STREAMLINING INVENTORY PLANNING & PURCHASE PRICE OPTIMIZATION
WITH ANAPLAN
Among the many uses of Anaplan in domains like Finance, Supply Chain, HR, Sales and Marketing, Anaplan can also be used to optimize and automate procurement decision makings for manufacturing companies. As a result, the best price and quantity for each of the inventory component can be found. This would not only help to streamline inventory planning but also to optimize procurement decisions and supplier management.
BACKGROUND
In a manufacturing company there are numerous components, which are procured from different suppliers and combined to make the finished goods. There is an internal process to decide on the quantity of components to be procured and the price at which they are to be bought. Since this is one of the most important cost for the businesses, they aim to buy the optimum quantity at the best price.
To arrive at the best price and quantity, data from various source are combined in numerous spreadsheets in a manual process. ERPs also enable such calculations and results are shared for final approvals.
Anaplan can be used not only to transform input data and automate to arrive at the best buy and quantity for each of the component based on the defined parameters, but also to create an approval workflow and repository of decisions taken.
BUYING DECISION
Multiple parameters play into forming basis for automating decisions for optimal price and quantity for each of the components. Through Apps and UX pages in Anaplan, end users can be provided with input fields where they can define threshold limits, margins, range etc. for each of the component. Input files containing business data can be integrated in Anaplan and a schedule set. These form the bases of running calculations.
BILL OF MATERIALS
BOM forms an important part of the input files of a manufacturing company. BOM is Bill of Materials that define the list of items and quantity required to make Finished Goods. It is crucial for the calculations to segregate ‘kits’ and components from the Bill of Materials.
What is a ‘kit’?
UNDERSTANDING KITS
Lists of Kits here:
FG – B
FG – C
A, B and C are Finished Goods.
A uses Components 1,2 and 3
B uses Components 4,5 and 3
C uses Components 6,7,3 and 5
Here components 3 and 5 are common components used in Finished Goods A, B and C. Since Finished Goods B and C use more than 1 common component, they are kits.
By concatenation of Finished Good and Component in the input data (to save model space), then de-concatenating them and using required formulae and functions in Anaplan, the number of shared components and finally the list of kits can be calculated. This is useful in most of the future calculations for procurements.
WORKFLOW & REPORTS REPOSITORY
In Anaplan data and workflow access related restrictions are very easy to be done. Users can be categorized into different groups. Read, no read or write access can be given to them, such that the whole workflow and approvals can be done in a very secure manner.
The whole approval process can be done in different tables in the UX pages, where the end users could select list of components and send it to the next approval table by running an action. After approvals the results could be seen. At the back end in Anaplan, different views of the same modules and Booleans to facilitate those actions can be created.
The final decisions can also be sent to the Repository module, contrasting spreadsheet-based processes in which decision traceability is very difficult and time taking, and no audit could be done to find out the factors that led to the decisions.
BENEFITS
Through Anaplan, multiple sources of data and parts from varying Lines of Business can be combined to improve purchase decisions and take price advantage, eliminate offline Spreadsheets, optimize Inventory level and improve In-Stock Rates.
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