MyDay 1.2.1 Supported Roles

SX.e 5.5 and 6.0

Purchasing

Purchasing Manager

✓

Purchasing Agent

✓

Sales

VP of Sales

✓

Sales Manager

✓

Finance

Accounts Payable Manager

✓

Accounts Receivable Manager

✓

Controller

✓

Accounting Manager

✓

VP of Finance

✓

Inventory Management strives to maintain a delicate balance between two seemingly opposing company objectives: customer service and profitability.

On the Customer Service side, we want to stock every possible product our customers could request. On the profitability side, we want to stock as little inventory as possible in order to minimize the potential liability of having a huge, resource-draining asset on our books.

Prior to implementing Infor ERP SX.enterprise, some of our clients might seem to have healthy warehouses chock full of products. Unfortunately, they were sometimes filled with the wrong products! On the one hand, the client had lots of products that nobody wanted; but on the other hand, the company was starving for the most popular products with high demand.

Implementing SX.enterprise’s inventory management controls can help improve both a distributor’s customer service and profitability metrics. Our clients want to continuously monitor their performance, asking questions such as, ‘How am I doing?’ or ‘Where do I need to improve?’ It’s all part of a process designed to help you gain an edge over the competition.

To that end, you’ll want to gain greater familiarity with some of the key metrics available in SX.enterprise. These reports provide the data and the insight necessary to help you identify areas for improvement.

Customer Service

Three components of the Customer Service objective include:

• Availability – How well am I stocking the products my customers need?
• Accuracy – How accurate are my invoices? Am I cutting a bunch of Credit Memo’s?
• On-Time Delivery — Am I getting the right product to the customer when its needed?

Inventory Fill Report (ICRIF)

The Inventory Fill Report measures how well you are stocking the product your customers need.

This report examines OE lines, comparing the quantity ordered with the quantity shipped. The report calculates two different fill rates:

1. Quantity Fill Rate -- If a customer orders 100, and you ship 90, the calculated quantity fill rate on this transaction is 90%.
2. Line Fill Rate -- If a customer orders 100 and you ship 90, the fill rate on this transaction is ZERO.

Tip: Always use the Line Fill Rate to measure your business! To illustrate the importance of this concept, let’s say you want to tune-up your car. You head over to the local parts supply store to pickup eight spark plugs, but the guy behind the counter says he has only seven in stock. Are you 88% happy? Heavens no! You’ll no doubt march down to the local competitor where you buy not only the spark plugs, but also all the other stuff you need for the tune-up. The first store didn’t just lose $2 on a single spark plug; it lost an order with an aggregate value of $50 or more.

Here is a sample SX.enterprise Inventory Fill Report. This report examines one month’s sales activity and was run in summary (Option #2 = no). The last three columns on the right calculate the Line Complete percentage.

After running this report in summary, go back and run it in detail for a select number of key vendors. You may find that small tweaks you make in the ordering controls (ASQ, 5High) on a particular vendor’s product line can push the Fill Rate up a few points, with significant benefits to you.

What should your fill rate be?
As you go through these exercises, you might gain inspiration from your peers. Inventory management expert Grant Howard took a cue from the Department of Homeland Security and developed a simple color-coded rating system to indicate the fill rate health for a typical distributor, as follows:

Profitability

Inventory is normally the largest, cash consuming asset on a distributor’s books.   Carrying too much inventory ties up cash that could be more profitably used elsewhere.  Carrying too little inventory strangles customer service, causing your customers to shop around. Fortunately, there are a couple tools available in SX.enterprise to help you continuously monitor the level and profitability of this inventory asset:  the Surplus Stock Report and the Inventory Turns Analysis Report.

Surplus Stock Report (ICRIS)

Surplus Stock is excess inventory that provides absolutely no value or profitability to your company.  This stuff needs to leave the warehouse and never come back! It is wreaking havoc with your turns ratio and tying up cash that could be used elsewhere.

