Show TOC

Inventory Controlling: Parameters Controlling

Description

As of release 3.0A, it is possible to access parameters controlling in Inventory Controlling. With the help of parameters controlling, you can find out quickly and clearly why stocks are too high. In a later release, variance analyses in which a modification of the parameters can be tested will be added to parameters controlling.

Parameters controlling can be carried out within a standard analysis.
Parameters controlling takes a cause-driven approach with the aim of optimizing stock, that is, reducing capital lockup. "Cause-driven" means that any characteristic values with weaknesses with regard to certain parameters can be chosen selectively. In this way, you can obtain a more detailed view of data than, say, if you consider data from only one perspective. For example, if you only analyze materials with a high stock value, the potential suitability of this stock is not taken into account at all.

Parameters controlling is implemented within a special standard analysis in the form of 5 predefined dual classifications.
In these dual classifications, the characteristic values are classified with regard to two key figures. The resulting segments can then be examined in more detail with regard to the characteristic values they contain. In this way, connections between the key figures and potential problem areas can be recognized quickly.

The system defines the class boundaries according to the available data. The system always specifies 6 classes. The user can also specify class boundaries and the number of classes interactively.

The following five dual classifications are available:

The key figures Range of the average receipt and Value of the average receipt are compared to each other.
Materials allocated to the upper classes with regard to both key figures, that is, materials with a large lot size (range of the average receipt) and a high average value of goods received, are readily noticeable. We recommend that you use a smaller lot size here, since the lot size used up to now led to the value of goods received being high, which meant the stock value was high and this, in turn, caused a high capital lockup.
The key figures Range of average stock upon receipt and Value of average stock upon receipt are compared against each other.
If a material is displayed as having a high range of average stock upon receipt and a high value of average stock upon receipt, you should perhaps modify the order rule parameter and also the usage and delivery time parameters.
The key figures Average stock upon receipt and Stock factor are compared against each other.
The key figure stock factor is derived from the quotient of average stock upon receipt and safety stock and should be optimally at 1.
This dual classification has to do with the parameters for usage and delivery time. If usage is estimated correctly in delivery time, the average stock should equal the safety stock upon receipt. You should, therefore, look out for materials where both key figures differ from each other greatly. In this case, improvements might be made in the usage forecast or in the delivery time setting here.
In the reorder point procedure, a purchase order is always initiated if stock falls short of the reorder level. The reorder level consists of both the safety stock and the usage in the delivery time. If, say, the average stock is always higher than the safety stock upon receipt, this can be a signal that the delivery times were estimated incorrectly, the order has been placed too early or the safety stock is too high.
The key figures Range of average receipt and Range of average stock upon receipt are compared against each other.
The aim of this dual classification is to represent the influence of all parameter sets. Characteristic values in the upper classes with regard to both key figures should be given particular attention. The mutual occurrence of a high lot size, represented by the key figure "range of average receipt", and a high safety stock (range of average stock upon receipt) suggests that MRP is incorrect. For, if a high lot size is being aimed for, a low safety stock is, generally speaking, sufficient. If, on the other hand, a high safety stock is being aimed for, then lower lot sizes are sufficient.
During this dual classification, the system consciously makes no specific statement about the lot size or order rule parameters, because you can easily recognize general weak spots by comparing the two key figures against each other.
The key figures Value of last usage and Days when not used are compared against each other.
The days when there is no usage are calculated by taking the difference in time between the date of last usage and the current date.
Slow-moving items can be found here during the above-mentioned dual classifications if the material movements fall within the observation period. You will need to act if dates of usage are far in the past and if the current stock value - and, therefore, capital lockup is high.

Presentation of results

Depending on the setting you made, the results will be presented in either a list or a graphic display. Perform the user-specific settings via Parameters controlling --> Settings .

A 3D-graphic appears, where the class boundaries of the two key figures are represented on the x-axis and the y-axis; the z-axis shows the number of characteristic values in the segments.
A segment overview appears in the form of a matrix. The point where a line intersects with a column represents the number of object values for a combination of classes (for example, during a lot size check: the number of materials with a range of average receipt up to 40 days and a value of average stock upon receipt of 100,000).
Using the function Detailed information, you can display a list of the characteristic values whose values fall within the chosen class combination (for example, a list of materials whose range of average receipt is 40 days and whose value of average receipt is in the class $100,000).
Using the function Class boundaries, you can respecify the number of classes and/or the upper boundaries for the key figures.
With the function Graphics, you can present the data from the segment overview in the form of a 3D graphic display.

Further notes

The updating of the key figures Average stock upon receipt and Value of average stock upon receipt for the information structure S031 is not carried out continuously and must be started using report RMCBPARA.

Changes in procedure

To reach Standard analysis Parameters controlling, proceed as follows:
from the Inventory Controlling menu, choose Standard analyses --> Param. controlling --> New selection.
Within standard analysis, you will find the 5 dual classifications under the menu option "Edit".

Planning

In a later release, variance analyses in which a change of the parameters can be tested will be added to parameters controlling.