Indicators for Inventory Performance Measurement

[Jacopo Cappellato-4]

Hi all,

I would like to enhance OFBiz by adding new indicators for Inventory Performance Measurement.
My notes are based on the study of chapter 5 ("Inventory Planning and Management") of the book "Supply Chain Strategy" by Edward H. Frazelle.

Here are some of the concepts that I would like to map to OFBiz (or add to OFBiz if missing):

L = lead time; in OFBiz: ProductFacility.daysToShip

LD = lead time demand (average demand during lead time); in OFBiz (NEW): ProductFacility.leadTimeDemand (or daysToShipDemand); or we could add the field demandPerDay and then get LD as demandPerDay*daysToShip

UFR = unit fill rate (defined as the portion of the total number of units requested by customers that we want to have available in stock; e.g. 0.9 means that we will get 10% of backorders); in OFBiz (NEW): ProductFacility.unitFillRate

SS = safety stock; in OFBiz (NEW): ProductFacility.safetyStock (or we reuse minimumStock field for this and derive ROP as LD + SS)

ROP = reorder point; this is usually ROP = LD + SS; in OFBiz: ProductFacility.minimumStock

Q = reorder quantity; in OFBiz: ProductFacility.reorderQuantity

UIV = unit inventory value; in OFBiz: InventoryItem.unitCost

ICR = inventory carrying rate (the percent of the unit inventory value that represents indirect costs like insurance, taxes, obsolescence, storage costs etc...); in OFBiz (NEW): Facility.inventoryCarryingRate (this is typically set at the warehouse level, not per product)

There are a few more indicators that we should consider but these would be a good start for now.
Based on these it would be possible to build some interesting reports; some of these indicators can (and should) derive from (or at least be inspired by) the analysis of historic data, but this is a subject for another day.

What do you think?

Jacopo

[Jacques Le Roux]

Sounds like a very interesting idea and enhancement

Thanks

Jacques

From: "Jacopo Cappellato" <[hidden email]>

> Hi all,
>
> I would like to enhance OFBiz by adding new indicators for Inventory Performance Measurement.
> My notes are based on the study of chapter 5 ("Inventory Planning and Management") of the book "Supply Chain Strategy" by Edward
> H. Frazelle.
>
> Here are some of the concepts that I would like to map to OFBiz (or add to OFBiz if missing):
>
> L = lead time; in OFBiz: ProductFacility.daysToShip
>
> LD = lead time demand (average demand during lead time); in OFBiz (NEW): ProductFacility.leadTimeDemand (or daysToShipDemand); or
> we could add the field demandPerDay and then get LD as demandPerDay*daysToShip
>
> UFR = unit fill rate (defined as the portion of the total number of units requested by customers that we want to have available in
> stock; e.g. 0.9 means that we will get 10% of backorders); in OFBiz (NEW): ProductFacility.unitFillRate
>
> SS = safety stock; in OFBiz (NEW): ProductFacility.safetyStock (or we reuse minimumStock field for this and derive ROP as LD + SS)
>
> ROP = reorder point; this is usually ROP = LD + SS; in OFBiz: ProductFacility.minimumStock
>
> Q = reorder quantity; in OFBiz: ProductFacility.reorderQuantity
>
> UIV = unit inventory value; in OFBiz: InventoryItem.unitCost
>
> ICR = inventory carrying rate (the percent of the unit inventory value that represents indirect costs like insurance, taxes,
> obsolescence, storage costs etc...); in OFBiz (NEW): Facility.inventoryCarryingRate (this is typically set at the warehouse level,
> not per product)
>
> There are a few more indicators that we should consider but these would be a good start for now.
> Based on these it would be possible to build some interesting reports; some of these indicators can (and should) derive from (or
> at least be inspired by) the analysis of historic data, but this is a subject for another day.
>
> What do you think?
>
> Jacopo
>

[samhamilton]

Hi Jacopo,

This is almost exactly how we do it at the moment but in a spreadsheet.
Very much looking forward to testing this in the near future!

Cheers
Sam



On 07/04/2010 19:43, Jacques Le Roux wrote:

> Sounds like a very interesting idea and enhancement
>
> Thanks
>
> Jacques
>
> From: "Jacopo Cappellato" <[hidden email]>
>> Hi all,
>>
>> I would like to enhance OFBiz by adding new indicators for Inventory
>> Performance Measurement.
>> My notes are based on the study of chapter 5 ("Inventory Planning and
>> Management") of the book "Supply Chain Strategy" by Edward
>> H. Frazelle.
>>
>> Here are some of the concepts that I would like to map to OFBiz (or
>> add to OFBiz if missing):
>>
>> L = lead time; in OFBiz: ProductFacility.daysToShip
>>
>> LD = lead time demand (average demand during lead time); in OFBiz
>> (NEW): ProductFacility.leadTimeDemand (or daysToShipDemand); or
>> we could add the field demandPerDay and then get LD as
>> demandPerDay*daysToShip
>>
>> UFR = unit fill rate (defined as the portion of the total number of
>> units requested by customers that we want to have available in
>> stock; e.g. 0.9 means that we will get 10% of backorders); in OFBiz
>> (NEW): ProductFacility.unitFillRate
>>
>> SS = safety stock; in OFBiz (NEW): ProductFacility.safetyStock (or we
>> reuse minimumStock field for this and derive ROP as LD + SS)
>>
>> ROP = reorder point; this is usually ROP = LD + SS; in OFBiz:
>> ProductFacility.minimumStock
>>
>> Q = reorder quantity; in OFBiz: ProductFacility.reorderQuantity
>>
>> UIV = unit inventory value; in OFBiz: InventoryItem.unitCost
>>
>> ICR = inventory carrying rate (the percent of the unit inventory value
>> that represents indirect costs like insurance, taxes,
>> obsolescence, storage costs etc...); in OFBiz (NEW):
>> Facility.inventoryCarryingRate (this is typically set at the warehouse
>> level,
>> not per product)
>>
>> There are a few more indicators that we should consider but these
>> would be a good start for now.
>> Based on these it would be possible to build some interesting reports;
>> some of these indicators can (and should) derive from (or
>> at least be inspired by) the analysis of historic data, but this is a
>> subject for another day.
>>
>> What do you think?
>>
>> Jacopo
>>
>
>