and their

associated sources of supply.

FPD/203 TPIM - 9

FUNCTIONAL OVERVIEW

Note: TPIM time-sequences the records and looks at a very large number of files.

Therefore, the program will take considerable processing time (for example,

much longer than invoicing).

TPIM - 10 FPD/203

FUNCTIONAL OVERVIEW

INFLOWS

� Requisitions

� Purchase Orders

� Warehouse Transfers

� Rework Orders

� Kits

� Quotes

Time Phased Management Functional Overview

USER SPECIFIED

� Customers

� EDI Group

� Data Range

� Min Qty Pct Change

� Max Qty Pct Change

� ABC Codes

OUTFLOWS

� Customer Orders

� Warehouse Transfers

� Rework Orders Kits

� EDI 862s

� EDI 830s

Supply Filter Criteria Demand

TPIM

ProcessingNew Procedure Procedures Library

TPIM

Processing Summary

TPIM

Processing Details

Inflow Source Codes

T-S Code Source Of Supply

P - O Purchase Order

PIO In-transit Order Desk Purchase Order

W - T Warehouse Transfer

R - O Rework Order

K - T Kitting Order

M - A Authorized Manufacturing Job

M - O Ordered Status Manufacturing Job

M - R Reserved Status Manufacturing Job

TPIM also extracts all detailed transactions for the user-defined sources of

demand. The TPIM Detailed Item screen contains a second column header,

identified as T-S, in the Outflows section. The values displayed in this column

identify the various sources of demand for the item. The following table lists

possible outflow T-S values and their associated sources of demand.

Outflow Source Codes

T-S Code Source Of Demand

SO Sales Order

SHO Shipped Order

W - T Warehouse Transfer

K - T Kitting Order

3 - P EDI 830 Planning transaction from SRS (of “lower” weight thana “firm” 830)

3 - F EDI 830 Firm Planning transaction from SRS.

6 - P EDI 862 planned Shipping transaction from SRS (of “lower”weight than a “firm” 862)

6 - F EDI 862 Firm Shipping transaction from SRS

M - F Firm Manual Release forecast from SRS

M - P Planned Manual Release from SRS (considered of “lower”weight than a “firm” release)

M - A Authorized Manufacturing Job

M - O Ordered Status Manufacturing Job

M - R Reserved Status Manufacturing Job

P - D Past Due EDI from SRS

P - P Past Due is repopulated

FPD/203 TPIM - 11

OUTFLOW SOURCE CODES

Time Phased Operating Procedures

When the TPIM process is initiated for the first time, the user is presented with a

series of five screens through which the TPIM processing selections are

specified. Through each screen the user may define new values, modify

previously defined values, or have the TPIM process activated using previously

specified values. The five screens presented to the user are:

• Time Phased Inventory Management Procedures Screen

• Time Phased Inventory Management Item Selection Screen

• Time Phased Inventory Management Supply Screen

• Time Phased Inventory Management Demand Screen

• Time Phased Inventory Management Selection Screen

After the TPIM process has been executed, the results are reported in summary

and in detail. The two screens used to report this information are:

• Time Phased Inventory Management Item Summary

• Time Phased Inventory Management Item Detail

In addition to displaying the TPIM analysis information, each of these screens

provides the user with the capability to activate secondary displays showing

additional information. This information may also be presented in printed form

through the used of various function keys associated with each screen.

The following pages provide detailed operating procedures for each of the

screens in the TPIM system.

Recommendations

Because of the large number of files and transactions this program looks at, we

recommend you do not run TPIM for all items in one production run.

Instead, we recommend you run it using approximately 10% of your parts for

each production run. You can define this based on a range of item categories and

a single ABC code, and save the parameters in the following programs.

We also recommend you use Multiview to analyze one segment of your items in

one session while creating the TPIM file for another segment in a second session.

TPIM - 12 FPD/203

TIME PHASED OPERATING PROCEDURES

TPIM Procedures Screen

The Time Phased Inventory Management Procedures screen is used to list the

procedures previously saved by the user. A number identifies each procedure,

date and time it was last saved. This is followed by a user-defined title to identify

the contents of the procedure that was run. The user has the option to:

• Run an existing procedure.

• Modify an existing procedure and save it as a new procedure, giving it a

new name.

• Enter a new procedure.

Entry/Inquiry Screen

Field Explanation

SELECT

Select one of the previously recorded TPIM procedures.

Function Keys

F1-Start

Display the first page of the list of TPIM procedures.

F3-Next

Display the next page of TPIM procedures.

CMD

Create a new TPIM procedure.

FPD/203 TPIM - 13

TPIM PROCEDURES SCREEN

TPIM Selections

The Time Phased Inventory Management Selection Screen presents the standard

inventory options.


Field Explanation

Do You Want To Continue? (Y/N)

Y = Continue in the current program.

N = Exit the program.

Whse

Enter the number of the warehouse that contains the items you want to

print.

To include items from all warehouses, leave this field blank and press

SKIP.

Select Whole File? (Y/N)

Y = Include all items from the specified warehouse.

N = To include only a range of items.

Item/Shortname/Category Sequence? (I/S/C)

I = Run the report in item number sequence.

S = Run the report in short name sequence.

C = Run the report in Category Code sequence.

TPIM - 14 FPD/203


From Item Number

To Item Number

These fields display only if printing a range of items in item number

sequence.

Enter the range of item numbers to include in the report.

From Shortname

To Shortname

These fields display only if printing a range of items in short name

sequence.

Enter the range of short names to include in the report.

From Category

To Category

These fields display only if printing a range of items in Category Code

sequence.

Enter the range of Category Codes to include in the report. Entries must

be valid Category Codes from Category Maintenance (IM/CFM).

Select All ABC Codes? (Y/N)

Y = Print all specified items, regardless of their ABC Code.

N = Print only those items flagged with specific ABC Codes.

From ABC Code

To ABC Code

These fields display only if N is entered in the Select All ABC Codes

field.

Enter the range of ABC Codes for which to print.

To print for one code only, enter the same characters in both fields.

Select All Materials? (Y/N)

Y = Include all items that meet the specified parameters, regardless of

their Material Code.

N = Include only those items with a specific Material Code.

