Previous article: Inventory Planning Alerts and Monitoring
The current planning module is provided as a pilot in beta mode and by
means of an integration with a 3rd party service. The features supported
are those described in this Knowledge Base section only - additional
functionality may be able to be provided on a case by case basis.
The following data are accessible under the “Planning and Projections” section and you can view them either from the main application menu (the “Planning” item) or through various drill-downs from other views:
The “Planning and Projections” view displays data for one or multiple items. The calculated ending inventory on hand for each monthly period is displayed in the top part whilst the bottom part can display additional details. The periods in which the ending inventory goes out of bounds are highlighted.
Forward Projection Details
The “Projection Detail” tab provides information on all inventory components involved in the forward projection calculation for the item selected in the top part of the view. For instance,
Beginning inventory – the inventory on hand quantity at the beginning (first day) of each monthly planning period. The number for the very first period is retrieved from Megaventory on the first day of the month. The number for all other periods is a carry-over of the calculated ending inventory from the previous period.
Production Orders/Purchase Orders – manufactured items show a production order component, and purchased items show a purchase order component. It is a sum of quantities for all existing work orders/purchase orders present in Megaventory for the item in the specific period.
Firm/Planned Production Plans, Firm/Planned Purchase Orders – manufactured items have production plan components whilst purchased items have purchase orders components. The planned quantities are calculated by the system for each period with the goal of maintaining ending inventory within bounds. The planner may review, override and approve the planned quantities – once approved the quantity switches from the planned component to the firm component and it is no longer modified by the planning calculation.
Sales Orders/Forecast/Effective Demand – these components are only shown for manufactured items. Sales Orders show the sum of quantities of all sales orders for the item expected to be shipped in the period. A forecast is the forecasted sales quantity for the item in the period. Effective demand is calculated as the maximum between sales orders and forecast.
Dependent Demand – this component is only shown for purchased items. The system uses the bill of materials of manufactured items to calculate the quantities of materials needed to manufacture the planned/firmed quantities of finished goods. The dependent demand is the sum of the quantities required by each and every finished good that uses this purchased item in its BOM. More detail about the dependent demand calculation is available on the “Where Used” tab in the view.
Ending Inventory – is calculated by the system for each and every period using the previously described components. For a manufactured item the calculation formula is:
Beginning inventory + Max (Production Orders, Firmed/Planned Production Plans) – Effective Demand
For a purchased item the formula is similar:
Beginning inventory + Max (Purchase Orders, Firmed/Planned Purchase Orders) – Dependent Demand
A period’s ending inventory is carried over to the next period as the beginning inventory. Ending inventory cannot be a negative quantity – if the calculation result is negative, it is adjusted to 0.
Missed demand – whenever the ending inventory calculation would result in a negative value the missed demand shows the demand quantity that cannot be fulfilled.
Inventory policy minimum/Inventory policy maximum – define the lower/upper bounds for the ending inventory. When ending inventory goes outside these bounds the numbers are highlighted in the view and alerts are generated. The inventory policy minimum is functionally equivalent to the safety stock/reorder point. Inventory policies can be configured for each and every item and are used by the planning agents to create the plan.
Days of Supply Remaining – this metric is calculated by the system for each and every period. It estimates the number of days for which the ending inventory can cover the expected future demand.
A right-click in the “Projection Detail” tab brings up a menu with views that provide access to the detailed data used to calculate the projection components for the item. The planner may use these views to make changes/adjustments to the data and the plans.
The “Item Inventory Graph” tab provides a graphical representation of the ending inventory and its bounds.
The above table shows two components for each finished good manufactured using this material: Production - the finished good production quantity for each period and Material Consumption - the quantity of material consumed to produce it. At the bottom, there are two total lines for each component. The Total Material Consumption matches the Dependent Demand component shown on the “Projection Detail” tab.
Next article: How to make a production plan in Megaventory