2. Ops Council Charter, cont.
Turns Management/Slow or Dead Inventory/Forward Buys/Strike Pricing Management
Desired Effect
Ensure the highest and best use of E3 Trim/SAP to maximize turns and price gains and lower inventory
investment.
Metric
Market Gains
Turn
Inventory
Company run rate improvement goal - $537,000
Technologies
E-3 Trim
SAP
Corporate Chair Operations Chair
Mike McCarthy Jon Mollman
Members
TBD
2
3. Inventory Reduction/Turns
Management
• Maximizing Price Gains
– Monthly Strike Price Increases
- Goal is to have 21-30 days on hand (depending on shelf life
- Buyers need to be certain of Vendor price change rules
> Is it by Order date, Ship date or Receipt date
> Put in notes in E3 so anyone will know
• Monthly Strike Price Decreases
– Goal is to have 7 days or less on hand
– Ensure Buyer reviews all future open PO’s and adjusts pricing
3
4. Inventory Reduction/Turns
Management
• React immediately upon price change notification
- Need to meet Vendor lead times
• Utilize relationship where you can
– on late notification, still try to adjust PO’s
• Understand which Vendors will push back or notify the Concept
– push the limit, but within reason
4
6. Working Capital
• This is A/P, A/R and Inventory
• Cash Flow is generated by the following:
• Reduce A/R- we get funds in quicker from our customers
• Increase A/P- we hold onto our funds longer by stretching
payments to our vendors
• Maximize Inventory Turns - we bring in the minimum amount
needed to service our customers, thereby holding on to
capital. This creates value and allows us to use the funds for
other business needs.- Just In Time Management of
Inventory
6
7. INVENTORY TURNS
• Inventory turns is simply the number of times we
cycle or turn our inventory per year.
• Inventory turns calculation: Divide the annual cost of
sales by the average inventory level.
• Example; Cost of Sales $36,000,000 Average
Inventory for this time $6,000,000 equates to 6
Inventory Turns
7
8. Improving Inventory Turns
• What is the benefit of increasing inventory
turns?
– Financial Impact: less money spent - allocation for
other business needs
– Reduced interest charge or carrying costs
– Better utilization of Warehouse Capacity
– Less chance of loss, damage or theft
8
9. Basic Questions
• What is the minimum lead time as per the vendor?
• What is the reliability of the vendor and/or trucker to
make appointments?
• What is the minimal safety stock needed? -
Seasonality is a factor
• Are there other items available as a substitute in an
emergency? Can LTL be utilized?
• What is the effect on price change income/buy-ins? -
Do not want to sacrifice real $$’s
• What is the back up plan if we run O/S? Can we pick
up from a nearby center?
9
10. Potential Hazards
• Running out of Stock - affects customers and could
cause additional expense filling orders
• Vendor Responsibility - we must hold vendors to
their appointments, but we must also be held
accountable for our errors and detention charges
• Requirements to have promotional inventory on
hand before the actual start date - SLO’s, toys
• Balance buy-ins, i.e., Coke buy-in at year end -
additional cost of carrying inventory versus the
additional income generated from the buy-in
10
12. High/Low Expense
• Example October: $1,466,103 @6.5% is
$7,330 (.065/364*28)
• Example November: $2,170,603 @ 6.5% is
$10,853 (.065/364*28)
• Additional cost of $3,523 or .0156 cents/case
12
13. HIGH/LOW FACTORS
• Single Concept- less SKU’s, BKC 430 items- mostly TL,
but some LTL- we have worked with RSI to get
approval for more LTL’s due to less stores and usage
• Multi- Concept- more SKU’s, possibility of duplication
of items
• Customer Needs- Westborough- forced to bring in
containers from Italy for Bertuccis, no viable
alternative.
13
14. Inventory Levels Report
Maines Paper & Food Service, Inc.
