Forecasting Workbench in PRMS TM SHOP FLOOR CONTROL Work Order/ FPO Maintenance Auto Allocation to Lots Pick Slip Print Master Production Schedule Material Requirements Plan Soft Bill Maintenance Stage Request Consolidated Pick Scheduling Workbench by Production Line RMS/Present Version 3.4 A Product of MXB - Managing the Business 100 N. Freeman Road Tucson, AZ 85748 (520) 886-5914 www.electriced.com
RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Sample Agenda i Attendance Sheet ii Forecasting Workbench Overview 1 What it Does 4 Definitions 8 Forecasting Methods 15 Forecasting Techniques 16 Simple Moving Average 18 Exponential Smoothing 20 Exponential Smoothing with Trend 22 Exponential with Seasonality 24 Exponential with Seasonality/Trend 26 User Enter and Locked 28 Focus ForecastingTM 30 This Year/Last Year Next Quarter 32 Last Year Quarter = Next Quarter 34 Product Group Forecasting 36 Four Methods of Safety Stock 40 Safety Stock Methods Compared 42 Exception Reporting 44 Forecasting Product Configuration 47 Forecasting Product Classifications 48 Mass Parameter Maintenance 52 Forecasting Environments 55 Single Plant 56 Multi Plant 58 DRP 60 VMI 9.0 62 Forecast Transfer Program 64 File Transfer Structure 66 Purchased Finished Goods 68 Simple Order Point 68 Time Phased Order Point 68 Setting Up and Operations 71 System Control 72 Product Master Maintenance 84 Warehouse Inventory Maintenance 86 Seasonal Profiles 86 C MXB, 1998 Printed in the United States All Rights Reserved PRMS is a trademark of Acacia Technologies, a division of Computer Associates Inc.
RMS/Teachkit PRMS TM Forecasting Workbench Table of Contents Mass Parameter Maintenance 90 Forecast Information Maintenance 102 Forecast Profiles 116 Creating the Calendar 118 Shop Calendar Maintenance 118 Forecast Period Maintenance 118 Generate Calendar 118 Update Calendar (Holidays) 118 Post Calendar Updates 120 Print Calendar 120 Calendar Inquiry 120 Entering Forecasts - Forecast Update 122 Forecasting Reports 125 Forecasting Inquiries & Reports 126 Inquiries 126 Seasonal Profiles Inquiry/Where Used 126 Forecast Profiles Inquiry/Where Used 128 Forecast Information Inquiry 128 Time Phased Order Point Inquiry 130 TPOP Calendar Inquiry 130 Sales Forecasting Inquiry & Retrieval 132 Product Group Explosion/Implosion 132 Product Group Model Inquiry 134 Reports 134 Forecast Performance Report 134 Excess/No Move Inventory Report 136 Forecast and Parameter Exception Report 136 Forecast Explosion Report 138 Forecast and Demand History Report 138 Forecast Transfer Report 140 Calendar Print 140 Period End 143 Log Current Forecast to History 144 Generate Forecast Parameters 146 Appendix 149 Forecasting Files List i Creating Forecast Models and Structures ii IM0100 Product Group Model iii IM0120 Forecast Structure iii IM0160 Model Propagation v C MXB, 1998 Printed in the United States All Rights Reserved PRMS is a trademark of Acacia Technologies, a division of Computer Associates Inc.
Sample Agenda Day 1 Morning Overview Forecast Methods Forecast Techniques Forecast Models and Structures Safety Stock Calculations Exception Reporting Afternoon Forecasting Product Configuration Product Classifications Mass Parameter Maintenance Interfaces to DRP and MPS and other Environments Day 2 Morning Setting Up Regular Maintenance Afternoon Reports and Inquiries Month End Additional Subjects Page i
Course Title RMS/Teachkit Forecasting Workbench Course Dates check (x) Name (printed) Job Function Day 1 Day 2 Day 3 Day 4 Page ii
Forecasting Workbench Overview SHOP FLOOR CONTROL Work Order/ FPO Maintenance Auto Allocation to Lots Pick Slip Print Master Production Schedule Material Requirements Plan Soft Bill Maintenance Stage Request Consolidated Pick Scheduling Workbench by Production Line RMS/Teachkit Page 1
PRMS TM G e n e r a l L e d g e r I n t e r f a c e Distribution Requirements Planning Warehouse Replenishment Orders Capacity Requirements Planning Payroll/ Human Resources Customer Order Processing Accounts Receivable Master Production Scheduling Shop Data Forecasting Workbench Product Structure Material Requirements Planning Shop Floor Control Inventory Control Physical Inv./ Cycle Count PRMS is a trademark of interbiz, a division of Computer Associates, Int'l Planning Execution Vendor Managed Inventory 9.0 Rough Cut Capacity Planning Purchasing/ Receiving Accounts Payable Quality Control MXB,2000 Page 2
