{"id":12268,"date":"2024-01-30T10:12:20","date_gmt":"2024-01-30T14:12:20","guid":{"rendered":"https:\/\/smartcorp.com\/blog\/extend-epicor-kinetic-forecasting-min-max-planning-copy\/"},"modified":"2024-01-30T10:42:45","modified_gmt":"2024-01-30T14:42:45","slug":"ampliar-epicor-bistrack-con-planificacion-y-pronostico-de-puntos-de-reorden-dinamico-smart-ipo-s","status":"publish","type":"post","link":"https:\/\/smartcorp.com\/es\/blog\/extend-epicor-bistrack-with-smart-ipo-s-dynamic-reorder-point-planning-and-forecasting\/","title":{"rendered":"Ampl\u00ede Epicor BisTrack con la planificaci\u00f3n y pron\u00f3stico din\u00e1mico de puntos de reorden de Smart IP&O"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_margin=”0px||||false|false” custom_padding=”0px||||false|false” global_colors_info=”{}”][et_pb_row admin_label=”Row” module_class=”blog_glob” _builder_version=”4.16″ locked=”off” global_colors_info=”{}”][et_pb_column type=”4_4″ saved_specialty_column_type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text content_last_edited=”off|desktop” admin_label=”CONTENT” module_class=”post-main_text” _builder_version=”4.24.0″ header_3_text_color=”#0c71c3″ header_3_font_size=”19px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n

In this article, we will review the \u201csuggested orders\u201d functionality in Epicor BisTrack, explain its limitations, and summarize how Smart Inventory Planning & Optimization (Smart IP&O) can help reduce inventory & minimize stock-outs by accurately assessing the tradeoffs between stockout risks and inventory costs.<\/p>\n

Automating Replenishment in Epicor BisTrack
<\/strong>Epicor BisTrack\u2019s \u201cSuggested Ordering\u201d can manage replenishment by suggesting what to order and when via reorder point-based policies such as min-max and\/or manually specified weeks of supply. BisTrack contains some basic functionality to compute these parameters based on average usage or sales, supplier lead time, and\/or user-defined seasonal adjustments. Alternatively, reorder points can be specified completely manually. BisTrack will then present the user with a list of suggested orders by reconciling incoming supply, current on hand, outgoing demand, and stocking policies.<\/p>\n

How Epicor BisTrack \u201cSuggested Ordering\u201d Works<\/strong>
To get a list of suggested orders, users specify the methods behind the suggestions, including locations for which to place orders and how to determine the inventory policies that govern when a suggestion is made and in what quantity.<\/p>\n

\"Extend<\/a><\/p>\n

First, the \u201cmethod\u201d field is specified from the following options to determine what kind of suggestion is generated and for which location(s):<\/p>\n

Purchase <\/strong>\u2013 Generate purchase order recommendations.<\/p>\n

    \n
  1. Centralized for all branches \u2013 Generates suggestions for a single location that buys for all other locations.<\/li>\n
  2. By individual branch \u2013 Generates suggestions for multiple locations (vendors would ship directly to each branch).<\/li>\n
  3. By source branch \u2013 Generates suggestions for a source branch that will transfer material to branches that it services (\u201chub and spoke\u201d).<\/li>\n
  4. Individual branches with transfers \u2013 Generates suggestions for an individual branch that will transfer material to branches that it services (\u201chub and spoke\u201d, where the \u201chub\u201d does not need to be a source branch).<\/li>\n<\/ol>\n

    Manufacture <\/strong>\u2013 Generate work order suggestions for manufactured goods.<\/p>\n

      \n
    1. By manufacture branch.<\/li>\n
    2. By individual branch.<\/li>\n<\/ol>\n

      Transfer<\/strong> from source branch \u2013 <\/strong>Generate transfer suggestions from a given branch to other branches.<\/p>\n

      \"Extend<\/a><\/p>\n

      Next, the \u201csuggest order to\u201d is specified from the following options:<\/p>\n

