Smart PO Intro

Screen Number - 4155

The Smart PO system calculates inventory requirements for BWI sold items.   The requirements are based on current orders, future orders, safety stock requirements, and projected orders based on sales history.  Availabilty of items is based on on-hand inventory, current Purchase Orders, and transfers from other warehouses.  The available inventory is compared to the current and expected requirements and recommendations are made on how much inventory is needed to acquire.  The system may recommend to transfer inventory from another warehouse if available, or creating a new Purchase Order to a vendor.

Note:  With new procedures for inventory management, all requirements all calculated based on the total availability and requirements for each Division as a whole.   All quantities used to calculate the requirements are a summarized number for all locations within a division.  And as such, only the primary division locations will be listed on the display.  This method gives better control over inventory for a division, including the division twigs, to the division manager.  The division manager can then decide when and where inventory needs to be moved within his division.  And purchasing agents are only required to manage inventory for the division as a whole, not each individual location.

Exception:  Vendors identified as Exception Vendors for a location are managed separately for that location.  Exception vendors sell special inventory items are are better served by a particular location.  The available quantities and requirements are calculated separately and are not included in the Division summarized requirements calculations.  The Exception Vendors will be displayed in Pink on the requirements list. 

The initial display of the suggested items has the extended display.   F11 will switch the screen to single line display.  This will display more items on each page of the screen.

You can filter it by vendor and by branch.

The Projected Sales From and To dates in the top right corner can be adjusted. This is the date range that the initial screen will display the requirements.  It defaults to the current month from last year to last month.

Additional note: The order by date is the date the program generates, that you need to order by in order to reach the needed delivery date. This is calculated based on the lead-times in the system. It will be highlighted red if that date is before today’s date, indicating that it should already be on order.

The screen will default to your buyer number, and it will only show you items under your buyer number. You cannot see other buyers’ items.

You can sort by V-Vendor, D-Date, I-Item, and T-to separate the P's (purchases) from the T's (transfers).

On each items line you can: 5-Detail display, R-Recalculate, O- Clear Overrides, P- Select for PO, C- Select for Combined PO, T- Select for transfer, and U- Unselect.

Additional notes:

If the quantity available is less than 0, the item number will be red indicating a B/O.

If the item is for a regional warehouse, the branch and vendor code will be hi-lighted (white).

If the branch and vendor code are displayed in pink, that vendor is an Exception vendor for that particular warehouse.

If an item is marked as Obselete or Inactive, the item number will be displayed in Reverse image.

If an item is marked as Obselete or Inactive, and the quantity available is less than 0, the item number will be displayed in red and Reverse image.

When a line is selected to be included on a new PO or Transfer, the entire line will be blue.

(Some colors may vary depending on the setting you have your AS400 session set to.) 

Function Keys:

From the detail display screen:

Function Keys:

Creating POs:

Once you have reviewed all the items in the main screen, place a “P” next to the ones you want to put on a PO. Hit F9 to generate. You will see a pop up letting you know the vendor and division. If those are correct, hit F9 again. A warning will appear on the pop up if the quantity selected does not reach the PO target, but will still let you create the PO.

You will get another pop up with the PO number and option to review or print. Review takes you to 4110 so that the PO can be edited but will be auto populated with the defaults for that vendor and dates from the smart PO system.

If you select “Y” to review it will take you to screen 4110 to review and edit the PO.

Creating Combine POs:

This generally follows the same steps as creating a PO. Once you have reviewed all the items in the main screen, put “C” next to the ones you want to put on a PO. (Make sure they have a “P” in the PO/Trf column, or it will not be added to the PO.) Hit F9 to generate. You will get a pop up asking which branch you want to be the primary ship to location. Once selected, hit F9 again. A warning will appear on the pop up if the quantity selected does not reach the PO target, but will still let you create the PO.

This takes all the items you have selected and puts them on a PO to the primary ship to location you selected. The total quantity of each item is added up then broken out through 4210 with transfers to the locations you need the inventory for. All of this can be reviewed and adjusted in 4110.

Creating Transfers:  

Once you have reviewed all your items in the main screen, enter a “T” next to the ones you want to put on a transfer. Hit F9 to generate.

You will see a pop up letting you know you have selected items for Pool Transfers. Hit F9 again.

The next pop up lets you know transfers have been created, and you have the option to review. If you select “Y” to review, it will take you to screen 3611 to review and edit the transfers.

Notes regarding Do-Not-Transfer items: If an item is marked in the item master as Do-Not-Transfer, this item cannot be transferred between different divisions.  Transfers can still be made within the same division.