Inventory Levels
June July
Location Dec-05 Jun-06 Excess Inv Jul-06 Excess Inv Aug-06 3-Sep-06 10-Sep-06 17-Sep-06 23-Sep-06
Corporate Park 37,065,606 37,665,312 1,481,154 30,828,420 1,300,788 30,528,003 31,444,151 29,988,640 31,301,792 32,103,874
Alice Street 5,150,449 5,996,346 5,624,561 5,126,986 5,423,554 5,810,640
Total Corporate 37,065,606 37,665,312 1,481,154 35,978,869 1,300,788 36,524,349 37,068,712 35,115,626 36,725,345 37,914,514
Johnson City Ledger 692,909 814,819 814,819 905,306 905,306 905,306 905,306 905,306
Syracuse Ledger 424,517 400,307 400,307 436,895 436,895 436,895 436,895 436,895
Mid-Atlantic 4,834,796 3,544,835 - 3,104,655 210,287 2,691,342 3,234,339 2,989,806 3,403,701 2,976,804
New England 5,086,260 4,630,711 42,166 3,865,782 43,954 4,134,566 4,675,477 4,232,285 4,562,372 4,643,432
NY-Metro 1,981,958 1,637,462 638 1,708,710 963 1,765,247 2,126,996 1,630,653 1,952,542 1,855,227
Ohio 3,966,218 3,260,155 6,251 2,986,602 6,444 2,927,249 3,247,802 3,312,124 3,135,496 3,156,260
Maryland 5,397,582 5,108,097 43,399 5,298,190 33,237 4,784,638 5,157,681 4,949,091 5,129,735 5,000,237
Memphis 3,979,857 3,707,244 17,038 3,970,661 16,539 3,539,829 3,743,940 3,429,354 3,406,154 3,133,575
Chicago 8,647,089 8,620,027 78,033 8,010,482 48,267 7,171,254 7,564,606 7,439,831 7,408,812 7,287,732
Total MPFS 72,076,793 69,388,968 1,668,678 66,139,077 1,660,479 64,880,676 68,161,755 64,440,972 67,066,359 67,309,982
Change (8,200)
W/E 9/23/06
Inv Turns Fcst Vrce to
Budget Inventory Fcst
Sep-06 Sep-06 Sep-06
Corporate Park 16.92 37,042,075 (872,439)
Alice Street
Johnson City
Syracuse
Mid-Atlantic 59.78 2,684,370 (292,433)
New England 35.31 4,057,135 (586,297)
NY-Metro 42.55 1,935,508 80,281
Ohio 50.73 2,848,137 (308,123)
Maryland 39.89 4,700,045 (300,192)
Memphis 44.88 3,301,493 167,918
Chicago 27.96 6,891,623 (396,108) 14
15. Tools Needed to Improve Turns
• Usage Report
• Landed Cost Report - work with RSI to obtain
LTL rates rather than T/L pricing
• Excel Worksheet
15
16. Metro Turn Performance
Inventory Turns 2006
60
50
40
30
20
10
-
Jan Feb mar Apr May Jun Jul Aug Sept Oct Nov
16
17. Inventory Management
• Printing the Stock Status Report:
• H&S Option 5 – Purchase Order Menu – enter
• Option 9 – Purchase Report Option – enter
• Select the Stock Status – Whs/ Buyer/Item
• Select for W - Weekly
17
21. Objectives
Maximize profits / margins
Minimal inventory levels
Zero out of stocks
Minimum exposure to loss
Maximize E3 ordering
21
22. Organization
Use a day planner or desk calendar
• Prioritize
Keep folders and bins for promotional items
Have a daily routine and stick to it
Set up folders in outlook
Get email addresses for vendors & back up for out
of office
Update vendor survey regularly
22
23. Purchase Order Process
Holding bin or book for orders not yet confirmed
Confirmations
Files by date {1-31}
Changes to date or quantity
Price changes- contracts
23
24. Work Together
w o rkin g as a tea m re a lly m a ke s a d iffere n ce
P u rcha sing
In ven to ry con trol
R e ce iving C u sto m er se rvice T ra nsp o rta tion
a p po intm en ts p ro m o tio ns b a ckh a u ls
24
25. Team Work Produces:
• Inventory control – timely adjustments, correct inventory
• Receiving - timely receiving, orders here on correct date
• Customer Service – some customers wont participate in
promos, auto shipments effect sales- prevents obsolete
inventory
• Trans. – product here for shipping from backhauls, money
saved by picking up
25
26. Reports and Tools
SIAR - sales inventory analysis report
Items below min
Items on order by item type
Back in stock
Perishable items log
Manual order worksheet
26
27. SIAR Report
5/18/07 5:49:17 MAINES Paper & Food Service, Inc.
