Inventory Allocation Procedures

When the scheduled shipping system is used, the shipper company enters sales orders, inventory receipts, reconciles open sales orders, and allocates available inventory to sales orders on a daily basis.  Once all inventory receipts for the day have been entered, the operator uses the Inventory Allocation program to allocate the available inventory to orders that have scheduled ship dates through the current date.  Once the available inventory has been allocated to orders within the scheduling window, the operator prints picklists through the appropriate date and ships the merchandise to the customers.

Receive Inventory - Since the system will be used to allocate each inventory item to open sales orders on a daily basis, it is very important that inventory receipts are entered as quickly as possible.

Reconcile Sales Orders - This procedure recalculates the reserved and total reserved quantities for each inventory item in the system.  The system is designed to reserve or allocate inventory to orders that fall within the scheduling window.  As each day goes by, some orders which were not within the scheduling window at the time of order entry move forward into the scheduling window.  Since the reserved quantity for each item may change on a daily basis, the reconciliation program is used daily to recalculate the reserved quantity of each inventory item before the available quantity is allocated to backordered order lines.  The reconciliation program runs through the sales order file and totals the ordered quantities for each inventory item.  The program also uses the schedule date for each line item with the scheduling window and the current system date to determine if the RESERVED quantity should be updated.  If the open and or backordered lines on an order fall within the scheduling window, they are included in the reserved quantity and the total reserved quantity for each item.  If the order lines do not fall within the window, they are included in only the total reserved quantity for the each item.

Make sure that the system is displaying the current system date.  Since the reconciliation program recalculates the reserved quantity of each inventory item by using the scheduling window and the system date, it is very important that the system date be correct when the program is run.  If the displayed date is not correct, the operator should change the date before running the reconciliation program.

Run the Sales Order Reconciliation program.  Once the operator is sure that the system date is correct and that no invoicing is taking place, the operator runs the reconciliation program.  The program recalculates the reserved and total reserved quantities for each inventory item.  The program also produces an allocation report which lists the items and quantities allocated to orders and the individual sales orders that the items are allocated to.

If the Sales Order Reconciliation program is interrupted or does not finish processing properly, the program can be re-run.  

Allocate Inventory to Backordered Sales Orders by Schedule Date - Once all inventory receipts for the day have been keyed into the system the operator allocates available inventory to backordered sales order lines.  The inventory is allocated to backordered sales order lines in sales order number order.  For each item, the program calculates the quantity already allocated to type "O" (open) orders, and compares this quantity to the on hand quantity for the item to get the quantity available to allocate.  The system then allocates the available items.  

Make sure that the system is displaying the current system date.  Since the allocation program assigns or allocates on hand inventory to orders by using the scheduling window and the system date, it is very important that the system date be correct when the program is run.  If the displayed date is not correct, the operator should change the date.

Print Picklists for all open unprinted sales orders thru the appropriate schedule date. - Once the available inventory has been allocated, the operator prints picklists for all open unprinted orders with schedule dates through the appropriate date.

Make sure sales orders have been reconciled as of end of prior day.  This is normally part of nighttime processing.

Make sure available inventory has been allocated.

Run the print picking list program selecting open, unprinted orders, through the appropriate date (generally this will be the system date plus the number of days set by the PLWINDOW system control parameter.)  Alternatively, the company may only wish to print orders scheduled though the current system date.  The system date or the system date plus the scheduling window may be used to print picklists, but the shipper company should make sure that the date used is used consistently.

Ship the Orders for which picklists have been printed. - Once the above procedures have been completed, the operator completes and ships the orders for which picklists have been printed.  The picklists for orders which are not shipped on the same day they are printed should be retained in the warehouse and completed as soon as possible. 

Monthly Procedures 

The following procedures should be performed on a monthly basis.

Purge system of orders which were not completed before cancellation date.

