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.
The above explanation is a rough sketch of ATP. If you don’t know how to use ATP, we would suggest that you give Netcellent a call. It may take hours of training just to get to the beginner level of using ATP.  Below is an ATP Inquiry provided as an example for you.



EMK


Inventory Management

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 Feature - Obsolete Kit Parent When First Component is Obsolete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

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