The inventory replenishment features in Vision can help you determine how much of a stock product to buy and when to order to assure the right turnover on each stock item with the lowest outgoing cost.
During End-of-Day processing and during on-demand stock replenishment, the system identifies products in need of replenishment, based on various reorder point (ROP) factors.
The ROP Factors screen is where you can manually set up and maintain three ROP factors for a product: the safety stock quantity, the ROP quantity, and the line point quantity. You can specify different quantities for different warehouses to reflect different product usage in your various warehouses.
If you have a product in your system that has not generated enough usage (that is, if few or any customer orders have been placed for this product in a particular warehouse), you may want to manually set up quantities for the ROP factors on the ROP Factors screen and set what is known as a freeze date. Before the system calculates the ROP factors for a product in a warehouse during End-of-Month processing and during on-demand ROP/EOQ recalculations, the system checks for a freeze date for the warehouse product:
If a freeze date exists and it is sometime in the future, then the system does not recalculate the ROP factors for that warehouse product; instead, it uses the quantities manually set up on the ROP Factors screen.
If a freeze date does not exist, or if the freeze date established is today or in the past, then the system continues processing with the standard calculations for the ROP factors of the product.
Some advantages of using a freeze date include the following:
By establishing a freeze date, you can set up realistic ROP factors for products when they are still new and you do not want to skew their ROP factors because they do not have much usage yet. After the freeze date has passed, the system ignores the ROP factors that were manually established on the ROP Factors screen for the warehouse product.
You do not need to set a warehouse product's ABC code to Manual and then manually enter the reorder point quantity, the safety stock quantity, and the linepoint on the Main screen of the Product Management tab. Many organization have done this in the past whenever they added a new product to their system because they did not want the lack of usage to skew their reordering of this product. There are two drawbacks to this work flow: (1) The manual ABC code prevents you from being able to use velocity pricing for the product, since velocity pricing looks at the ABC code of the product. The Pricing Model screen on the Pricing tab is where you set up velocity pricing. (2) If you use the manual ABC code, once adequate usage has been established for a product in a warehouse, you need to remember to change the ABC code from Manual to a specific code on the Main screen of the Product Management tab.
Note: You can change the ROP factors for a warehouse product only if the warehouse has an inventory class of sellable inventory. For more information, refer to Specify the type of inventory that a warehouse carries. In addition, you can set up ROP factors for stock or temporary products only. In most cases, you would not want to modify the ROP factors of a temporary product; however, you are allowed to do so if necessary.
The ROP Factors screen is available on the Purchasing tab and the Product Management tab, enabling you two different entry points for setting up ROP factors for a product. A slight difference exists between this screen on the two tabs:
If you use the Product Management tab to access the ROP Factors screen, you first need to select the product on the Product Lookup screen. Then you can set up ROP factors for the selected product on the ROP Factors screen of the Product Management tab.
If you use the Purchasing tab to access the ROP Factors screen, you can conduct your product search directly on the ROP Factors screen instead of using a separate lookup screen.
The instructions below explain how to use the ROP Factors screen on the Purchasing tab. For instructions on using the ROP Factors screen on the Product Management tab, refer to Set up or modify ROP factors for a product.
Note: To access the ROP Factors screen, you must have the proper security privileges. Either the Product Maint (Global) job function or the Product Maint (Warehouse) job function needs to be assigned to one of your roles. Roles are assigned to users in the User Maintenance on the Security Maintenance screen of the Vision Configuration tab. For more information, refer to About roles and job functions.
On the Purchasing tab, click the ROP Factors button. The ROP Factors screen appears.
The Search for field is a combination text box and drop-down list; this enables you to specify a product in one of two ways:
In the Search for field, type one of the following:
The product number, or part of it
The product description, or part of it
—or—
In the Search for drop-down list, select a recent entry. A maximum of your 10 most-recent entries are listed in the drop-down list.
Click the Search button or press Enter. If only one product meets your search criteria, the corresponding product information is provided on the ROP Factors screen.
If more than one product meets your search criteria, the corresponding products are identified in the Product listing at the bottom of the ROP Factors screen. To select the appropriate product, click the corresponding row in the listing.
In the ROP Factors area, type quantities in the Safety Stock, ROP, and Line Point columns for a specific warehouse as appropriate:
In the Safety Stock column, type the quantity that should be used as the low point for reorder point calculations.
In the ROP column, type the quantity that should be used as the midpoint for reorder point calculations.
In the Line Point column, type the quantity that should be used as the high point for reorder point calculations.
To remove any quantity, select the quantity and press the Delete key. If you leave a field blank, the system calculates the corresponding ROP factor using the standard calculations during End-of-Day processing and during on-demand stock replenishment.
To set a freeze date for the warehouse product's safety stock quantity, reorder point quantity, and/or linepoint, type the last date that the manually entered ROP factors should be used during End-of-Month processing and during on-demand ROP/EOQ recalculations (or click the arrow to select the date from the calendar). To use this date, select the check box for this date.
Note: To set a freeze date for a product in a particular warehouse, you must enter a quantity in at least one ROP factor field — Safety Stock, ROP, or Line Point. Also note that you cannot select a freeze date from the past.
Click the Accept button to save your changes.