MESIR1D Report # DWEND Sales Item Inventory Analysis Report
WENDYS UNITS
4 4 3 Days R=Received
Item # Description Label Week Weeks Weeks Last This Weekly B.O.H. on D=Due
Usage Ago Ago Week Week Demand Hand P/O # Cases Date
930447 POTATO BAKER WRAPPED 80 CT PACKER 5212 1391 1390 1373 1058 1303 137 1
226656 D 320 5/18/07
POTENTIAL PROBLEM 846- P/O DUE
930824 DRESS ITALIAN VINAIG WENDYS 303 105 110 81 7 76 7 1 225173 R 60 4/13/07
POTENTIAL PROBLEM 69-
930020 BEEF PATTY 8/1 RED 2OZ GRND WENDYS 6081 1708 1625 1533 1215 1520 277 1 226458 D 300
5/18/07
POTENTIAL PROBLEM 943- P/O DUE
P/O DUE 226459 D 200 5/19/07
P/O DUE 226625 D 300 5/21/07
P/O DUE 226626 D 300 5/22/07
27
28. Items Below Minimum
PO09G1 DARDEN DIRECT DISTRIBUTION, INC.
5/21/07 5:19:36 ITEMS BELOW MINIMUM PAGE 1
CMP/DIV/LOC 32 1 1 WHS- 1
BUYER- 90 JENNY HABURA
PACK SIZE ITEM_DESCRIPTION_ ACTUAL MARKET CSQTY ALLQT WTD 1WK 2WK 3WK 4WK 5WK NEXT PO/QTY ITEM_#
6 88 OZ ARTICHOKES QUARTERED 40.30 40.30 6 1 1 2 3 4 1 4 5/25/07 4 944030
1035 OZ RICE CARNAROLI 24.10 24.10 30 10 8 48 66 59 54 42 5/25/07 140 943567
VENDOR # VENDOR NAME VENDOR PH/FAX
115455 AMERICAN ROLAND 212-741-8290
28
29. Perishable Items Ordering
• Check the perishable items report that inventory
control emails daily for any issues with rotation and
dates
• Run Items on order report for today’s sales
quantities
• Record sales on manual order worksheet and
decide what is needed
• Place purchase orders manually or thru E3
29
30. Perishable Items Log
Qual
Maines # Description Required Dates Slot # Date(s) of Product Count H&S Diff
ity
Must be received w/12 days.
930097 Chicken 8 pc BIC Fresh 10-000A 41cs- 5/21/07; 38cs- 5/22/07 79 79 0
Store must get 7 days.
Must be received w/8 days
930019 Beef Patty 4 oz, 4/10# 10-007A 700cs- 5/16/07 547cs 5/17/07 1247 1251 -4
Stores must have 4 days
Must be received w/8 days
930020 Beef patty 2 oz, 4/10# 10-015A 104cs- 5/16/07; 500cs- 5/17/07 604 604 0
Stores must have 4 days
Must be received w/14 days 208cs- 5/19/07; 400cs- 5/21/07; 900cs-
930131 Frosty Mix, 1/5 gal 10-021A 1508 1511 -3
Stores must have 5 days 5/22/07
Must be received w/14 days 88cs- 5/19/07; 450cs- 5/21/07; 800cs-
930927 Frosty Mix Vanilla, 1/5 gal 1338 1333 5
Stores must have 5 days 5/22/07
30
31. Manual Order Sheet
: 14-May 15-May 16-May 17-May 18-May 18-May
DATE
Monday Tues Wed Thurs Friday Sun
Item #
Moyer
652 Sat p.u OH
930019
800 700 1300 700 700 800 Due n
4oz beef
815 726 850 965 1055 715 Sold
637 611 1061 796 441 526 Bal
>
195 OH
930020
200 300 400 300 300 200
2oz beef
270 218 274 346 398 268 Sold
125 207 333 287 189 121 Bal
31
32. E3 Ordering
Best Practice:
E3 is our system for calculating orders using several factors such as
Sales, safety stock and vendor requirements
• If the information is correct the orders will be correct
• Safety stocks – depends on customers needs, warehouse space
and sales fluctuations
• Clear out exceptions every Monday - * this is key to catch
increases or decreases in sales.
