Like what you see? Discover the benefits of the D365UG/AXUG Community. Learn More
During one of the Master Planning classes at 2015 Summit, it was brought up that you could run a journal that would show the usage of components to determine min/max levels in Master Planning.
I have a customer that we have been running for several years, so we have the historical data. I was wondering how I can run this so I don't have to figure out the usage manually.
So thanks to Evert, I was able to successfully create a safety stock journal. Now, I think I'm reading it correctly, but could someone explain to me what each column mean/does? I ran the journal for a handful of common items we use for a customer. I used data from the beginning of the year, and clicked the std dev box. When I did the proposal, I used a multiplier of 2. (Not sure what is a good number to use.) I just want to make sure I explain this correctly to the group when proposing to make these changes.
The multiplier determines how much you want to cover variations (swing) of demand. Demand is never a straight line, but rises & falls over time. The more roller coaster like it is (steep hills & valleys), the more deviation there is and the more likely you may be out of stock without an adequate multiplier when you approach steep usage (a hill).
There are 2 styles of multipliers - the factor option is a simple multiple (1.2 is common for many industries, but it may be more or less depending on the types of products you offer). Service level accounts for higher /lower deviations by calculating coverage 90%, 95%, etc of the time (meaning you will be able to cover that percent of deviation). A service factor of 85 is roughly the same as 1.2 factor. This covers 20% of daily demand over lead time. If lead time is 10 days, the factor adds 2 days of demand fulfillment. The AX Help on the calculate function is pretty good.
You want to pay attention to how much inventory you are going to carry - safety stock can be expensive and many companies try to avoid it if at all possible. It is usually used for components that have lead times longer than the production/sales cycle or as a means to reduce frequent purchasing for low cost items. Lead times have to be accurate. If you have seasonal fluctuations, you want to accommodate for that- no point in holding excess in July when you need it for November and potentially running out.
------------------------------Mark ProutyProgrammer / AnalystANGI Energy SystemsJanesville WI
------------------------------Jessica MurphyMaster PlannerGoodwill Industries of Central IndianaIndianapolis IN
Good comments. Be particularly careful with service Level - a service level of 100 percent would indicate that you NEVER stock out of a product so your safety stock will be through the roof. It's also important to have a good lead time on the product otherwise the calculations will be off. I've always found that safety stock is a both art and science! I had a scheduled blog post regarding safety stock go up on www.ax-simplified.com that may provide some additional insight.
I would only use the factor as a multiplier if I was forecasting that my business would increase or decrease dramatically from the period I'd selected to analyze. Which takes me to my last point...make sure the issues period you select to analyze is a good match for your business. For example, if you sell pool floats, you would want to look at your transactions from last summer, and not the previous six months, to get a better indicator of safety stock levels for this summer.
------------------------------Mark ProutyProgrammer / AnalystANGI Energy SystemsJanesville WIOriginal Message:Sent: 05-10-2016 11:17From: Jessica MurphySubject: Usage Journals
How is AX calculating inventory value? When I look up purchase price and inventory on hand, that cost does not equal.
What is you inventory valuation method? This is found on the item model group for the item. Depending on the report you are looking at, the inventory value is either the current average cost x on hand, or is the value based upon the valuation method.
We use standard cost.
Site designed by Brightfind
Powered by Cobalt xRM and Higher Logic