In today’s P21 training tutorial, we are going to talk about Min Max and how it affects purchasing. It is a pretty straightforward and simple-to-use process.
What is Min Max?
Set a Min/Order Point and a Max/Order Quantity in the Purchase Stock Card. If the stock of an item falls below the Min, the system will prompt you to order up to the Max.
How to use the Min Max Purchasing Method:
- Start in the Replenishment Tab for a specific location.
- Note: If you have multiple locations, you must set up Min Max at each location.
- Open Item Master Inquiry and pull up the Purchase Stock Card.
- Note: Net Stock is the same in both Up To or Min Max. (insert link)
Sample Use Case:
You have an item with a Net Stock of 101 and a Min (Order Point) of 100. Since your Net Stock is still greater, the system will recognize there is no need to purchase the item.
However, when someone places an order for 10 items, your Net Stock will change.
Now, when you refresh your data (by right-clicking in the tab and selecting Refresh), Net Stock has dropped to 91, which is below the set Min (Order Point) of 100.
P21 takes the difference between your Max quantity and the Net Stock to find the order quantity and will prompt you to purchase that amount.
Note: If you had a special unit of measure that you use, Prophet 21 would do a calculation for that number as well.
Notes on the Min Max Method:
Min Max is a manual process. So if you simply “set it and forget it,” you could potentially throw off your purchasing processes.
For example, if you had a well-performing item that has since fallen off, but is still getting ordered, at some point, you will overstock. Or vice versa, you are not ordering enough of an item because your Min Max has not increased based on an item’s performance.
Note: By default, Min Max is a manual process. However, Atlas has worked with a company to do a ‘Dynamic Min Max.’ In this project, we ran a process that would update Min and Max on certain items, based on different calculations, if a customer chose to.
When to use the Min Max Method:
Min Max works well for items that are sporadic and especially for new items. The alternative Up To method does not work with new items very well unless you have at least a twelve-month history of them.
Remember, Min Max is a simple, easy-to-use purchasing method, but it is important to note that it is a manual process that must be monitored (unless you call Atlas to help you out with that 🙂).
If you would like to see additional tutorials like this, put a comment or question down below.