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Forecasting Workbench in PRMS TM Master Production Schedule Material Requirements Plan Scheduling Workbench by Production Line Work Order/ FPO Maintenance Pick Slip Print Stage Request Consolidated Pick SHOP FLOOR CONTROL Soft Bill Maintenance Auto Allocation to Lots RMS/Present Version 3.4 A Product of MXB - Managing the Business 100 N. Freeman Road Tucson, AZ 85748 (520) 886-5914 www.ElectricEd.com
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Page 1: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench in PRMSTM

Master Production Schedule

Material Requirements Plan

Scheduling

Workbench

by

Production

Line

Work Order/

FPOMaintenance

Pick SlipPrint

Stage Request

Consolidated

Pick

SHOP

FLOOR

CONTROL

Soft BillMaintenance

Auto Allocation to

Lots

RMS/PresentVersion 3.4

A Product ofMXB - Managing the Business

100 N. Freeman RoadTucson, AZ 85748

(520) 886-5914www.ElectricEd.com

Page 2: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

RMS/Teachkit PRMSTM Forecasting Workbench

Table of ContentsSample Agenda iAttendance Sheet iiForecasting Workbench Overview 1

What it Does 4Definitions 8

Forecasting Methods 15Forecasting Techniques 16

Simple Moving Average 18Exponential Smoothing 20Exponential Smoothing with Trend 22Exponential with Seasonality 24Exponential with Seasonality/Trend 26User Enter and Locked 28Focus ForecastingTM 30

This Year/Last Year Next Quarter 32Last Year Quarter = Next Quarter 34

Product Group Forecasting 36Four Methods of Safety Stock 40

Safety Stock Methods Compared 42Exception Reporting 44

Forecasting Product Configuration 47Forecasting Product Classifications 48Mass Parameter Maintenance 52

Forecasting Environments 55Single Plant 56Multi Plant 58DRP 60

VMI 9.0

62Forecast Transfer Program 64

File Transfer Structure 66Purchased Finished Goods 68

Simple Order Point 68Time Phased Order Point 68

Setting Up and Operations 71System Control 72Product Master Maintenance 84Warehouse Inventory Maintenance 86Seasonal Profiles 86

C MXB, 1998 Printed in the United States

All Rights ReservedPRMS is a trademark of Acacia Technologies, a division of Computer Associates Inc.

Page 3: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

RMS/Teachkit PRMSTM Forecasting Workbench

Table of ContentsMass Parameter Maintenance 90Forecast Information Maintenance 102Forecast Profiles 116Creating the Calendar 118

Shop Calendar Maintenance 118Forecast Period Maintenance 118Generate Calendar 118Update Calendar (Holidays) 118Post Calendar Updates 120Print Calendar 120Calendar Inquiry 120

Entering Forecasts - Forecast Update 122

Forecasting Reports 125Forecasting Inquiries & Reports 126

Inquiries 126Seasonal Profiles Inquiry/Where Used 126Forecast Profiles Inquiry/Where Used 128Forecast Information Inquiry 128Time Phased Order Point Inquiry 130TPOP Calendar Inquiry 130Sales Forecasting Inquiry & Retrieval 132Product Group Explosion/Implosion 132Product Group Model Inquiry 134

Reports 134Forecast Performance Report 134Excess/No Move Inventory Report 136Forecast and Parameter Exception Report 136Forecast Explosion Report 138Forecast and Demand History Report 138Forecast Transfer Report 140Calendar Print 140

Period End 143Log Current Forecast to History 144Generate Forecast Parameters 146

Appendix 149Forecasting Files List iCreating Forecast Models and Structures ii

IM0100 Product Group Model iiiIM0120 Forecast Structure iiiIM0160 Model Propagation v

C MXB, 1998 Printed in the United States

All Rights ReservedPRMS is a trademark of Acacia Technologies, a division of Computer Associates Inc.