Suggested Schedule - Requires at least a 3 day scheduling window

Run reconciliation program each night as a batch process.  This will reserve inventory for items that were not in scheduling window before.  If run on Friday 1/1 would reserve inventory for orders to be shipped thru Monday 1/4.  If run on Monday, would reserve inventory for orders to be shipped thru Thurs 1/7

Run allocation program each morning

Print Picklists for all orders that are open and unprinted with schedule dates up thru end of window.  For example, if picklists are printed on Friday 1/1 for schedule dates thru Monday 1/4, the operator would receive picklists on Friday for all orders to be shipped thru Monday.  On Monday morning, the operator would print picklists for all open unprinted orders with schedule dates thru 1/7.  The operator would at that point have picklists for all open orders entered thru Friday with scheduled ship dates thru Thursday.  The operator would also still have picklists for any orders printed thru Friday that had not been shipped out.  On Monday afternoon, the operator could also print the picklists for orders with schedule dates thru 1/7 to get orders entered Monday that are scheduled to be shipped by Thursday.  On Tuesday morning the operator would print picklists for open unprinted orders with schedule dates thru Friday 1/8.  At that point, the operator would also have the orders entered thru Monday with schedule dates thru Friday.

12/31  Thursday (PM) - Reconcile orders thru 12/31 + 3 days = 1/3

1/1     Friday - Run Allocation - Allocate Inventory to orders entered thru 12/31 with schedule dates thru 1/4 (system date of 1/1 + 3 days)

          Friday - Print Picklists for all open unprinted orders with schedule dates thru 1/4.

          Friday (PM) - Reconcile Orders thru 1/1 + 3 days = 1/4

 

1/2     Saturday - No activity - Assume business is closed

 

1/3     Sunday - No Activity

 

1/4     Monday - Run Allocation - Allocate Inventory to orders entered thru 1/3 with schedule dates thru 1/7 (system date of 1/4 + 3 days)

          Monday - Print Picklists for all open unprinted orders with schedule dates thru 1/7.

          Monday (PM) - Reconcile Orders thru 1/4 + 3 days =1/7

 

1/5     Tuesday - Run Allocation - Allocate Inventory to orders entered thru 1/4 with schedule dates thru 1/8 (system date of 1/5 + 3 days)

          Tuesday - Print Picklists for all open unprinted orders with schedule dates thru 1/8.

          Tuesday (PM) - Reconcile Orders thru 1/5 + 3 days =1/8

 

1/6     Wednesday - Run Allocation - Allocate Inventory to orders entered thru 1/5 with schedule dates thru 1/9 (system date of 1/6 + 3 days)

          Wednesday - Print Picklists for all open unprinted orders with schedule dates thru 1/9.

          Wednesday (PM) - Reconcile Orders thru 1/6 + 3 days =1/9

 

1/7     Thursday - Run Allocation - Allocate Inventory to orders entered thru 1/6 with schedule dates thru 1/10 (system date of 1/7 + 3 days)

          Thursday - Print Picklists for all open unprinted orders with schedule dates thru 1/10.

          Thursday (PM) - Reconcile Orders thru 1/7 + 3 days =1/10

 

1/8     Friday - Run Allocation - Allocate Inventory to orders entered thru 1/7 with schedule dates thru 1/11 (system date of 1/8 + 3 days)

          Friday - Print Picklists for all open unprinted orders with schedule dates thru 1/11.

          Friday (PM) - Reconcile Orders thru 1/8 + 3 days =1/11

rules - no entering orders for schedule dates prior to today

No Partial Processing - No partial orders are handled at the time that inventory is allocated.

partial ships - if total qty not available - no picklist is printed.

calc amt allocated to open orders

calc inv qty oh - qty res

allocate to no partials

allocate to BO"s

allocate to no partial orders first

the system checks to see if the order must be shipped complete or if the customer will accept partial shipments.  If the customer will accept partial shipments of the order

 

More:

Order Processing End of Period Procedures