Advanced Inventory Manager (AIM) IntroductionFollow
Welcome to Advanced Inventory Manager or AIM as we like to call it. This module was made to make the life of Purchasing Leaders in your business easier. We know small changes in your supply chain can have a large impact on your P&L and maintaining healthy stock levels is a challenge when dealing with changing lead times and demand. With AIM-set inventory levels you won’t lose forecasted sales opportunities or tie up working capital in unnecessary overstock – in other words, you and your customers will stop paying the price for preventable inventory breakdown. So, let’s ensure you use AIM to its full extent and plan inventory levels for all your products based on your latest data, risks and expert knowledge.
AIM will not generate Purchase Orders automatically but it will make the existing reorder report more effective by generating intelligent min and max levels that function as reorder point triggers and purchase quantities. The Insights Page provides you with visualizations, actions, and/or callouts to help you set and review product’s Min and Max stock levels and Lead Days.
Glossary of terms:
- Rate of demand (RoD)- Rate of Demand is simply a Rate of Sale, Rate of Warehouse Transfer Out, Rate of daily average use in assemblies or a combination if sellable components that are also transferred. Example: If you sold 240 units in the last 12 months then the RoD will be 20 units per month (240/12=20).
Outgoing stock movement between warehouses are included in the calculation of RoD but stock adjustments do not factor into demand, but rather SoH availability against your min and max levels - which is how your stock position (under, within limits or over) is measured.
- Days of Stock - Using rate of Demand per Day, calculate the Days of Stock at current average daily use instead of quantity.
Example: RoD = 5, this means 35 units equates to estimated 7 Days of Stock if the RoD remains the same.
- Lead Days – The duration of time between placing Purchases with your supplier and receiving the products and receipting it in.
- Use Actuals – Calculates the average duration of days between the date the order was placed and the date the order was receipted in or Completed per product across all warehouses for the filtered set.
- Min stock – Reorder point quantity (in Just in Time (JIT) this is based on lead times) i.e. minimum amount of stock I should hold at my next Purchase.
- Min stock buffer (JIT only) - Number of days of stock held above Min stock to offset (internal or supplier) delay risks
- Max stock buffer – The amount of stock you replenish to at every Reorder (expressed in Days, it often matches purchase frequency)
Consider: do I buy at intervals (frequency-based) or flexibly at min quantity (stock-based)?
- Understock – Overdue for Purchase at this point in time, will likely stock out. The quantity has dipped under the recorded min level (Products will also display under Low stock alerts in the Reorder Report if there are no Open Purchase Orders.)
- Overstock – Working capital tied up or preparing for peak season. The quantity exceeds the recorded max stock level (Products will display under High stock alerts in the Reorder Report).
- Deadstock – Products that have not sold at all within the selected date range, likely at the end of Product Life Cycle.
- Quantity – AIM uses the base unit of measure for all products.
Important/Prerequisites, please take note:
- AIM Modelling will exclude product/warehouse combinations where there is no SOH and no rate of demand within the date range. This is because the calculated stock limits x the rate of demand will always equal zero. However, if you wish to create a forecast for a product that has no historic demand, such as a new product, you can search for this product on the AIM Insights Dashboard and load the Product Forecast to set a future demand forecast.
- All products marked as Obsoleted excluded from AIM.
- The default Rate of Demand (RoD) is ‘Per Month’ with a default period of 12 Months. We also provide options to see the RoD calculation for your products Per Week or Per Day and the date range selection gives you options to look at your RoD over the latest 1 Month, 3 Months, 6 Months, 12 Months, or 18 Months. If the RoD shows 30 per Month over 12 months then you can assume that for the last 12 months, you sold 360 units of the product (360/12).
- AIM will not generate Purchase Orders automatically as you can use the Reorder Report for this. The Reorder Report is made more effective by AIM as the stock controls are calculated according to historic or forecast demand.
- We recommend that all SOH products should have a default Supplier. AIM will help you to calculate new Min and Max stock levels using parameters you add to the strategy panel, if the Product does not have a default supplier the New Lead Days, used in the calculation, cannot be saved in the product record in Unleashed.
- If you make any updates in Unleashed related to the default supplier of any product you will have to wait approximately an hour for these changes to be visible in AIM
- We recommend that you do not change the Per Warehouse Controls when using AIM.
- If there are more than 1000 products in your filtered set AIM will split them up in sets of 1000 items each. You will have to process each set individually (make changes, select and submit these changes) before moving on to process the next set. On the Modelling page, you will see the number of sets and the total number of items/records in the set.
TIP: Add more filters to reduce the number of records to make it more manageable and focused.
- Once subscribed to the AIM module all superusers will have full permission to the functionality, viewing and filtering on any of the insights, using the modelling page, add or edit product forecasts, submit changes, view the transaction log and revert changes if so desired.
- Role Permission for all other Roles needs to be unlocked. With AIM unlocked for selected Roles they will have read-only access. Toggle on the ‘Edit’ tick box to allow users to save and submit changes using AIM.