Originally written by John Hardwick, last updated Oct 24, 2023, on the Swan Retail knowledge base (FRS).

Overview

When used with reorderable product settings, optimisation can be used to monitor stocking levels thus keeping the stock levels for quick turnaround goods sufficiently high.

The Create Purchase Order routine allows the operator to view demand raised by sales or internal orders and convert them into purchase orders using the order or the supplier as the collation group.

The optimisation routine allows the operator to choose who to construct purchase orders using the demand in the system and optionally stocking levels to derive a quantity to be ordered, perhaps buying more than the demand to reach price quantity breaks (not system controlled).

When used in partnership with replenishment goods the demand can be combined with speculative purchases to keep stocking levels high/fill containers/limit the need to manually create internal orders.

Optimisation removes the need to use the Create Purchase Order routine, perhaps the remaining use would be if a sales order requires immediate action converting sales demand to a purchase order quickly.

Purchase order optimisation shows demand from sales orders, internal orders, and replenishment goods in one place allowing the operator to gain a full picture of demand and / or stocking levels prior to generating a purchase order thus helping to keep cost expenditure down/maintain a controlled stocking level.

The optimisation process has two steps 

• Review – create a shopping list

• Create purchase orders – check out

Optimisation operates alongside the Create Purchase Order routine with purchase orders generated by either route sharing the same onwards processing functions.  Once the purchase order has been generated all existing features of SwanFRS are available.

Configuration      

Application Parameter

The following application parameter controls the PO optimization program.

Ticking instructs the daily price rebuild process to include the option prices for re-orderable items.  This increases the run time of the ‘rebuild’ option but allows the optimisation process to correctly cost items with options.  Since the rebuild usually runs overnight this is only a problem when the user rebuilds prices via the menu button.

Purchasing Departments

Optimisation uses the concept of purchasing departments.  These are separate to product groupings and sales departments and allow you to collate suppliers thus enabling purchasing to be controlled by groups rather than suppliers.

At least 1 purchasing department is required to operate optimisation.

A purchasing department is simply a means of grouping disparate suppliers together to enable the viewer to see purchase demand for them without having to view each supplier separately.  This grouping is not linked to the product group which is designed for sales related activities.

Supplier Linking

Only suppliers linked to a department will be included within the Optimisation.  This can be assigned when editing the supplier detail as per the highlighted (red box) section below

It is possible to restrict the generation of purchase orders for demand goods thus making the item only capable of being ordered within Optimisation by ticking the PO Optimisation Exclusive flag on the supplier detail page.

Using this method, it is possible to force all goods from specified suppliers into the Optimisation process.

Reorderable Stock

SwanFRS offers the ability to monitor stocking levels for specified SKUs allowing the operator to make informed decisions as to when to purchase possibly before the is any demand in the system for the item.  This process is referred to as Reorderable stock.

This process is designed to allow the operator to ensure stocking levels are maintained. The system will not automatically generate purchase orders should stocking level fall but will allow the operator to view stock levels and make informed decisions.

There are two ways of setting the product reorder status depending upon whether the product has options or not. 

Reorderable Stock (with no options)

Purchase Order Optimisation uses the following control fields set against the SKU.

Reorderable Stock (with options)

To set a product for reordering which has options then the procedure listed below should be followed.

•   Ignore the reorderable setting at SKU level.

•   Find a stock item with the correct combination of options using one of the stock search facilities.

If an item of stock with the correct combination of options does not exist, then create the item via an internal order, adding the correct options using the ‘add product’ facility.

• Once a piece of stock (irrespective of status) has been found which matches the desired option criteria and assuming access permission allow, click on the stock icon.

• This produces the stock detail screen, where via the Amend option, it will be possible to place a tick in the reorderable stock field (highlighted in the example below) 

• To remove an item from the reorderable list, reverse the process by removing the tick.

It is necessary to set this field for all reorderable product option combinations to be seen within PO Optimisation.

Location Specific Stocking Levels

This program allows location specific stocking and re-order levels to be defined.

The image indicates there is a ‘global’ setting (as set in Set Up Product Pricing) which will be used unless a site-specific control has been set.

