McConnell Chase provides Inventory Solutions for Service Parts and Finished Goods in independent locations as well as complex supply chain supporting vendor managed inventory (VMI), distribution requirements planning (DRP), and collaborative planning forecasting and replenishment (CPFR).

You want the right inventory in the right place at the right time. You accomplish this by defining your system of points of supply and distribution, and then forecasting, setting safety stocks, setting replenishment order quantities, and operating a replenishment process based on these numbers.

Distribution System
FD6 provides for defining and maintaining an entire inventory distribution system of source plants and primary, secondary, etc., distribution centers. This provides the skeleton for operating FD6's vendor managed inventory (VMI) and distribution requirements planning (DRP) solutions.

Forecasting
Among the many excellent methods FD6 provides for generating statistical forecasts are methods for intermittant or low volume items, and methods with non-normal distributions: Poisson, binomial, negative binomial. In addition, FD6 allows for conditioning outliers, providing multiple demand sources (EDI, POS, etc), normalizing irregular periods, optimizing accuracy at specific time periods, data limiting, and substitution/obsolescence linking. Specifically, the methods include exponential smoothing, double exponential smoothing, Holt, Winters, Box-Jenkins, Curve fitting, Linear and Multiple Regression, Quadratic curve fitting, Exponential curve fitting, Growth curve fitting, Croston's, simple moving average, fixed moving average, random walk, and an international statistical accuracy competition winning expert selection method for automatically picking the best method.

Setting Safety Stocks and Replenishment Order Quantities
Safety stock level is a trade off between customer service level and cost. FD6 provides for evaluating inventory levels by cost, and for selecting and maintaining the optimal inventory level. FD6 provides several methods each for calculating safety stock and order quantity (such as EOQ and desired turns) and methods can vary by item and by supply chain location. FD6 also provides for measuring the financial impact of improving accuracy and reducing lead time.

Operating a Replenishment Process
FD6 provides the data structures, functions, user interface, and systems integration software to operate a complete replenishment process -- completely integrated with all of FD6's forecasting and planning capability. This includes importing item data, inventory, sales orders, and shipments, forecasting and consuming forecasts, producing replenishment plans for service goods, finished goods, and a whole supply/demand chain.

User Interface -- Inventory Replenishment

In this example the user has queried the database for inventory exceptions, products whose inventory levels are projected negative inside lead time. We see the selected product in the item navigator list on the left. In the Inv/Mfg/Dist tab to the right of the item navigator we see that the management forecast variance safety stock method computed a safety stock of 50 for this item to support a 90% customer service level. We see that the EOQ method computed a order quantity of 157. Imported from the manufacturing system are other fields -- minimum order quantity (100), order multiple (60), current inventory (255), and lead time (20).

The grid in the bottom section shows two inventory projections by month. Inv/Curr Plan is based on current inventory and currently open orders shown in the Curr Plan row. Inv/New Plan is based on current inventory and proposed replenishment orders shown in the New Plan row. The arithmetic for projections is INV(t+1) = INV(t) - Unconsumed Forecast(t) - Backlog(t) - DRP Demand(t) + Plan(t).

The story, starting in the first grid column, is that the backlog of 405 against current inventory of 255 will drive inventory negative. A suggested order of 240 answers this, covering the first period's need and setting the next period opening inventory to 90, the safety stock. In the next period, forecasted sales (61) again drives inventory negative. However, the need is answered by another order of 180, lot sized by an order quantity of 157 and a pan size of 60. Replenishment proceeds similarly forward.