Only Material

This field is displayed only if you have not selected all Materials.

Enter the Material Code for which to print.

To include only those items without a Material Code, leave this field

blank.

FPD/203 TPIM - 15

TPIM SELECTIONS

Select All Finishes? (Y/N)


their Finish Code.

N = Include only those items with a specific Finish Code.

Only Finish

This field is displayed only if you have not selected all Finishes. Enter

the Finish Code for which to print.

To include only those items without a Finish Code, leave this field blank.

Select All Specials? (Y/N)


their Special Code.

N = Include only those items with a specific Special Code.

Only Special

This field is displayed only if you have not selected all Specials.

Enter the Special Code for which to print (do not include the slash).

To include only those items without a Special Code, leave this field

blank.

Any Changes? (Y/N)

This field allows you to double-check your entries before continuing in

the program.

N = Display the next screen.

Y = Change one or all of your entries. The cursor will move through

each field again.

TPIM - 16 FPD/203


TPIM Supply

The Time Phased Inventory Management Supply screen is used to identify each

source of inflow of items into the warehouse. The user is presented with various

sources from which inventory is received and asked to select all of those that are

applicable. Based on the responses entered through in this screen, the Time

Phased Inventory Management System will extract data from the appropriate

FASPAC and manufacturing files. This data is used to identify the inflow

quantities and dates for each item. It is also used in calculating the net balance

position of each item throughout the date range being evaluated.


Field Explanation

Use Requisitions?

Y = Include the quantities for items on requisition in net balance.

N = Exclude items on requisition.

Include Or Display? (I/D)

If you entered Y in the previous field:

I = Include items on requisitions in net balance.

D = Display requisitions, but do not include net balance.

Use Purchase Orders?

Y = Include the quantities for items on order via purchase order in net

balance.

N = Exclude quantities for items in purchase orders from net balance.

FPD/203 TPIM - 17

TPIM SUPPLY

Use Reserved Whse Transfers?

Reserved for future use.

Include Or Display?


Use Whse Transfers?

Y = Include quantities for warehouse transfer incoming product in net

balance.

N = Exclude warehouse transfers in net balance.

Use Rework Orders?

Y = Include the quantities for rework orders quantity in net balance.

N = Do not include rework quantity in net balance.

Use Reserved Kits?


Use Kits?

Y = Include the quantities for kits in net balance.

N = Exclude the quantities for kit quantity from net balance.

The following fields are displayed only if the manufacturing module is

active.

Use Mfg. Quotes?

Y = Include the quantities for manufacture items with status of quote in

net balance.

N = Do not include quote items in net balance.

Use Mfg. Reserved?

Y = Include the quantities for manufacture items with status of reserved

in net balance.

N = Do not include items with status of reserved in net balance

Include Or Display? (I/D)

If you entered Y in the previous field:

I = Include items with reserved status in net balance.

D = Display items with reserved status but do not include net balance.

Use Mfg. Ordered?

Y = Include the quantities for manufacture items with status of ordered in

net balance.

N = Exclude manufacture items with status of ordered from in net

balance.

TPIM - 18 FPD/203


Use Mfg. Authorized?

Y = Include the quantities for manufacture items with status of

authorized in net balance.

N = Exclude manufacture items with status of authorized from in net

balance.

Function Keys

F1 – Next

Use values currently displayed and proceed to next screen

F3 – New

Enter new outflow selections

FPD/203 TPIM - 19

TPIM SUPPLY

TPIM Demand

The Time Phased Inventory Management Demand screen is used to identify the

sources of demand or outflow for the selected inventory items. These demands

can include customers, warehouse transfers, rework orders, kits and various EDI

transactions.


Field Explanation

Use Customer Orders?

Y = Include the quantities for customer orders as demand in the net

balance.

N = Exclude customer orders from net balance.

Display Mode

Select the method by which to display the orders. By selecting an option,

you determine whether to display specific orders for a particular Ship To

and Date (1) or a less specific group of orders for the customer by date,

week, or month (2,3,4).

1 = Ship To/Date

2 = Cust/Date

3 = Cust/Week

4 = Cust/Month

TPIM - 20 FPD/203


Use Reserved Whse Transfers?


Include Or Display?


Use Whse Transfers? (Y/N)

Y = Include the quantities for outbound warehouse transfer in the net

balance.

N = Exclude outbound warehouse transfers from net balance

computation.

Use Rework Orders? (Y/N)

Y = Include the quantities for rework orders in the net balance

computation.

N = Exclude the quantities for rework orders from net balance

computation.

Use Reserved Kits ? (Y/N)


Use Kits? (Y/N)

Y = Include the quantities for demand for kitting in net balance.

N = Exclude the quantities for demand for kitting in net balance.

Use 862’s? (Y/N)

Y = Include the quantities for 862 EDI transactions in computing net

balance.

N = Exclude the quantities for 862 EDI transaction from computing net

balance.

Use 830’s? (Y/N)

Y = Include the quantities for 830 EDI transactions in net balance.

N = Exclude the quantities for 830 EDI transaction from net balance.

Firm, Plan Or Estimate?


FPD/203 TPIM - 21

TPIM DEMAND

Display Mode

Select the method by which to display the orders.

1 = Ship To/Date

2 = Ship To/Week

3 = Ship To/Month

4 = Group/Date

5 = Group/Week

6 = Group/Month

Note: The Group option (Group/Date/Week/Month) allows

Manufacturers to display orders for several Bill-To Customers at once.

By selecting a Group that has been previously set up in the Buyer

Contract System, manufacturers can view orders for all Bill-To

Customers that are part of this group - by date, week, or month.

Function Keys

F1 – Next

Use values currently displayed and proceed to next screen.

F3 – New

Enter new outflow selections.

TPIM - 22 FPD/203


TPIM Selections

The first Time Phased Inventory Management Selection screen is used to define

filter information to be used by the Time Phased Inventory Management system

to allow the user to zero in on specific reporting requirements. Filter criteria

entered through this screen includes customer number, date range and

adjustments to the min and max control values for each inventory item. In

addition, the user is allowed to adjust the minimum and maximum for each item

by specifying percentage changes.


