Purchasing Rules
| Document Version | v.3 |
|---|---|
| Document Last Updated | 10/30/2023 |
| Software Version Documented | v9.9.2 |
Overview
This document will cover how to use Purchasing Rules in Savance Enterprise. Purchasing Rules is a way to dynamically change inventory settings as metrics change. In other words, these rules will continually be evaluated to automatically adjust settings for inventory items as goods are bought and sold. This allows Savance Enterprise to agilely respond to changes in demand and value, helping to minimize losses and maximize profits.
Purchasing Rules Basics
Because this is such a large and important feature, I will first give the general basics of the feature before going into specific details. To open up the Purchasing Rules window go to **Purchasing > Purchasing Manager > Purchasing Rules.
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The top section will show a list of all manufacturers that have rules (including “All”, which means that the rule applies to all manufacturers.) Under each manufacturer are the rules that apply to it, which can be shown or hidden by clicking the “+/-” next to the manufacturer’s name. You can view details for any rule by clicking on it and viewing the information below. To add a new rule for a manufacturer, either click the manufacturer or click ‘New’, or change the manufacturer drop down during the creation of the rule.
The middle section in blue shows all items that apply to the selected rule based on a set of criteria. This will be discussed in further detail in a later section.
And finally, the bottom section is the settings that will be changed for all the items that match the given criteria. We will also go into further details in a later section below.
Define the Parts the Rules Apply To
When you are creating a new rule, you will first want to define the items this rule applies to. This is configured in the middle section of the Purchasing Rules window, as seen below:
The possibilities in this section are very powerful due to the multiple combinations possible. You can create very vague rules or very detailed rules based on your organization's needs. You can first choose a manufacturer and warehouse if necessary, or you can select “ All” for these options if you would like the rule to apply across the board. By default, we have two rules already created for you that apply to all manufacturers:
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Set Inactive if days of inactivity are more than 180 days.
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Set active if the days of inactivity is less than or equal to 180 days.
After you’ve chosen a specific manufacturer or all you will want to configure the Group Type by clicking the Add Group button. There are two types: Match All (AND) or Match Any (OR). As the name suggests, this determines whether all corresponding fields need to be matched or whether only one of them needs to be matched. So if you have a Match All (AND) group with 3 fields, all 3 fields must be met in order for the rule to apply. If you have a Match Any (OR) group with 3 fields, only 1 of all 3 fields must be met in order for the rule to apply. You may add a combination of AND and OR groups, and there is no limit to how many groups you can add to the rule.
The Field is the most important part of the criteria to determine what items will apply. These can be added by selecting a group and clicking Add Criteria. A list of all available fields are below, with a description of each:
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MFG Code: This is a manufacturer’s shortcode.
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Part Number: This is the name of a specific part number. Remember that you can also use "contains" (for example) to have all items that contain the text "ABC" apply to this rule.
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Description: This is the description for a part number.
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UPC Symbol: This is the UPC Symbol, which is defined during the creation of a Part Number.
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Discount Code: This is the discount code that is set in the Pricing section of the Item Manager.
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Velocity Code: This is the Velocity Code specified for the item in Item Manager > Warehouse > Classifications
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Product Type: This is the Product Type specified for the item in Item Manager > Warehouse > Classifications
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UNSPSC: This is the UNSPSC (United Nations Standard Products and Services Code) specified for the item in Item Manager > Warehouse > Classifications
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Category Code: This is the Category Code specified for the item in Item Manager > Warehouse > Classifications
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UD Classifications: These are the optional "User Defined" classifications or codes specified in Item Manager > Warehouse > Classifications.
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UD Costs: These are the "User Defined" costs specified in the Item Manager. By default these will be named "UD Cost 1", "UD Cost 2", etc; however, keep in mind that these can be renamed if necessary (so they would show up with a different name in this list in that case).
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Trade Cost: This is the trade cost that was either imported for this item or is specified in the Item Manager
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True Cost: This is the true cost that was either imported for this item or is specified in the Item Manager
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On Hand: This is the quantity of items on hand in the specified warehouse
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Value: This is the Mean Daily Usage * Cost / On Hand. So if you sell 10 of a $3 item per day with 6 currently in stock, then Value = 10*3/6 = $5.
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Hits: This is the number of times the item appears on the order.
