next previous PEER Planner - DRP/Replenishment

The DRP module of PEER Planner requires a database of product information, forecasts of demand by location and inventory data by location. PEER Planner/DRP is a day-to-day planner that takes downloads of forecasted demand (weekly or monthly) to allow an inventory planner to take action immediately on problems so they do not get worse.

It is a strategic program that supports improved understanding of underlying patterns and ‘what-if’ capability to test different ways of managing the inventory. While the specific features are under user control, in general, the inventory planner software automatically performs several key operations during off hours and highlights specific problem situations for detailed review - by a human planner - during normal working hours.

Time phased requirements are produced for all products, whether they are designated as being on DRP or on Reorder Point replenishment method. All methods establish a safety stock by location to ensure coverage at a specified service level (fill rate). All service levels are on an individual product line fill basis.

The safety stock calculation uses actual location forecast error and assumes a standard or average lead-time for replenishment. Starting with current national inventories, the demand forecast (Total requirements) is projected into the future. Time phased future replenishments from the source of the product (vendor or manufacturing) are matched to the forecast to project future national inventory levels. Considering standard lead-times (in weeks) to make order-on-source changes in delivery, the system adjusts source orders outside lead-time to keep national inventories between safety stock and maximum inventory levels. An inventory analyst, not the system, can only make replenishment order changes within lead-time.

The after-hours portion of the inventory planner is where the computer highlights particular products for analysis and does the routine but time intensive calculations necessary to consolidate information for the inventory planner. The scripting capability gives the user the opportunity to have various inventory management activities done by the computer on a daily, weekly, monthly or quarterly basis. The user determines the timing based on how the user sets up the processing scripts.

In common use, the system will perform the following inventory management activities after-hours:

  • Generate a time series of requirements for material on the source, based on cataloged lead-times for delivery out twelve months or more into the future. These requirements are driven by starting with a beginning inventory level as it exists at the time the script is run, subtracting forecasted demand and adding projected receipts already committed to.
  • The projected requirements for material can be based on either DRP or Reorder Point logic. Both DRP and Reorder Point logic depend on calculations of safety stock by stocking location to protect against forecast error at that location. The safety stock method for each item and location is user selected in the Strategy module. The system uses whatever safety stock method has been selected. The safety stock is recalculated after each forecast is done, at least monthly.
  • Demand is collected in daily, weekly, and monthly buckets by product and location. Demand data is downloaded from the host computer.
  • Forecasting is done weekly, or monthly based on a user definition through scripting.
  • After all other scripting work has been completed, the system will set up certain products for planner review during a normal workday. For each review reason, a separate review queue accessed from the Reviewsheet screen menu is created. The review reasons can be programmed from user requests at the time of setting final system specifications.

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