        \n
      1. Minimum \u2013 Suggests orders \u201cup to\u201d the minimum on hand quantity (\u201cmin\u201d). For any item where supply is less than the min, BisTrack will suggest an order suggestion to replenish up to this quantity.<\/li>\n
      2. Maximum when less than min \u2013 Suggests orders \u201cup to\u201d a maximum on-hand quantity when the minimum on-hand quantity is breached (e.g. a min-max inventory policy).<\/li>\n<\/ol>\n
          \n
        1. Based on cover (usage) \u2013 Suggests orders based on coverage for a user-defined number of weeks of supply with respect to a specified lead time. Given internal usage<\/em> as demand, BisTrack will recommend orders where supply is less than the desired coverage to cover the difference.<\/li>\n<\/ol>\n
            \n
          1. Based on over (sales) – Suggests orders based on coverage for a user-defined number of weeks of supply with respect to a specified lead time. Given sales orders<\/em> as demand, BisTrack will recommend orders where supply is less than the desired coverage to cover the difference.<\/li>\n<\/ol>\n
              \n
            1. Maximum only \u2013 Suggests orders \u201cup to\u201d a maximum on-hand quantity where supply is less than this max.<\/li>\n<\/ol>\n

              Finally, if allowing BisTrack to determine the reorder thresholds, users can specify additional inventory coverage as buffer stock, lead times, how many months of historical demand to consider, and can also manually define period-by-period weighting schemes to approximate seasonality. The user will be handed a list of suggested orders based on the defined criteria. A buyer can then generate POs for suppliers with the click of a button.<\/p>\n

              \"Extend<\/a><\/p>\n

              Limitations<\/strong><\/p>\n

              Rule-of-thumb Methods<\/u><\/p>\n

              While BisTrack enables organizations to generate reorder points automatically, these methods rely on simple averages that do not capture seasonality, trends, or the volatility in an item\u2019s demand. Averages will always lag behind these patterns and are unable to pick up on trends. Consider a highly seasonal product like a snow shovel\u2014if we take an average of Summer\/Fall demand as we approach the Winter season instead of looking ahead, then the recommendations will be based on the slower periods instead of anticipating upcoming demand. Even if we consider an entire years\u2019 worth of history or more, the recommendations will overcompensate during the slower months and underestimate the busy season without manual intervention.<\/p>\n

              Rule of thumb methods also fail when used to buffer against supply and demand variability.\u00a0 For example, the average demand over the lead time might be 20 units.\u00a0 However, a planner would often want to stock more than 20 units to avoid stocking out if lead times are longer than expected or demand is higher than the average.\u00a0 BisTrack allows users to specify the reorder points based on multiples of the averages.\u00a0 However, because the multiples don\u2019t account for the level of predictability and variability in the demand, you\u2019ll always overstock predictable items and understock unpredictable ones.\u00a0\u00a0 Read this article<\/a> to learn more about why multiples of the average fail when it comes to developing the right reorder point.<\/p>\n

              Manual Entry<\/u>
              Speaking of seasonality referenced earlier, BisTrack does allow the user to approximate it through the use of manually entered \u201cweights\u201d for each period. This forces the user to have to decide what that seasonal pattern looks like\u2014for every item. Even beyond that, the user must dictate how many extra weeks of supply to carry to buffer against stockouts, and<\/em> must specify what lead time to plan around. Is 2 weeks extra supply enough? Is 3 enough? Or is that too much? There is no way to know without guessing, and what makes sense for one item might not be the right approach for all items.<\/p>\n

              Intermittent Demand<\/u>
              Many BisTrack customers may consider certain items \u201cunforecastable\u201d because of the               intermittent<\/a> or \u201clumpy\u201d nature of their demand. In other words, items that are characterized by sporadic demand, large spikes in demand, and periods of little or no demand at all. Traditional methods\u2014and rule-of-thumb approaches especially\u2014won\u2019t work for these kinds of items. For example, 2 extra weeks of supply for a highly predictable, stable item might be way too much; for an item with highly volatile demand, this same rule might not be enough. Without a reliable way to objectively assess this volatility for each item, buyers are left guessing when to buy and how much.<\/p>\n

