Long-Term vs. Short-Term Inventory Quantity Available and Inventory with Time Line

Q - As the volume of our business increases, the complications of booking orders into the future, as well as scheduling inventory receipts into the future, has made the back order function onerous. An order that is scheduled to ship six or eight months in the future grabs all the inventory, while the shipment to satisfy that order won’t arrive for another five or six months. Meanwhile, all new orders are put on back order.

We are looking for a more flexible method of deciding the quantity available for allocation to stop orders being part shipped when the reason is the allocation of inventory to orders not shipping until well into the future.

Do you have options/modules/add-ons/ideas about looking at the current stock and open purchase orders on a time line to assist in allocating inventory to orders on hand?

When only a few items were involved, they could be handled (more or less) outside the system. As the number of items in this state increases and more web orders bypass human contact, keeping your eye on the problem has grown from an irritation to a headache.

Do you have suggestions for us?

A - We have comprehensive solutions to deal with your issue.

Long-Term vs. Short-Term Quantity Available (Qty Avail)


Regarding the available quantity, in Elliott we have two kinds:
  • Quantity Available: The definition of Qty-Avail = Qty-OH – Qty-Alloc
  • Excess Quantity: The definition of Excess-Qty = Qty-OH – Qty-Alloc + Qty-BO
So let’s take a look at item A that has Qty 10 on hand. Initially, there’s no order on this item.
  • Then Customer 100 places an order of Qty 3 to be shipped tomorrow. So the Qty-Order = 3, Qty-To-Ship = 3. This will cause the item Qty-Alloc to increase by 3.
  • As a result Qty-Avail = 10 – 3 = 7. Excess-Qty = 10 – 3 + 0 = 7.
  • Now Customer 200 places an order of Qty 6 to be shipped 6 months from now. Since this is going to be shipped in the distant future, you enter the order as Qty-Order=6, Qty-To-Ship=0, Qty-BO=6. This will cause the Qty-Alloc to increase by 6 and the Qty-BO to increase by 6.
  • As a result, the new Qty-Avail = 10 – 9 = 1. Excess-Qty = 10 – 9 + 6 = 7.
From the above example, you can see that Qty-Avail refers to the long-term availability. Excess-Qty refers to the short-term availability. Throughout the system, we have various options to show or use Qty-Avail or Excess-Qty based on the Global Setup.  The Fill Backorder function always uses the Excess-Qty. For the order that’s going to ship 6 months later, you will only fill the back order prior to when you are ready to ship.

Inventory on the Time Line - ATP


As for the inventory on the time line, we have an excellent function called “Available to Promise” or ATP. ATP is Elliott’s way of doing MRP. This is the core functionality in Elliott, and it is extensive.

If you've never used the ATP feature before, we suggest you start by performing an ATP Regen by going to I/M -> Util-Setup -> ATP Regen and Process -> Generate -> Total Regen.  Don't Create Plan Order since Plan Order is another whole subject.

Generally speaking, as a manufacturer, you are categorized as manufacture to stock, manufacture to order, or a combination of these two.
  • If you manufacture to stock, then you need forecasting.  Forecasting often can be assisted through history statistics. 
  • If you manufacture to order, then you may not need forecasting.  The ATP will advise you of the shortage of materials based on the sales order, so you know exactly what to buy in order to produce the products ordered by your customers.
As for a distributor, the same principle applies:  
  • Some distributors/importers in the fashion industry perform trade shows and take advance orders many months ahead of delivery.  Then they will turn around and place the orders with their suppliers. This is what we call purchase to order.  This type of distributor/importer has very high inventory risk.  Their job is to order the right quantity and deliver at the right time for their customer.
  • On the other hand, if your must have the inventory on hand to make the sales, then you will be in the purchase to stock scenario.  In that case, forecasting is important.
Once you have done the ATP regen, you can access ATP information from the following areas:
  • I/M -> Inquiry -> Available to Promise: This inquiry will let you see your inventory future balance by time line.  It is an excellent way for a customer service representative to advise the customer if there will be inventory available at a future time.  It can also be used by the buyer or planner on an ad hoc basis to see if purchasing or production is needed.
  • I/M -> Inquiry -> Stock Status Inquiry:  You can drill down to ATP from this screen. There are also many other areas in Elliott where you can drill down to the ATP inquiry.  Since ATP inquiry shows all transactions in Sales Orders, Purchase Orders and Production Orders, all quantity allocation and on-order items are reflected in ATP with detail break down.  Therefore, it is often a convenient place for you to investigate the details of allocation.
  • I/M -> Reports -> Available to Promise Reports: There are various ATP reports you can run through this option.  ATP reports can be used by the buyers or planners for purchasing or production planning.  It can be exported to CSV so you can perform an analysis on a spreadsheet.  ATP reports can also used by the customer service representatives to advise customers if any scheduled shipment will be late.
  • I/M -> Util-Setup -> ATP Regen and Process: Generally speaking, the ATP database is updated in real time automatically.  If you're using ATP for the first time, you should perform a total ATP regen.  In addition, if you want to use ATP as MRP (Material Requirement Planing), Elliott can generate plan orders for you.  You will need to generate plan orders when you perform ATP regen.  ATP Processing is a function designed for the buyers and planners.  Buyers can you this function to create PO Requisitions.  PO Requisitions can then be posted and become POs.  The planners can use this function to create BOMP production work orders.
  • COP -> Maintenance -> Forecast Maintenance: You can use this forecast function to drive your ATP plan orders. Forecast data can be imported from an CSV file. Therefore, you can manage your forecast database in a spreadsheet.  When you are satisfied, then you can import the forecast data into Elliott.
  • I/M -> Reports -> Re-ordering Advice Reports: These reports are important for forecasting purposes. In particular, the User Defined CSV Export will allow you to extract Elliott's inventory, sales, usage and ATP data in extremely flexible ways.  We call the "User Defined CSV Export" as the "Elliott Inventory Report Writer."  You can use this function to give you the necessary information for purchasing and planning.
 Below is an ATP Inquiry screen provided as an example for you:


The above explanation is a rough sketch of ATP. Please look at the following knowledge base articles for more details:
http://support.elliott.com/knowledgebase/articles/1181563-introduction-to-available-to-promise-atp

If you need more information beyond that, we suggest that you give Netcellent a call. It may take hours of training just to get to the beginner level of using ATP. 

EMK


Inventory Management

  1. Long-Term vs. Short-Term Inventory Quantity Available and Inventory with Time Line
  2. Introduction to Available to Promise (ATP)
  3. Inventory Aging Report by Location Sequence Produces Different Result Than by Other Sequence
  4. Inventory Aging Report Shows Different Age Between Single and All Locations
  5. Multiple Users Entering Physical Count Tag at the Same Time Issue
  6. Expand Item Description 1 and 2 Character Limit
  7. How Different is an IM Kit from a BOMP Kit?
  8. Explanation on Component Availability Inquiry
  9. How Is Shortcut Item Different from Kit Item?
  10. No Privilege to View Location History
  11. How to Calculate EOQ (Economic Order Quantity)
  12. Item Quantity Allocation Is Incorrect
  13. Reorder Advice Custom CSV Export Shows Zero Items
  14. Elliott Physical Count Processing
  15. Feature - Add-On Item Drill Down From Item Search
  16. Feature - Utility to Reset Item PTD Fields from Location History
  17. Feature - Inventory Snapshot
  18. Feature - ATP Regen to Consider Order Multiple and Economic Order Qty
  19. Feature - Item Master Activity Sub-Code
  20. Feature - Add Support for the Update of “Mostly Mfg Flag” in Change Existing Item Import
  21. Feature - Auto Delete BOMP Product Structure When Item Obsolete
  22. Feature - Item Linkage Report/Processing
  23. Feature - Added the Ability to Organize Product Categories by a New Product Category Group
  24. Procedure to Correct Bad Serial Number with Special Symbol
  25. Feature - Additional SY12MONS Updates
  26. Feature - Additional Activity Codes for Item Linkage CSV Report and Item Linkage Processing
  27. Feature - Item Number Wild Card Support for Starting Item Number
  28. Feature - Obsolete Kit Parent When First Component is Obsolete
  29. Feature - Show Items with Qty Variance on Tag Variance Reports
  30. IM01S3 Inventory Management Iten Audit Trail Report
  31. IM04S2 Inventory Management Inventory Transaction Audit Report
  32. IM02S2 Inventory Management Inventory Location Audit Trail Report
  33. IM03S1 Inventory Management Usage Exception Reports
  34. IM06SCN Inventory Management Stock Status Report
  35. IM08S1 Inventory Management Print Cycle Count Worksheet
  36. IM14S1 Inventory Management Item History Report
  37. IM19S1 Inventory Management Serial/Lot Stock Status Report
  38. IM19S2 Inventory Management Serial/Lot Issue History Report
  39. IM20S1 Inventory Management I/M Distribution to G/L Report
  40. IM26SCN Inventory Management Frozen Stock Status Report
  41. IM30S1 Inventory Management Kit Where-Used Report
  42. IM31S1 Create Unreleased POs by Vendor
  43. IM32S1 Inventory Management Kit Gross Requirements Report
  44. IM0201 Inventory Management Location Control File Maintenance
  45. IM0405 Inventory Management Available To Promise Inquiry
  46. IM0500 Inventory Management Stock Status Inquiry
  47. IM0500Q Inventory Management Stock Status Inquiry
  48. IM0700 Inventory Management ABC Analysis Reports
  49. IM0900 Inventory Management Reordering Advice Reports
  50. IM1000 Inventory Management Physical Count Processing
  51. Feature - Utility to Reset Item PTD/YTD Fields from Location History
  52. IM1100 Inventory Management Utilities Setup
  53. IM1201 Inventory Management Location File Maintenance
  54. IM1300 Inventory Management Recalculate Reorder Fields
  55. IM1400 Inventory Management Clear Item Accumulators
  56. IM1501 Inventory Management Product Category File Maintenance
