Wednesday, January 5, 2011

Psychic Inventory

The Wikipedia article on carrying cost includes an interesting concept called "psychic stock." While we are all familiar with reorder points and safety stock, psychic stock may be a new concept. In retail, this is best demonstrated by the process of fronting shelves. For those of us who had grocery store jobs in our high school or college past, there are terrible memories of sliding items to the front of the shelf to make the shelves appear full even if the next truck wasn't due for another 2 days.

So how does this apply to wholesale distribution and GP?

One of the worst things you can tell a customer is that you are out of stock of an A item they want to order. Wouldn't it be nice if you could provide your customer service reps the ability to see into the future and determine if the item a customer is requesting will be available even if the current inventory is zero? To accomplish this, Dynamics GP provides you with the Available to Promise or ATP functionality.

Available to Promise looks at existing sales, purchase, and manufacturing orders and determines what will be available when your customer requests delivery. If your customer requests delivery a week from now and you have a PO due tomorrow, your customer service rep can easily see that quantities will be available.

Now for the bad news: First, Available to Promise is only "available" for Advanced Management users. It is not included or available for Business Essentials. Second, the calculation is only as good as the dates on the documents. If you CSRs or your purchasing department accept the current default on documents, ATP will calculate based on those dates. Garbage in, garbage out.

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