              Reverting to Spreadsheets<\/u>
              The reality is most BisTrack users tend to do the bulk of their planning off-line, in Excel. Spreadsheets aren\u2019t purpose-built for forecasting and inventory optimization. Users will often bake in user-defined\u00a0              rule of thumb<\/a>\u00a0methods that often do more harm than good. \u00a0Once calculated, users must input the information back into BisTrack\u00a0manually. The time consuming nature of the process leads companies to\u00a0infrequently compute their inventory policies \u2013\u00a0<\/a>Many months and on occasion years go by in between mass updates leading to a \u201cset it and forget it\u201d reactive approach, where the only time a buyer\/planner reviews inventory policy is at the time of order.\u00a0 When policies are reviewed after the order point is already breached, it is too late.\u00a0 When the order point is deemed too high, manual interrogation is required to review history, calculate forecasts, assess buffer positions, and to recalibrate.\u00a0 The sheer volume of orders means that buyers will just release orders rather than take the painstaking time to review everything, leading to significant excess stock.\u00a0 If the reorder point is too low, it\u2019s already too late.\u00a0 An expedite may now be required, driving up costs, assuming the customer doesn\u2019t simply go elsewhere.<\/p>\n

              Epicor is Smarter
              <\/strong>Epicor has partnered with Smart Software and offers Smart IP&O as a cross platform add-on to its ERP solutions including BisTrack, a speciality ERP for the Lumber, hardware, and building material industry.\u00a0 The Smart IP&O solution comes complete with a bidirectional integration to BisTrack.\u00a0 This enables Epicor customers to leverage built-for-purpose best of breed inventory optimization applications.\u00a0 With Epicor Smart IP&O you can generate forecasts that capture trend and seasonality without manual configurations.\u00a0 You will be able to automatically recalibrate inventory policies using field proven, cutting-edge statistical and probabilistic models that were engineered to accurately plan for\u00a0              intermittent demand<\/a>. \u00a0 Safety stocks will accurately account for demand and supply variability, business conditions, and priorities.\u00a0 You can leverage\u00a0service level driven planning<\/a>\u00a0so you have just enough stock or turn on\u00a0optimization methods<\/a>\u00a0that prescribe the most profitable stocking policies and service levels that consider the real cost of carrying inventory. You can support commodity buys with accurate demand forecasting over longer horizons, and run \u201cwhat-if\u201d scenarios to assess alternative strategies before execution of the plan.<\/p>\n

              Smart IP&O customers routinely realize 7 figure annual returns from reduced expedites, increased sales, and less excess stock, all the while gaining a competitive edge by differentiating themselves on improved customer service. To see a recorded webinar hosted by the Epicor Users Group that profiles Smart\u2019s Demand Planning and Inventory Optimization platform, please register here.<\/a><\/p>\n

               <\/p>\n

               <\/p>\n

              \"\"<\/a><\/p>\n

               <\/p>\n

               <\/p>\n

              [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"

              En este art\u00edculo, revisaremos la funcionalidad de \u201c\u00f3rdenes sugeridas\u201d en Epicor BisTrack, explicaremos sus limitaciones y resumiremos c\u00f3mo la Planificaci\u00f3n y optimizaci\u00f3n inteligente del inventario (Smart IP&O) puede ayudar a reducir el inventario y minimizar los desabastecimientos al evaluar con precisi\u00f3n las compensaciones entre los riesgos de desabastecimiento. y costos de inventario. <\/p>","protected":false},"author":164,"featured_media":9743,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"