Field Explanation

From Customer

Thru Customer

Enter the range of customers to be included.

For all customers, leave these fields blank.

Information for the following three fields is defined in the FASPAC

Scheduled Release Subsystem Module. Leave the following four fields

blank if this module is not active.

EDI Group

Identify the EDI group for which the Time Phased Reporting Selections

are to be made.

FPD/203 TPIM - 23

TPIM SELECTIONS

EDI Cust

If the EDI group is left blank, enter the EDI customer to be reported.

EDI Ship To

If the EDI customer number has been entered, an EDI Ship To address

can be entered to identify the specific location.

Buyer Group

Leave blank or enter Buyer Group code as defined in the Scheduled

Release Subsystem.

From Date

This date is used to identify the first day for which Time Phased

Inventory Management information will be evaluated.

Thru Date

This date is used to identify the ending day for which Time Phased

Inventory Management information will be evaluated.

Warehouse


Item Type


Any Item Not Reviewed For 000 Days


Ignore Minimum? (Y/N)

Y = Report only those items that have a balance below 0.

N = Report items that have a net balance value that are below the

minimum quantity values.

Percentage To Increase/Decrease By

Enter 0 if the current minimum value is to be used, enter a plus if the

minimum value is to be increased.

Enter a minus if the minimum value threshold is to be decreased.

Ignore Maximum? (Y/N)

Y = Do not report items with net balance is above the max value.

N = Report items with net balance value greater than maximum.

TPIM - 24 FPD/203


Percentage To Increase/Decrease By

Enter zero if maximum value is to be used.

Enter plus if the maximum value is to be increased.

Enter minus if the maximum value is to be decreased.

Sort By (S) hip Date, (D)ue Date Or (E)stimulated End Date? (S/D/E)

Specify how manufacturing jobs are sequenced.

S = Ship Date

D = Due Date

E = Estimated End Date

Std Cost Whse Source The Same As Whse Selected? (Y/N)


Warehouse


Function Keys

F1 – Next

Use values currently displayed and proceed to next screen.

F3 – New

Enter new outflow selections.

FPD/203 TPIM - 25

TPIM SELECTIONS

TPIM Summary

Upon completion of the TPIM process, each inventory item that did not have a

net balance value within its minimum and maximum control values for the

duration of the date span being evaluated is listed in the Time Phased Inventory

Management Item Summary screen. The user may examine each of the items in

detail by entering the appropriate selection number. The screen also provides the

user with the capability to print TPIM details for a selected group of items. After

an item is selected, the TPIM Item Detail screen is displayed as explained in the

next selection.


Field Explanation

SELECT

Enter the number in the SEL column to designate the item that is to be

examined in detail.

TPIM - 26 FPD/203


Function Keys

F1-Start

Display the first 18 items in the Time Phased Inventory Management

Summary screen.

F3-Next

Display the next 18 items.

F5-Change Display Sequence

Change the sequence in which items are displayed:

I = Display in item number sequence.

S = Display in item short name sequence.

C = Display in category code sequence.

F7-Print

Print items or notes:

I = Print item notes.

N = Do not print item notes.

From Itm/Cat/Shortname = Enter first item number, category, or shortname (depending on how the report was run) to be printed, or leave thefield blank for all.

Thru Itm/Cat/Shortname = Enter last item number, category, or shortname to be printed, or leave the field blank for all.

Print New Heading Between Items? (Y/N)

Print Toggle Dsp? (Y/N)

FPD/203 TPIM - 27

TPIM SUMMARY

TPIM Detail

After an item has been selected for a detailed analysis, the Time Phased

Inventory Management Item Detail display screen is presented as shown in the

following example.


The user can evaluate the current status of the item by examining the time-phased

sequence of inflows and outflows and the net balance value after each

transaction. The user can quickly ascertain when the net balance value for the

item is above the maximum control value, within the max and min control limits

or below the minimum control value by looking at the character displayed in the

right most column of the detail section. If a * is displayed, the net balance is

above the maximum quantity and if a @ is displayed, the net balance is below the

minimum quantity. If neither character is displayed the net balance value is

within the minimum and maximum control limits.

A time-phased plot of the information displayed in the above example is

presented on the following page. As the plot revels, on October 10th the net

balance value of 46,695 units for item .10J3500BHFEZ is below the minimum

stocking value of 55,378 units. On October 26 an inflow quantity of 28,921 units

is receive from source M-A (manufacturing authorized jobs) raising the net

balance value to 65,491 units which is above the minimum level. On November

20 and additional 190,000 units is received from source M-O raising the net

balance value above the maximum stocking level which is 264,277 units. Finally,

on December 5 an outflow of 2,250 units to source P-D (EDI Past Due Shipment)

brings the net balance value down to 263,693 units which is within the min and

max control limits.

TPIM - 28 FPD/203


Using the information presented in this screen the user can take a proactive

position by dealing with only the exceptional items, that is, those that are not

performing in accordance with the predefined set of controls. Thus the user can

initiate the necessary replenishment or disposition action as deemed appropriate.

Information displayed in detail screen and additional capabilities available

through this screen are defined as follows:

Field Explanation

Item

The item’s name, short name, and description are displayed

Whse

Warehouse identification number.

Item

Item number currently being evaluated.

Short name of item currently being evaluated.

Sorted by

This entry refers to the method by which manufacturing jobs are sorted.

Description

Description of item currently being evaluated.

ABC

ABC classification code for item being evaluated.

3 Mth Avg Usage

Average of most recent three months usage.

FPD/203 TPIM - 29

TPIM DETAIL

Minimum

Minimum quantity threshold value.

On hand

Quantity of item currently on hand in designated warehouse.

Maximum

Maximum quantity of item to be on hand in warehouse.

LN

Line identification number of transaction

Date

Date of transaction.

Qty

Quantity of item in transaction.

Inflows T-S

See the list of possible inflow T-S values on page 6.

Job

Job number of transaction.

Line

Line number of transaction for the job.

Outflows/Qty

Quantity of item shipped.

SRC for source

The standard costing system for manufacturing jobs.

Cust

Number of customer receiving product.

Ship

Ship to address number for customer receiving product.

Net Balance

Running balance of quantity of item on hand.

