How to action your new items
Items show as new when there is no way to accurately determine the status to be assigned – your goal is to action them to get them off the new items “to do” list
Read the tutorial
In this tutorial I am going to share some tips on how to action your new items.
How are “new” items identified
New items are excluded from the status determination process as there is no way to accurately determine the status that should be assigned.
Stocked items are categorised as new:
- that have stock on hand or stock on order
- for which there is no demand (yellow highlight)
- an age less than or equal to 12 (the orange circle)
- and no manual forecast overrides (no snowflake in the red circle)
The status units is calculated as stock on hand plus stock on order.
Multiplying the status units by average cost results in the status value that is used to prioritise new items, so that you can deal with the biggest issues first.
Your goal: get “new” items off the list
Remember your goal here is to get the item off the “new” items exception list so that it can be tested for stock-outs, potential stock-outs, surplus orders, or excess.
Let’s take a look at a few examples and the possible actions that you might take.
Incorrect stocking indicator
If you only ever buy an item when a customer orders it from you, set the stocking indicator to non-stocked.
If the item should not be ordered under any circumstances, set the stocking indicator to obsolete.
Check for supersessions
If the item is replacing an existing item like-for-like, then you should link the items in a supersession. This enables the new item to use the sales history of the old item when generating a forecast.
Add a manual forecast for stocked items
If the item should be stocked and sold from this location but it is not a supersession, enter a manual forecast based on your sales expectation.
Add components to the bill of materials (bom)
If the item should be a component in a bill of materials, add the item to the bill in your ERP, along with the correct ratio, and ensure that its finished good has a forecast.
Configure central warehouse supply
If the item is at a central warehouse that is buying on behalf of sub-locations, ensure that the source of supply at the sub-locations is set to the central warehouse and the demand will roll up to the item at the central warehouse.
And that’s it for my tips on how to action your new items
Consistently actioning your top new “to do” list will result in items being assessed for inventory issues such as stock-outs, potential stock-outs, surplus orders and excess.
Now you are able to address real inventory issues that will result in dramatic improvements in your fill rate and in increased sales.