Order Methodology
The AGR system is designed to create optimal order proposals based on upcoming demand through advanced forecasting techniques. The Ordering method is in terms of a time period, covering one replenishment cycle at a time.
The Replenishment cycle is specified in days instead of units. It automatically converts to units by looking at the forecast. This means that sunglasses with a replenishment cycle of 30 days will convert to more units over the summer months than during the winter months.
The order formula:
Demand for the Order Period + Safety Stock + Min visual stock – Stock on hand – Undelivered orders = Calculated quantity
Round up to minimum order quantity and order multiples = Qty in the Order Proposal
Rounding: if you want order quantities to round down instead of up to the next order multiple, apply a threshold % in the "minimum order multiple threshold" setting.
How are orders created in AGR?
The order proposals can be manually created through orders, items or reports. The order creation can be automated through Order Schedules.
Once reviewed and confirmed the orders are transferred to the ERP system.
Depending on the setup, AGR handles both
Purchase orders - from suppliers to warehouses/stores.
Transfer orders - from warehouse to stores, or store to store.
The following data / system setup influences the order proposal:
Lead time: The time it takes from the point of sending a purchase order until it is received in the warehouse/store.
Order schedule: The days between creating order proposals.
Order period: depends on the order creation/setting
a manually selected period.
Lead time + Order schedule
Lead time + Order coverage days,
can be used in conjunction with order schedules and manual order creation
Demand for the order period: Statistical forecast + if applicable: open sales orders; bom demand; sales plan; promotions.
Safety stock: uncertainty in sales during the order period
Stock on hand: Subtracted from the replenishment need.
Undelivered orders: Subtracted from the replenishment need.
MOQ: Order quantity must meet or surpass the minimum order quantity.
Order Multiple: Order quantity is by default rounded up to the next multiple i.e. 10 pcs pr. box.
Order logic settings help finetune the order calculations, and can be applied through Bulk update and item card details
They are a part of the Order Pro package.
Order logic settings:
Additional Lead time: Adds days to the order period, logistics or handling time.
Min display stock: Sets the minimum stock value. fits well for retail, ensures the shelf looks nice and AGR replenishes upcoming sales on top.
Minimum order multiple threshold: Defines the % threshold that the calculated order quantity must surpass to round up to the next order multiple. Else it rounds down.
Order Coverage Days: The size of the order quantity: represented in days coverage. – when you order this is for how long you would like the stock to
Order Frequency Days: Part of the Order period: Lead time + order frequency
Reorder point/Max Stock: If both are used, the sales forecast is disabled and when stock goes below the reorder point (min) the order proposal will order up to the max level, subtracting any undelivered quantity on the way.
Special Order Item: Items marked as special order items will only have an order quantity calculated if there are open sales orders that exceed the stock on hand & undelivered on the way.
Manual vs Scheduled orders
Manual orders can be created manually by users in Items or Reports.
Scheduled orders are created automatically as set up in the Order Schedules Calendar, (included in the Order Pro package)
Order Status
In Process Once created, order proposals have a status of "in process".
Confirmed Once confirmed, the status changes to "confirmed".
Transferred for subscribers of the Order Pro package, confirmed orders will be automatically sent over to the ERP system, once the ERP receives the order, the AGR order id is given a status of "transferred"
Manual order transfer workflow
For subscribers of the Inventory IQ package
The order transfer from AGR to the ERP system is Manual
When confirming an order, toggle the "download order" option.
This will confirm and download the order to excel, making it available for uploading to your ERP system.
After confirming the order it is moved to the status "Transferred" and the user has the ability to select an order there and re-download it if needed.
Optionally, there is always the "export to Excel" option, for any order in any status.
By default, orders are visible in AGR for 8 days after creation.
If a longer period is required, contact your customer success manager to change the default setting.