My company is trying to address inventory issues related to stock levels (we’re hoping to assess, with some fair accuracy, which parts are consistently over-stocked so that we can generate a plan for sensible reduction of that stock).
I’ve been asked to put together a BAQ that basically looks at quantity on hand and compares that value with our minimum and safety levels. I understand that I should be able to derive these values directly from [PartWhse] - because that table shows these levels for all warehouse locations.
In the field notes for the [PartWhse.SafetyQty] field, Epicor states:
Note: Safety + Minimum = Reorder Point… using this formula the reorder point is the amount at which to reorder to maintain at least the prescribed minimum quantity.
… which leads me to believe that:
[PartWhse.OnHandQty] - ( [PartWhse.SafetyQty] + [PartWhse.MinimumQty] ) = “Reorder Flag”
All of that said, I do understand that, between MRP and PO Suggestions, there is a lot more behind the scenes that Epicor calculates within the realm of demand to help planners/buyers assess when the right time should be to order a part. Our Supply Chain supervisor is also of the opinion that the concept of “inventory” cannot be assessed solely on values contained in the [PartWhse] table.
Yet, I cannot seem to shake the idea that “inventory” (in terms of counts-to-stock levels) is merely a snapshot of “what do I have right now” compared to “what am I supposed to have as a minimum/maximum”. If I am consistently below the defined minimum stock level, then I need to develop a plan to increase the stock-level of that part. If I’m exceeding my maximum (assuming a max is defined), then I am over-stocked and I need to scale back ordering of that part. When a max is not defined, it is perhaps because my only concern is maintaining inventory at the minimum level. Therefore, if I’m looking at a report indicating a minimum stock level of 3, and my report consistently says I have 6 quantity on hand, then I would also need to scale back orders for that part.
To me, “inventory” is a different animal than “stock”. Inventory is what you have on hand plus your WIP, plus your allocations, plus, potentially, your future demand. Stock is merely what you have in the warehouse that is not yet in WIP, or bolted on to an assembly and being carted around the production floor.
So… my question is… if my company is merely interested in current stock levels (not part WIP; not part allocations; not scheduled demand), then should I not be looking exclusively at the [PartWhse] table? Why would the idea of comparing [PartWhse.OnHandQty] to [PartWhse.SafetyQty] + [PartWhse.MinimumQty] be a foolish one? If it is foolish, then what is the purpose of the [PartWhse] table?
Thank you, everyone.