Visma.net ERP
About replenishment methods and their parameters
With Visma.net ERP, you can assign different replenishment methods to different items of inventory stocked at different warehouses and specify warehouse-specific parameters for these methods. Different items may require different parameters because of different customer demand for them and different numbers of days required to receive the requested quantities from the suppliers.
You can use either of the following replenishment methods: Min./max. and
Fixed order qty.
For each stock item, the system uses the specified
method to calculate the quantities required to replenish the stock of this item,
based on the replenishment parameters that you specify on the Replenishment
info tab of the
Item warehouse details (IN204500) window.
The available replenishment methods and their parameters are discussed in the sections below.
The min./max. method
You use the Min./max. method to maintain the stock level of a stock item at a particular warehouse between the specified minimum and maximum quantities.
To use this method for an item, you should specify the following parameters:
| Parameter | Description |
|---|---|
| Maximum quantity | This is the maximum stock quantity allowed for the item at the warehouse. |
| Safety stock | This is the additional stock of the item maintained to avoid stockouts. A safety stock is required if there are fluctuations in demand and supply. |
| Reorder point | The system uses the reorder point quantity in the
Min./max. replenishment method rather than a minimum quantity.
Generally, a minimum quantity would be estimated as the quantity that may be required during the lead time (the time when the product is being shipped from the supplier location to your company). The quantity set as the reorder point is the minimum quantity plus the safety stock. |
Process triggered at low stock level
Once the system detects that the current stock level (the available quantity) has reached or fallen below the reorder point, it:
- calculates the required replenishment quantity as the difference between the maximum and current quantities to replenish the stock up to the maximum quantity.
- estimates the available quantity by adding quantities on supply and deducting quantities on demand.
You control the way the system calculates the quantities on supply and quantities on demand for classes of stock items by using the Item classes (IN201000) window.
The fixed order quantity method
Use the Fixed order quantity method
when you want to replenish the item stock with a fixed quantity each time it falls
below the reorder point.
This method uses the following parameters:
| Parameter | Description |
|---|---|
| Fixed quantity |
We recommend that you use as the fixed quantity the economical order quantity (EOQ) determined by warehouse specialists for a particular item by estimating the cost of ordering the item from a particular supplier. For each supplier from which the stock item can be purchased, the EOQ is specified in the Supplier inventory (PO201000) window. You can view EOQs specified for all suppliers of the item on the Supplier details tab of the Stock items (IN202500) window. |
| Safety stock | This is an additional stock of the item maintained to avoid stockouts. The safety stock is required if there are fluctuations in demand and supply. |
| Reorder point | For this method, just like above, the reorder point is specified as the safety stock plus the quantity that may be required during the lead time. |
Process triggered at low stock level
With the Fixed order quantity method, the system:
-
generates request for the economical order quantity (EOQ) for the item once it determines that the available quantity reaches reorder point or is lower than that.
-
estimates the available quantities by adding quantities on supply and deducting quantities on demand.
You define the way the quantities on supply and quantities on demand are calculated for stock items by using the Item classes (IN201000) window.
The parameter estimation
For automated replenishment, you can manually enter estimates of replenishment parameters, such as safety stock, maximum quantity, and reorder point that were made externally by logistics specialists for each item. Alternatively, you can configure the system to automatically calculate the replenishment parameters.
In Visma.net ERP, you can use demand forecast models to calculate replenishment parameters by using sales statistics.
With this flexibility, you can lower carrying costs, avoid stockouts, minimise excess or obsolete inventory, improve cash flow, and increase customer loyalty levels.
Other item-specific parameters
The parameters described below are also used in automated replenishment for the stock item at the specific warehouse.
| Parameter | Description |
|---|---|
| Launch and termination dates |
These dates define the range during which the replenishment settings specified in the Item warehouse details (IN204500) window will affect the item if it is stocked at this warehouse. By default, the dates come from the item settings (which are specified in the Stock items (IN202500) window but can be overridden for the item at the specific warehouse). |
| Supplier details |
To replenish the stock of the stock item at the warehouse, you should specify the supplier from which inventory will be purchased. The system uses the default supplier of the stock item (as specified on the Supplier details tab of the Stock items (IN202500) window) unless you have chosen another supplier for the item at the warehouse. The other item-specific parameters are associated with the selected preferred supplier:
|
