achieving inventory optimisation and distribution controls with cycle count

Global Users. Global Solutions.

Achieving Inventory Optimization and

Distribution Controls with Cycle Count

Raza Haider


Who is DataRoad?

• DataRoad is…

•an Oracle Certified Partner

providing consulting services using the Oracle 11i E-Business Suite.

DataRoad has nationally-recognized expertise in providing Oracle-based E-Business solutions

for clients in a wide range of industries.

About…


DataRoad provides…

• 11i E-Business Suite Implementations• 11i E-Business Suite Upgrades• Managed Services of Applications and Technologies• Oracle Database and Applications Server Services• Oracle Professional Staffing• Customized Oracle Training• Oracle Software Development• Hardware and Software for Oracle Infrastructure• Headquarter located in Jacksonville, FL

About…


Presenter’s Qualifications

Raza Haider

• Sr. Independent Consultant, specializing in Oracle 11i E-Business Suite

• 7+ years of experience in Financials 11i, Supply Chain, and Self-Service including iProcurement, iExpense, and development of APPS web inquiry systems

• Successfully completed many multi-org / multi-currency implementations and upgrades under tight schedules and deadlines

• [email protected]


Presentation Agenda

• Objective• Inventory Optimization – Why?• Oracle Solutions• Concepts and Procedures

– Identify Phases• ABC Analysis• Workday Calendar• Cycle Count

– Supporting Reports• When to perform Cycle Counting?• Conclusion• Q&A


Objective

• The purpose of this presentation is to demonstrate the steps involved in building a Cycle Counting system using Oracle 11.5.10

• Use the paper and this presentation together


Inventory Optimization – Why?

• Inventory accuracy in manufacturing, distribution, and fulfillment operations is critical

• Without accurate stock level information in your system, effective inventory management is impossible

• Accurate inventory contributes to improved customer service• Procuring the right quantities to replenish your inventory is

crucial • Up-to-date stock levels will positively impact business

performance and mission results (ROI)• Organizations must ensure inventory accuracy for

procurement controls, auditing and financial reporting


Oracle Solutions

• Oracle meets all challenges and demands to achieve accurate stock levels with methods like Physical Inventory and Cycle Counting

– Physical Inventory• Takes a snapshot of inventory quantities • Material transactions are frozen until after you have performed

your adjustments• May not be suitable for those operations that verify stock

balances more than once a year

– Cycle Counting• Cycle counting can be utilized to achieve accuracy with a great

degree of flexibility• Available in a number of Oracle modules


Cycle Count Concepts and Procedures

• Cycle counting is the periodic counting of individual items throughout the year

• Items of higher value are counted more frequently than items of lower value

• Cycle count initiates counts to be scheduled as often as desired (daily, weekly, monthly, etc)

• Ensures that no items will be skipped, or counted more often than necessary

• It can replace the traditional year-end physical inventory


Concepts and Procedures

• The presentation will identify the main components of building a practical cycle counting system

• Screen prints are presented to illustrate the steps • Cycle Count can be divided into 3 primary phases:

– ABC Analysis – Inventory Calendar– Cycle Count

• Each can be configured and tailored to fit any business requirements

• Oracle Inventory responsibility


Concepts and ProceduresOracle Inventory Responsibility


• ABC Analysis– Determines the values of items by ranking them in a

criterion and then grouping them into classes– ABC Analysis is divided into four main sub-tasks

• ABC Compile• ABC Classes• ABC Assignment Groups• Assign Items

Concepts and ProceduresABC Analysis – Phase 1


• Navigate to Inventory ABC Codes ABC Complies New

• Choose one of 15 compilation criteria for performing an ABC analysis

• Can be defined and complied for the entire organization or a specific sub-inventory


ABC Compile


Concepts and ProceduresABC Compile



ABC Compile - Criterion



ABC Compile

• Analyze your results with “ABC Descending Value Report”

• Use it as a guide in assigning your items to ABC classes

• Tools menu will allow you to:View, Purge and Print compile



ABC Compile


• ABC classes are used to identify the value groupings to which your items belong

• Use your own terminology for ABC classes • For example, if you select criterion “Historical number of

transactions” in your compile, you can define classes A, B, C and D where:– Class A for High Moving Items– Class B for Medium Moving Items– Class C for Slow Moving Items– Class D for Obsolete Items

• Navigate to Inventory ABC Codes ABC Classes


ABC Classes



ABC Classes


• Before you assign items to ABC classes, you must define an ABC group

• Groups link a particular ABC compile with a valid set of ABC classes

• Inventory ABC Codes ABC Assignment Groups


ABC Assignment Groups



ABC Assignment Groups


• Choose the sequence number that corresponds to the last item in each class

• You can base your assignment on the percentage of items or the cumulative inventory value that corresponds to the last item in each class

• For example, if you assign 55% of your items to class A, then you must choose a value between 0% and 45% for the next class

• To define assignments, click ‘Assign Items’ button in the group window. Alternatively you can navigate to Inventory ABC Codes ABC Assign


Assign Items



Assign Items


ABC Analysis:

Use the following reports to verify ABC analysis information – ABC Descending Value Report can be used to analyze your

result. Oracle Inventory ranks all the items in your ABC compile in descending order to produce the ABC Descending Value Report. This report can be utilized as a guide in assigning your items to ABC classes.