This routine also allows the setting of option specific stock / reorder levels.

Operation

Purchase Order Optimisation

The routine presents the operator with a screen listing the purchasing departments.

New Snapshot

To start the process of reviewing demand / reorderable stocking levels, a snapshot must be created. 

Clicking create new instructs the system to rebuild the list of items which need to be considered for the optimisation process.  All products which have purchase demand (from sales or internal orders) and items which have the reorderable flagged set will be used to build a list of products to be purchased.  This working copy is time and date stamped to enable an operator to review the listing several times prior to regenerating the list or producing a series of purchase orders.

All new demands / newly set reorderable items are excluded from the ‘snapshot’ until it is rebuilt via the create new option.

Using this concept, it is possible to take a copy of the items to purchase at a time and work on this list ignoring current sales activity which will wait until a new copy is taken.

Clicking ‘create new’ where an existing snapshot exists produced a warning page like that shown below –

Viewing the Snapshot

Viewing the snapshot displays the saved ‘shopping basket’, thus allowing the operator to make changes / create purchase orders. 

To clear the shopping basket of previous transactions the ‘create new’ option is required.

Optimisation Header

Once the snapshot has been generated (reviewed) a screen like that shown below is displayed.

When operating with business areas the screen will offer the ability to limit data to locations within the selected business areas.  The offering for the business area will be limited by the areas and locations available to the operator.

The default settings are for all branches, grouped with margins.

Field	Comments
Department	Clicking returns control back to the department snapshot page, enabling the selection of an alternative department.
Business Area	Only visible when operating with business areas configured The list box will contain all the business areas available to the operator to select from. Ordering location and receiving location will be limited to those within the selected business area.
Ordering Branch	It is possible to select a specific sales branch from which to work from the drop-down list or work with all branches.  This is the location responsible for creating the demand. Selecting a specific branch does not affect the composition of the snapshot it simply reduces the volume of data only showing demand for the specified location.
Receiving Branch	It is possible to select a specific receiving branch from which to work from the drop-down list or work with all branches.  This is the location which is expected to receive the goods into stock upon supplier delivery. Selecting a specific branch does not affect the composition of the snapshot it simply reduces the volume of data only showing demand for the specified location. If a specific receiving branch is selected the sales order branch and group field are automatically greyed out defaulting to all branches and not ticked respectively.
Group	This field is only available when ‘All branches’ is set for the ‘receiving branch’.  Where ticked the display will group demand by supplier.  (It is not possible to amend costs or quantities in this mode) Where not ticked the screen will show demand by supplier / location.
Creation Date	This field shows the date and time the snapshot was created.
Group By Range	Where ticked the display will be grouped by range. Where unticked a single line per supplier (and optionally location) will be displayed.
Show Margin	Tick to show the ‘gross’ and ‘net’ selling price along with the margin achieved or untick to show only the cost price.
Show Comments	Tick to show any purchase order comments in the page – this may result in fewer items being displayed per page especially where larger comments exist. Unticked hover over the comment icon to see the details.
Display Demand	Tick to show ‘demand’ items. The default setting is ticked.  This option displays items which should be purchased to fulfil sales or internal orders.
Display Reorderable	Tick to show ‘reorderable’ items. The default setting is unticked. This option displays items which are flagged as ‘reorderable’ and may not have a sales or internal order from which to fulfil demand.

Detailed View - Suppliers

The detail section of the display will alter dependent upon the choices made in the header section.

Clicking the Supplier name drills down to the List of ranges within the Supplier

If units are available which could either wholly or partially fulfil demand the ‘free stock on hand’ or ‘free stock on order’ column(s) will contain the legend ‘Available’.  Should the decision be made to fulfil the demand from stock rather than buying goods in click into the item (clicking on the items’ description) and use the reserve option.

Clicking Department return control to the snapshot view.

At this point it is not possible to change the suggested purchase quantities, to do so the operator must drill down into the specific supplier data.

This is achieved by clicking in the blue supplier’s name in the data grid.

Detailed View - Ranges

Clicking the selected supplier name redisplays the grid this time at range (collection) level.

