DRP Operations

How is SMS used in DRP operations?

SMS accommodates these inventories with ease!  These inventory operations typically have low receiving costs per order, no components, lumpy demand and shorter lead times.   Often these inventory operations are regional distributors who don't make any product - yet get a variety of items from a wide range of suppliers.  These items are then resold - or used to perform customer services such as repairs.  If suppliers are international, planners can experience long leadtimes for shipments from overseas.

Does SMS include a DRP Roll-up?
Yes it does!  SMS accommodates an unlimited number of regional warehouses and local warehouses.  It can distinguish specific characteristics for each location such as lead time, ordering cost and customer service levels.  For example, leadtime for an item that is supplied by a vendor would have a typical leadtime - while the leadtime at the local warehouse (supplied from the regional warehouse) would have a leadtime of only one week.  SMS calculates specific requirements (not forecast) for each local warehouse and rolls this requirement up to the regional warehouse.  SMS also reports by supplier so you can work directly with your supplier to place orders - manually or electronically from the many electronic formats available with SMS.

Does SMS look for Lumpy Demand?

Yes it does!  SMS has specific logic to accommodate sporadic or lumpy demand.  For these items - and they could be many in a typical DRP environment - SMS recognizes the high forecast error inherent in attempting to predict sales for these items.  SMS addresses this through the safety stock calculation.  For items with only a few sales - or only a few months of any sales activity - SMS can calculate a proper safety stock level.  This logic takes into account the quantity of sales activity, the cost of the item, the customer service level, the lead time of the item and how recently the last sales occurred.  SMS predicts an accurate safety stock even if the forecast is "lumpy".

Does SMS have a Transfer Function?

Yes it does!  SMS handles transfers of stock for unlimited locations.  Thanks to our "Ordering Code" logic SMS can identify all items that have more than one year's supply of excess stock.  These are candidates to be transferred to a location that may urgently need stock.  SMS determines where you need that stock - and where you can get it from in a hurry.  This feature gives you reports and electronic files for automated transfer processing if desired.