Forecasting Workbench What it Does Generates or Accepts Input for Shipment Forecasts at the Product/Warehouse Level SPECIFICALLY, AN ESTIMATED SHIPMENT FORECAST BY WAREHOUSE How many warehouses do you ship from and should that impact the forecast in total? BASIS FOR PROJECTIONS IS MONTHLY "DEMAND" FROM WAREHOUSE INVENTORY FILE (INWIP100) Misses to Shipment Schedule will result in a lower base to calculate future forecasts Calculates Safety Stock Values ONE OF FOUR METHODS Transfers Safety Stock and Forecasts to MPS, DRP, VMI 9.0 or Requisition Entry for execution Provides Performance Reporting and Exception Reporting for Process Management Page 4
Forecasting Workbench What it Does End Item Management MULTIPLE FORECAST METHODS INCLUDING SIMULATION PRODUCT GROUPS FOR MANAGING FAMILIES AND GEOGRAPHIC MODELS CLASSICAL ORDER POINT AND TIME PHASED ORDER POINT Interface to Requisition Entry (PO0010) for Purchased Finished Goods Combined Item Management PLANNING AND TRACKING OF INDEPENDENT PORTION OF COMBINED DEMAND MULTIPLE SAFETY STOCKING METHODS MASS PARAMETER MAINTENANCE TO SIMPLY CONFIGURE CUSTOMER SERVICE GOALS INTEGRATION TO MRP FOR COMBINED DEMAND PLANNING Via Auto Accept MPS Page 6
Forecasting Workbench Definitions Primary Database File - IMSFP100 Suggested Forecast Generated by the forecast month end Not maintainable Current Forecast At beginning of month, the same as suggested forecast Maintainable Management Override A quantity which may replace or be added to a current forecast to generate a resultant forecast UA - User Add (+ or -) UR - User Replace Management Override quantities are retained by the month end process Resultant Forecast Forecasted Demand Current Forecast + User Add Management Override = Resultant User Replace Management Override = Resultant Page 8
Forecasting Workbench Definitions Mean Average Deviation (MAD) Measurement of Forecast Accuracy MAD Defined.1 25 ( ) * Forecast - Sales @MADSP Mean Absolute Deviation Smoothing (System Control, Forecast Workbench Options) Assigns weight to previous period deviation + Previous Period.1 100 @MADSP Mean Absolute Deviation Smoothing ( 1 - ) * Old Mad 2.5 90 92.5 Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025150015001500150015001500 10001000 Quantity Shipped / Forecast Page 10
Forecasting Workbench Definitions Bias Measurement of Forecast Accuracy with Consideration for Positive and Negative Deviation Negative Bias infers that Forecasts are less than Actual Orders Tracking Signal How well the forecast is tracking to Actual Orders Outliers Between +1.0 and -1.0 0 is good Warning Messages issued after +/-.55 Tracking Signal = New Bias/New Mad Actual Demand outside acceptable minimum and maximum quantities Forecasting calculations and inventory parameters are not recalculated. Forecast and parameters remain as previously established. Limits established in System Control with a Constant (L) Upper Large Demand Quantity (LDQ) = Old Forecast + (L * New MAD) Lower LDQ = Old Forecast - (L * New MAD) Page 12
Forecasting Methods SHOP FLOOR CONTROL Work Order/ FPO Maintenance Auto Allocation to Lots Pick Slip Print Master Production Schedule Material Requirements Plan Soft Bill Maintenance Stage Request Consolidated Pick Scheduling Workbench by Production Line RMS/Teachkit Page 15
Forecasting Methods Forecasting Techniques Simple Moving Average LAST "N" PERIODS / "N" Exponential Smoothing WEIGHTED AVERAGE OF SALES TO FORECAST Exponential with Trend SYSTEM CALCULATED LONG TERM OR PLANNER SPECIFIED Exponential with Seasonality EXPONENTIAL WITH TREND AND SEASONALITY User Entered and Locked ROLLING 12 Focus Forecasting BASED ON BOOK FOCUS FORECASTING, BY BERNARD SMITH "BEST OF" STRATEGIES AS MEASURED BY LAST THREE PERIODS Product Group Forecasting APPLICATION OF TECHNIQUES TO "STRUCTURES" Page 16
Forecasting Methods Simple Moving Average Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025101710171017101710171017 Quantity Shipped / Forecast 1000 500 MXB, 1998 (925 + 1100 + 1025) / 3 = 1017 # PERIODS USED DEFINED AT PRODUCT/WAREHOUSE LEVEL (IM0007) OR SYSTEM CONTROL (WCMANT-IMFCST) Page 18