TPIM - 30 FPD/203


Status

* = You have gone over your maximum

You have gone under your minimum

blank = You are within the appropriate range.

Function Keys

F1-Start

Return to first transaction for this item.

F3-Next

Display Time Phased Inventory Management Detail for next item.

F5-TOG Display

Display customer name.

F6-Usage

Display 3, 4, 9, 12 months average usage values for item.

F7-Print

Print detailed transactions for selected item(s). See page xx23.

F8-Notes

Add/Edit note associated with this item.

F9-Item

Return to Time Phased Inventory Management Summary Display.

F11-Delete

Delete this item from Time Phased Inventory Management Summary

Display.

F12-Next Item

Display next item from Time Phased Inventory Management Summary

Display.

F13-Previous Item

Display detailed information for previous item.

F14-Recalc

Recalculate current inventory item detail based on most recent

transaction.

FPD/203 TPIM - 31

TPIM DETAIL

F15-HI

Display history inquiry screen.

If function key F6 is pressed, the monthly average usage for the past four

quarters is displayed as shown in the following example.

Average Usage Display Screen

Field Explanation

3 Months Usage

6 Months Usage

9 Months Usage

12 Months Usage

The figure in each of these fields represents the average usage for the

specified time period (the past 3, 6, 9, 12 months). Each figure is

calculated based on the information in the usage history file. This

information can be viewed through the Time Phased History Inquiry

(TPI/TPHI) screen.

Buy History

Displays the vendor, PO date, quantity ordered, and unit cost.

TPIM - 32 FPD/203


TPIM Detail Report

If you press F7, the system creates a printed copy of the information displayed in

the TPIM detail screen for each of the selected items. Refer to the Time Phased

Inventory Management Detail Display screen for a description of each of the

values listed in the report. The following is an example of a Time Phased

Inventory Management Report.

Sample Report

FPD/203 TPIM - 33

TPIM DETAIL REPORT

COMPANY: 10 FASPAC 3.4 DEMO FILES PAGE 1

RUN ID: TPIM TIME PHASED INVENTORY REPORT 05/11/99

RUN BY: WPD 08:23:25 05/11/99

———- Inflows ———- ———- Outflows ——— Net

Date Qty T-S Job/Lin Qty T-S Cust/Ship Balance

================================================================================================================================

Item: /10F400SDW6A 93350

10 X 4 DRYWALL SCREW H&B.PHOS ANTIQUE BRASS Z

Average Usage: 0 Minimum: 18 On Hand: 100000-Maximum: 292

06/22/98 1 R-O 213//001 100001 *

07/14/98 1000 P-O 000247/002 99001- @

09/02/98 100 P-O 000444/003 99101 *

09/12/98 550 P-O 000247/001 98551- @

11/26/98 150 PIO 000161/001 98701 *

Print For All Warehouses

Print Whole File

Print In Item Number Sequence

Print All ABC Codes

Print All Materials

Print All Finishes

Print All Specials

Include Requisitions

Use POs

Don’t Use Reserved Whse Transfers As Inflows

Use Whse Transfers As Inflow

Use Rework Orders As Inflow

Use Kits As Inflow

Don’t Use Mfg. Quotes

Don’t Use Mfg. Reserved

Don’t Use Mfg. Ordered

Don’t Use Mfg. Authorized

Use Customer Orders. Print In Ship To/Date Mode

Don’t Use Reserved Whse Transfers As Outflows

Use Whse Transfers As Outflow

Use Rework Orders As Outflow

Use Kits As Outflow

Don’t Use EDI 862s

Use EDI 830s

Use Plan

Print In Ship To/Date Mode

Print From Customer: 1 Thru Customer: 1

Print From: 01/01/98

Print Thru: 12/31/98

Warehouse: 01

Don’t Use Minimum

Don’t Use Maximum

Sort Mfg Jobs By Estimated End Date

END OF REPORT

Inventory AFS Recalculation (TPI/TPIC)

The Time Phased Inventory Available For Sale Calculation (TPIC) program

provides an alternative procedure for calculating the AVAILABLE quantity

maintained by FASPAC. In previous releases of FASPAC, the value of the

AVAILABLE quantity displayed in PI and INQ for each inventory item was the

net inventory position after all demand for the item was taken into consideration,

regardless of when the demand must be met. The value was calculated as follows:

AVAILABLE = On Hand Quantity

+ Rework (If SYS/IMS option 10 is Yes)

– Committed (Orders + transfers + rework)

As an alternative, a new AVAILABLE FOR SALE (AFS) value can be

computed by the system when the TPIC process is run. The TPIC process

determines the minimum stocking level over a specified date range. The

minimum level is determined by taking into account each item’s on-hand

quantity, inflow of product and outflow of product for the specified date range.

The starting date for the all items is the system’s current date. The ending date

for each item is the starting date plus the sum of the vendor lead time and review

cycle for the item as specified in the warehouse master file. As an example, if the

system date was January 1, the item has a lead time (LT) of 15 days and a review

cycle (REV) value of 30 days, the ending date for the item is February 15th.

However, if the LT and REV values are both 0, the item’s AVAILABLE header

and quantity will be displayed rather than the AFS header and quantity value

since the date range to be examined can not be computed.

The prerequisites required to activate this functionality are:

• In the SYS/IMS screen, set the “Display Available For Sale Qty” setting

(option 14) to either Y or R.

• Confirm that valid lead times have been established for the required items.

If items are being review on a periodic basis, appropriate review cycle values

should also be entered for each item.

After these steps have been completed, the TPIC process should be run at the end

of each day for each warehouse. It re-computes the AFS quantity for each item

by taking into account the beginning stock position, inflows and outflows of

product for the specified period of time.

After the TPIC process has completed, the Part Inquiry (PI) and Inventory

Warehouse Inquiry (IM/INQ) screens will display the AFS quantity for each item

as shown in the following two examples.

TPIM - 34 FPD/203


PI Entry/Inquiry Screen

IM/INQ Entry/Inquiry Screen Two

FPD/203 TPIM - 35

INVENTORY AFS RECALCULATION (TPI/TPIC)

Time Phased Inventory

Management Forecasting

Background

One of the most important predictions a distributor makes is how much of a

stocked item will be used in the future. Used, for inventory control purposes,

means all withdrawals from stock at a specific warehouse for sales to customers,

replenishments of other branches, and internal requirements such as components

for a kit, or the raw stock for a plated item.