Page 4: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Sample Agenda

Day 1Morning

OverviewForecast Methods

Forecast TechniquesForecast Models and StructuresSafety Stock CalculationsException Reporting

AfternoonForecasting Product Configuration

Product ClassificationsMass Parameter Maintenance

Interfaces to DRP and MPS and other Environments

Day 2Morning

Setting UpRegular Maintenance

AfternoonReports and InquiriesMonth EndAdditional Subjects

Page i

Page 5: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Name (printed) Job Function Day 1 Day 4Day 3Day 2check (x)

Course Title

Course Dates

RMS/TeachkitForecasting Workbench

Page ii

Page 6: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench Overview

Master Production Schedule

Material Requirements Plan

Scheduling

Workbench

by

Production

Line

Work Order/

FPOMaintenance

Pick SlipPrint

Stage Request

Consolidated

Pick

SHOP

FLOOR

CONTROL

Soft BillMaintenance

Auto Allocation to

Lots

RMS/Teachkit

Page 1

Page 7: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

AccountsReceivable

CustomerOrder

Processing

Master Production Scheduling

Material Requirements Planning

Shop FloorControl

Warehouse Replenishment

Orders

General

Ledger

Interface

RoughCut

CapacityPlanning

CapacityRequirements

Planning

MXB,2000

PlanningExecution

ForecastingWorkbench

DistributionRequirements

Planning

Vendor Managed Inventory9.0

Product Structure

ShopData

Purchasing/Receiving

AccountsPayable

Payroll/Human

ResourcesPhysical Inv./Cycle Count

QualityControl

InventoryControl

PRMS TM

PRMS is a trademark of interBiz, a division of Computer Associates, Int'l

Page 2

PRMS
Be sure to distinguish between the planning modules and execution modules. If the planning modules are implemented and managed, the execution of those plans is electronic and simple for the most part. If the planning modules are not managed effectively, a significant amount of overhead is required to support the execution modules. The primary point is that PRMS is a highly integrated system. Relative to Forecasting, it is one of the drivers of Master Production Scheduling, where the final decision of what to supply is made. The second form of "demand" to MPS is Customer Orders, depending Demand Source Rules.
Page 8: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

What it Does

Generates or Accepts Input for

Shipment Forecasts at the

Product/Warehouse LevelSPECIFICALLY, AN ESTIMATED SHIPMENT FORECAST

BY WAREHOUSE

How many warehouses do you ship from and should that impact theforecast in total?

BASIS FOR PROJECTIONS IS MONTHLY "DEMAND"FROM WAREHOUSE INVENTORY FILE (INWIP100)

Misses to Shipment Schedule will result in a lower base to calculatefuture forecasts

Calculates Safety Stock Values

ONE OF FOUR METHODS

Transfers Safety Stock and Forecasts to

MPS, DRP, VMI 9.0 or RequisitionEntry for execution

Provides Performance Reporting and

Exception Reporting for Process Management

Page 4

What it Does
While it may seem esoteric, there is a significant difference between a sales forecast and a shipment forecast. This is specifically for projecting shipments for a month. If last month you were scheduled to ship 20 orders for 10 each of a product and you missed 2 of the orders, the demand in the Warehouse Inventory file will be updated at month end for 16. This value will be used in the calculations of future forecasts, not the value of booked orders (20). If your company has combined demand items, the Workbench is an excellent way to drive the independent portion of demand for those items.
Page 9: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

What it Does

End Item ManagementMULTIPLE FORECAST METHODS INCLUDING

SIMULATION

PRODUCT GROUPS FOR MANAGING FAMILIES AND

GEOGRAPHIC MODELS

CLASSICAL ORDER POINT AND TIME PHASED ORDER

POINTInterface to Requisition Entry (PO0010) forPurchased Finished Goods

Combined Item ManagementPLANNING AND TRACKING OF INDEPENDENT

PORTION OF COMBINED DEMAND

MULTIPLE SAFETY STOCKING METHODS

MASS PARAMETER MAINTENANCE TO SIMPLY

CONFIGURE CUSTOMER SERVICE GOALS

INTEGRATION TO MRP FOR COMBINED DEMAND

PLANNINGVia Auto Accept MPS

Page 6

What it Does
Even if your end item demand is not complex enough to benefit from formalized forecasting methods, managing the combined demand items is very effective with the Workbench.
Page 10: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