Forecasting Methods Exponential Smoothing Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025100210021002100210021002 Quantity Shipped / Forecast Alpha =.10, old forecast = 1000 1000 500 MXB, 1998 Forecast = (Alpha * Last Period Sales) + ((1-A) * Old Forecast) (.10 * 1025) + (.9 * 1000) = 1002 PROVIDES BASE FOR TREND AND SEASONALITY Page 20
Forecasting Methods Exponential Smoothing w/trend Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025110212021302140215021602 Quantity Shipped / Forecast Alpha =.10, old forecast = 1000, Trend = +100 1000 500 MXB, 1998 Forecast = (Alpha * Last Period Sales) + ((1-A) * Old Forecast) (.10 * 1025) + (.9 * 1000) = 1002 Page 22
Forecasting Methods Exponential Smoothing w/seasonality Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025 511 1453 571 105212521172 Quantity Shipped / Forecast.51 1.45.57 1.05 1.25 1.17 Level = 1002 Profile = MXB 1000 500 MXB, 1998 Pattern Value = Period Sales / ((Sum Sales by Period)/ # Periods) PROFILES OF PATTERNS MAY BE BASED ON HISTORICAL OR USER DEFINED AND APPLIED TO GROUP OR PRODUCT/WAREHOUSE Page 24
Forecasting Methods Exponential Smoothing w/seasonality & Trend Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025 561 1503 621 110213021222 Quantity Shipped / Forecast.51 1.45.57 1.05 1.25 1.17 Level = 1002 Profile = MXB 1000 500 MXB, 1998 Trend = 50 SEASONALITY IS FIRST CALCULATED, THEN TREND APPLIED Page 26
Forecasting Methods User Entered & Locked Actual Demand / Forecast Period -6-5 -4-3 -2-1 1 2 3 4 5 6 450 1275 500 925 11001025150015001500150015001500 Quantity Shipped / Forecast 1000 500 MXB, 1998 Period End Rolls Forecast into Current Periods Page 28
Forecasting Methods Focus Forecasting TM Best of Three Provided Strategies PAST THREE MONTHS AVERAGE DEMAND = NEXT THREE MONTHS DEMAND THIS YEAR/LAST YEAR NEXT QUARTER LAST YEAR QUARTER AVERAGE = NEXT QUARTER AVERAGE User Defined Strategies may be Programmed and Integrated Focus Forecasting is a registered trademark of IBI exclusively licensed to Bernard T. Smith Page 30
Forecasting Methods This Year/Last Year Next Quarter Last Year/This Year Change Last Year Demand 1 2 3 4 5 6 7 8 9 10 11 12 450 1275 500 925 11001025 890 11001300 900 11501450 This Year Demand / Forecast 1 2 3 4 5 6 7 8 9 10 11 12 925 11001025139313931393 Quantity Shipped 2225 / 3050 = 1.37 (37%) 3050 / 3 = 1017 * 1.37 1000 500 MXB, 1998 Next Quarter is Change from Last Year Previous Quarter and Last Quarter * Average of Last Quarter Page 32
Forecasting Methods Last Year Quarter = Next Quarter Last Year Quarter = Next Quarter Last Year Demand 1 2 3 4 5 6 7 8 9 10 11 12 450 1275 500 925 11001025 890 11001300 900 11501450 This Year Demand / Forecast 1 2 3 4 5 6 7 8 9 10 11 12 925 11001025 742 742 742 Quantity Shipped 2225 / 3 = 742 1000 500 MXB, 1998 Next Quarter is Average of Last Year Last Quarter Page 34
Forecasting Methods Product Group Forecasting Grouping of Products According to Product Line or Distribution Point FORECASTS ARE ENTERED FOR THE "PARENT" AND EXPLODED THROUGH AND BY THE PERCENTAGES OF THE "CHILDREN" Percentage Assignments cannot be greater than 100 Forecast Model FORECAST STRUCTURE WITHOUT DESIGNATION OF WAREHOUSE Used to Propagate a Standard Forecast Structure to Multiple Warehouses May or May Not Include Percentages May be Multi Level Forecast Structure STRUCTURE OF CHILDREN WITH PERCENTAGES AND SPECIFIC FOR A WAREHOUSE May be Multi Level Page 36
Forecasting Methods Product Group Forecasting Forecasting Model Management Product Family Product 1 Product 2 Product 3 (IM0100) Product Family Product 1 Product 2 Product 3 Model Propagation (IM0160) Product Family Product 1 Product 2 Product 3 Product Family Product 1 Product 2 Product 3 Forecast Structure Maintenance (IM0120) Product Family Product Family Product Family Product 1 20% Product 1 65% Product 1 50% Product 2 35% Product 2 25% Product 2 20% Product 3 45% Product 3 10% Product 3 30% Forecast Whse A Forecast Whse B Forecast Whse C MXB, 1998 FORECAST AND/OR PLANNING PARAMETER MAINTENANCE AT STRUCTURE LEVEL OR INDIVIDUAL PRODUCT/WAREHOUSE LEVEL Page 38
