Inventory Leveling

This document explains how to use inventory leveling. This process automatically moves existing stock to locations where there is stock deficiency based on the target and maximum stock values defined. Different distribution centers and warehouses are grouped together and defined as co-planning groups. The leveling takes place within these groups.

There are three types of inventory leveling:

Outcome

Existing stock is automatically moved to locations where there is stock deficiency based on the target and maximum stock values defined.

These are the uses:

Before you start

'Planning Policy. Open' (MMS037) must be defined in order to include the item in the leveling.

Follow These Steps

Define Settings and Policy for Inventory Leveling

  1. Start 'Leveling Settings. Open' (MWS006). From the E panel, define the target and maximum stock quantity and coverage days.

  2. Proceed to 'Leveling Policy. Open' (MWS007). From the E panel, define how to perform the leveling.

    • Select the type of Group leveling:
      • Level 1 - only from distribution centers to region warehouses in a one-directional push.
      • Level 2 – between distribution centers and region warehouses in a bi-directional push.
      • Level 3 – same as Level 2, but leveling can also occur between included region warehouses.
    • Select the Priority sequence:
      • Quantity – surplus stock and deficiency stock is based on the stock quantity. For example, safety stock and maximum order quantity.
      • Coverage days – surplus stock and deficiency stock is based on the amount of time in coverage days. For example, lead time and planning time fence (PTF).

Set up Co-planning Groups

  1. Start 'Co-planning group. Open' (MWS008). From the E panel, define the main warehouse for the co-planning group.

  2. Select the Leveling policy to use with the co-planning group. The leveling policy specifies how the inventory leveling will be performed for this group.

  3. After you have set up all the necessary co-planning groups, use the Low level code to indicate the inventory leveling sequence between the different groups. Based on your main warehouse and your co-planning groups, a low level code can be calculated using function key F14 in (MWS008).

Set up Co-planning Group Details

  1. Start 'Co-planning group details. Open' (MWS009). From the E panel, set up the connection between the co-planning group and all the included warehouses.

  2. Designate whether the warehouse is a distribution center or a region warehouse within the group.

  3. Connect the Leveling setting to use with the warehouse in the co-planning group. This defines what is considered target and maximum stock levels.

Start Inventory Leveling

  1. Start 'Inventory Leveling' (RPS670).

  2. Make the necessary selections.

    When leveling is finished, a message can be received. When leveling is finished, a message can be received informing the planner that a potential excess stock situation has occurred. This message will be the basis for a new activity, Sell-back of Goods to Supplier.

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