  57. IM1601 Inventory Management Material Cost Type File Maintenance
  58. IM1701 Inventory Management Material Cost Type/Loc File Maintenance
  59. IM1801 Inventory Management Buyer/Analyst Code File Maintenance
  60. IM1901 Inventory Management Initialize Lifo/Fifo File
  61. IM1902 Inventory Management Adjust Item File to Lifo/Fifo
  62. IM1903 Inventory Management Serial/Lot Processing/Multi-bin Utilities
  63. IM1904 Inventory Management Serial/Lot Stock Status Inquiry
  64. Feature - Add Additional Record Types to Reorder Advise User-Defined CSV Export
  65. IM2500 Inventory Management Reset Allocated Quantities
  66. IM2700 Inventory Management Set Trx Audit File Beginning Balances
  67. IM2800 Inventory Management Freeze Inventory
  68. IM2900 Inventory Management Kit File Maintenance
  69. IM3301 Inventory Management Job Code File Maintenance
  70. IM3400 Inventory Management Job Analysis Report
  71. IMACTMNT Inventory Management I/M Account File Maintenance
  72. IMAGESCN Inventory Management Inventory Aging Report
  73. IMATPGSN Inventory Management Generate ATP File
  74. IMATPRSN Inventory Management Available to Promise Report
  75. IMBININV Inventory Management Bin Inventory File Maintenance
  76. IMBINMNT Inventory Management Bin File Maintenance
  77. IMBINTRN Inventory Management Inventory Transfer Processing
  78. IMCHGBIN Inventory Management Change Bin No/Pick Seq
  79. IMEXPTSN Inventory Management Export Item for Take an Order
  80. IMFRMMNT Inventory Management Item Label Form Setup
  81. IMGENMNU Inventory Management Generate Location History
  82. IMIMSITM Inventory Management Item Import Utility
  83. IMITMUDS Inventory Management Item User-Defined Fields Import Utility
  84. IMSUBMNT Inventory Management Substitute Item Class File Maintenance
  85. IMUSRMNT Inventory Management User-Defined Code File Maintenance
  86. IMVESMNT Inventory Management Vessel File Maintenance
  87. IMVLSMNT Inventory Management I/M Serial/Lot History File Maintenance
  88. Feature - Expanded Selection Parameters for Reorder Advise User Defined CSV Export
  89. Change - Update Both Kit Parent and Components Usage
  90. Feature - Create Price Code 1 from Item Minimum Price Utility
  91. Change - Available to Promise by Item Report - Add Item Description 2
  92. Feature - Support AR (Attribute) Type in Reorder Advise User Defined CSV Export
  93. Can System Default Item User-Defined Code?
  94. Feature - Item Label Printing Enhancements
  95. Feature - Ability to Initialize Character Fields During Change Existing Item Import
  96. Understanding Status Code at Inventory Transfer Dispatch Screen
  97. Feature - Support GTIN Based on Two Different UPC Codes
  98. Feature - Update Estimated Date/Time When Printing Transfer Tickets
  99. Feature - Allow Physical Count Tag Import Without Serial Number
  100. Feature - Delete Kit Components When Item Activity Code is Set to 'O'
  101. Feature - New QTYAVAILBYCOMP Attribute Fields
  102. Feature - Allow GTIN Maintenance in I/M Change Bin No/Pick Seq Processing
  103. Feature - Improvements to Reorder Advise Reports
  104. What Is the Difference Between INV_TRX_UN_COST and INV_TRX_NEW_AVG_COST in IMINVTRX Table?
  105. Feature - Added a Function "Create Inventory Trx CSV Import"
  106. Feature - Added Support to “Create I/M Trx CSV Import” for Kit Items
  107. Feature - Improvements to QTYAVAILBYCOMP and QTYAVAILBYCOMP2 Attributes
  108. Feature - Add Desc2 Column to Item Linkage CSV Report
  109. Feature - Numeric Item List Changes
  110. Feature - Added 1C and LD Column Types to Reordering Advise User Defined CSV Export
  111. What's the Difference Between Lead Time & Planning Lead Time?
  112. Explanation of ATP LP Type - Negative Sign (-) vs (*) Symbols

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