• Use the notes function for increases and decreases to items
32
33. E3 Main Menu
Workstation ID QPADEV022L 11 Orders Placed
Orders Items
a 0 Short Shipments n 475 Exceptions
b 0 Overdue
c 0 Alternate Source
d 7 Due q 30 Overstock
e 0 Forward r 9 Out of Stock
f 0 Planned s 0 Lost Sales
g 0 Booked
h 0 Transfer u 63 Uninitialized Items
i 0 Back Orders
j 0 Order Point 'A'
k 0 Order Point
l 0 Buyer Order Point y Kit To Do Menu
m 105 All Orders z Utility Menu
33
34. E3 Maintenance
• Keep up to date with adding items and vendors to
the E3 system
• Supercede items-old to new
• Order Policy Analysis
34
35. Other Key Processes
• Item maintenance (subs, deals)
• Clean up : obsolete items/old open pos
• Sometimes order less more often
• Weekly and monthly price changes
35
36. Questions?
Call either of us, we would be glad to help
Darlene Passarelli: 301.543.1104
Jenny Habura: 630.295.5134
36
38. In my opinion, E3 is the best tool Maines has given the
purchasing department:
• To efficiently place orders quickly and accurately
• To maximize on all deals and price increases
• To identify fast or slow trending items
• To manage our inventory
• To service our customers at the high levels that they
have come to expect from Maines.
38
39. • E3 is designed to enable distributors to more profitably
anticipate and satisfy customer product demand.
• Features of E3 most commonly used at Maines include:
– History exception program
– New item information
– Seasonal forecasting functions
– Deal program
– Superceding functions
– Reserve item functions
– Ti Hi ordering functions
39
40. • E3 Success comes from a strong set up of
both vendors and items.
• 70% of using the system successfully is in
accurate vendor set up.
40
41. Vendor Setup Includes:
• Service Level goal
• Lead time quoted from vendor
• Lead time forecasted in days
• Lead time variance %
• Buying bracket(s)
- can be set by dollars, cases, weight, cube or pallets and if there are
multiple brackets available, the discounts can be added and the
system will calculate which bracket is the most profitable
41
43. • Reviewing history on demand forecasting
screen.
– New items (uninitialized) need to have a
starting forecast.
– History on an item can be filtered or adjusted
to account for promotional activities, opening
orders, etc.
– Determine if the item is seasonal. If so a
seasonal profile can either be created or
copied from a similar item
43
44. • Decide if the item history should be reviewed
weekly or every 4 weeks.
– Almost all of our items are set up to review weekly,
split cases are set up to review every 4 weeks.
• Setup item minimum order information.
– This allows us to have E3 automatically order the
product in our warehouse Ti/Hi quantities as well as
set a minimum purchase. For example, we sell 100
cases of an item per week. The pallet holds 10 cases,
we would set this item up to order a buying multiple
of 10 with a minimum quantity of 100.
44
45. Once every item in the vendor is reviewed and
properly set up, an Order Policy Analysis is run.
• If there are multiple brackets set up, E3 will
determine the most profitable bracket.
• Once this is accepted, we are ready to place an
order with the supplier.
