Mass Transfer or Periodic Balancing Between Warehouses

Charles J. Bodenstab

Rather than looking for overstocked conditions each time a replenishment order is being generated, it may be more desirable to periodically make a special run to balance inventories between locations. This is particularly true if the freight cost makes single shipments uneconomical. Additionally, there is a lot to be said for performing this balancing function once per quarter, for example, rather than every time an order is being generated. It is a more efficient process than interfering with the basic reorder function.

It is very simple to have MARS perform this mass transfer function. The steps are as follows:

• Go into the basic “pre-select” screen as if you were going to create a regular order.
• Select the vendors you wish to explore for the mass transfer.
• Select the warehouses that you wish to have considered for transfers. (Note that your earlier transfer setup matrix will eliminate transfer routes that were considered unacceptable - see documentation.)
• Go to the right upper file tab and click on “Lead Time/Ord. Freq” which will allow you to modify the lead time for this order only. (Read the documentation carefully to insure that you do this function exactly as stated to get the lead time to change.)
• Change the lead time arbitrarily to about three months. (Our objective here is to force a strong requirement for product so that the warehouses that have good use for product create a decent demand.)
• Go to the order screen and click on the transfer feature.
• Double click on the “T” and only the transfer recommendations will appear.

What you have now achieved is as follows. The locations that could make good use of product are calling for product while locations that have excess product are being highlighted as suggested transfers. By going down each item you can now put together a single mass transfer that will go a long way to re-balancing your inventory on a one-shot basis. Freight costs will be minimized since quantities have been consolidated. Additionally, there will be no need to use the transfer function for the next few months.

One may argue that this could be a fairly time consuming operation, since each transfer recommendation should be checked visually to decide exactly which warehouse to use in the transfer, and to impose some subjective wisdom to the process. This function needs to be performed only once per quarter, however, and it will speed up the routine process significantly. Finally, after the first few times the run is performed, the inventories will start to become balanced and the number of transfers being suggested will drop rapidly. The function will become a minor maintenance routine at worst. Incidentally, the financial pay-off for this effort will be considerable, since you will frequently be getting rid of the particularly slow moving stock in a very cost effective way.