– ABC Assignments Report lists items and the ABC classes of the items

Forms Inquiry – Update ABC Assignments window checks class assignment of

items within an ABC group

Concepts and ProceduresABC Analysis



Workday Calendar – Phase 2

• Workday Calendar is required in cycle counting

• Can have exceptions • On/Off day follows workday patterns• Build the Calendar from Tools menu• Navigate to Inventory Setup

Organizations Calendar



Workday Calendar – Phase 2


• Cycle counting has multiple components – Cycle Count (Definition)– Perform full cycle count– Cycle Count Entries– Approve Counts

• Cycle count can be manual or automatic– Manual process requests counts for any item at any time– Automatic scheduling chooses the specific item to count in a

time interval• Both are very similar to set up; however the following

sections discuss the automatic scheduling scenario

Concepts and ProceduresCycle Counting – Phase 3


• Divided into multiple tasks and each task can have additional subtasks

• Header– Cycle count name Description– Calendar– GL adjustment account

• Adjustments/discrepancies are posted to this default account but it can be overridden when entering the actual counts

Concepts and ProceduresCycle Count (Definition)


• Detail Regions– ‘Scope and Control’– ‘Serial and Schedule’– ‘Adjustment and ABC’

• Cycle Count Classes



• Detail Block

– ‘Scope and Control’ region has:• Count Controls parameters• Count Subinventories

– To include organization or sub-inventory level cycle counting information

• Automatic Recounts

• Navigate to Inventory Counting Cycle Counting Cycle Count New



Concepts and ProceduresScope and Control


• Detail Block

– ‘Serial and Schedule’ region has:• Serial control options

– Optional

• Auto scheduler parameters– Must select ‘Auto Schedule’ to initiate counts to be

scheduled as often as desired (daily, weekly, monthly, etc)



Concepts and ProceduresSerial and Schedule


• Detail Block

– ‘Adjustment and ABC’ region has:• Approval - tolerances parameter for

– Qty variances– Adjustment value– Hit/Miss analysis

• ABC Initialization– Compile Group – (Re)initialize option



Concepts and ProceduresAdjustment and ABC


• Click on ‘Classes’ button– Select the name of the ABC class for your cycle

count– The number of times per year you want to count

each item in this class• Close Classes window and Save• Oracle will submit a concurrent request

–Classes will be assigned to items

Concepts and ProceduresCycle Count Classes


Concepts and ProceduresCycle Count Classes


Concepts and ProceduresPerform full cycle count



• Enter all parameters for each program • Make sure to check ‘Save output’ before

submitting the job • Cycle count listing has the detailed

information on items • The report provides blank space to write

down actual counts


Concepts and ProceduresCycle count listing


• Navigate to Inventory Counting Cycle Counting Cycle Count Entries

• Header level you can find your cycle count, adjustment account, and other defaults

• Details level will show all open count requests • Enter all required and optional information for

each line• Use listing report to make adjustments

Concepts and ProceduresCycle Count Entries


Concepts and ProceduresCycle Count Entries


• Navigate to Inventory Counting Cycle Counting Approve Count

• At the header level you can find your cycle count, adjustment account and other defaults

• The detail level will query pending counts • Approve cycle count adjustments held for:

– approval, to recount an item, or to reject the adjustment• Inventory determines which counts need approval by

using the approval tolerances you enter while defining your cycle count.

• Once an item is approved, qty-on-hand is adjusted and the material adjustment value is posted to GL - once transferred

Concepts and ProceduresApprove Count


Concepts and ProceduresApprove Count


• ABC Assignments Report• ABC Descending Value Report• Cycle Count Entries and Adjustments Report• Cycle Count Hit/Miss Analysis• Cycle Count Listing• Cycle Count Open Requests Listing• Cycle Count Unscheduled Items Report• Cycle Counts Pending Approval Report• Cycle Count Schedule Requests Report


Supporting Reports


• This completes the cycle counting initial process• Based on the frequency and the scheduled date, you would ‘Perform

full cycle count’ as described above



• When to perform Cycle Counting?– During the time when material transactions

are not moving– Typically this is just before or after normal

peak working hours – Consider counting for one hour each morning

before your warehouse opens for business or – Each afternoon, after the last order has been

filled



• Time is money; Oracle Cycle Counting will save a tremendous amount of time

• Significantly reduces overtime costs associated with performing the counts while reducing the plant shutdowns

• Ultimately, cycle count adjustments are posted to General Ledger facilitating accurate financial system and reports

Concepts and ProceduresConclusion


Q & A

Thank You!

Raza [email protected]

achieving inventory optimisation and distribution controls with cycle count

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