How to get started with safety stock journals and optimizing safety stock levels in D365FO
Safety stocks are essential to build supply chain resilience and keep operations running to service customer demand. D365FO comes with functionality to help you calculate the minimum stock level for an item. The safety stock journal needs at least 3 months of historical data to calculate the minimum stock level and the result can be posted directly to the item coverage minimum field. Where it will be used in master planning. ?
How is the minimum field on item coverage used in D365FO
The minimum field is essential when talking about inventory replenishment and master planning, which is managed through different coverage codes. All coverage codes use the value that is set in the minimum field on the item coverage page. Overall, the minimum field is used two different ways:
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1.????? Minimum quantity for min/max purposes – This approach uses the minimum quantity together with min/max logic. It applies when the Coverage code field is set to Min/Max for the relevant item or coverage group. The Minimum quantity represents the average daily usage multiplied by the item's lead time.
2.????? Minimum quantity for inventory plan purposes – This approach uses the minimum quantity to represent an inventory plan in combination with demand forecasts. It applies when the Coverage code field is set to Period or Requirement for the relevant item or coverage group. The Minimum quantity represents an inventory plan that reflects the desired customer service level to help reduce stock-outs, partial shipments, and delivery lead times. The minimum quantity reflects a percentage of forecast accuracy for a given item. It doesn't represent a desired inventory position.
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How to configure the safety stock journal
The first step is to configure the “Safety stock journal names”.
?Afterwards go to the “Safety stock calculation” and press “New” to create a new calculation.
The next step is to add lines to the journal. This can be done manually by pressing “New” or by pressing “Create lines” where issue data is fetched based on some criteria.
When pressing “Create lines”. It becomes possible to choose the historical data to use for calculating the safety stock.
The toggle “Calculate standard deviation” must be set to “Yes” if the service level should be used for determining the minimum inventory level.
Now the data is fetched, and the “Current minimum quantity” is the minimum from the item coverage, and this is copied to the “New minimum quantity” because the calculation has not been performed. This is also the reason why “Calculated minimum quantity” is empty.
Press the button “Calculate proposal” to see the historical calculated suggestion for a minimum quantity.
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After reviewing the quantity press “Validate” and then “Post” to update the minimum field under item coverage.
Then the minimum field is updated on the item coverage.
Remember that the “Maximum” value must be higher than the “Minimum” otherwise it will not be possible to post the calculated minimum value in the “Safety stock journal lines”.
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To learn more about safety stock and supply resilience in D365FO like how to:?
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Reach out and get help.?
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Want to read more about features that can help to create supply chain resilience then read these articles:
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Procurement & Supply Chain Recruiter | 20+ Year Supply Chain Leader Across Afghanistan, Iraq, Kuwait and Kosovo | Founder at FinBlock Executive Search
8 个月Great article Jonas Kristensen. It certainly resonated with me. I spent the better part of two decades in Afghanistan and Iraq, where even a priority one order would take at least 90 days on average. So the safety stock levels had to be monitored with obsession. I clearly remember the main distribution center for Afghanistan running out of hand sanitizer, and the company having to pay $120,000 in airfreight out of Dubai... And it still took nearly a month before we had any.