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ID500 At-Risk Items For Becoming Obsolete Overview & Sample

Tired of writing off inventory, frustrated that you have been maintaining high stock levels for models that are now discontinued? This process monitors total clicks by model per month and contrasts it with Inventory Value carried for those same months. It uses this trend information to advise you where you are carrying more inventory value than the current clicks-per-month warrant and suggests the dollar amount by which you should consider lowering your carried inventory.

This alert is designed to give you visibility into the lifecycle of models in the field in relation to your inventory on parts and supplies for that item. By comparing the trend of pages-per-month against the trend of inventory-on-hand you are given a visual (graph) and numerical representation of how closely these two trends match. The alert accounts for parts that are used by multiple models by assigning percentages based on overall historical use, so if (for instance) a part is used by three models, each model gets a percentage of the value assigned to its total. In a perfect world you would use your last parts for a model on the last service call for the last piece of equipment in the field, and ship your last toner three weeks before the last machine is scrapped. The goal of this alert is to make sure that you’re moving in the right direction to make this happen. More specifically, the goal is to advise you when you’re not doing that well enough. Once the alert has shown you an at risk model, then run the custom report inside eAuto to focus on that specific model.

Please note:

1. This alert uses (primarily) data drawn from the analytics tables, it is accurate only through the end of the previous calendar month.

2. Must have been on eAuto at least 12 months in order for this alert to find data. Alert will run in 12+, 24+ or 36+ month mode depending on what it finds. (Less than twelve months and nothing happens.)

VariableW - Inventory dollars in excess to trigger

VariabeX - no longer used as of version 2013.03.09 (was used to set how many months back alert should look for valid data in eAuto in order for the alert to draw from. Set to 24 or 36 though alert can use as little as 12 months if need be, but note trending data will be more valid at 36 month setting.)

Alert Sample:

(It ranks in order with the highest at risk model at the top)

 

 

Then run the Custom Report to get detailed information by model showing you which parts are used on this model. It provides detailed information on availability, location and usage. It also advises where items are being used by more than one model.

Custom Report Sample:

(Named CEO Juice Obsolete Inventory Report)

 

Best Practice:

1)      Subscribe to ID543. It will send an alert to your purchasing dept if they order a part considered "at-risk" so they can make sure there is no existing inventory onhand to use.

2)      Adjust your automated ordering process, specifically your Min/Max levels if you’re using auto-replenishment. The detailed report will show you quantities on-hand and usage trends. Make sure you’re not keeping too much of anything on-hand based on current and expected needs. This is an art and not a science, but if an item is ‘at-risk’ consider whether you can lower your minimum stock on-hand. In extreme cases (towards the end of a model’s lifecycle), consider the cost of moving this/these parts onto an order-on-demand program, keeping only emergency stock in inventory.

3)      Optimize your inventory placement. The detailed report will show you usage information by warehouse for items, so you can see where you’re using the item from most frequently and where you’re not using it from at all. Make sure your inventory is handy so that the people who might need it can get to it easily (as opposed to asking someone to order another one).  

Pre-requisites: Analytics

Related alerts: ID543

Definitions

Copies per month - # of copies billed on contract

Inventory value per month - $ value of inventory carried (per month) for this model, as a percentage of total if item(s) used by other models

Distribution Ratio ('Also Used By', Model Distribution Value) – If an item is used by more than one model, this alert calculates what percentage of total parts usage should be attributed to each model for reporting purposes. The Inventory Value and Inventory Usage data takes into account only the percentage of items used by that model.

Inventory Usage per Month - $ value of parts/supplies used for this model per month.

              

 

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