To return to the supplier listing click the Suppliers section of the path as indicated below with the red box.

At this level the screen is showing range specific information and is not amendable

To view the specific purchase quantities and to make changes click the highlighted range name in the data grid.

Detailed View – Items

Having selected a range to view the grid displays the SKUs which either require purchase demand fulfilment and / or are marked as reorderable.

It is possible to return to the supplier or range list by clicking the relevant item in the data path shown below with the red highlight box.

At this level it is possible to interact with the data grid, specifying the purchase quantities required.

Field	Comments
All Locations	For measured goods, clicking the location provides a grid at the bottom of the page showing roll information and allowing the operator to consolidate ‘cut’ items into rolls.
SKU	SwanFRS’s SKU reference.
Model	The supplier’s model number
Description	The concatenated item description with descriptions below If the line item has one or more demand item (created by a sales order), clicking presents a grid at the bottom of the page allowing the operator to change the receiving branch of the sales order and to click into the sales order to see its construction.
SO	The number of sales orders manufacturing the demand quantity. If the line item has one or more demand item (created by a sales order), clicking presents a grid at the bottom of the page allowing the operator to change the receiving branch of the sales order and to click into the sales order to see its construction.
Gross	This is the current promotional selling price of the SKU including taxes (where applicable).
Nett	This is the promotional selling price exclusive of taxes.
Cost	This is the current promotional cost of the SKU.
Margin	This is the margin expected should the item be sold at the promotional price.
Free Stock Local All	This column shows the current free to sell stock at the specified location and secondly all locations
Free Stock on Order	This column shows the current free to sell stock on order due into the specified location and secondly all locations
Free Stock BA All	This column shows free to sell in the location’s business area again showing the quantity in the BA then all.
Free Stock BA On Order	This column shows free to sell in the location’s business area again showing the quantity in the BA then all.
Min. Qty	This is the minimum quantity set for either the specified location or the SKU if no location specific data is defined.
Max. Qty	This column shows the maximum stocking level for the specified location / SKU.
Reorder Qty	This column shows the default purchase quantity set to the location / SKU combination.
Quantity To Fulfil	The Quantity to fulfil relates the number of units required to fulfil current sales order demand.   I.e., the base quantity needed to ensure all sales order have stock allocated.
Quantity	The quantity field can be manually specified and indicates the number of units to be purchased should the preview be converted into purchase orders. SwanFRS uses a formula to calculate the quantity column which will be applied if the A/N check box is ticked. This formula checks the quantity to fulfil against the minimum quantity and increases the purchase quantity the minimum if the demand quantity would leave the stocking levels low. Secondly the process checks the reorder quantity and rounds the purchase quantity to a multiple of this value. If the resulting quantity to purchase exceeds the maximum quantity the cell will show in red however the over purchase suggestion will remain due to the reorder quantity. If the quantity specified is not a multiple of the reorder quantity a warning message is produced advising the operator of this and offering the next multiple of the order quantity as an alternative. The operator may choose to continue or order the multiple offered.
Cost	This is the unit cost of the SKU item.
Negotiated Cost	This field is amendable and holds the cost agreed with the supplier. The cost is entered as a unit cost not as a line total.
Line Total Cost	This value is calculated from the Quantity multiplied by the Negotiated cost and is effectively the line price.
A/N	Clicking the A sets all rows to ticked.  Clicking N removes the ticks from each row. Each row can be ticked / unticked individually. Ticking instructs the system to calculate the Quantity column, defaulting to the quantity SwanFRS suggests the retailer should purchase to meet demand and to keep within the minimum and maximum stocking levels set whilst considering the number of units to purchase each time.
Comments	This column allows the operator to view / create purchase order notes. These notes are used when sending the PO to the supplier.

Order Specific Data

Clicking the line description or the number of internal/sales orders indicator where there is sales order demand for the SKU / option combination generates a second data which is shown below the SKU listing grid. This table lists the sales orders making up the demand.

Internal orders show with a sales order number of 0 – it is not possible to drill into the internal order.

Via this grid it is possible to change the expected receiving branch, drill into the sales order or stock number and to enter order specific purchase order comments.

