Inventory Target Setting.ppt

1、Inventory Target Setting,Global Inventory Target Setting Processes : Top Down vs. Bottom Up,Process The Overall Inventory Targets is the result or compromise between the regional bottom up targets and the top down directions (max. global level / required level of inventory turns),Premises Top Down T

2、argets have almost been finalized Use Bottom Up Targets from DRP DMT on Regional Level Need to set these up or update them,Top Down Directions,Taken from Mikes December 2006 S Cycle FrequencyProduct Wheel for local Produced items / Frequency of imports for imported products (days) AgeThe minimal agi

3、ng requirement before shipping (days) PipelineThe transit time from close coupled warehouse to other warehouse (days) Add-onAdditional volume for quality holds ,etc (days); Othersnot used anymore had been used to compensate reprocessing demand in SCCB Tool. Its solved now (days); StagingUsed to buil

4、d up volume for large exports (days) Inventory Bands & Target The lower control levelSafety stock TargetSafety Stock + ( * Cycle Frequency) + Age + Pipeline + Others) + Stage The upper control level Target + Add-on Red : Calculated against the availability forecast Blue : Calculated against the expo

5、rt demand * instead of IP Tool I propose to use the spreadsheet from Ana-Laura (see next slide),Inventory Targets Components and Calculation,Safety Stock Calculation To calculate the safety stock, a spreadsheet from Ana Laura Xavier (SA) can be used. This is a simple and good way to calculate safety

6、 stock based on forecast accuracy (forecast vs. shipments) and a customer service level of 98% (can be adjusted). Target Setting Workfile I re-build the DRP DMT Target Setting Tool in Excel. We can choose either to work on the regional targets off-line in excel or on-line in the DRP DMT (this will also transfer the data into UDA). Either way, the excel file is ideal to analyze da