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- The importance of stock Allocation in the Apparel & Footwear Industry
martes, 15 de julio de 2014
Allocations in inventory management refer to actual demand created by sales orders or work orders against a specific item. The terminology and the actual processing that controls allocations will vary from one software system to another.
A standard allocation is an aggregate quantity of demand against a specific item in a specific facility, I have heard standard allocations referred to as normal allocations, soft allocations, soft commitments, regular allocations. Standard allocations do not specify that specific units will go to specific orders.
A firm allocation is an allocation against specific units within a facility, such as an allocation against a specific location, lot, or serial number. Firm allocations are also referred to as specific allocations, frozen allocations, hard allocations, hard commitments, holds, reserved inventory. Standard allocations simply show that there is demand while firm allocations reserve or hold the inventory for the specific order designated.
The special situation of the apparel and footwear industry requires an optimization of the assignment of existing stock to open requirements. The allocation process distributes the currently available stock to due sales orders according to certain calculation logics at a specific time. If the ordered quantities are larger than the actually available stock, you can use the allocation run to reach the best customer satisfaction under the given circumstances in your business.
In most cases, you have to carry out an allocation run before delivery of any AFS materials.
The allocation process begins with the sales order creation and the accompanying availability check. In the apparel and footwear industry there are several weeks or months between the order creation and the delivery of the goods to the customer. In this time period, the quantity of the ordered materials can be reduced due to several reasons. You must then decide how this insufficient quantity should be distributed among the existing orders.
1. Styles and SKUs must be created in SAP.
2. You have on-hand stock
3. Customer allocation setup (warehouse, bin, priority, etc)
4. Orders are entered in the Sales AR module.
1. Select the styles or items to participate in the allocation run (the physically existing stock ) and the main warehouse or distribution center.
1. Define a sort rule and depending on your settings you can override the original sequence of the incoming orders for the allocation process. The sorting is the tool for the optimal distribution of the insufficient quantity of stock among the existing orders according to specific criteria. For example, customers with high priority due to their sales volume or their importance in the market, are given preference and are supplied with the goods first.
2. The actual allocation of the available stock to the selected orders takes place according to the chosen allocation logic.
The allocation process is an important process in apparel, footwear and accessories companies. SAP Business one and the AFS solution can achieve this in a simple way.