Planning Hierarchy - Exercises

IMPORTANT
It is extremely important that you set up and work within your own site to maintain your data integrity. If you work within any other site, you will compromise your own exercise data as well as the data of other students. Predictable exercise results require that your data be isolated in your own site.

Basic Data Setup

Purchase/Inventory/Sales Part

Purpose: The purpose of this exercise is to create part data entries necessary for running the reordering functionality.

Windows:
New Part Assistant

  1. Create a number of  parts as both purchased, inventory, and sales part by using the New Part Assistant. Part should belong to the same company but could have different sites.
  2. The parts created should use different groupings like asset class, commodity group and could also have different primary suppliers.
  3. If the planning hierarchy should be used for ABC/Frequency/Lifecycle level one needs to create transactions in previous periods and run the background job for classification.

General exercise for Purchased Part

General exercise for Stored Sales Part

Main Exercise

Purpose: The purpose of this exercise is to show you how to set up planning hierarchy and how to review the impact on inventory part.

Windows:
Basic Data for Planning Hierarchy
Inventory Part/Planning/General
Inventory Part/Planning/Order Point

The planning parameters used for calculating safety stock, order point and lot size should be controlled on different groupings of inventory parts.

Reordering Inventory

  1. Open the Basic Data for Planning Hierarchy window. Note that values on the company level are required as these represent the last level of the hierarchy.
  2. For created inventory parts verify that values for planning parameters from hierarchy on General and Order Point tabs in the Inventory Part/Planning window all have the source from company and use those values.
  3. Open the Asset Class tab in the Basic Data for Planning Hierarchy window and create values for asset class in both the General and the Order Point tab. Use some of the asset classes created and used on your parts. Note that it is not necessary to change all values. You could for instance have values for ordering cost and inventory interest(%) to be fetched from company and then have different values for service rate(%) depending on the asset class used on the inventory part.
  4. Check inventory parts again to verify that values for a specific asset class are actually used on the individual inventory part. Service rate(%) can be checked on Inventory Part/Planning/General
  5. Continue to test and verify different settings on different levels of the planning hierarchy and that it updates the inventory part. If ABC/Frequency/Lifecycle classification is used make sure that they are updated. Check that values are picked from the right priority. Values defined lower down in the hierarchy should be used before values higher up. For example values from site should be used before company.
  6. Finally open a inventory part, Inventory Part/Planning/General or Order Point tab and make changes directly on that part. Verify that this value is used as operational value and that the source in inventory part. This represents the lowest level in the planning hierarchy.