Automating the process to formation of procure of goods with large shoulder delivery.

21 Июля 2014


I want to bring to your attention the fourth and last article in a block on automating procurement of goods. It is expected that, by the time of procurement logistics has already done a number of transactions necessary to automatically calculate their volume, in fact: goods grade the; for each rank is defined quality of service indicator, and, consequently, defined levels of insurance stocks; the shoulder supplies demand projections formed position of the goods. Here is an example of a software product that allows only a few actions to obtain the required company purchases.


Develop an IT solution to determine the amount of the purchase of the company's product range, which takes into account the:

  • balance of goods is in a warehouse;
  • flow of delivery, which has planned (shipments of goods, orders that have already been deployed in production or already in the way);

  • possible shortage of goods in the period of the shoulder supplies;

  • pent-up demand in the future.

The additional functionality should allow Procurement Division staff member:

  • control the volume and weight of the generated purchase;

  • adjust the total volume or weight of the purchase to the normal volume or weight (for example, the volume of the container);

  • view the history of a previous procurement;

  • display information in a tabular format, for further processing or in the form of graphs.


The solution of this problem was implemented on the basis of document, in which each line matches one product from the range (Figure 1), and grouping columns for one month supply shoulder.

Figure 1 - Interface document “Formation of a procurement”

Fill in the document can be: by product group, plant production, by rank products. At this stage automatically populate the columns that store: the remains of the goods at the beginning of the period of the forecast; insurance stocks are calculated individually for each month; forecasts of demand for the goods, taking into account the seasonality factor; if necessary, ascending or descending trend, reflecting the sales product; and, finally, possible sales in each month taking into account the flow of supplies, a possible shortage and pent-up demand. Then for each position or for the whole document, you can create a predictable charts and sales (Figure 2).

Figure 2 – Schedule “Prediction for residual goods” and chart “Sales forecast”.

As shown in the Figure 2, for each product you can schedule balances identify a point of order, when the remains of concern the insurance reserve (on the schedule of insurance reserves are shown in red color). On that date, and there is a need for a purchase, the amount of which is equal to the forecast (displayed in blue color), if the frequency of the supply is equal to one month. For a one and a half, two months or more, the algorithm will take into account predictions of months following the month of the order. The decision allows to forming purchasing automatically, but does not preclude the adjustment manually. If you change the quantity of the purchased item, schedule and sales is rebuilt automatically, that allow the operator to visually assess the picture of future projections.

Note that the behavior of the pent-up demand for each product, may also interfere with the Logistics Department. In this example, how you can see no Figure 2, schedule of pent-up demand has the shape of a trapezoid. Is slew rate; threshold above which the pent-up demand is not growing (for example, equal to forecast) and the speed of the downturn. This allows you to more accurately simulate real pent-up demand in the case of the product was absent a small time or swim from the assortment of the company for a term of for which the customer has changed attitude to the goods(they found a substitute for the missing goods or simply forgot about him…).


Thus, the decision enables the Division logistics:

  • automatically expect to, the date and amount of purchase;
  • minimize the potential for error when generating the purchase, because the algorithm uses the subsystem verification of procurement;

  • create a procurement, taking into account the current insurance stocks, in terms of minimizing the cost of the company's goods in storage;

  • take into account the increasing demand for goods after his absence in stock companies in future periods;

  • customized total purchases under the rule not only in proportion to the number of individual products, but also differentiated (forexample, increase the order only for products of the first rank).

Comment you can leave after registration on our site. Thank you. Dmitry Kalchenko.

Translation from Russian Tatyana Kalchenko.

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