Furthermore, we have compiled some ways that companies can mitigate the supply chain effects of this global pandemic, but it is important to remember that every business has their own challenges and not all the advice compiled here will apply to everyone.
Stocking up on the right products
If your supply chain strategy entails securing supply on key products for the next few months, use our order constraint feature to scale up the order volume to match the demand period you want to secure. This will save you a lot of time.
In the order view, start by grouping all your items by their ABC specification in order to prioritize your items.
In our reports use the “Move In Report” to highlights items that have a pending purchase order but are likely to go out of stock before they arrive. Use the report to contact your suppliers, see if they can expedite your order.
For a drop in demand, use the “Move Out Report” to see if you can cancel or delay incoming undelivered PO’s, to avoid overstock and protect cash flow.
If you don’t have these reports currently setup in your AGR system, you can create them with the following:
‘Move In Report’:
• Closed = 0
• Advanced: Days until stockout committed < Days cover committed
Columns: Item id, location, primary vendor, item no, item name, stock units, undelivered, Days until stockout committed, Days cover committed, lead time, ABC, safety stock for order period.
‘Move Out Report’*:
• Stock out expected = No
• Advanced: Estimated stock next delivery date > safety stock for order period + 2*(forecast for order period)
– the proportion, here 2, can of course be changed
Columns: Item id, location, primary vendor, item no, item name, stock units, undelivered, Estimated stock next delivery date, Safety stock for order period, forecast for order period, stock out expected.
*The Move Out Report is a bit more complex and can differ from company to company, so let us know if you need any help creating it.
We understand that there’s a lot going on right now, so feel free to contact your consultant and they can add these reports for you.
For a sales peak or sales drop, that in no way reflects demand going forward, it is a good idea to apply demand smoothing to keep your forecast data accurate. Volatile demand patterns like sale peaks and sale drops can reduce forecasting accuracy and increase the level of safety stock needed to keep up a certain service level.
Adjusting Safety Stock
If you find that your sales are going down and you want to adjust your safety stock levels, adjust the confidence level of your items in item details.
Overriding the Sales Forecast in the Planner
As these are unprecedented times it might be a good idea to overwrite your demand forecast subjectively through the AGR Plans feature, keeping your business operations more agile and current.
In the image above, you can see that the user expects sales to be down by 30%, and makes this adjustment within the Baseline Plan. For some companies, they might expect to have no sales, so you could put -100% for the next month or two, and then make adjustments as the situation around the world becomes clearer.
If you are currently not utilizing the planning feature of AGR, then an AGR consultant can easily help doing similar above mentioned changes to your companies items demand.
Thankfully, COVID-19 is a temporary crisis and business is bound to go back to usual at some point, the question is when and how? We want to make sure that when demand picks up, your AGR forecasts are ready too.