45
46. An Order Policy Analysis
needs to be run:
• Each time a new vendor is set up
• Any time there is a significant change in business
with the vendor (adding or losing volume or
items)
• At least once every 6 months
• When inheriting a vendor from another buyer
46
47. Replenishment Buying
Vendor Setup = 70% of success
History Exceptions = 20% of success
Other Maintenance = 10% of success
47
48. Replenishment Buying Flow is
• Vendor Setup > History Exceptions > Deals
= Correct Suggested Order Quantity
• If this is followed, the suggested order
quantity is always mathematically correct.
48
49. Replenishment Buying
is the end result of
• Demand forecasting
• Lead time forecasting
• Order policy analysis
• Service level management
49
51. Demand Forecasting Patterns
• Smooth = less safety stock, low MADP
• Erratic = higher safety stock, higher MADP
• Trending = keeping up with current trends
• Seasonal = Predictable, repetitive peaks of demand
MADP = Mean Absolute Deviation expressed as a percentage … In other
words how much does an item deviate from the forecast.
Ranges are:
• 0-25% stable
• 26-49% moderate
• 50% and up erratic
51
52. Demand Forecasting
• Each item has it’s own unique calculation
• You can limit the amount of history used
to forecast an item
52
54. History Exceptions … Concept is to manage
by exception
• History exceptions are shown every Monday morning,
based on the previous week’s sales
• Items show up based on preset company control factors,
these are the settings we use:
5% Demand Filter High
3% Demand Filter Low
35% Tracking Signal Limit
54
55. •
Exception Screen
Demand Filter High
• Demand Filter Low
• Tracking Signal High
• Tracking Signal Low
• Service Level Check
• Infinity Check
• Watch Items
• Seasonal Items
• New Items
55
56. It is important to remember that when reviewing
history exceptions, you do not need to make a
change, the system has already done that.
It is simply showing you the items that are
exceptions and since you may know something the
system doesn’t about the item, it allows you to
correct the forecast.
56
57. Lead Time Forecasting
• Can be set at the vendor level
• Can also be set at the item level … item level information
will always override the information at the vendor level
• It is important that this information is accurate since as
much weight is placed on lead time as on demand when
calculating the suggested order quantity
• Lead time and lead time deviation will impact when you
buy as well as safety stock so it is important to keep it
accurate.
57
58. Order Policy Analysis
• This balances the cost to buy with the cost to
carry
• Every vendor will have a most profitable order
frequency
• Once established, this is the order cycle
• However, Every vendor is checked every night and
the order will come “due” on need, Not based on
days since bought
58
59. Service Level Management
Service levels drive safety stock needs, item by item
3 types of items
1. Stable
2. Lumpy
3. Super Lumpy
– Some items can be corrected with seasonal
forecasts (like ice melt or charcoal).
59
60. Service Level Management
• Higher service goals will drive safety stock
and inventory levels higher
• Our system default is 97%
60
61. Key Components of Safety Stock
• Demand forecast
• Lead time
• Lead time variance
• Order Cycle
• Service level
• MADP
61
62. If all the information up to this point is
correct …
Then daily buying simply
becomes replenishment,
not buying
62
63. Daily Replenishment Buying
• An order becomes due when enough items get at or below
the item order point resulting in service jeopardy for the
vendor line.
• Every item is analyzed every night
• An order is built for each vendor each night (even non-due
orders)
• Items reaching their order point ahead of the rest of the line
will prompt as Order Point Checks
• Due orders MUST be bought daily
• Suggested order quantities should not be changed,
component information should be fixed instead
63
64. Daily Buying .. How To
• Sign on to the E3 To Do Menu
• Set Data Base Selector to Buyer ID# and
Warehouse (company) #
• Use easy to navigate work flow starting at the top
left corner “Due Orders”.