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Stock: The status of the item meaning if you “stock” the item regularly
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Hits Percentage: The percentage value of how many times an item has been added to an order
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Days Of Inactivity: How many days has this item had no activity
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Location On Hand: Where the item is located.
Once you’ve created the groups and selected criteria for each one you will then need to change the Equality and
Value columns for each field. For example, if you want the field to be “All items with a “Trade Cost” greater than
“50” (see screenshot below), then you would do the following: Set the field to “Trade Cost”, set the Equality to
“is greater than”, and set the Value to “50”.
Alternatively, you can also select values that contain text (such as part numbers that contain text i.e. “1234ARL”)
All items that match these fields will have their settings changes based on what settings are configured in the bottom
section.
Define Which Settings to Change
Once you have decided what items to apply the rule to, you will have to decide what setting will be configured for all matching items. This can be done in the bottom section of the Purchasing Rules window.
All you have to do is click Add Setting, choose the setting that is to be changed, and set the value. A description of all available settings can be seen below. When you are adding a setting, you will see the following window.
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Lead Days: The average number of days between placing an order and receiving the order from your vendor.
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Minimum Order Quantity: This is the minimum amount of an item that can be put on an order.
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Reorder Point: This is the level of inventory when an order should be made with vendors to bring your inventory back up. It is equal to Mean Daily Demand * Lead Time + Safety Stock. This allows you to order from your vendor enough days ahead of time so that you are never out of stock (but still never overstocked).
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Reorder Quantity: This is how much to order from your vendor when you reach the Reorder Point. This is equal to Mean Daily Demand * Lead Time.
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Target Fill Rate: This is the percentage of orders that are filled without a backorder. The industry standard is 98% fill rate, meaning 98% of the time you want to have something in stock. If this is too low, sales may be lost because your inventory is low and orders are not being quickly fulfilled. If this is too high, your stock may be too high.
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UD Classifications: These are the optional "User Defined" classifications or codes specified in Item Manager > Warehouse > Classifications.
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Velocity Code: This is the Velocity Code specified for the item in Item Manager > Warehouse > Classification
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Product Type: This is the Product Type specified for the item in Item Manager > Warehouse > Classifications
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UNSPSC: This is the UNSPSC (United Nations Standard Products and Services Code) specified for the item in Item Manager > Warehouse > Classifications
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Category Code: This is the Category Code specified for the item in Item Manager > Warehouse > Classifications
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Stock: This is a "True" or "False" value, determining whether the item is Stock or not.
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Active: If the inventory is active.
All of these values can be found in the Warehouse section of the Item Manager. This section can be seen below.
Configure Rule Priority
In some cases, you may have multiple rules apply to a single item. Example: You have an item “ARL12345” with the manufacturer “ARL'' then you create a rule that applies to all ARL items that contain “123” and a rule that applies to all ARL items that contain “345”. If these rules apply different values to the same setting, which setting will take priority for item “ARL12345” since it falls into both category rules?
If you look near the middle of the Purchasing Rules window, you’ll notice two large buttons:
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Increase Priority
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Decrease Priority
If you click the “+” button next to a manufacturer at the top, you will be able to view all rules that apply to this manufacturer. Rules at the top of the list will apply first, and rules at the bottom will be checked last. If you would like a rule to take priority over other rules for this manufacturer, select the rule and then click the ‘Increase Priority’ button. The same thing can be done to decrease its priority. This is an important step to take to ensure accurate purchasing settings for your inventory, so be sure you set your rule priorities carefully.
Processing Rules
When you create a rule, it will not apply immediately. Because rules take time and resources to calculate, they are processed after hours every night. If you are an administrator, you can change this task on the server. The default name of the task is ‘Processing Purchasing Rule Calculation’.
If you would like to process all item rules during the day you can click the ‘Process Rules Now' button from the Purchasing Rules window. This will bring up the following warning:
It is not recommended that you run this during business hours, as this may slow your system's performance (depending on how many rules you’ve created.) However, if you need to run this task in the middle of the day for any reason, simply click ‘Yes’ to proceed. Depending on the number of rules this process can take a couple of minutes up to an hour.
Once the Purchasing Rules have been processed, you’re all set. You can come back to the Purchasing Rules window to change these settings at any time.