So, what is Surplus Stock? There are two definitions:

1. Short-term Surplus.  Every Product in your stocking inventory has a Line Point (when to buy) and an Order Quantity (how much to buy). If you purchase a product right at Line Point, and order the Order Quantity, you should never have more on hand than Line Point + Order Quantity.  Any quantity above this total is considered Short-term Surplus.
2. Long-term Surplus.  When using the formula above, companies that were screwing their inventory down really tight found they were getting rid of surplus inventory of a product in one month.  The product would then drop below Line Point in a few months, and they found themselves turning around and purchasing more of the product.

To prevent this scenario, the Long-term Surplus calculation was established.  Long-term Surplus is simply any stock exceeding a twelve month supply.

In the ICRIS report, the Long-term surplus calculation is selected by setting option #8 to “L”, and option #9 to “12. 

Run this report in summary (Option #7 = “No”) and by Buyer (Option #4 = “B”) on a monthly basis to monitor the level of surplus.   The person(s) to whom you assign the responsibility for reducing Surplus Stock will want to run the report in more detail.

How much Surplus Stock should you have?
In our experience, distributors who have never examined this report and don’t have procedures in place to consistently monitor surplus stock have generally discovered they have around 25% of their inventory tied up in surplus stock.  Companies that consistently work on reducing their surplus can tighten this down to around 5% to 10%. The savings can be significant. For example, decreasing the surplus stock level from 25% to 15% can shave one million dollars from a $10,000,000 warehouse!

Grant Howard’s color-coded rating system to evaluate your company’s Surplus Stock:

Inventory Turns Analysis (ICRIT)

The Inventory Turns Analysis measures your inventory’s effectiveness by calculating how many times per year the stock on your shelf is sold.

Inventory Turns are calculated by dividing twelve months of the Cost of Goods Sold by the product’s Average Inventory Value. The Cost of Goods Sold is calculated by summing the past 12 month’s usage and multiplying it by the product’s cost used for GL purposes. At the end of the month, ICAMM calculates an Average Inventory Value for each product in the warehouse.  You can see this value in the Usage window.

Run the ICRTT report in summary (option #6 = YES) each month to monitor turns:

What should your inventory turns be?

Grant Howard’s color-coded rating system to evaluate your company’s Inventory Turnover:

Now What?

If you start monitoring these metrics and you don’t like the results—if your company is consistently running in the red or orange category—then give E&A a call! We can help fine-tune your Ordering Controls to increase Customer Service, and help develop a Surplus Prevention and Disposition Program to conserve cash and increase inventory turns.

Brady Bibb is a business consultant specializing in the Infor ERP SX.enterprise product. He can be reached at 217.546.7225.

Another year has come and gone! For most people, it’s a busy time of year – especially for those whose fiscal year end is the same as the calendar year end. Having a plan in place can help make things easier.

In Infor ERP SX.enterprise, there are five steps to closing the year. It is important to establish an organized plan in which you want to run the reports and other functions that have a direct impact on year-end processes. These functions do not need to be performed in any specific order, but they do need to be completed prior to posting any transactions for the new year. Of course, E&A encourages you to run through these processes in your test company so that you become familiar with how the programs function prior to performing them in your live system.

End of Year functions

• Step 1: Print 1099 forms in Accounts Payable Administrator Federal 1099 print (APAF) This function will print 1099’s for vendors that have been identified in APSV, taxing tab. This function can be run before or after you close the year for AP. If you choose to print BEFORE closing the year, then the totals printed should come from the APSV payments YTD field. If you run AFTER closing the year, it will need to use the APSV payments last YTD field. Use option #2 to govern which total will be used when printing the the 1099s. Please note that SX.enterprise supports the 1099-MISC form only which is style 6. If you need to print on additional forms, a custom program will be required. You MUST run the AP Federal 1099 Print program at the end of your calendar year regardless of whether the calendar year is your fiscal year end. Because these vendors are tracked on a calendar year and not a fiscal year, you MUST run APAY on these vendors at the end of your calendar year as well as at the end of your fiscal year.
• Step 2: Perform Accounts Payable Year End processing (APAY) This end of year processing will roll the vendor YTD totals to the previous YTD buckets. It will also zero out specific fields to prepare for reporting on the new year.
  
