FAQ [Inventory Management]              Back to FAQ             

 

 

 

 

There is surprisingly little you have to do to be operational with MARS-IW, particularly if your product does not contain seasonal characteristics. The download and upload program can frequently be done with a report writer, and is fully discussed in Appendix A. The download program takes care of virtually all the data that MARS-IW needs. If an element of data is missing in your host system's data base, such as weight, the system will still operate properly, except that when you have built an order you will simply not get the total of the order expressed in weight. It is also possible to add data elements directly into the PC data base via the "Item Maintenance" screen.

The system's parameters are all defaulted to logical levels and can, and should, be left alone. Vendor parameters are very easily set, and can be downloaded or entered directly into the PC via the "Vendor Parameter" screen.

Seasonality can be entered directly or calculated from past history. These indices have to be built only once, and then they are valid for a few years before the subject should be revisited. This is one area where understanding the theory is desirable and the book can be helpful.

While it is always desirable to understand as much as possible about any system you are using, it is not necessary for you to read the book. The system is designed for easy operation if you accept the basic strength and effectiveness of the system. (Which has been amply proven at countless locations.) This is not too dissimilar to what we do constantly in today's high technology world. We generally have little idea of the internal technology of much of what we use today, yet if the product is well designed it is easy to use, and performs the function intended.

It should be noted, however, that the book is written at two levels which gives you an option to avoid some of the more technical material. One level talks about the theory in non-statistical terms that imparts the concepts underlying the system without making you understand the mathematics or theory. If, however, you are interested in the math, the book provides that level of detail as well.

The "Pre-select Screen", which comes up immediately after clicking on the "Order Screen" icon, gives you the ability to select virtually any combination of SKUs from the data base. While most of the time you will be building an order against one vendor, for restocking one location, the screen allows for many other situations. For example, you can build an order for multiple locations at one time, or multiple vendors, or only a sub-group of SKUs within a vendor, etc.

The actual process of creating an order is so easy and so fast that it can actually be confusing. After picking the group of SKUs you will hit the "go directly to order" icon and the next screen will actually be the initial order, complete in every respect, except for overrides that you wish to make.

The palletizing, or lot sizing, feature handles this issue automatically. First of all the term lot sizing relates to any need for full multiple quantities -- whether it is pallets, cartons, shrink wrap cards, etc. You do need to have the carton quantity in the data field for each specific item, or the system has no guidance on what action to take. If the carton is 20 units for example, the system will round up in every case to the full carton amount. e.g. if the system wanted 7 it would order 20, if it wanted 49 it would order 60. Additionally, it will place a "P" in the flag field to let you know that palletizing took place.

In this situation, simply set the "lot sizing field" in the item record to something less than 100%. A good default level is 40%, which will tend to force the system up to full lots only if the remaining amount is less than 40% of the total originally called for. For example, if the lot size was 20, and the system wanted 15 or 18, it would round up to 20. If the system only wanted 9, it would not go to 20, and would stay with the original order of 9. If the system wanted 29, however, it would order 40, since even though ordering 11 more when it wanted 9 was not acceptable, 11 more when it wanted 29 is acceptable.  (You can use percents above or below 40 to be more aggressive or less.)

In this case you would set the appropriate quantity in the "vendor minimum" field of the item record and the system would automatically accommodate it. For example, if the vendor's policy was that they would ship in cartons of 20, but would not accept an order for that specific SKU, unless it was for at least 300, then if the system wanted 34 it would order 300. If it wanted 312, it would order 320. (Note, in this example, you would have also set the pallet quantity to 20 units and 100% lot sizing.)

In this case, you would use the "goal seeking" feature that is on the "Main Ordering Screen" in the form of a red target icon. After the order has come up automatically, you will see on the lower left of the screen the size of the order in terms of units, cost, weight, and volume. If the order falls short of the vendor's minimum, and must be artificially increased, goal seeking will perform this function in an outstanding fashion. The concept of how goal seeking works, and why it is so elegant, is discussed at further length in the documentation, and of course, the book.

Incidentally, goal seeking has many uses beyond this example. For example, it will facilitate the creation of a large order that is needed to meet some year end objective that is required to gain a discount over the entire prior years purchases.

