Whether you run a small single-site motor factor business, or a large multi-branch parts distribution operation, you will realise the importance of having the right stock in the right place at the right time. Achieving this perfect scenario is extremely difficult, but Autopart has several built-in features and modules that can help.
Most Autopart users make use of the Suggested Ordering feature within the Purchase module. This screen will suggest which parts (and how many of them) to order at any given time, based on several criteria; stock on hand, outstanding back orders, existing purchase orders, minimum and maximum stock levels, lead times and possibly alternative part availability.
A typical motor factor will hold anywhere between 20,000 and 50,000 individual SKUs at each location. Managing this is a significant challenge, where the consequence of getting it wrong means either having insufficient stock to supply customers, or too much sitting on the shelf just gathering dust.
Minimum and maximum (min & max) stock levels are used to control when parts need to be ordered and the quantity to order.
The “Minimum” quantity is the point at which the order review process is triggered. When stock on-hand reaches the minimum quantity, a part is flagged for review.
The “Maximum” quantity is the highest quantity you want to hold in stock at any one time.
So, essentially, the min and max work together to manage ordering and stock holding.
This module removes much of the time and effort needed to manually manage stock levels. It can be configured with limited complexity for single-site operations, or with many different settings and parameters for multi-branch operations, and anywhere in between.
In its simplest form, the module looks at sales history and calculates an Average Monthly Usage figure for your chosen parts. It then uses this figure as a basis for the calculation of the minimum and maximum quantities, based on parameters that you set yourself.
If today you are placing orders manually or entering minimums and maximums manually against your parts, then there is a strong possibility that you have both too much and too little stock sitting on your shelves.
The Min and Max recalculation routine uses your sales data to accurately calculate your minimum and maximum levels, ensuring that your system is configured to order the right quantities of the right parts and at the right time. This doesn’t just happen once; you can recalculate as often as you like (normally either monthly or quarterly) to ensure you react to changes in demand patterns.
The great thing about this routine is that you can run it as many times as you like, and it will only create suggested minimum and maximum changes.
Even better, you can see what impact any changes will have on your stock holding by part number, product group, range, supplier and overall. Only when you are happy with the changes do you need to update the live stock file, which can be done with a simple click of a button.
This routine will carry out a series of calculations based on a set of parameters of your choosing. It will not tell you what is a good or what is a bad result; it will simply provide you with the results of its calculations.
As a minimum the routine needs to know three things:
1. The number of months to use to calculate the Average Monthly Usage (AMU)
2. What percentage of the AMU to use to calculate the maximum level
3. What percentage of the max to use to calculate the minimum level.
Once these are set, you can run the routine and the system will crunch the numbers and calculate any changes to the minimum and maximum levels based on your selection criteria.
So far, we have only scratched the surface of what is possible with the Min & Max Recalculation routine. It has many more parameters and settings that allow almost endless customisation. For example, it can take into account seasonality, build in buffer stocks, account for lost sales, and much more.
Everything!
Once customers become confident with the Min & Max Recalculation results, the whole process, including updating of the live stock file, can be added to the month-end routines. No more need for manual intervention.
If you have never used this routine before or it’s not configured on your system, then we recommend you speak to your Account Manager for an initial overview and to discuss whether it makes sense to take it further.
Suggested Ordering.
Stock Levelling (for multi-branch sites).
Buyer’s Tasks.
Product Reclassification.
For businesses looking for high-end stock optimisation solutions, Klipboard partners with Netstock, which provides supply and demand planning solutions.