Definitions

Primary Database File - IMSFP100

Suggested ForecastGenerated by the forecast month end

Not maintainable

Current ForecastAt beginning of month, the same as suggestedforecast

Maintainable

Management OverrideA quantity which may replace or be added to acurrent forecast to generate a resultant forecast

UA - User Add (+ or -)UR - User Replace

Management Override quantities are retained by the month endprocess

Resultant ForecastForecasted Demand

Current Forecast + User Add Management Override = Resultant

User Replace Management Override = Resultant

Page 8

Page 11: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

Definitions

Mean Average Deviation (MAD)Measurement of Forecast Accuracy

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 11001025 15001500 150015001500150010001000

@MADSP Mean Absolute Deviation Smoothing

Assigns weight to previous period deviation

* Forecast - Sales( )

+

(System Control, Forecast Workbench Options)

Previous Period

.1 25

.1 100

2.5

90

(1 - )* Old Mad

92.5

MAD Defined

@MADSP Mean Absolute Deviation Smoothing

Page 10

Page 12: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

Definitions

BiasMeasurement of Forecast Accuracy withConsideration for Positive and Negative Deviation

Negative Bias infers that Forecasts are less thanActual Orders

Tracking SignalHow well the forecast is tracking to Actual Orders

Between +1.0 and -1.00 is goodWarning Messages issued after +/- .55Tracking Signal = New Bias/New Mad

OutliersActual Demand outside acceptable minimum andmaximum quantities

Forecasting calculations and inventory parameters are not re-calculated. Forecast and parameters remain as previouslyestablished.

Limits established in System Control with aConstant (L)Upper Large Demand Quantity (LDQ) = Old Forecast+ (L * New MAD)Lower LDQ = Old Forecast - (L * New MAD)

Page 12

Definitions
Outliers - From the Acacia Technolgies CA-PRMS Forecasting Workbench AS/400 User Guide "...6 is a normal value to use...4 gives tight control...values under 4 should not be used"
Page 13: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Master Production Schedule

Material Requirements Plan

Scheduling

Workbench

by

Production

Line

Work Order/

FPOMaintenance

Pick SlipPrint

Stage Request

Consolidated

Pick

SHOP

FLOOR

CONTROL

Soft BillMaintenance

Auto Allocation to

Lots

RMS/Teachkit

Page 15

Page 14: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Forecasting Techniques

Simple Moving AverageLAST "N" PERIODS / "N"

Exponential SmoothingWEIGHTED AVERAGE OF SALES TO FORECAST

Exponential with TrendSYSTEM CALCULATED LONG TERM OR PLANNER

SPECIFIED

Exponential with SeasonalityEXPONENTIAL WITH TREND AND SEASONALITY

User Entered and LockedROLLING 12

Focus ForecastingBASED ON BOOK FOCUS FORECASTING, BY BERNARD

SMITH

"BEST OF" STRATEGIES AS MEASURED BY LAST THREEPERIODS

Product Group ForecastingAPPLICATION OF TECHNIQUES TO "STRUCTURES"

Page 16

Techniques
These are the different methods of forecast generation supported by the workbench. Hint, take it slow and simple. Forecasting is an art and confusing inherently bad assumptions with complex formulas may yield even worse assumptions and forecasts. With Exponential Smoothing, a weight (%) is assigned to last period sales and the inverse of that weight is applied to last period forecast. This percentage is called the alpha and 10% is expressed as .1. An alpha may be assigned per product/warehouse or default from System Control.
Page 15: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 11001025101710171017101710171017

500

1000

MXB, 1998

Simple Moving Average

(925 + 1100 + 1025) / 3 = 1017

# PERIODS USED DEFINED AT

PRODUCT/WAREHOUSE LEVEL (IM0007) OR SYSTEM

CONTROL (WCMANT-IMFCST)