The left side of the screen are the
Order Categories
64
65. E3TRIM To Do Menu
Company E3T MAINES PAPER AND FOOD SERVICE
Buyer 010 211814 Orders Due in Dollars
Warehouse 001 6185 Orders Placed in $'s
Workstation ID QPADEV0257 1 Orders Placed
Orders Items
a 0 Short Shipments n 1858 Exceptions
b 0 Overdue
c 0 Alternate Source
d 19 Due q 118 Overstock
e 1 Forward r 65 Out of Stock
f 0 Planned s 0 Lost Sales
g 0 Booked
h 0 Transfer u 0 Uninitialized Items
i 2 Back Orders
j 2 Order Point 'A'
k 11 Order Point
l 0 Buyer Order Point y Kit To Do
m 88 All Orders z Utility Menu
65
66. Select D Option to see the Orders that
should be placed today
Buyer 040 Due Orders
Warehouse 001
Vendor Sb Vendor Name Wg Whs St Amount Del
a 206875 DAYMARK 001 1 3595 3
b 231600 02 DURO BAG 001 1 7648 0
c 378000 JET PLASTICA 001 1 8259 0
d 630760 01 PRAIRIE 001 1 93540 0
e 721500 1 SOLO STOCK 001 1 3335 5
66
67. Select the first vendor on the list
Display Work Calculator DR0B
2009 05/21 Order Detail 09:49:38
Buyer 040 3 Delay
Vendor 206875 DAYMARK
Warehouse 001
2009 05/14 Last Order Date
Independent Auto Adj Final Adj Totals Bracket
3,596 3,596 3,596 Dollars 1 1
511 511 511 Eaches 2 0 Maximum
300 300 300 Weight 3 1,000 Minimum
31 31 31 Cube 4 0 Up to Max
43 43 43 Dozen 5 1 Unit
79 79 79 Cases 6 .000 Discount %
82 82 82 Layer 7 0 Bkt Pricing Opt
43 43 43 Pallets 8 0 Discount Pass On
511 511 511 Gallons 9 0 Savings Per
Order
Checks 0 Savings Pass On
a 2 AOP d 33 MANL
b 2 OP
c 16 NEW
5 Rebuild 6 Accept 7 Prt PO 8 All Itms 9 SOQ Itms 10 Clr Ord 23
Trk Spl 67
68. There are 3 levels of an Order
Order Detail Screen shows:
• Viewing options
• Rebuild options
• Order accept key
Item Summary Screen shows:
• Items and suggested order quantities
• Helpful codes such as N or W
• This is where any manual special order items will be added to the order.
(browse when needed, buyers do look at this screen prior to accepting an order)
Item Detail Screen shows:
• Full details of how the system got the suggested order quantity
(should only be viewed when needed and if all set up is correct that should be rarely)
68
69. You can accept the order as is or review all items on the order
• Once you are comfortable with the order, go back
to the Order detail screen and accept the order.
• Order approval screen allows you to set pick-up
information
• Each due order is handled the same way until the
list is completed
69
70. Next Step
Orders
a 0 Short Shipments • “A” order point items are
b 0 Overdue items with service level
c 0 Alternate Source above 98%
d 6 Due • J and K items are below
e 0 Forward their respective order
f 0 Planned points but the vendor line
g 0 Booked has not yet met the
h 0 Transfer vendor order point … this
i 0 Back Orders is a quick way to see
j 4 Order Point 'A' items you may run out of
k 3 Order Point that can be added to an
l 0 Buyer Order Point
open order and that
m 79 All Orders
might have a jump in
sales during the week
70
71. Additional E3 Features
• Deals and Forward Buy Functions
• Promotional Functions
• Superceding Functions
• Super and Sub Vendor
• Set days of the week ordering
• Set weeks of the year ordering
71
72. Deals and Forward Buy Functions
• Setting up a Deal allows us to maximize any
additional discounts a vendor offers
• It also allows us to buy-in on a price increase or
when a vendor gives us extended terms
• Our system is set up to cap the buy at 42 days and
it will place the order as late as possible.
72
73. Promotional Functions
• This allows us to key in expected demand during a
promotional period and have the system order
the product based on the extra demand.
• E3 will also filter the added demand out of the
forecast so not to increase inventory after the
promotion.
• This does not work well for long promotions,
since it buys all the increased demand at one time
– It is better to manually increase the forecast for long
promotions and then adjust the promotional use out
at the end.
73
74. Superceding Functions
• Superceding is a way to easily transfer
item demand from one item to another.