Forecasting Methods Four Methods of Safety Stock Calculated and optionally transferred for DRP, MPS or VMI 9.0 Warehouse Inventory (INWIP100) or Product Master (MSPMP100) Safety Stock value is overwritten % Fill Rate from Stock FILL RATE SPECIFIED BY A, B, C CATEGORIZATION SAFETY FACTOR MULTIPLIED BY MEAN AVERAGE DEVIATION Specification of Safety Stock Level Weeks of Supply % of Demand During Lead Time SPECIFIED IN VENDOR MASTER FILE Page 40
Forecasting Methods Safety Stock Methods Compared Safety Stock Methods Actual Demand / Forecast -6-5 -4-3 -2-1 1 450 1275 500 925 110010251017 Quantity Shipped / Forecast Safety Stock Method % fill rate weeks supply % demand 1072 1017 509 1000 500 MXB, 1998 Forecast = Simple Moving Average % Fill Rate = 98 Weeks of Supply = 4 % Demand Over Lead Time = 50% Lead Time = 20 Days Page 42
Forecasting Workbench Exception Reporting Forecast and Parameter Exception Report (IM0004) Identifies the configuration of the drivers to the forecast and safety stock calculations including warnings for out of bounds conditions TRACKING SIGNAL EXCEEDS +/-.55 Run Selection Warehouse, Product, Vendor Output Warehouse Product ABC Tracking Signal Previous Forecast Demand History Reorder Min Trend Vendor Forecasting Classification Safety Stock Method MAD Suggested Forecast Smoothing Factors Reorder Mult Profile Working Document to Analyze and Maintain Forecasts GENERATED AS RESULT OF MONTH END PROGRAM Option available to run without updating forecasts Page 44
Forecasting Product Configuration SHOP FLOOR CONTROL Work Order/ FPO Maintenance Auto Allocation to Lots Pick Slip Print Master Production Schedule Material Requirements Plan Soft Bill Maintenance Stage Request Consolidated Pick Scheduling Workbench by Production Line RMS/Teachkit Page 47
Forecasting Workbench Forecasting Product Classifications System Controlled SYSTEM GENERATED FORECASTS AND INVENTORY PLANNING PARAMETERS Forecasts Generated EOQ, Order Point and Safety Stock are Calculated Forecast Performance is Calculated Short & Long Term Trend, MAD, Tracking Signal, Large Demand Quantities Planner Controlled Simple Moving Average and Exponential Smoothing Only INVENTORY PLANNING PARAMETERS ARE REVIEWED AND ESTABLISHED BY PLANNER P1 P2 Forecasts Calculated, Not Used EOQ, Order Point, Safety Stock and Order Quantity Specified Forecast Performance is Calculated Short & Long Term Trend, MAD, Tracking Signal, Large Demand Quantities Exponential and Moving Average Forecasts Calculated Order Point and Order Quantity Specified in Weeks of Supply Forecast Performance is Calculated Short & Long Term Trend, MAD, Tracking Signal, Large Demand Quantities Page 48
Each one of our RMS/Teachkit courses and training presentations are available for your selection. Choose the full color, 'Present' format for self-review or your presentation document for the class through your projection system. If you would like to print student manuals, select '+ Print' format. In addition to receiving the 'Present', you will receive an additional file specifically configured and optimized for two-sided student workbook production. Submit to your own laser printer or send outside. If you prefer, you can choose the 'Present' format only and order the student manuals from us! All our printing is crisp, laser printing, two-sided, soft bound and delivered on time 100% of the time. Education & Reference General Present + Print Present + Print Manufacturing Welcome to PRMS 99.00 199.00 Product Definition 199.00 349.00 PRMS Overview 199.00 349.00 Manufacturing Planning 199.00 349.00 Version 9 Enhancements 99.00 199.00 Shop Floor Control 199.00 349.00 'Canned' Reports & Inquiries 99.00 199.00 Router Training 149.00 299.00 Distribution Inventory Forecasting Workbench 149.00 299.00 Inventory Control 99.00 199.00 Customer Order Processing 199.00 349.00 Cycle Count & Phys. Inv. 99.00 199.00 Order Entry Training 149.00 299.00 Lot Control 99.00 199.00 RGA's & C/D Memos 149.00 299.00 Financial Replenishment Orders 99.00 199.00 Standard Costing 149.00 299.00 Purchasing & Receiving 199.00 349.00 Accounts Payable 149.00 299.00 Online Tutorials The Keyboard & PRMS 99.00 Navigating PRMS 99.00 Purchasing Overview 99.00 Requisition Processing 99.00 Measuring Execution Performance 99.00 Contact us: MXB@AOL.com u.s.800-304-5914, 520-886-5914, fax 520-298-5525