Page 18

Simple Moving Average
Simple Moving Average sounds like a very simple way to easily forecast the independent demand of combined demand items (spares), but be careful. Because the demand history is updated by shipments, if your customer service level is less than 100% or you are booking orders in the future because the inventory is not available to ship immediately then your shipments were lower than they potentially could have been. This will produce a lower forecast than it would have if the inventory had been available. You can go on a downward spiral and actually plan poor customer service within a few monthly cycles.
Page 16: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 110010251002

500

1000

MXB, 1998

Exponential Smoothing

Alpha = .10, old forecast = 1000

10021002100210021002

Forecast = (Alpha * Last Period Sales) + ((1-A) * Old Forecast)

(.10 * 1025) + (.9 * 1000) = 1002

PROVIDES BASE FOR TREND AND SEASONALITY

Page 20

Page 17: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 110010251102

500

1000

MXB, 1998

Exponential Smoothing w/Trend

Alpha = .10, old forecast = 1000, Trend = +100

12021302140215021602

Forecast = (Alpha * Last Period Sales) + ((1-A) * Old Forecast)

(.10 * 1025) + (.9 * 1000) = 1002

Page 22

Page 18: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 11001025 511

500

1000

MXB, 1998

Exponential Smoothing w/Seasonality

1453 571 105212521172

.51 1.45 .57 1.05 1.25 1.17

Pattern Value = Period Sales / ((Sum Sales by Period)/ # Periods)

Level = 1002 Profile = MXB

PROFILES OF PATTERNS MAY BE BASED ON

HISTORICAL OR USER DEFINED AND APPLIED TO

GROUP OR PRODUCT/WAREHOUSE

Page 24

Page 19: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 11001025 561

500

1000

MXB, 1998

Exponential Smoothing w/Seasonality & Trend

1503 621 110213021222

.51 1.45 .57 1.05 1.25 1.17

Trend = 50

Level = 1002 Profile = MXB

SEASONALITY IS FIRST CALCULATED, THEN TREND

APPLIED

Page 26

Page 20: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Quantity Shipped / Forecast

Forecast/Actual Demand Period

450-6 -5 -4 -3 -2 -1 1 2 3 4 5 6

1275 500 925 11001025 1500

500

1000

MXB, 1998

User Entered & Locked

1500 1500150015001500

Period End Rolls Forecast into Current Periods

Page 28

User Entered
Forecasts may be entered and locked as exhibited by this optimistic and steady state forecast.
Page 21: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Focus ForecastingTM

Best of Three Provided StrategiesPAST THREE MONTHS AVERAGE DEMAND = NEXTTHREE MONTHS DEMAND

THIS YEAR/LAST YEAR NEXT QUARTER

LAST YEAR QUARTER AVERAGE = NEXT QUARTER

AVERAGE

User Defined Strategies may beProgrammed and Integrated

Focus Forecasting is a registered trademark of IBI exclusively licensed to Bernard T. Smith

Page 30

Page 22: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

This Year/Last Year Next Quarter

Last Year Demand

4501 2 3 4 5 6 7 8 9 10 11 12

1275 500 925 11001025 890 11001300 900 11501450

Last Year/This Year Change

500

1000

MXB, 1998

Next Quarter is Change from Last Year Previous Quarter and Last Quarter * Average of Last Quarter

Quantity Shipped

/ ForecastThis Year Demand

9251 2 3 4 5 6 7 8 9 10 11 12

11001025

2225 / 3050 = 1.37 (37%) 3050 / 3 = 1017 * 1.37

139313931393

Page 32

Page 23: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Last Year Quarter = Next Quarter

Last Year Demand

4501 2 3 4 5 6 7 8 9 10 11 12

1275 500 925 11001025 890 11001300 900 11501450

Last Year Quarter = Next Quarter

500

1000

MXB, 1998

Next Quarter is Average of Last Year Last Quarter

Quantity Shipped

/ ForecastThis Year Demand

9251 2 3 4 5 6 7 8 9 10 11 12

11001025

2225 / 3 = 742

742 742 742

Page 34

Page 24: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Product Group Forecasting