  The APAY function will need to be run twice if you have 1099 vendors. You will run it once at the end of the calendar year for all 1099 vendors, and again at the end of the fiscal year for all other vendors.
• Step 3: Perform Accounts Receivable Year End Processing (ARAY) There is only one function to run for Accounts Receivable at year end and it has the same function as APAY. This program will roll all of the customer YTD totals to the previous YTD buckets as well as zero out specific fields to prepare for reporting on the new year.
• Step 4: Perform Inventory Year End Processing (ICAAY) This function will roll all of the inventory YTD totals to the previous YTD buckets as well as zero out specific fields to prepare the reporting in the new year.
• Step 5: Create New Chart of Accounts in GL Administrator Year End Processing (GLAY) This function will create the general ledger chart of accounts for the new year. For balance sheet accounts, the current year ending balance will be rolled into the forward balance for the next year. The forward balance for income statement accounts and the Clearing account will be set to zero for the next year. You will be prohibited from posting any transactions for the new year if this function has not been run, so make sure you schedule this at the appropriate time to avoid disrupting business on the first working day of the year. This function will also update the “current fiscal year” value in AO, financials, fiscal year.  

Now that we have discussed the processes that you do run, let’s talk about some of the “don’ts”.

• DO NOT end your fiscal year without a plan in place for processing! Create a checklist that can be followed to ensure that all processes that impact end of year are performed in the proper order.
• DO NOT think that year-end processes take the place of your normal month-end processes! The month-end procedures should also be followed on the last month of the year; the year-end procedures are in addition to these procedures. Add specific reports to your end of year checklist so you are sure to run them in the proper order.
• DO NOT close the year without running OEEPI to process all orders that are shipped or running POEI to receive all products that have been received! You will want to run WTEI to receive all warehouse transfers that have been received or process any kit workorders that are outstanding. Failure to do this could result in inaccurate general ledger information. Once the end of year processes are run, there is no way to rollback the data.
• DO NOT run the end of year processes when users are logged on and working in the system! These processes are zeroing out balances and if someone should be working on the system and trying to update those balances, the information rolled could be inaccurate.
• DO NOT run GLAY without running GLAP first! According to Infor’s documentation, the GL Administrator Distribute Profit function reads through every GL account and calculates the difference between the income and expense accounts and records this as net income. This amount, either negative or positive, is posted to the profit accounts according to the percent of profit value established for each account. The percent of profit is set up in Administrator Options-Financials-Profit Dist.
  
  This function should be performed at the end of each month; however, you can wait and perform it for each period at the end of the year (it can only be performed for one period at a time). You can adjust and close out a period multiple times, since GL Administrator Distribute Profit does not accumulate entries. This includes any adjustments that must be made to a prior year.
  
  For example, if you must make adjustments to a month in the prior fiscal year, you can post the adjustments, then run GL Administrator Distribute Profit again. The period-to-date profit figures are recalculated each time it is run. It is important, however, that you distribute profit before you perform GL Administrator Year End, or your General Ledger will be out of balance. If adjusting entries need to be made after profit has been distributed and GL Administrator Year End is complete, post the adjusting entries and simply rerun this function. Financial statements can be printed and GL Administrator Year End will not have to be performed again.
  
  WARNING: GLAP does NOT make an additional posting from your Current Year Earnings to your Retained Earnings accounts! You must do this manually. MAKE SURE that you do not make this posting until all of your adjustments have been made and GLAP run. If you post from your current year earnings to your retained earnings and then try to run GLAP, you will double your earnings and throw your General Ledger out of balance.
  