Traditionally, in FASPAC, usage has been associated with “Sales Quantity” only.

The TPI module allows the definition and tracking of usage to be expanded to

cover all sources of demand. An alternate procedure for establishing Min and

Max controls is also used to set this control based on total usage demand rather

than just sales.

The following situations must be considered to determine usage for each item in

a warehouse:

• Company policy may be to replenish remote branches from a central

warehouse. If so, warehouse transfers to the remote branch should be

considered as usage by the central warehouse. This is the normal “path of

flow” for supplying the remote branch. A similar argument could be used

for kitting and rework operations within a facility.

• At a remote branch, replenishment may be from a central warehouse

and/or purchased locally (presumably at a higher price). Therefore a

history of ALL sources of inflow for a product should be kept.

• In many companies it is common to buy the plain part and then plate it. To

ensure correct ordering for the plain part, the usage into rework and other

areas such as kitting is important to determine the total usage for the item.

The TPIM module is capable of building a new usage history file for each item

using information captured during FASPAC’s normal processing functions that

have taken place prior to the development of the TPIM applications. This usage

includes transactions recorded over the past several months or years. The

following TPIM programs are provided to assist in building, maintaining and

displaying usage history for each inventory item.

• IM/MAI—define “usage” by item within warehouse

• TPI/TPLU—load item/warehouse “usage” by category

• TPI/TPHC—build the new “usage” file

• TPI/TPHI—view the new “usage” information

• TPI/TPHM—maintain “usage” information

TPIM - 36 FPD/203

TIME PHASED INVENTORY MANAGEMENT FORECASTING

Inventory History Inquiry (IM/HI)

The FASPAC system captures usage history for all of the basic types of demand

for each inventory item. These types of demand include:

• Normal sales to customers (regular usage)

• Replenishments for satellite branches from central warehouse stocks

(transfer usage)

• Material withdrawn to be converted into another item through a rework

operation

• Material use as components for kitting and assemblies

In IM/HI each of the basic types of usage demand is captured and displayed. The

first screen shows sales usage.


F5 toggles the screen to display REWORK, TRANSFERS, and IN PROCESS

information.

FPD/203 TPIM - 37

INVENTORY HISTORY INQUIRY (IM/HI)

When F5 is pressed, the second screen displays the other sources of usage that

may include branch transfers, rework operations and components for kitting

operations:

F5 toggles the screen to display SALES and CANCELED figures.

TPIM - 38 FPD/203


Inventory Maintenance (IM/MAI)

Each item in a warehouse has an identifier used to define its valid sources of

demand. This identifier is displayed by selecting the “F- Forecasting” screen, as

shown in the following example.


By entering 01 with the cursor positioned at the SELECT prompt, the user can

specify the sources of demand for the item by entering a value between 1 and 4

and follows.

Field Explanation

SELECT

1 = Sales usage

2 = Sales usage plus warehouse transfers usage

3 = Sales usage plus rework usage plus in process usage

4 = Sales usage plus warehouse transfers usage plus rework usage plus in

process usage

FPD/203 TPIM - 39

INVENTORY MAINTENANCE (IM/MAI)

Load Usage Definition (TPI/TPLU)

Usage definitions may be loaded en masse, by warehouse and category within

warehouse. One of four methods is used to define the sources for usage.


Choose the method that represents the most appropriate sources of usage for the

specified category in the designated warehouse.

Field Explanation

SELECT

1 = Sales usage

2 = Sales usage plus warehouse transfers usage

3 = Sales usage plus rework usage plus in process usage

4 = Sales usage plus warehouse transfers usage plus rework usage plus in

process usage

TPIM - 40 FPD/203


Inventory Usage History Calculation (TPI/TPHC)

This “one-time” program creates a new true usage file based on the usage

definition previously established for each item. Activation of this program

requires a password provided by FASPAC. Please call your FASPAC

representative to proceed. As part of the month-end process, the usage history in

this file is “rolled forward” similar to that done in the IM/HI.


Caution! Call Faspac Customer Support before running this program.

FPD/203 TPIM - 41

INVENTORY USAGE HISTORY CALCULATION (TPI/TPHC)

Usage History Inquiry (TPI/TPHI)

This function is used to view the monthly usage history for each item. The usage

history file can contain usage history for the last 60 months for each item.


Function Keys

F1 = Start

Reset this screen to reflect Warehouse 01 data.

F3 = Next Whse

Scroll through each Warehouse, including a display of ‘All’ Warehouse

data.

F5 – Toggle

Toggle this display from displaying the names of each month, to

displaying XX monthly periods, with period 1 being the most current.

TPIM - 42 FPD/203


Usage History Maintenance (TPI/TPHM)

Item usage history information can be modified using this function. If an item has

an unusual demand for a given month or the item is out of stock, a manual

correction to reflect what the normal demand would have been can be made

using this screen. The next time the average monthly usage is calculated, the

corrected value is used to calculate the new average.


Function Keys

F1 = Start

Reset this screen to reflect Warehouse 01 data.

F3 = Next Whse

Scroll through each Warehouse, including a display of ‘All’ Warehouse

data.

F5 – Toggle

Toggle this display from displaying the names of each month, to

displaying 60 monthly periods, with period 1 being the most current.

To edit an entry, use F3 to find the correct Warehouse, and SELECT the period,

1, 2, etc., even when the month names are displayed.

FPD/203 TPIM - 43

USAGE HISTORY MAINTENANCE (TPI/TPHM)

Inventory Class Code Assignment (TPI/TPCC)

This function provides the capability to assign a ranking code to each inventory

item in each warehouse. The ranking code is based on total dollars of usage, at

cost, over the past 12 months. Each item’s total annual usage dollars is compared

to all other items in the warehouse after items that do not pass the dead stock

criteria have been excluded. Each item is assigned an item class code that has a

value between 0 and 12. A value of 0 denotes items with the most usage dollars.

