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Openbravo and frePPLe advanced planning concepts

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This presentation summarizes the advantages of coupling Openbravo ERP and frePPLe APS

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Openbravo and frePPLe advanced planning concepts

  1. 1. © 2016 Openbravo Inc. All Rights Reserved. 1 Openbravo Advanced Planning with FrePPLe June 2016
  2. 2. © 2016 Openbravo Inc. All Rights Reserved. 2 Index3 Business Benefits Advanced Planning
  3. 3. © 2016 Openbravo Inc. All Rights Reserved. 3 Index3 From the Financial perspective Working Capital optimization • WC =AR+IN-AP (current assets – current liabilities) • WC-Ratio =AR+IN/AP (above but close to 1 is good) A good Indicator of Operational Efficiency Business Benefits of Planning From the Commercial perspective Increased Turnover & Customer satisfaction by less stock-outs From the Operational perspective Reduced costs by Reduced Excess & Obsoletes Reduced costs by Optimized Transport and WHse Utilization
  4. 4. © 2016 Openbravo Inc. All Rights Reserved. 4 Index3 From the Organizational perspective • Planning is a high-value activity. • At best it is executed at a Central or DC level. • A planner is well connected to other functions. • Planning streamlines other activities in the Organization. • The FrePPLe engine calculates an Optimized Supply Chain. • The Openbravo Commerce suite allows to execute lean. • The combination allows to move from people-dependency to system-dependency. Business Benefits of Planning
  5. 5. © 2016 Openbravo Inc. All Rights Reserved. 5 Index3 FrePPLe • Supply Chain Planning engine • Shop-floor Scheduling engine • Powerfull, Versatile and Efficient Openbravo • Web-native Wide&Deep Enterprise functionality for mid-sized to large Retailers • Back-end and Front-end nurtured from same DB • Intuitive and Productive User-Interface The Perfect Match and a Winning Combination Business Benefits of FrePPLe / Openbravo Combination
  6. 6. © 2016 Openbravo Inc. All Rights Reserved. 6 Index3 Business Benefits Advanced Planning
  7. 7. © 2016 Openbravo Inc. All Rights Reserved. 7 Index3 Advanced Planning Components Main Components of Advanced Planning • Forecasting 1. Demand Forecasting 2. Forecast Analysis and Review 3. Forecast Consumption • Inventory Planning 1. Inventory Parameters Optimization 2. Inventory Planning Review • Replenishment Planning 1. Replenishment Modeling 2. Initial Replenishment plan Review 3. Export approved plan
  8. 8. © 2016 Openbravo Inc. All Rights Reserved. 8 Index3 Advanced Planning Forecasting 1. Demand Forecasting 1. Auto-Select and Auto-Tune between best forecast algorithm: • Moving average – flat forecast • Single exponential – flat forecast • Double exponential – trending demand • Winters – seasonal demand • Croston – intermittent demand 2. Outlier detection and Correction • User can interfere/force at any level and moment Sales history Expected future sales
  9. 9. © 2016 Openbravo Inc. All Rights Reserved. 9 Index3 Advanced Planning Forecasting 2. Forecast Analysis & Review 1. Review the forecast and edit it with extra information • Product Life Cycle approach • Add forecast values for new products (fade-in) • Reduce or remove forecast for old products (fade-out) • Adjust forecast on agregated level / family item-level • Add promotions • Exclude exceptional one-off sales from the demand history 2. Review at product, location, customer and time dimension • Region: Sales manager • Customer: Account manager • Product Range: Product manager • Overall: General manager
  10. 10. © 2016 Openbravo Inc. All Rights Reserved. 10 Index3 Advanced Planning Forecasting 3. Forecast Consumption 1. Short term demand consists primarily of customer sales orders. 2. Longer term demand consists primarily of sales forecast The forecast consumption algorithm reconciles both short- and long-term demand into a Consolidated Demand Signal that is consistent and complete across the chosen horizon. The start&end, curve&angle and length of the line that separates Open Orders from Forecast is different per industry, sector, geography and product-type.