Grouping of Products According toProduct Line or Distribution Point

FORECASTS ARE ENTERED FOR THE "PARENT" AND

EXPLODED THROUGH AND BY THE PERCENTAGES OF

THE "CHILDREN"

Percentage Assignments cannot be greater than 100

Forecast ModelFORECAST STRUCTURE WITHOUT DESIGNATION OF

WAREHOUSEUsed to Propagate a Standard Forecast Structure toMultiple WarehousesMay or May Not Include PercentagesMay be Multi Level

Forecast StructureSTRUCTURE OF CHILDREN WITH PERCENTAGES AND

SPECIFIC FOR A WAREHOUSEMay be Multi Level

Page 36

Product Group Forecasting
The forecasting workbench allows you to develop a forecast model where parameters can be established and maintained in mass. You may then propagate this model throughout your forecast environment and make changes to the specific models and products at specific locations. This is especially important when in a DRP environment and the forecast maintenance occurs at a product/warehouse level (lots of combinations). The percentage of a component in a structure cannot exceed 99%. This fits an application such as Product Families. When planner bills are required that allow representation of multiple quantities per parent, then review Planner Bills Items in the MPS module.
Page 25: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Product Group Forecasting

MXB, 1998

ForecastWhse

A

ForecastWhse

B

ForecastWhse

C

Product Family Product Family Product Family

Forecasting Model ManagementProduct Family

Product 1Product 2Product 3

Product Family Product 1Product 2Product 3

Product Family Product 1Product 2Product 3

Product Family Product 1Product 2Product 3

Product 1 20%Product 2 35%Product 3 45%

Product 1 65%Product 2 25%Product 3 10%

Product 1 50%Product 2 20%Product 3 30%

Forecast Structure Maintenance (IM0120)

(IM0100)

Model Propagation (IM0160)

FORECAST AND/OR PLANNING PARAMETER

MAINTENANCE AT STRUCTURE LEVEL OR

INDIVIDUAL PRODUCT/WAREHOUSE LEVEL

Page 38

Page 26: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Four Methods of Safety Stock

Calculated and optionallytransferred for DRP, MPS or VMI9.0

Warehouse Inventory (INWIP100) or Product Master (MSPMP100)Safety Stock value is overwritten

% Fill Rate from StockFILL RATE SPECIFIED BY A, B, C CATEGORIZATION

SAFETY FACTOR MULTIPLIED BY MEAN AVERAGEDEVIATION

Specification of Safety Stock Level

Weeks of Supply

% of Demand During Lead TimeSPECIFIED IN VENDOR MASTER FILE

Page 40

Safety Stock
Having different methods of calculating safety stock allows you to establish inventory goals relative to the products future requirements instead of just a static number (100 may be one week's supply one month and six month's supply another month). An argument can be made that forecasts are always wrong (that's why it is a forecast) and that management of inventory levels relative to demand may be a more effective strategy if the lead times of the manufacturing or sourcing process can support this. Safety stock requires cash, therefore it should be justified relative to the customer service levels required by the business. Just like all inventory, Safety Stock is relative to lead time. Any fat or lead times that are not optimized require more cash and risk to run the business.
Page 27: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Methods

Safety Stock Methods Compared

Quantity Shipped / Forecast

/Actual Demand Forecast

450-6 -5 -4 -3 -2 -1 1

1275 500 925 11001025

Safety Stock Methods

1017

500

1000

MXB, 1998

Forecast = Simple Moving Average% Fill Rate = 98Weeks of Supply = 4% Demand Over Lead Time = 50% Lead Time = 20 Days

Safety Stock Method% fill rate

weeks supply

% demand

1017 5091072

Page 42

Safety Stock Computed
% Fill Rate will is essentially taking a percentage of the sum of possible demand including the forecast plus the mean average deviation. If you're trying to tie out to my result of 1072 don't spend too much time, I made it up as the sum of demand including MAD times .98. The actual calculation utilizes series of standard deviations to further refine the number.
Page 28: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

Exception Reporting

Forecast and Parameter ExceptionReport (IM0004)

