Automating Inventory Reordering—Exercises

IMPORTANT
It is extremely important that you set up and work within your own site to maintain your data integrity. If you work within any other site, you will compromise your own exercise data as well as the data of other students. Predictable exercise results require that your data be isolated in your own site.

Basic Data Setup

Supplier

Purpose: The purpose of this exercise is to create a supplier to be used in the main exercise.

Windows:
Supplier

  1. Open the Supplier window, and search for supplier 5000.
  2. Right-click, then click Copy Supplier to create your new customer XX5000.

General exercise for Supplier

Purchase/Inventory/Sales Part

Purpose: The purpose of this exercise is to create the part data entries necessary when using the reordering functionality.

Windows:
New Part Assistant

  1. Create XX-58-401 as a purchased, inventory, and sales part by using the New Part Assistant. Use supplier XX5000.

General exercise for Purchased Part

General exercise for Stored Sales Part

Inventory Locations

Purpose: The purpose of this exercise is to set up the basic data required for using the reordering functionality.

Windows:
Inventory Locations

  1. Open the Inventory Locations window and create inventory locations of the following types: Arrival, Quality Assurance, and Picking.

General exercise for Entering Inventory Locations

Purchasing

Purpose: The purpose of this exercise is to verify basic data required for using the reordering functionality.

Windows:
Supply Chain Matrix for Supplier
Supplier for Purchase Part
Calculate Purchase Leadtime

  1. Ensure that all four lead time components in the Supplier Chain Matrix for Supplier and the Supplier for Purchase Part window are set to zero. Two lead time values are found in the Supplier Chain Matrix for Supplier window and in the Supplier for Purchase Part  General and Inspection Info tabs.

  2. Click the Supplier for Purchase Part/General tab and verify that no delivery pattern is used.

  3. Open the Calculate Purchase Leadtime window, click the Parts Leadtime field and select Update also expected.

  4. Click OK to perform the calculation.

Note: It is crucial that lead time information throughout Distribution is synchronized. Any attempt trying to offset the calculations by entering different lead time parameters will have draw-backs at other steps in the process.

Inventory Part

Purpose: The purpose of this exercise is to verify basic data required for using the reordering functionality.

Windows:
Inventory Part
Supplier
Supplier for Purchase Part
Calculate Purchase Leadtime

  1. Verify that purchase lead-time and expected lead time on the Inventory Part/Acquisition tab is zero. If not, recheck the lead time information in the Supplier and Supplier for Purchase Part windows. Rerun Calculate Purchase Leadtimes.

  2. Clear the Availability Check and V.M.I. check boxes in the Inventory Part/Misc Part Info tab.

  3. In the Inventory Part/Planning Data tab, set the planning method to C, safety stock to 2, order point to 10, and order point quantity to 20. Set the Supply Type field to Requisition.

General exercise for Purchased Inventory Part

Customer

Purpose: The purpose of this exercise is to create a customer to be used when running the reordering functionality.

Windows:
Customer

  1. Open the Customer window, and search for customer 1000.
  2. Right-click, then click Copy Customer to create your new customer XX1000.
  3. Open the Customer/Order/Misc Customer Info tab, and connect order type NO to the customer.
  4. Go to the Customer/Address/Order Address Info tab to verify that no route is connected to the customer.
  5. On the same tab, verify that delivery lead times are set to zero.

Note: By using zero lead times and a seven days a week calendar, it is easier to understand the dates created for purchase and customer orders. The main reason for using zero lead times, a seven days a week calendar, and no routes or delivery patterns is that we want to find out how the order proposal routine works, without having to deal with delivery time and lead time adjustments.

General exercise for Customer

Site

Purpose: The purpose of this exercise is to verify basic data required for using the reordering functionality.

Windows:
Site

  1. Open the Site window. Search for your site.
  2. Click on the Inventory tab and verify that the Picking Lead Time field is set to zero.
  3. Click on the General tab and change distribution calendar ID to 7.

Note: By using zero lead times and a seven days a week calendar, it is easier to understand the dates created for purchase and customer orders. The main reason for using zero lead times, a seven days a week calendar, and no routes or delivery patterns is that we want to find out how the order proposal routine works, without having to deal with delivery time and lead time adjustments.

General exercise for Site

Main Exercises

Purpose: The purpose of these exercises is to show the details of the order proposal routine, and how to set up an environment for testing the results from the order proposal. The setup data used in these exercises covers several test cases. You are encouraged to create more cases on your own.

Windows:
Inventory Part Availability Planning
Create Order Proposal
Background Jobs
Calculate Purchase Leadtime
Automatic Order Processing
Procurement Basic Data/Order Processing Types


You are responsible for availability planning in the warehouse. To train your staff, you have put together some educational materials. Before having your students complete the exercises, you have decided to first try them yourself.

Test Case No. 1

  1. Open the Inventory Part Availability Planning window. Verify that there are no existing supplies or demands. If there are, cancel them in the appropriate windows.
  2. Remove all stock so that the quantity on hand is zero.
  3. Open the Create Order Proposal dialog window to run the process.

Note: When executing the order proposal, always enter your part number, and leave the Commodity Group 2, and Planner fields blank. Do not change the default Control values. You must enter a value in the PO Coordinator field. You might need to execute the job manually in Background Jobs.

  1. Open and populate the Inventory Part Availability Planning window. How much is ordered? Why?
  2. Note the purchase requisition number, and run Create Order Proposal again.
  3. Check on Inventory Part Availability Planning. What has happened? Why?