A prerequisite to running this program is to establish the criteria for ranking all of

the items that have not been flagged as dead stock. In addition, an entry is

required to define the “Dead Stock Threshold”. The dead stock threshold is a

dollar value that each item’s annual dollars of usage must exceed to be defined as

an active item. As an example, if the threshold value is set to twenty dollars, all

items that have an annual usage in dollars (annual usage quantity times unit cost)

equal to or less that twenty dollars are assigned a class code of 13 which denotes

dead stock. The Warehouse Control Specifications fourth screen is used to define

the thirteen percentage values associated with each of up to thirteen class codes.

The “Dead Stock Threshold” value is also entered in this screen as shown in the

following example.

WCS Screen Four

After the ranking criteria and dead stock threshold values are defined, this

process can be run to reclassify all of the items. First each items total dollars of

usage is calculated. The usage values are obtained from the Item Usage History

file. (The usage quantities for each item can be viewed through the MFHI

screen.) The dollar value of each item’s usage is computed by multiplying the

total usage quantity over the most recent 12 months by the item’s unit cost. The

cost base used is that defined by the “Cost Used Before Adjustment” entry in the

SYS/WCS screen.

TPIM - 44 FPD/203


If the item’s usage and quantity on hand values are both zero (the item is just a

computer record), the item is removed from the analysis and not reported as a

dead stock item. Next, the item is then checked to see if its annual usage dollars

is equal to or below the dead stock threshold. If this condition is true, it is

assigned a class code of 13.

A classification code is assigned to each of the items that are above the dead

stock threshold as follows. All of these items are sorted in descending order by

total dollars of usage. Items having the most usage dollars are at the top of the list

and items with the smallest total usage cost are at the bottom. Finally, an

Inventory Classification Code (CLS) is assigned to each item. The CLS code

assigned is determined by the item’s position relative to the other items in the

ranking.

For instance, if a warehouse contained 10,000 items that are above the dead stock

threshold value, using the example listed in the Warehouse Control Specification

shown in the previous section, the top 400 items (4.0%) would be assigned a

class code of 0. The next 800 items, (items 401 through 1200) which would

represent a cumulative 12% of the total number of items, would be assigned a

class code of 1. The next 8% (items 1201 through 2000) would be in class 3. The

bottom 8% (those below the cumulative 92%) will be assigned a class code of 12.

Using this scheme each of the 10,000 active items is assigned a class code value

between 0 and 12 depending on its ranking.

The last step in the ranking process is to calculate a new Economic Order

Quantity (EOQ) value for each item. This value is obtained by multiplying the

item’s average monthly usage times the item’s newly assigned class code, or:

EOQ = AMU * CLS

If the item has a CLS value of 0, the EOQ value will be computed asfollows:

EOQ = AMU * 0.5

If the Inventory Cost Analysis Detail (TPI/TPCD) report is run immediately after

the TPIC process, all of the item’s listed in the ICAD report reflect the results of

the ranking just performed. The rightmost two columns of the report list the

previous and current class code for each item.

When the TPCC selection is made, all items associated with each warehouse in

the current company are reclassified. This process, which is typically run as part

of a month end procedure, should be performed prior to running the TPMM

process. In this manner, the new Min and Max values calculated by the TPMM

process take into account the results of the new EOQ value computed for each

item.

When the Assign Class Codes selection (TPCC) is made, the following screen is

displayed.

FPD/203 TPIM - 45

INVENTORY CLASS CODE ASSIGNMENT (TPI/TPCC)


TPIM - 46 FPD/203


Inventory Cost Analysis Detail (TPI/TPCD)

This report is similar to FASPAC’s Inventory Sales Analysis report. However, in

this report each item’s ranking is based on the total dollars of usage rather than

just the quantity sold as reported in the ISA report. The information presented in

the TPCD is designed to report each item’s ranking and contribution to total

warehouse activity and cost. The total usage, which can include warehouse

transfers, kitting, plating/rework, etc is taken into consideration. The report also

indicates each item’s current stock value and contribution to the warehouse’s

total carrying cost.


Field Explanation

Whse

Enter the number of the warehouse.

To include items from all warehouses, leave this field blank and press

SKIP.

FPD/203 TPIM - 47

INVENTORY COST ANALYSIS DETAIL (TPI/TPCD)

Sample Report

• Information printed in each column in the detailed section of the report is:

• Seq No—Sequential number of each item reported

• Item Number—FASPAC part number

• Usage Quantity—Most recent 12 months total usage for the item

• Unit Cost—Unit cost for the item. (Cost method used determined by

SYS/WCS setting)

• UM—Unit of measure

• Extended Cost—Usage quantity times unit cost

• Cum Cost—Cumulative cost from previous line plus extended cost from

current line

• Cum Pct—Cumulative cost divided by total cumulative cost for the

warehouse

• On-hand Quantity—Current quantity on hand

• Extended Cost—On Hand Quantity times Unit Cost

TPIM - 48 FPD/203


COMPANY: 10 BEST DISTRIBUTION, INC. PAGE 1

RUN ID: ICA INVENTORY COST ANALYSIS DETAIL REPORT 09/21/98

RUN BY: WPD 12 MONTHS 18:25:21 09/23/98

Warehouse: 01

SEQ ITEM NUMBER USAGE UNIT UM EXTENDED CUM CUM ON HAND EXTENDED CUM CUM CLASS

NO QUANTITY COST COST COST PCT QUANTITY COST COST PCT FM TO

===============================================================================================================================

