Re: Number of times out of stock

We have asked our customers for Estimated Annual Usage figures on what they
order from us.  This information is used in quoting pricing to them, and
goes into the forecast, which helps us plan our raw material
availability.  Some customers are real good at this estimate.  Some
customers actual annual ordering has no relation to their EAU.

When a new customer item is in the process of being engineered, with
samples for customer approval, we have conditional customer orders in the
system, coded so production knows not to launch MRP reccommendations.  They
are in the system so that raw materials get ordered so that when the
samples are customer approved, and the engineering finalized, we do not
have a bottleneck of raw material lead times to get started on the new parts.

You can run reports off of ITH Inventory History file.
You know what the on-hand balance is as of a point in time, such as Opening
Balance from last end-month fiscal.
Write a program that looks at the changing on-hand balance going backwards
in time, like what INV300 F21 history does, except instead of putting the
running balance on screen or on report, it only outputs the dates that the
total was zero or negative, and at end of item break a total number of
times, within the time period that you have ITH retention, limiting
selection on basis of item type and item class, since some might be
permanently empty.  Also output to a work file = item/facility/number of
times, then sort by number of times, to print those items that ran out of
stock the most often.

When we look in our BOM, we see item type phantom, item class engineering
change, a line giving latest record of item notes that apply to this
particular item.  This is an example of an item in our system that should
be permanently out of stock.

However, I think that if the item out of stock is one that you did not
need, because there are no current requirements, you should be happy that
it is out of stock, with no money invested in materials you won't be using
for a while.

We have a big interest in listing inventory that we have no use for.  We
now get this kind of data by matching CIC (cost) + ILI (inventory) + IIM
(date of last corporate usage), looking for BOM orphans (components with no
parents) after engineering changes, and some modifications generating work
files that link BOM components to customer end items based on date of last
shipment, to identify raw materials used exclusively on customer items for
which we have not had sales in a reasonable time period.

Also if it is a sub-assembly production item, you would expect that it
ought to regularly run out of stock as soon as you have completed
fulfilling customer requirements.  Rather, the issue might be items that
have greater requirements than on-hand or on-order, that MRP says you need
to expedite, or those that have gone negative, triggering coding calling
for a cycle count.

We have several items that regularly go negative because we are not posting
all transactions in the sequence they really happened.  For example final
assembly labor reporting is delayed until inspection has approved what goes
to the customer, which can lead to some adjustments to the approved
quantity.  This means that we ship what we made before we post the final
inventory that we made, so that end items invariably go negative quantity.

Look at the dynamic planning fields that can plan safety stock based on
average days requirements.

Find a numeric field in some file that y"all do not anticipate you will
ever be using, and is large enough to accommodate this.  If you only got
one facility, then Item Master might do the job.  At the end of the day,
have some program that identifies all items in the condition you not like -
perhaps raw materials needing purchase order expediting in excess of their
vendor lead times, perhaps customer order requirements that are past due -
then for every item in that condition, increment the selected field by one.

I think there is a need for better visibility of the potential for not
meeting a schedule.  10 days from now a shipment promised to a customer
will not go out on time, because of a problem on the shop floor or with raw
materials.  Do you see this coming in time to take proper corrective
action, or will the first that anyone in management knows about it is the
day the shipment is due that does not go out?

-
Al Macintyre (macwheel99@sigecom.net via Eudora)
Al's diary http://radio.weblogs.com/0107846/
Cure cancer. http://members.ud.com/about/