Inventory Replenishment Setup

Hi Everyone,

In this article I would like to cover basics on quick Inventory Replenishment (IR) configuration. It could be useful for a demo to your prospect.

Main IR goal is to analyze supply, demand and availability for certain items and in case it goes below what is allowed  - order it from supplier.

Step One. Setup IR numbering sequence, that will be used by replenishment calculation process.This is done in Inventory Setup screen.

Step Two. Set up inventory class, with replenishment values.

To achieve that you will need to create Replenishment Class ID and Seasonality. First one defines replenishment source: Purchase Order, Manufacturing or Transfer. Why transfer - because replenishment values are calculated per Warehouse (Site), and we can transfer the item from one to another to fulfill the need. OK, and second one, seasonality, is to address specific date-range-demand by multiplying it by a factor. Below are both screens:

 Step Three. Now we can create an item, with the above class, and Replenishment Tab for that ID will get populated automatically from the class:

What is missing here, if we use Min/Max replenishment method, we need to indicate, for that particular item, how much should be qty on stock when we replenish and what should be Safety Stock - our inventory buffer. Also good thing to indicate a reorder point, the moment when we should generate a PO.

Step Four. Lets generate some history for this item. Since I am using year 2012, lets put receipt in January on 500 pcs. Generate a sales order in February on 350 pieces with delivery in March and then generate replenishment in March.

I will skip these documents, moving quickly to Prepare Replenishment screen

System suggests us 850 items to purchase, but there is no preferred vendor for our item. Lets correct it and try again.

Please note, vendor price is pending, so we should run Vendor Price Update process from Purchasing Module before we can actually create a PO.

And now we can run the replenishment again.

Last Step. Important to know that IR does not create PO automatically, we should create them by Process from Purchasing Module, called Create purchase Orders.

Resulting would be a PO.

Wishing you all the best,

Sergey.