27 125C400KCS8Y 1039 10.73 C 112 464403 100.5 149151 16008 9226117-100.1 07 07

28 /C 1050 9.34 C 98 464501 100.5 600- 56- 9226174-100.1 07 07

29 50C100HCSS 1031 9.30 C 96 464597 100.5 14119 1314 9224860-100.1 08 07 *

4 CLASS 07 TURN RATE 0.02 7120 425 258670 20145

30 /TOOLCJD 6 15.85 EA 95 464692 100.6 2 32 9224828-100.1 08 *

31 1C450HCS3 323 26.37 C 85 464777 100.6 204- 54- 9224882-100.1 08 08

32 25C50HCS8Z 3420 2.06 C 71 464848 100.6 201580 4160 9220722-100.0 08 08

33 37C150HCS3Y 410 9.86 C 40 464888 100.6 190 19 9220703-100.0 08 08

4 CLASS 08 TURN RATE 0.07 4159 291 201568 4156

34 /KIT COMPONENT lb 1000 4.00 lb 40 464928 100.6 5000 200 9220503-100.0 09 09

35 25C200BCG0G 800 3.00 C 24 464952 100.6 0 0 9220503-100.0 09 09

36 / 11 2.00 EA 22 464974 100.6 78 156 9220347-100.0 09 09

3 CLASS 09 TURN RATE 0.24 1811 86 5078 356

37 31C100HCS2Z 563 2.22 C 13 464987 100.6 127 3 9220344-100.0 09 10 *

38 50C100HCS5P 100 9.50 C 10 464996 100.6 100- 10- 9220354-100.0 10 10

39 25C50HCS8/B 500 16.34 M 8 465004 100.6 10300 168 9220185-100.0 10 10

40 /TRACEABLE KIT 40 16.30 C 7 465011 100.6 0 0 9220185-100.0 10 10

4 CLASS 10 TURN RATE 0.23 1203 36 10327 161

41 /HCS KIT 100 5.00 C 5 465016 100.6 900 45 9220140-100.0 11 11

42 1C350HCS8 50 8.44 C 4 465020 100.6 2218 187 9219953-100.0 11 11

43 /NC100HCS2Z 10 9.23 C 1 465021 100.6 2183 202 9219751-100.0 11 11

44 /YFW TEST 6235 .00 C 1 465022 100.6 503850 49 9219702-100.0 11 11

4 CLASS 11 TURN RATE 0.02 6395 10 509151 483

45 /2424-CIM 0 3.50 C 0 465022 100.6 5 0 9219702-100.0 12 12

46 /3030-CIM 0 3.50 C 0 465022 100.6 223 8 9219694-100.0 12 12

47 75C50HCS3 0 14.83 C 0 465022 100.6 12000 1780 9217914-100.0 12 12

48 /BOB TEST 1000- 1.42 EA 1429- 463593 100.3 896 1280 9216634-100.0 12 12

49 /KIT ITEM COMPONENT 4 10000- 15.00 C 1500- 462093 100.0 0 0 9216634-100.0 12 12

5 CLASS 12 TURN RATE 0.95- 11000- 2929- 13124 3068

49 WHSE. 01 TURN RATE 0.05- 41515714 462092 2385393- 9216633-

Warehouse: 01

END OF REPORT

• Cum Cost—Cum Cost from previous line plus extended cost from current

line

• Cum Pct—Cum Cost divided by Total Cum Cost for the warehouse

• Class From—Item’s class code before reclassification

• *—Asterisk printed if Class FM and Class TO are not equal

• Class To—Item’s new class code

Information printed in each column in the totals section of the report is:

• Seq No —Total number of items in current class

• Turn Rate —The classes total extended usage cost divided by total

carrying cost

• Usage Quantity—Most recent 12 months total usage for all items in the

class

• Extended Cost —Total extended cost for all items in the class

• On-hand Quantity —Total quantity on hand for current class

• Extended Cost —Total cost of on hand inventory for current class

• Cum Cost—Cumulative cost from previous line plus extended cost from

current line

FPD/203 TPIM - 49

INVENTORY COST ANALYSIS DETAIL (TPI/TPCD)

Inventory Cost Analysis Summary (TPI/TPCS)

The Inventory Cost Analysis Summary (TPCS) report is designed to present an

accurate picture of where a distributor’s inventory dollars are tied up. What is the

investment in active stock, dead stock and total stock? How is the inventory

turning in total and by class code?

The information in this report is a summary of that presented in the Inventory

Cost Analysis Detail (ICAD) report. If detailed information is required to identify

each items class code and how it was derived, the ICAD report should be run.

Note: This program is the same as the Inv. Cost Analysis Summary Rpt

(IMR/IMRP/ICAR) program.


Field Explanation

Whse

Warehouse for which Inventory Cost Analysis report is to be run

Run For Class

C = Report totals by inventory class code. A class code of 13 is used to

identify dead stock items

TPIM - 50 FPD/203


Or ABC Code

A = Report totals by inventory ABC code. An ABC code of Z is used to

identify dead stock items

Costing Method To Use

A = Warehouse average cost

C = Corporate average cost

R = Replacement cost

Sample Report

FPD/203 TPIM - 51

INVENTORY COST ANALYSIS SUMMARY (TPI/TPCS)

COMPANY: 10 ABC COMPANY PAGE 1

RUN ID: ICAR INVENTORY COST ANALYSIS SUMMARY REPORT 09/21/98

RUN BY: WPD CURRENT WAREHOUSE: 01 10:02:56 09/23/98

Class Number Of Pct Ave. Turn <----------------Usage------------------> <--------------Carrying----------------->

Code Items Item Cost/M Rate Cost Pct Cum Cost Pct Cost Pct Cum Cost Pc

================================================================================================================================

