Item management at SKU level means that every item for every location is listed individually and that its behavior in every location is constantly being monitored and evaluated immediately. Automatically! Every stage in the demand chain is controlled separately and remains manageable. Information is documented on a daily basis and can be incorporated into planning! PRIME One constantly examines every item (SKU) and evaluates its individual characteristics from scratch each time.
The following parameters are taken into consideration:
PRIME One automatically generates orders to suppliers or, depending on the organizational structure, to the respective superior trading levels. These orders are based on the comparison between the future demand determined for an item at its location using various forecasting techniques and the evaluation of its available stock (this includes, for example, the warehouse stock, already ordered or reserved volumes, customers’ pre-orders, etc.)
The individual item order point in PRIME One describes a dynamic quantity which is adjusted according to demand forecasts, current demand developments (variations), seasonal processes, dynamic safety stocks and possibly fluctuating delivery reliability (delivery time). PRIME One permanently adjusts internal settings, alignments and order behavior! If the requirements change, PRIME One automatically makes readjustments accordingly. PRIME One examines the availability of all items on a daily basis and in the event of demand suggests orders across all suppliers (synchronized) and automatically.
Using this approach, the required service level is monitored down to the individual item and the best possible service level achieved. This enables a sustainable reduction in the safety stocks required to achieve the service level.
The structured procedure that spans all replenishment departments delivers the required results using a high level of automation. It gives the user more time for proactive and strategic activities. Order suggestions are automatically optimized economically and aligned in such a way that the balance of the coverage ranges of all items (SKUs) of a procurement source remains as good as possible (inventory balancing).
Thus panic or corrective purchasing is reduced and logistical processes, such as incoming goods and volume flows, are synchronized much better.
PRIME One’s demand forecasts are calculated in several models based on actual demand or output volumes and are adjusted for artificial sales promotion activities, for example special offers or lost sales (non-sales or erroneous sales). During promotional campaigns, the system is capable of statistically calculating the increased demand (increased output), filtering this data and listing seasonally adjusted (separated from normal demand data) statistical data calculated down to the day. Thus the historical progression remains adjusted and forecasts undistorted. The separately listed special offer output can be accessed later for evaluation purposes. In this way, historical demand data remains undistorted and the accuracy of demand forecasts is higher! Seasonal profiles for the automatic description of measurably fluctuating but regularly recurring demand progressions are an important part of PRIME One’s demand planning. Corresponding functions allow all users to allocate and set up seasonal profiles individually or to reallocate existing profiles to new items at the SKU level at the click of a mouse. Safety levels are reduced further and the service level improved sustainably!
Irrespective of the delivery time agreed with the supplier, every item at every location has an internal delivery time history and undergoes variation monitoring. Even in those cases where an item at a certain location is firmly linked to only one supplier, the same supplier demonstrates a deviating delivery time behavior at other locations. Reliability can fluctuate greatly from one location to the next. As long as incoming goods are reported back to PRIME One, variations in supplier behavior are automatically monitored, forecast and results for more precise safety stock volumes evaluated for every SKU.
Subsequent evaluations regarding supplier behavior can be used in different scenarios (reminders, additional cost calculations because of excessive safety stocks, supplier evaluation). At each incoming goods delivery, the delivery times are measured for each item/SKU, forecast internally and evaluated periodically for calculating order times. Variations in delivery time are monitored individually and taken into account dynamically for safety stocks. Trends in delivery time are identified and integrated into delivery time forecasting. PRIME One’s order Response determines possible problems in availability at an earlier juncture before the incoming orders stage.