The Use of MARS-IW in a Multiple Location Warehousing Environment

Charles J. Bodenstab

General

The purpose of this paper is to describe how the MARS-IW inventory management system can perform very effectively in a multiple location warehousing environment.

First of all, let's define the two situations where the multiple location issue creates special considerations. The first, is where there one warehouse is supplied routinely from another warehouse, and the second, is the need to be aware when one warehouse is overstocked, and it would be more prudent to transfer the goods rather than order from the vendor.

Routine Restocking One Warehouse From Another

This form of routine restocking can vary considerably from one company to the other, but the concept of how MARS-IW handles the need is the same in each situation.

In some cases there may be a “master warehouse” or “mixing warehouse”, which has the primary mission of receiving large shipment from the vendors, and then it redistributes the product down to a series of subsidiary warehouses on a routine basis. In another case, the two warehouses may be of similar size and scope, but one has been designated as the primary receiving point for some specific set of products which it then ships to the other locations as needed.

The application of MARS-IW is quite simple in either of these situations. The key is to identify the supplying warehouse as the “vendor” when the secondary location is being addressed for restocking. In other words, there is a vendor file for the supplying warehouse that contains all the needed information about that “vendors” characteristics, e.g. lead time, order frequency, etc. Additionally, the item record that is maintained by the host computer, indicates that the item is supplied by the “vendor” that is actually the warehouse.

The vendor file even has the option to designate it as a transfer point. The third file tab on the vendor file, if called up, has the question “Transfer”. If this is set to Yes, then the purchase order created will be tagged to recognize that this should be a transfer.

The actual process of building a replacement order on the one warehouse that is supplying the other, is identical to the normal MARS reorder process, and all the features such as palletizing, EOQ, etc. apply. When the order is complete, a “purchase order” is created, except that the host computer recognizes that this is in fact a “transfer order”, and processes it accordingly.

The restocking of the “master warehouse” is identical to the restocking of any warehouse from a vendor. There is one consideration to note, however. The “demand” on this warehouse is the total of all the transfers to the subsidiary locations plus the direct sales. Naturally, the host computer has to gather this demand accordingly.

Dealing With Overstock at Another Location

The other situation that arises in a multiple location environment, is the need to recognize when another location has an overstock of the item we are getting ready to replenish from the vendor.

MARS has an overstock feature that is fully discussed in the documentation. In general however, if excess stock exists at another qualified location, the system will place a “T” in the flag field to the far right to alert the user of this opportunity. It is then a simple matter to click on the field, and a window will appear that illustrates the overstock situation. A click on this field will then create a transfer order, and eliminate the item from the vendor order.

There is another way to handle this issue of overstocked product that has a usage at another location. This alternate approach is to periodically make “mass transfers” at a single time to take advantage of freight costs and to isolate the function to a specific time once per month or quarter. This approach is discussed in the following paper.