Allocation Run 

Purpose

The special situation of the apparel and footwear industry requires an optimization of the assignment of existing stock to open requirements. If a stock shortage occurs, the allocation run ensures an optimal assignment of stock to the open requirements. The allocation run distributes the currently available stock to due sales orders according to certain calculation logics at a specific time. If the ordered quantities are larger than the actually available stock, you can use the allocation run to reach the best customer satisfaction under the given circumstances in your business. You can use the ARun Optimizer, you can check and manually correct the results of the allocation run if necessary.

Prerequisites

You have to carry out an allocation run before delivery of any AFS materials. The allocation run is mandatory and cannot be switched off. The allocation type always determines the allocation run. The allocation type forms a framework and contains all allocation rules and checks that have been defined for a certain business process.

Process Flow

The allocation process begins with the sales order creation and the accompanying availability check. In the apparel and footwear industry there are several weeks or months between the order creation and the delivery of the goods to the customer. In this time period, the quantity of the ordered materials can be reduced due to several reasons. You must then decide how this insufficient quantity should be distributed among the existing orders.

       1.      In the first step of the allocation run (Selection) you must determine which requirements should participate in the next allocation run as well as which stock the allocation run should access. The physically existing stock as well as certain future receipts like, purchase orders, confirmations and production orders are considered during allocation. In preview mode purchase requisitions and planned orders are considered as well. In this case, you can set the allocation run so that it accesses future goods receipts that refer to existing purchase requisitions. It checks if the goods receipts might be able to cover the requirements of the selected orders at a specific time/ time period in the future.

       2.      In the second step (Requirements Check), the selected orders can be checked to see if they have:

¡        delivery block

¡        their cancellation date is exceeded

¡        they have a credit block

¡        they have a valid season assigned

¡        the maximum number of partial deliveries for that item is reached during the Allocation Run

These orders can then be excluded by the subsequent steps of the allocation run.

       3.      In the third step (Requirements Grouping), you can group sales orders by certain criteria, which enables you to further process each allocation group. The grouping is the prerequisite for using the allocation logic equal distribution.

       4.      In the fourth step (Stock/ Requirements Sorting), you can define a sort rule and depending on your settings you can override the original sequence of the incoming orders for the allocation process. The sorting is the tool for the optimal distribution of the insufficient quantity of stock among the existing orders according to specific criteria. For example, customers with high priority due to their sales volume or their importance in the market, are given preference and are supplied with the goods first.

If no sort rule is maintained or if the sort rule does not contain a sorting parameter, the sort sequence will be random.

       5.      In the fifth step (Allocation), the actual allocation of the available stock to the selected orders takes place according to the chosen allocation logic. The allocation is carried out based on the sorting criteria. Allocation is possible using FIFO logic (first in first out) and the equal distribution logic. Requirements Grouping is a prerequisite when using the Equal Distribution logic, and when using the FIFO logic with the only up to release quantity option. In case there is a maximum quota defined in the release rule, the allocation would happen only up to that quantity. See also Material Substitution.

       6.      In the sixth step of the allocation run (Release), the system checks whether the minimum quantities that are defined in the release rules could be fulfilled. If this is not the case, the allocated quantity can either be reserved for a certain order or the stock will be used for the next selected order.

Execution

The allocation run can be carried out in four different modes. Besides the normal mode that actually assigns the stock, there is a simulation mode that does not update stock. The preview mode can allocate future goods receipts just like the simulation mode. Both of the preview modes (2,4) can be used as an early warning system since they take future material availability into account. You can save the results of the preview modes and whenever necessary, process and evaluate them.

You can carry out the allocation with all functions both online and in the background. The selection set is available for the background processing of the allocation run and Reorganization is available for the ARun Optimizer.

Result

In the next step, you can create a delivery for the materials that have passed the release checks and then post the goods issue.