Identifies the configuration of the drivers to the forecast and safetystock calculations including warnings for out of bounds conditions

TRACKING SIGNAL EXCEEDS +/-.55Run Selection

Warehouse, Product, Vendor

OutputWarehouse VendorProduct Forecasting ClassificationABC Safety Stock MethodTracking Signal MADPrevious Forecast Suggested ForecastDemand History Smoothing FactorsReorder Min Reorder MultTrend Profile

Working Document to Analyze andMaintain Forecasts

GENERATED AS RESULT OF MONTH END PROGRAMOption available to run without updating forecasts

Page 44

Page 29: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Product Configuration

Master Production Schedule

Material Requirements Plan

Scheduling

Workbench

by

Production

Line

Work Order/

FPOMaintenance

Pick SlipPrint

Stage Request

Consolidated

Pick

SHOP

FLOOR

CONTROL

Soft BillMaintenance

Auto Allocation to

Lots

RMS/Teachkit

Page 47

Page 30: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Forecasting Workbench

Forecasting Product Classifications

System ControlledSYSTEM GENERATED FORECASTS AND INVENTORY

PLANNING PARAMETERSForecasts GeneratedEOQ, Order Point and Safety Stock are CalculatedForecast Performance is Calculated

Short & Long Term Trend, MAD, TrackingSignal, Large Demand Quantities

Planner ControlledSimple Moving Average and Exponential Smoothing Only

INVENTORY PLANNING PARAMETERS ARE REVIEWEDAND ESTABLISHED BY PLANNER

P1Forecasts Calculated, Not UsedEOQ, Order Point, Safety Stock and Order QuantitySpecifiedForecast Performance is Calculated

Short & Long Term Trend, MAD, TrackingSignal, Large Demand Quantities

P2Exponential and Moving Average ForecastsCalculatedOrder Point and Order Quantity Specified in Weeksof SupplyForecast Performance is Calculated

Short & Long Term Trend, MAD, TrackingSignal, Large Demand Quantities

Page 48

Classifications
Forecasting classifications allow you to determine how much automation occurs in the generation of a forecast. A range from automatic to manual control. The ability to group forecasting methods and categorize products and product families are the key to successfully managing the large volume of data being generated in the Workbench.
Page 31: Forecasting Workbench in PRMS - Electriced.com Workbench Sample.pdf · RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting

Each one of our RMS/Teachkit courses and training presentations are available for your selection.Choose the full color, 'Present' format for self-review or your presentation document for the class throughyour projection system. If you would like to print student manuals, select '+ Print' format. In addition toreceiving the 'Present', you will receive an additional file specifically configured and optimized fortwo-sided student workbook production. Submit to your own laser printer or send outside. If you prefer,you can choose the 'Present' format only and order the student manuals from us! All our printing is crisp,laser printing, two-sided, soft bound and delivered on time 100% of the time.

Present + Print Present + Print

Education & Reference

General ManufacturingWelcome to PRMS 99.00 199.00 Product Definition 199.00 349.00

PRMS Overview 199.00 349.00 Manufacturing Planning 199.00 349.00

Version 9 Enhancements 99.00 199.00 Shop Floor Control 199.00 349.00

'Canned' Reports & Inquiries 99.00 199.00 Router Training 149.00 299.00

Distribution InventoryForecasting Workbench 149.00 299.00 Inventory Control 99.00 199.00

Customer Order Processing 199.00 349.00 Cycle Count & Phys. Inv. 99.00 199.00

Order Entry Training 149.00 299.00 Lot Control 99.00 199.00

RGA's & C/D Memos 149.00 299.00 FinancialReplenishment Orders 99.00 199.00 Standard Costing 149.00 299.00

Purchasing & Receiving 199.00 349.00 Accounts Payable 149.00 299.00

Online TutorialsThe Keyboard & PRMS 99.00 Navigating PRMS 99.00

Purchasing Overview 99.00 Requisition Processing 99.00

Measuring ExecutionPerformance 99.00

Contact us: [email protected] u.s.800-304-5914, 520-886-5914, fax 520-298-5525


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