Note: Each time you are asked to check on Inventory Part Availability Planning, you should compare the status before and after refreshing the window. One way to easily do this is to use two separate windows, one that is refreshed just before running order proposal, and one refreshed just after.

Test Case No. 2

  1. Receive a quantity of 15 of part XX-58-401 into a picking location.
  2. Check on Inventory Part Availability Planning.
  3. Run Create Order Proposal.
  4. Check on Inventory Part Availability Planning. What has happened? Why?
  5. Enter a demand for 3 pieces, and check on Inventory Part Availability Planning. What do you think will happen when you run the order proposal?

Note: Create demands by entering a customer order requested prompt. You do not have to release the customer order, as the line is released and thus visible as demand. Change the sales quantity on the order line to simplify order changes.

  1. What do you think will happen if there is a demand for 5 pieces? Change sales quantity from 3 to 5, and run the order proposal.
  2. What do you think will happen if there is a demand for 7 pieces? Change sales quantity from 5 to 7, and run the order proposal.

Test Case No. 3

  1. Change the wanted delivery date to four days later. The sales quantity remains at  7 pieces.
  2. Check on Inventory Part Availability Planning. Discuss why the Plannable column looks as it does.
  3. Run Create Order Proposal. What do you think will happen?
  4. Check on Inventory Part Availability Planning. What happened? Why?
  5. Run Create Order Proposal again, but enter 10 in the Planned Days field.
  6. Check on Inventory Part Availability Planning. What happened? Why? What date is created for the requisition? Why?
  7. What is the purpose of the Planned Days parameter? How do you think it should be used?

Test Case No. 4

  1. Now it's time to introduce a purchase lead time of 7 days. Remember to execute Calculate Purchase Leadtime with the Parts Leadtime field set to Update also expected.
  2. Check on Inventory Part Availability Planning. Try to explain the difference from the previous check.
  3. Change sales quantity to 3 pieces, and wanted delivery date to tomorrow's date.
  4. Run Create Order Proposal. Use planned days 10.
  5. Check on Inventory Part Availability Planning. Does it look as you expected?
  6. Change sales quantity to 7, refresh Inventory Part Availability Planning, and run Create Order Proposal, planned days 10. What do you think will happen?
  7. Check on Inventory Part Availability Planning. What happened? Discuss why.
  8. Remove the purchase requisition. Change sales quantity to 15, refresh Inventory Part Availability Planning, and run Create Order Proposal, planned days 10. What do you think will happen?
  9. Check on Inventory Part Availability Planning. What happened? Why is the due date changed compared to previous situation?

Test Case No. 5

  1. Remove existing purchase requisitions. Change the sales quantity to 3 pieces. Add a new customer order line for 3 pieces, wanted delivery date today plus three days. Run Create Order Proposal, planned days 10.
  2. Check on Inventory Part Availability Planning. Try to explain what happened.
  3. Remove existing purchase requisitions. Add a new customer order line for 3 pieces, wanted delivery date, today plus four days. Run Create Order Proposal, planned days 10.
  4. Check on Inventory Part Availability Planning.
  5. Remove existing purchase requisitions. Add a new customer order line for 5 pieces, wanted delivery date, today plus five days. Run Create Order Proposal, planned days 10.
  6. Check on Inventory Part Availability Planning. What happened? Why?

Test Case No. 6

  1. Remove all your current demands and supplies. Enter three new demands for 11 pieces each with planned delivery dates today plus 10, 20, and 30 days.
  2. Run Create Order Proposal, planned days 100.
  3. Check on Inventory Part Availability Planning. What happened? Verify what happened by using the flow chart in the training material.

Test Case No. 7

  1. Remove all supplies and change sales quantity for all lines from 11 to 10 pieces.
  2. Run Create Order Proposal, planned days 100.
  3. Check on Inventory Part Availability Planning. What happened? Compare to the previous case. What is the difference?

Test Case No. 8

  1. Remove all supplies.
  2. Enter a purchase requisition, wanted receipt date today plus 20 days.
  3. Run Create Order Proposal, planned days 100.
  4. Check on Inventory Part Availability Planning. What happened? Compare to previous case. What is the difference?

Test Case No. 9

  1. Remove all supplies.
  2. Remove all demands but one. Use sales quantity 11 pieces and wanted delivery date today plus 15 days.
  3. Run Create Order Proposal, planned days 10.
  4. Check on Inventory Part Availability Planning. What happened?
  5. Change the sales quantity from 11 to 14 pieces.
  6. Run Create Order Proposal, planned days 10.
  7. Check on Inventory Part Availability Planning. What happened? Verify what happened by using the flow chart in the training material.

Test Case No. 10

  1. Remove all your current demands and supplies. Enter a new demand for 15 pieces, wanted delivery date tomorrow.
  2. Run Create Order Proposal, and check on Inventory Part Availability Planning.
  3. Convert the purchase requisition to a purchase order. Obviously, our supplier cannot deliver today, but he confirms that he can deliver to our premises today plus two days. Confirm the order for delivery today plus two days.
  4. Check on Inventory Part Availability Planning.
  5. Run Create Order Proposal, and check on Inventory Part Availability Planning. Can you explain what happened? How can you prevent this from happening?

Test Case No. 11

  1. Create a purchase order processing type where all four events are used. Specify number of days before latest order date.
  2. Connect the order processing type to your purchase part.
  3. Add some demands for the part, and process order proposal.
  4. Check on Inventory Part Availability Planning.
  5. Run Automatic Order Processing. Use requisitioner, INV.
  6. Check on Inventory Part Availability Planning. Discuss how to set up automated order handling in a real environment. What are the pros and cons?