We thought we had finished our Fishbowl review, but we found something of interest that we wanted to highlight separately because it is important functionality. This is the Auto Reorder Point which is available within the part view the Fishbowl Inventory software (for an introduction to Fishbowl, please see the previous post).
You can get to Auto ROP by selecting the part view and then selecting the button in the upper left part of the screen.
This brings up the selection to run the Auto ROP for all the parts, or for just some of the parts. We will select all of the parts.
Date Range
Next we want to select a period of time for which the ROP will base its calculation. We will choose last month, but we could select the past 3 months or further back. This selection would depend upon what type of parts we are selling of course.
Weighing History vs. the Forecast
Now we can choose whether to considering increasing or decreasing sales by forecasting percentage. This selection comes down to how heavily we want to weigh the past vs. the future. We will choose a Forecast Percentage of 50%, so that we weight the past and future expected values evenly.
Input Data
This next screen really showcases Fishbowl’s strength, transparency and education. Fishbowl asks for inputs for lead time, safety stock and basic stock, which will allow the system to perform the necessary calculations. The safety stock and basic stock are asked for in terms of days instead of in terms of units. This allows the system to decide what the units should be. However, where this screen excels is in explaining what the system is doing to the user. This level of transparency is unheard of in SAP or Oracle. Instead different inbuilt help must be used, but in neither system is the help as easy to find, nor are the instructions as straightforward as what is listed here in Fishbowl. If the user knows this already, then they can breeze past it, but its there for new users, or for users who have not seen this transactions for a while or just need a refresher on what the system is doing.
Order Up to Level
Now the system asks for the order interval. Now this could have been placed on the previous screen and saved space, however, then there would not have been room for the explanations. The explanations on this screen very clearly state what the Order Up to Level is composed of, and then asks for the user to enter the order interval, so how frequently the company is interested in placing an order for this item. This is important because this is the practical constraint. Consistent order frequency helps with supplier management (everyone likes consistency), and with order management. In this way different classes of suppliers can be placed on different intervals. The interval can stay the same, but the quantity can change. For very low order quantity suppliers, the interval can be lengthened in order to keep transportation costs low, and as a percentage more inventory should be carried on average. (please don’t email me about how inventory is “bad.” This is not a blog on JIT, Lean or other topics that interest people or strategy consultants who have no background inventory management.)
ROP Results
Next we move to the recommendations. Fishbowl has created the calculations and provided the ROP recommendations for the entire part database.
Conclusion
Its hard not to be impressed with this functionality. Calculating ROP values is very important. The fact the Fishbowl makes it so easy means the ROPs can be frequently updated with very little effort. We also liked the fact that Fishbowl explains what is happening throughout the input process, rather that treating it as a black box.