There is a "discount" button in the lower right of the "Main Order Screen" that activates a feature to provide you with the optimum quantity to buy under this circumstance. To use this feature after the original order has come up, you click on the SKU in question, and then click on this button. A screen comes up that asks you for the discount being offered. After you enter the percent, it immediately tells you the optimum amount to purchase, including the net savings. The amount recommended is truly the optimum, e.g. if you ordered one extra item than the system recommended, you would have eaten up the original savings in excess carrying costs by the time the item was sold. Conversely, if you ordered less, you will have left some savings on the table.

There is a feature called the "history substitution program" that is activated when you are in the "Item Maintenance Screen". The actual steps to use this feature are discussed in the documentation, but the concept is as follows. The system will ask you for the "new item" number, at which point you enter the stock number of the new item. It will then ask you for the "old item", and you do the same for the old item that is the basis for the history to be transferred. It will then ask you for the "modification factor", which is a percent by which you expect the history of the old item to be applicable for the new item. For example, if you put in .70, then the system will take 70% of the history for each month of the old item, and place it in the new item's record.

This feature allows you to also modify the history of an item already in the system. For example, assume that you just obtained the business of a new large account that is going to double the demand for a few specific SKU's. You could then use this feature except that you would put the old and new item number in as the same, but put a 2.0 in the modification factor, and the system will automatically double the sales for each month and put it back into the record.

This is one area where a simple paragraph will not cover the subject. MARS-IW does handle the complex subject of seasonality in a manner far superior to other systems on the market. Reading the book and documentation is recommended for this one subject. In summary, however, the system asks you to isolate families of products that have the same seasonality characteristics and then facilitates the process of building a seasonality index for that family. This technique is vastly superior to the usual approach of simply saying that you should order what you moved in the same month in the prior year.

Non-stocked items, are designated by having an "X" in the A B C field, and in fact, they are referred to in the system as "X" items. The download program should transfer across any items that you want to consider. You can then select the items specifically for the order being built on the "Pre-select Screen". (There is a file tab that specifically brings up these items.) You can then insert the quantity in the order column when the items come up in the order screen, although note that you must hit the "all" button to see the items, since they will not come up automatically on the order screen.

An alternative to the above is as follows: The system has been designed so that, even for an "X" item, if the net available is negative, (e.g. a committed amount has been entered and no stock is available), then it will come across during the download automatically and will also be ordered -- but up to the negative net available only.

In contrast to the simple measurement of "turns", which can be tremendously misleading, MARS-IW provides you with a "Profile Report", which lays out the nature of your overall inventory on a simple one page display.

The problem with the measurement of "turns" can be illustrated as follows: Your inventory could be performing to 12 turns, which on the surface sounds fairly decent. However, half the inventory could be dead stock, thereby providing zero turns, while the other half is chronically out of stock, there by providing infinite turns. The average is 12 turns, but obviously the inventory is in big trouble.

The profile report displays the inventory by the months supply, starting with the number of SKU's that are under one month, all the way to twelve months supply and over. The net result is a visual display that pin-points the true distribution of stock, and highlights the trouble areas.

This report can be displayed for the entire inventory, or any break-down by vendor or location.

Many systems give you a report of the dead stock in terms of their age. Why wait until product is twelve months old before identifying it for action? MARS-IW gives you, upon command, a list of product that is over a given months supply. e.g. You can specify that you want to see all product that is twelve months supply or over, regardless of its age. The product may be only a few weeks old, but was brought in by error. Now is the time to identify the item as slow moving and take action while the packaging is fresh and possibly at least some usage has occurred recently.

Again, most systems provide weak responses to this issue. The typical report is an "out of stock" report, which is actually too late. MARS-IW's "Hot Report" is a list of items where the "Days Supply On Hand " has fallen below a given number that you set at time of report request. For example, you can request to see all the items for a given vendor where the stock is below 10 days supply. Now you have a pro-active system vs. a reactive one.

Actually, MARS-IW is ideal to drive a manufacturing operation, assuming that it has to produce to an inventory. All MRP and bill-of-material systems need a "Master Scheduler" to create the production order for each of the future production buckets. MARS-IW is that master scheduler. This issue incidentally, is covered in greater detail in Charlie's book where the unique features of the system make it ideal for this application.

Back to FAQ