When calculating whether to transfer or purchase a necessary item, a Do-Not-Transfer item will not suggest a transfer outside of the requiring branch.  If the only inventory available for transfer is outside of the requiring branch’s division, a new Purchase Order will be suggested.

If the user tries to select a transfer branch in the detail display screen that is outside the requiring branch’s division, a warning is displayed and the selection is ignored.

If the user selects a Do-Not-Transfer item to be included in a Combine PO and the Ship-to branch entered is outside of the required items division, a warning is displayed when the Purchase Order is generated to notify the user and the Purchase Order creation is canceled.

The item selected can then be un-selected and the Combine PO created.

Important notes:

Please make sure the setup of your items is correct. Having the correct buying increments, class, lead time, etc. are essential for the success of this program. If the setup is wrong, then the suggestions it makes will be wrong. Please update these when they change, the most critical being lead times. The entire calculation will be wrong if the lead time is incorrect.

This system is meant to be a suggestion. You will still need to review and agree with what it says. It is not meant for you to go in and do exactly what it suggests every time. There is human knowledge that cannot be programmed into the system. Your product knowledge allows you to know when it may be suggesting too much or not enough.

Safety stock can be turned on and off based on the vendor. So be sure to work with the Marketing Managers on these settings. You should know by working with your lines every day which ones need safety stock included or not.

All the information and calculations on the screen will be recalculated and refreshed every hour. This is to catch any manual transfers entered, PO’s created, customer orders entered,

and PO’s received. This gives you as “Real Time” information as possible.

Formulas for Smart PO calculations:

Safety Stock calculations:

Safety Stock: Daily Average Sales for the Next 3 months of sales based on the next 3 months sales from last year

            * item Lead Time.

            (If no Lead Time is established for the item, use the default Lead Time for the item’s primary vendor.)

                        Rounded up to the next Minimum Order Multiple for that item.              

                       (Only for class 1 or 2 items; Item status = ‘A’.)

                        Runs on first day of each month.

Lead Time calculations:

Lead Time: Based on the last 5 receipts for an item, find the average days to receive (Received Date - Order Date).

                        Based on receipts within the last 18 months.

                        (Default of average 30 days if no receipts.)

Smart PO Requirements calculations:

Available Quantity: Total quantity on-hand - Total quantity Allocated (Allocated Quantity + Quantity Short + Quantity Backordered from IBRBIN file.).

Current Pos: Total Open PO quantity + Total Combined Inbound PO quantity – Total Combined Outbound PO quantity.

Transfers In: Total Open Transfers In quantity + Total Pool Transfers In quantity.

Total Available: Available + Current Pos + Transfers In.

Safety Stock: (Safety Stock Quantity ÷ Days in current month) * Lead Time.

                       (Lead Time from Buying Controls file IBRGG – 4310; or Lead Time Exceptions file POSMARTLT).

                       (Safety Stock is included in requirements calculations for Class 1 items only,

                         and the Include Safety Stock flag from file VNDUDD must be set to ‘Y”.)

Projected Sales: Sum of monthly sales for next n months sales based on the next n months sales from last year.

                              (n = Projected sales calculated from detail display.  Determined by item Lead Time.)

                              (Sales Totals are reduced by the total quantity of Future Orders for that time period.)

                              Projected Sales quantity is rounded up to the next Minimum Order Multiple for that item.              

Future Orders: Total quantity of Open, Warehouse, Type ‘F’ orders.

                                 Orders with Future Date from Current date to next 9 months.

All Future Orders: Total quantity of ALL Open, Warehouse, Type ‘F’ orders.

Total Required: Safety Stock quantity (Class 1 items, and Use Safety Stock flag (from file VNDUDD only) = ‘Y’ +

                                Projected Sales quantity (Class 1 and 2 items only) +

                                Future Orders quantity.

Quantity Short: Total Required - Total Available.

Days of Inventory: Available quantity  (Safety Stock quantity ÷ 20).        20 = Daily Average.

Suggested Quantity: Same as Quantity Short (this field can be user overridden).

PO UOM Quantity: Suggested quantity converted to PO Unit of measure.

                                    AND rounded up to next full PO Unit of measure quantity, if necessary.

                                    AND rounded up to Buying Increment, if necessary.

                                    AND increased to Minimum Order quantity, if necessary.

Order by Date:   Calculate number of Days to order:    Days of Inventory – Lead Time.  (Maximum 365 days).

                              Calculate Order Date: Current Date + Days to order.

                                    (If Order by date is older than 1 month before today, force to 1 month before today.)

                                    (If Available quantity is Negative, force Order By date to Current date)

Deliver by Date:   Order by Date + Lead Time.