To view / change the order specific purchase order comments click the pencil icon. The grid will redisplay showing the comments previously recorded / allows creation of new comments.

Reserving

Where the system identified stock which could fulfil the orders demand it is possible to reserve the stock effectively allocating the free to sell item to the order.

In the example above the sales order could be fulfilled from available free stock, in such circumstances the reserve legend is displayed to the right of the order line.

Should the decision be taken to fulfil the demand with free to sell stock then click the reserve link, which will produce a screen like that shown below

Via this screen it is possible to allocate the free stock to the demand by placing a tick in the select column followed by selecting the Replace button.

The screen shows the demand item at the top of the screen, below a listing of available goods held locally or for the whole company (click the local, all or business area to toggle between the views – these options are subject to access restrictions.)

To allocate an item of free to sell stock (possibly on purchase order) to the sales order, thus removing the demand, click in the appropriate select box and click the REPLACE button.

Once the free stock has been reserved against the demand the item disappears from the ‘snapshot’ as there is no longer a requirement to fulfil the demand.

Remove Demand

For items linked to an internal order the system will offer the ability to cancel the demand via the Remove Demand option.

If the decision to remove the demand is taken, once the ‘item’ is cancelled there is no reserve option.  To add the item back into the system a new Internal Order is required.

PO Comments

It is possible to add a comment to multiple lines. This is achieved by selecting the demand items to have the PO comments added.

Enter the comments in the narrative box and click the ACCEPT button.

Measured Specific Orders

When viewing measured goods, clicking into the SKU’s Description / SO field presents the following data grid.

Via this section, it is possible to specify roll numbers thus effectively combining sales into a single bail reference.

Reorderable Items

Ticking the Reorderable Stock check box instructs the program to show all SKU items within the department (and other filters) marked as ‘reorderable’.

The reorderable check box effectively tells SwanFRS that stock levels should be monitored with a view to ensuring there is sufficient stock available.

Reorderable goods items appear irrespective of current demand or stocking levels and are simply a reminder to the operator to check stocking levels.

For these types of items, the sales order (SO) column will show zero. 

When showing the data at SKU / Option level, the system shows the free to sell stocking levels at the local / all locations and in the business area (where set).

Using these stocking levels in partnership with the minimum, maximum and reorder quantities set for either the specified location or against the SKU, the program will recommend a purchase quantity.

The recommended purchase quantity will be a multiple of the reorder quantity which may exceed the maximum stocking level.   Such scenarios will show as a red recommended quantity.

All quantities can be adjust as required.  It is also possible to adjust the negotiated cost.

The quantity column is only populated when the A/N tick box is ticked (or has been ticked in a previous operation).

In the example SwanFRS recommended the purchase of 10 units, the operator adjusted to 60 resulting in the Quantity specified shown in red as this exceeds the maximum quantity desired at the stock holding location.

Reviewing Proposed Purchase Orders

Once the desired purchase quantities have been finalised, it is possible to preview the purchase order(s) to be generated.

Clicking the PREVIEW POS button, when clicked lists the items marked for ordering.

The preview page ISN’T a purchase order, it is simply a statement listing the items currently identified as to be purchased along with the cumulative cost of the goods.

The ‘shopping list’ is effectively automatically saved at each stage and will be ‘recalled’ whenever the Last Snapshot Created date is selected on the main menu.

Electing to update the snapshot retains the quantities previously set overlaying the ‘recommended’ quantities with the current demand / stocking position.

Creating a new snapshot clears all previous processing thus effectively removing any purchase quantities set.

Creating Purchase Orders

When ready to convert the shopping list to one or more purchase orders, click the CREATE POS button, this button generates a warning screen.

Once processed the routine allows the operator to continue with the optimisation process or to view the purchase orders created via the VIEW PO LIST button.

Selecting the VIEW PO LIST option effectively calls the Find Purchase Order program, listing all the POs raised as a result of the action.

Once purchase orders have been generated it is recommended that a new snapshot be created before reviewing the demand / re-order list.

Files from the Confluence page

• PO Optimisation.pdf

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pdf

PO Optimisation.pdf
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