00 2 .6 9.38 0.04- 375.18 39.12 375.18 39.12 9360.08- 1.62- 9360.08- 1.62-

01 4 1.2 143.19 0.16- 53.23 5.55 428.41 44.67 326.89- 0.06- 9686.97- 1.68-

02 4 1.2 86.78 0.07 21.64 2.26 450.04 46.93 301.40 0.05 9385.57- 1.63-

03 3 .9 40.54 11.83 8.20 0.86 458.24 47.78 0.69 0.00 9384.88- 1.63-

04 4 1.2 17.62 0.09 4.54 0.47 462.78 48.26 49.81 0.01 9335.07- 1.62-

05 4 1.2 9.42 2.80 3.35 0.35 466.14 48.61 1.20 0.00 9333.87- 1.62-

06 4 1.2 17.62 0.01 1.07 0.11 467.21 48.72 85.63 0.01 9248.24- 1.60-

07 4 1.2 59.76 0.02 0.43 0.04 467.64 48.76 20.15 0.00 9228.09- 1.60-

08 4 1.2 70.04 0.07 0.29 0.03 467.93 48.79 4.16 0.00 9223.94- 1.60-

09 3 .9 47.49 0.24 0.09 0.01 468.01 48.80 0.36 0.00 9223.58- 1.60-

10 4 1.2 30.53 0.23 0.04 0.00 468.05 48.81 0.16 0.00 9223.42- 1.60-

11 4 1.2 1.68 0.02 0.01 0.00 468.06 48.81 0.48 0.00 9222.94- 1.60-

12 5 1.5 266.28 0.95- 2.93- 0.31- 465.13 48.50 3.07 0.00 9219.87- 1.60-

?? 71 21.7 0.00 0.00 0.00 0.00 465.13 48.50 0.07 0.00 9219.80- 1.60-

Active Stock Totals

49 11.20 0.05- 465.13 48.50 9219.87- 1.60-

Dead Stock Totals

207 186.30 0.00 493.88 51.50 586651.76 101.60

Other Stock Totals

71 0.00 0.00 0.00 0.00 0.07 0.00

Warehouse 01 Totals

327 21.71 0.00 959.01 100.00 577431.96 100.00

Warehouse: 01 WAREHOUSE ONE

Run For Class Codes

Cost Method: Average Warehouse Cost

END OF REPORT

Time Phased Inventory

Management Controls

Background

“The goal of all distributors is to provide the best possible service at the lowest

practical cost”.

“The most demanding challenge in managing a fastener operation is inventory

control”.

“In the 90’s the success of a distributor will depend on his ability to manage his

assets”.

“Level of service is based on when replenishment is initiated and distributor cost

is based on how much is ordered”.

These phrases can be found in the latest texts on inventory control and inventory

management. The purpose of implementing the inventory class coding scheme is

to give the FASPAC system user the best and most efficient and understandable

tools available to manage his inventory and optimize the investment in that

inventory.

The primary function of the class code is scheme is to allow a distributor to

achieve a maximum return on his inventory investment. Class 0 and 1 items

represent high usage dollars and should achieve an annual turn rate of at least 12.

The class 11 and 12 items represent low usage dollars. Typically and annual

investment in each of these items is less than $10.

So each items class value is the key to determining how much should be

replenished or the Economic Order Quantity (EOQ). As previously documented,

for each stocked item, its EOQ is computed as follows:

EOQ = AMU * CLS

If a class 2 item has an average monthly usage of 1,000 units, its EOQ is 2,000

representing a two months supply at current usage rates. Remember that the class

code assigned is based on the total dollar value of inventory over the past 12

months. So the class code is an indicator of dollars flowing through the

warehouse and not just quantities.

TPIM - 52 FPD/203

TIME PHASED INVENTORY MANAGEMENT CONTROLS

As an item’s usage rises or falls, the average monthly usage (AMU) is

recomputed to take into account this change. Each item’s class code is also

reassigned taking into account the change in demand. When the item drops to or

below to the dead stock threshold value, it is assigned a class code of 13 and its

EOQ is set to zero. The TPMM function is used to recalculate the minimum and

maximum stocking values taking into account each item’s class code, average

monthly usage, lead time and safety stock factor.

FPD/203 TPIM - 53

BACKGROUND

Min/Max Controls Update (TPI/TPMM)

This program updates the min and max controls for all items that do not have

their “Predefined Controls” flag set. It uses each item’s usage history, lead time,

safety stock percentage and class code to compute the item’s minimum and

maximum stocking values.

If an item’s class code is 13 indicating that the item is dead stock and its min and

max controls have not been designated as “predefined”, the minimum and

maximum stocking values are set as follows:

MIN = 0

MAX = 0

If the item has a class code ranging from 0 through 12, the minimum stocking

level is computed according to the following formula:

MIN = (AMU * VLT/30) * (1`+SS%/100)

Where:

• AMU is the average monthly usage for the most recent 12 months of

usage

• VLT is the vendor lead-time in days as maintained in the warehouse

master file. If this value is zero, the system will use the Default Lead-Time

value entered in the fourth screen in SYS/WCS.

• SS% is the safety stock percentage value maintained in the warehouse

master file. If this value is zero, the system will use the Default Safety Stk

value entered in the fourth screen in SYS/WCS.

The TPMM program uses each item’s minimum stocking level, average monthly

usage, and class code to compute the item’s maximum stock level according to

the following formula:

MAX = MIN + (AMU * CLS)

Where:

• MIN is the minimum stocking level as defined above

• AMU is the average monthly usage for the most recent 12 months of

usage

• CLS is the item’s class code for class values ranging from 1 through 12. If

the item’s class value is 0, .5 will be used in the above computation.

TPIM - 54 FPD/203


Entry/Inquiry Screens

Field Explanation

Whse

Enter warehouse number for which minimum and maximum controls are

to be updated

Report Only Or Report and Update

R = Report the changes that will be made if the update is performed

U = Update the controls and report the changes

FPD/203 TPIM - 55

MIN/MAX CONTROLS UPDATE (TPI/TPMM)

Sample Report

TPIM - 56 FPD/203


COMPANY: 10 GEST MANUFACTURING, INC. PAGE 1

RUN ID: RESET MINIMUM AND MAXIMUM STOCK QUANTITIES 07/29/98

RUN BY: WPD 11:52:38 07/29/98

S OLD NEW OLD NEW

WH ITEM DESCRIPTION H MIN QTY MIN QTY MAX QTY MAX QTY

=======================================================================================

01 / 0 0 3 0

02 / FACE MASK DUST MASK 5 0 30 0

02 /# 10 FLW 10 FLAT WASHER 20 0 100 0

02 /# 10 LCW 10 LOCK WASHER 20 0 100 0

01 /#1 1/16X1/2 WOODRUFF KEY 0 0 12 0

01 /#1 OIL CUP OIL CUP 0 0 3 0

01 /#10 5/32X7/8 WOODRUFF KEY 0 0 12 0

01 /#10-25-TPIX1/2-SINGLE FACE THREAD ROLL 2,000 2,000 10,000 2,000

02 /#10-25-TPIX1/2-SINGLE FACE THREAD ROLL 4,000 4,000 6,000 4,000

01 .12K6000WST02/@M12-1.75 X 60MM WELD STUD 2,188 2,188 23,188 17,485

End Of Report.

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