  
• DO NOT run the end of year processes twice! These programs will zero out fields and roll values to the previous YTD fields. If you perform this function twice, it will zero out your previous YTD fields as well. If the GLAY process is run twice, you will create the chart of accounts for another year and change your current fiscal year value. If you are unsure of whether the process has been run for the current year, please contact SXE support at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The term ‘nonstock’, as defined by Infor ERP SX.enterprise (‘SX’), generally refers to ‘on the fly’ items for which there is no product (icsp) record set up. They may be ordered one time for a specific customer and all the pertinent information, including description, pricing, and vendor are added directly in order entry (‘on the fly’). There is an option to create catalog entries for such items as part of this ‘on the fly’ process so the basic information entered can be reused on some future occasion. The limitation to this is that users often fail to check the catalog.

Nonstock items cannot have special pricing or costing. They cannot require any unit of measure conversions. Nor can they require any serial or lot control. They are also difficult to track if ever returned by the customer, including inclusion in physical or cycle counts.

One way to address these limitations is to designate the product status in the warehouse product (icsw) record as ‘Order As Needed’ (OAN). An OAN item will not show up on any recommended replenishments, but they are otherwise normal items that can have any or all of the special characteristics or capabilities listed above. The limitations with OAN items, however, are that they have to be separately set up in ICSP and ICSW before they can be added to orders, and they can only be activated or de-activated by going into ICSW and doing so manually.

SX 6.0 bridges this gap by adding a new type called an ‘Order As Needed-Nonstock’ (OAN-NS). An OAN-NS is just like an OAN, but has some additional capabilities an OAN does not which are discussed below.

Creation from Order Entry

One of the new features in 6.0 is to allow a nonstock item to be created in ICSP and ICSW as an OAN-NS directly from order entry, provided the operator has appropriate security to do so. On the nonstock information pop-up screen, a new option has been added to allow this to take place. The process is also smart enough to check to see if the item is already an OAN-NS. If it is, a message appears when you close the nonstock window:

This Item is an Active Order As Needed – Nonstock Item. Continue as a Stock Item?

If you answer ‘Yes’, the line item type is changed to a stock type.

In IC Entry Adjust Non-Stock/Direct Order (ICEAN) you may adjust nonstock items in inventory into a stock item. The nonstock items may be in inventory because of a customer return, or because an order was cancelled after product was shipped by your vendor. These items may have started out as on-the-fly nonstocks, but now that they’re sitting in your warehouse you may want to convert them into OAN-NS stock items in order to give your sales and warehouse personnel more visibility to them. ICEAN will even allow you to pick multiple items that may, in fact, represent the same thing, but are listed as multiple entries because of inconsistencies in how they were entered on orders by your sales staff. You merely have to highlight the items that are the same and right click, then choose ‘Mass Update’ to convert them all at once (if only a single item is selected, the ‘Inventory’ option gives you the same capability for one entry). A pop-up window will then allow you to indicate what you want the ‘true’ item number and description to be, along with the product category, status, vendor and product line.

Counting Nonstock Items

Another right click option in ICEAN is the “adjust” option. You can use this option to ‘dispose of’ (adjust out) or designate a bin location for an on-the-fly nonstock. This is helpful when using the newly added IC Physical Nonstock Report (ICEPN) which will print a count of nonstock items in inventory. This report will show the expected quantity in bin locations that hold nonstock inventory and differentiate between tied and untied (available to sell) quantities.

You might think that adding all these OAN-NS items will gum up your ability to find normal stock items by presenting you with too many items to choose from. Fortunately, the item search box has been updated to address this concern. You can exclude OAN-NS from the search criteria (and make this the standard default) or search for OAN-NS items only.

You may over-receive nonstock items to take care of those unfortunate contingencies easily without a lot of extra steps or creating unwanted stock items. The ICEAN and ICEPN Report gives you greater visibility to these un-tied nonstock products.

Several Event Manager events are available to alert you whenever an OAN-NS item has been created, enabling better management and control of the process.

You can also check other warehouses for nonstock items with available quantity. Order entry will even prompt you if it finds such a situation.

Finally, a new Sales Manager report, SMRON, will analyze nonstocks by the number of times sold (‘hits’) to help you determine if you should start stocking some of them.

Taken as a whole, the new nonstock enhancements in version 6.0 will be a great help to everyone who frequently deals with special order nonstock items and the hassles they can often create.