Inventory Visibility Tool

Overview

• Average Inventory Value

Inventory value by Zone / Country / Plant / Stock Type / Valuation Class.

Evolution of Level Inventory value by Zone / Country / Plant / Stock Type / Valuation Class.

• Inventory Value
• Global Sales
• Global Consumption
• DOS
• Inventory Turn
• Sales
• Restocking

• High level Inventory and Global Sales Value:

Average value of inventory according to selected months. Average value of Global Sales&Consumption (MM) for the same period. DOS and Inventory Turn.

• High Level Sales Value:

Average value of Sales (OBAS - invoiced) and Restocking (inter-company replenishment) converted in EUR for the same period.

• Evolution of Inventory, global Sales&Consumption (MM), Sales, Restocking, DOS and Inventory Turn.

Inventory Quantity by Zone / Country / Plant / Stock Type / Valuation Class.

Evolution of Inventory Quantity by Zone / Country / Plant / Stock Type / Valuation Class.

• Inventory Quantity
• Global Sales
• Global Consumption
• DOS
• Inventory Turn
• Sales
• Restocking

• High level Inventory and Global Sales Quantity:

Average quantity of inventory according to selected months. Average value of Global Sales&Consumption (MM) for the same period. DIOH and Inventory Turn.

• High Level Sales Quantity:

Average quantity of Sales (OBAS - invoiced) and Restocking (inter-company replenishment) converted in EUR for the same period.

• Evolution of Inventory, global Sales&Consumption (MM), Sales, Restocking, DIOH and Inventory Turn.

• Aging stock by categories ( 0-4, 4-12, 12-24, >24 months in quantity and value
• Expired - Not Expired stock in quantity and value.
• Evolution Expired and >12 months in quantity and value.

• The number of days and months in stock is calculated as follows: Last Day of the Month - Last Goods Receipt date (or Manufacturing date if Last GR date not available).
  
  
• Expired stock: Expiry Date - Last Day of the Month = Number of days before expiry.
  • If Number of days before expiry > 0 => Not Expired
  • If Number of days before expiry <= 0 => Expired
    
    
• Stock without batch numbers are excluded

The tool provides visibility on the following stock layers:

• Unrestricted Use
• Quality
• Material Provided to Vendor
• Inter-plant Transfer
• In Transit
• Customer consignment
• Blocked

• Double ABC Analysis
• 9 Box Model
• Excess Inventory

• Double ABC analysis: it illustrates the 80% for each product, an 80/15/5 analysis in term of Sales quantity and in stock quantity, assigning an ABC category to each product on both sales and stock volume. ABC Analysis is a valuable tool for inventory management. It makes sense to direct effort to control closely the items classified as A and use less sophisticated techniques on the items classified as C. By closely controlling the few (e.g. 20% of the items) A items, a company can focus on 80% of the inventory cost.
  
  Average Global Sales Qty and Average Global Consumption Qty of selected period is used for Sales ABC Classification 80 - 15 - 5. Sales and Consumption are added up to determine total sales quantity of FG. For other materials (RM, INT), we only take Consumption into account.
  
  For ABC stock classification, we take the average quantity of selected period.
  
  The coverage in weeks is calculated as follows: Average qty of Stock per month / Average Quantity of sales X 4

• 9 Box Model: Compares the ABC Classification based on sales with a Coefficient of Variation of the Demand in order to analyze further the stock composition.
  • Coefficient of Variation = Standard Deviation of the Demand/Average Demand for the period
  • Low Variability (L): COV≤1
  • Medium Variability (M): 1≤COV≤2
  • High Variability (H): COV≥2
  • Z= items with no demand
  
  Average Global Sales quantity and Global Consumption quantity - depending on the selected period - is used for Sales ABC Classification 80 - 15 - 5.

  Coefficient of Variability = Standard Deviation of Demand for selected period in Quantity (Global Sales + Global Consumption) / Average Demand for the period.

• Excess Inventory: Excess Inventory ('The Excess Inventory Analysis permits to categorize products into ABCD categories (A: 80% of sales; B: next 15%; C: last 5%; D: negative sales) and Identify for each category the stock value that is beyond the DIOH bracket (in Excess). There are 6 categories of DIOH (Weeks): Default values: cat 1: <4 weeks; cat 2: 4-8 weeks; cat 3: 8-12 weeks; cat 4: 12-16 weeks; cat 5: 16-26 weeks; cat 6: >26 weeks
  • Graph 1: Stock value. It places the Sum of the Inventory average value (of the selected period in months) of all items belonging to each category (e.g. Add the average inventory value for 2016 of 2 A products, one with 3 weeks of DIOH and another with 2 weeks of DIOH).
  • Graph 2: Nbr of Items. It counts the number of materials belonging to the category (same logic as above, count the number of A products with less than 4 weeks DIOH)"
  • Graph 3: Excess Value.
    • Definition of excess:
      • For A products: more than 8 weeks DIOH (upper range of cat 2)
      • For B product: more than 12 weeks DIOH (upper range of cat 3)
      • For C product: more than 16 weeks DIOH (upper range of cat 4)
    • Calculation of Excess weeks: Formula: Average DIOH (Weeks) - Definition of Excess for the product classification. E.g. An A product with 18 weeks of DIOH--> Nbr of Excess Weeks: 18-8=10"
    • Calculate Excess value: Total Average Stock Value/DIOH (Weeks)*Nbr of Excess Weeks.
    • Build Table: Place the Excess value corresponding to the product category on the category range of excess e.g A Product with 18 weeks of Excess. Value of Excess: 67k euros. The excess value will go in the A--> 8-12 weeks category"
    • Summary Table:
      • Total Average Inventory: Total of Graph 1.
      • Excess Inventory: Total Graph 3
      • Excess %: Excess Inv/Total Inventory
      • Nbr of Items with Inventory: Total Graph 2
      • Nbr of Items with Excess: Total of items in Graph 2 which are out of the defined range % of Items with Excess: Items with Excess/Items with Inventory.

• Excel extractor