– For example, if a customer changes their
specifications from 1 item or supplier to
another, we can transfer the history from the
original item over to the new item.
– There is also a calculator in the program that
allows for case pack differences.
74
75. Super and Sub Vendors
Dot Foods is a good example of a Super Vendor
• We order many different vendors on 1 purchase order
from the created “super” vendor.
• By creating this link in E3 it allows us to track our
purchases by the individual vendor as well as maintain
item information at the vendor level in the AS400 side of
our system.
Some suppliers have multiple shipping warehouses.
• These suppliers are set up in E3 as Sub Vendors.
• This allows us to separate items according to the shipping
locations and place individual orders by location.
75
76. Set Days of the Week Ordering
• E3 allows you to set the day of the week that a vendor shows up as a
due order
– This function is helpful for suppliers that are either backhauled or
have set pick-up days with our logistic carriers
– It is also helpful for vendors where we have set ordering days of the
week, like DOT.
– Each of these types of orders need to be reviewed since E3 will
build an order for that day of the week whether you need to place
it or not.
– This function should not be used unless it is absolutely necessary to
place an order on a certain day of the week. It can lead to
additional inventory. (we once had a buyer here who had 50
vendors so he set up his data base to order 10 vendors a day)
76
77. Set Weeks of the Year Ordering
• Not commonly used but helpful if there is
a vendor that can only be picked up every
other week
• Can set for even or odd weeks of the year
• Normally is set up in addition to set day of
the week option
77
79. Forecasting Accuracy Report
This is the report we use:
• Offers an overall report card of the accuracy of
last period’s demand forecast.
• It displays expected demand versus actual
demand during the most recent period.
• The report shows the actual sales dollars achieved
vs. the sales dollars expected based on forecast
and a ration between actual and expected.
79
80. • It does not take into account any changes we have
manually made in the demand forecast
– For example to gear up for a new customer or gear
down for loss of an account
• It can be run by buyer and for the company as a whole
• It should be run each week and then totaled by the
month to get a clearer picture of how each buyer is doing
• The ideal number is 100% the normal range is 90-95 or
105-110%.
– If the differences that are larger than forecast should
be analyzed.
80
81. This is basically the only report we have used and is
the best tool to determine if the buyer is keeping up
with history exceptions and their item demands, which
is the most important maintenance for accurate E3
ordering.
This is a sample of the report and recap of the
forecasting accuracy report information I have kept in
the past
81
83. Date Buyer Total Item Count Forecasted Actual Demand i n % of E xpected
Demand in $ $ Demand
August Jim Pope 1271 881193.33 900595.33 102.19
August Denise Barry 1214 718499.67 675580.00 94.1
August Deb Spirito 1171 569604.00 609288.33 106.98
August Jeff Dietrick 1167 7591590.00 790239.00 104.11
August Becky Roberge 1361 703250.00 678134.67 96.29
August Matt Deane 943 284169.67 293381.00 103.27
August Jack Loomis 804 630524.33 681212.00 108.13
August Brenda Hull 581 3363285.00 3065601.00 91.2
August Scott Leveille 24 25465.00 26586.00 104.3
August Cheryl Ashton 863 370054.00 334780.00 90.49
August Julie Deprato 474 2167508.00 2097425.00 96.76
Aug Co 1 9874 10472710.00 10152822.33 99.81
83
84. Other Reports Available Include:
• Lost sales analysis current and previous period
– Ranks items by lost dollars with biggest problems at the top
– These are potential lost sales based on the current forecast, not actual AS400 lost
sales
• On hand overstock current and previous period
• Inventory accuracy current and previous period
– Valuable when determining the inventory impact of varying service levels using
theoretical inventory values and %.
• Service accuracy
– Displays one column for every service level goal set and what was attained by system
class
• SOQ vs actual purchase quantity
– This is a daily report that would need to be run by buyer which shows any item that
the buyer changed the E3 suggested order quantity. The most recent E3 upgrade also
shows this information on the buyer order detail screen
• Service level analysis
– System calculated in stock % that would be most desirable
84