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              Recently, I had an interesting conversation with an inventory manager and the VP Finance. We were discussing the benefits of being able to automatically optimize both reorder points and order quantities. The VP Finance was concerned that given their large supplier required minimum order quantities, they would not be able to benefit.\u00a0 He said his suppliers held all the power, forcing him to accept massive minimum order quantities and tying his hands. While he felt bad about this, he saw a silver lining: He didn\u2019t have to do any planning. He would accept a large inventory investment, but his customer service levels would the exceptional.\u00a0 Perhaps the large inventory investment was assumed to be the cost of doing business.<\/p>

              I pushed back and pointed out that he was not as powerless as he felt. He still had control of the other half of the procurement process: while he couldn\u2019t control how much to order, he could control when to order by adjusting the reorder point. In other words, there is always room for careful quantitative analysis in inventory management, even when you have one hand tied behind your back.<\/p>

              An Example<\/strong><\/p>

              To put some numbers behind my argument, I created a scenario then analyzed it using our methodology to show how consequential it can be to use inventory optimization software even in constrained situations. In this scenario, item demand averages 2.2 units per day but varies significantly by day of week. Let\u2019s say the imaginary supplier insists on a minimum order quantity of 500 units (way out of proportion to demand) and fills replenishment orders in either three days or ten days in equal proportions (quite inconsistent). To spread the blame around, let\u2019s also suppose that the imaginary supplier\u2019s imaginary customer uses a foolish rule that the reorder point should be 10% of the minimum order quantity. (Why this rule? Too many companies use simple\/simplistic rules of thumb in lieu of proper analysis.)<\/p>

              So, we have a base case in which the order quantity is 500 units, and the reorder point is 50 units. In this case, the fill rate is 100%, but the average number of units on hand is a whopping 330. If the customer would simply lower the reorder point from 50 to 15, the fill rate would still be 99.5%, but the average stock on hand would drop by 11% to 295 units. Using the one hand not tied behind his back, the inventory manager could cut his inventory investment by more than 10%, which would be a noticeable win.<\/p>

              Incidentally, if the minimum order quantity were abolished, the customer would be free to arrive at a new and much better solution. Setting the order quantity to 45 and the reorder point to 25 would achieve a 99% fill rate at the cost of a daily on-hand level of only 35 units: nearly a 90% reduction in inventory investment: a major improvement over the status quo.<\/p>

              Postscript<\/strong><\/p>

              These calculations are possible using our software, which can make visible the otherwise unknown relationships between inventory system design choices (e.g., order quantity and reorder point) and key performance indicators (e.g., average units on hand and fill rate).\u00a0 Armed with this ability to conduct these calculations, alternative arrangements with the supplier may now be considered. For example, what if, in exchange for paying a higher price per unit, the supplier agreed to a lower MOQ. Using the software to conduct an analysis of the key performance indicators using the \u201cwhat if\u201d costs and MOQs would reveal the cost per unit and MOQ that would be needed to develop a more profitable deal.\u00a0\u00a0 Once identified, all parties stand to benefit.\u00a0 The supplier now generates a better margin on sales of its products, and the buyer holds considerably less inventory yielding a holding cost reduction that dwarfs the added cost per unit.\u00a0 Everyone wins.<\/p>

              \u00a0<\/p>

              \u00a0<\/p>

              \"\"<\/a><\/p>

              [\/et_pb_text][et_pb_code module_class=\"comment_sect\" _builder_version=\"4.10.7\" global_colors_info=\"{}\"]jQuery(document).ready(function($) { \/\/ Stuff to do as soon as the DOM is ready. Use $() w\/o colliding with other libs$(window).on('load', function(){ if ($(window).width() < 2000 ) { $(\".comment_sect\").append($(\"#comment-wrap\")) } if ($(window).width() < 2000) { $(\"#et-main-area\").prepend($(\".blog_bg \")) } if ($(window).width() < 2000 ) { $(\".post-main_text\").prepend($(\".et_post_meta_wrapper\")) } }); });[\/et_pb_code][et_pb_code admin_label=\"Comment \" module_class=\"com-title\" global_colors_info=\"{}\"]<\/p>

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