  11. 11. © 2016 Openbravo Inc. All Rights Reserved. 11 Index3 Advanced Planning Inventory Planning 1a. Inventory Parameters Optimization • Dynamically computes inventory parameters per warehouse • Users can override the values per period Inventory Parameter Calculation options Safety Stock The safety stock parameter is derived from the Desired Service Level, taking into account the Supplier lead-times and the Supplier delivery accuracy. a) Computed suggestion b) Fixed Quantity c) #Days of Forecast Reorder Quantity The ROQ is derived from the Economic Order Quantity (Wilson formula), taking into account the Item costs, the Order costs and the Holding costs. a) Computed suggestion b) Fixed Quantity c) #Days of Forecast
  12. 12. © 2016 Openbravo Inc. All Rights Reserved. 12 Index3 Advanced Planning Inventory Planning 1b. Inventory Parameters Recommendation • Stores, Outlets • Number of products * outlets requires Agile Approach. • Fixed Period with different periods per ABC classification. • Periodical automated ABC-reclassification, f.i. monthly. • Distribution Centers • Volumes allow for an elaborated, Economical Approach • Economic Order Quantity as General Guideline for matured products • Exceptions: • Deterioration products (expiry dates) • Beginning of LifeCycle products (fade-in) • End-of-LifeCycle products (fade-out) • … • Detect and Alerts for Outlier-Orders • Outlier-Order = >50% of QtyAvailable + Inside Supplier LeadTime • To be treated as exception by planner • Dynamic Sourcing allows to bypass EOQ when demand urges satisfaction
  13. 13. © 2016 Openbravo Inc. All Rights Reserved. 13 Index3 Advanced Planning Inventory Planning 2. Inventory Planning Review • Management by Exception: Calculated Stock-out Risk • FrePPLe calculates the risk of stockouts per SKU, per Warehouse. This provides an excellent starting point for the planner to fine-tune parameters, expedite orders or alternative sourcing. • Planners to review the Safety Stock to: • Make sure the service levels associated to a SKU are appropriate and don’t generate too much or not enough stock • Set fixed quantities for SKUs where there is not enough demand history to fully rely on the forecast • Set fixed periods of forecast for fast movers to make sure no stockout will occur • Planners to review the ROQ to: • Make sure not to order too frequently from a supplier. • Ensure the ROQ are not too high generating unnecessary stock.
  14. 14. © 2016 Openbravo Inc. All Rights Reserved. 14 Index3 Advanced Planning Replenishment Planning 1. Replenishment Modeling • Bill of Material – From Supplier to Product • Bill of Distribution – From Product to Customer • All resources, All suppliers • Generation of constrained or unconstrained plans • Dynamic Sourcing Source material by rules like “Cheapest source unless…”
  15. 15. © 2016 Openbravo Inc. All Rights Reserved. 15 Index3 Advanced Planning Replenishment Planning 2. Exception based Replenishment Review • Late Order Analysis • Drill down into a late order; Review its delivery plan and the causes for the delay • Critical Purchase/Distribution review • Understand for which open purchase orders the planner should contact the supplier to expedite the delivery • Excess inventory / safety stock violations • Identify inventory outside the expected limits 3. Planned Orders to be exported to Openbravo • Purchase orders • Distribution orders
  16. 16. © 2016 Openbravo Inc. All Rights Reserved. 16 Index3 Advanced Planning Connector Openbravo and FrePPLe Connector Bi-directional propagation in the supply chain • FrePPLe input from Openbravo • Sales History • Inventory • Pending Orders (SO, PO, DO) • Bill of Material, Bill of Distribution • Product/Whse planning parameters • FrePPLe output to Openbravo • Purchase Orders • Distributions Orders • Recalculated Planning Parameters
  17. 17. © 2016 Openbravo Inc. All Rights Reserved. 17 Thank you Web: www.openbravo.com/contact Email: info@openbravo.com Spain Office: +34 932 725 947 India Office: +91 33 4004 7358 Mexico Office: +52 559171 1841 Thank you very much for your attention
  18. 18. © 2016 Openbravo Inc. All Rights Reserved. 18 Disclaimer This document outlines Openbravo’ s product direction and should be considered as a statement of intentions. It should not be relied on in making a purchase decision. Openbravo has no obligation to deliver any functionality mentioned in this presentation. The forward-looking statements in this document are subject to various risks and possible future developments may change for several reasons, including but not limited to market changes and Openbravo development team workload. Openbravo assumes no responsibility for any inaccuracy or omission in this material.

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