Today’s Prophet 21 tutorial covers how to run inventory ranking and how to reclassify your ABC classes.
We will take you through a step-by-step process on how to use Prophet 21 to reclassify ABC classes so that your inventory ranking is accurate and up-to-date.
We’ll show you how to set up the right Ranking Criteria, choose Rank Values, select sales and cost basis, use FIFO for your system, run Rank and Reclassify features, and how apply changes. We’ll also cover how to print a report with your new ranking.
In just a few easy steps, Prophet 21 can make quick work of inventory re-ranking so that you can focus on running your business.
Let’s get started!
Creating Ranking Criteria for Your Inventory
Ranking Criteria are especially important if you have multiple occasions, want to run at different times, or want to rank your values differently for different locations.
To get started, first, give the Ranking Criteria an ID and Name.
Then choose Rank Values to rank by:
- Cost Dollars
- Profit Dollars
- Sales Dollars
- Units Sold
Next, select a Sales Basis and Cost Basis. (If your system is FIFO (First In First Out), change the site to FIFO.)
What you choose for your Sales and Cost Basis does not affect the actual rankings. It does however affect what you see on the Inventory Ranking. Remember, the actual ranking comes from the Rank Values.
Finally, Save the settings.
👉 Once the Criteria are saved, the system will automatically populate all of those settings every time you type in your Location ID.
Ranking Your Inventory According to the Criteria
Once you’ve established your ranking criteria, it’s time to rank your ABC classes.
- This is done by right-clicking in the window and selecting the “Rank” option.
👉 This action does not change anything in the system itself. Ranking simply pulls all of your existing items and shows you where they fit from the top item down to the last item.
- Running a ranking shows where all your items fall in the overall ranking.
- If you did run ranking for multiple locations, there would be a way to collapse it down and look at different locations at the same time.
Note: If you have a lot of items, this does take longer to run.
Verifying Demand Forecasting
It is important to note that you cannot utilize ABC Class Reranking unless Demand Forecasting has been run for your time period.
When the system pulls up the items in ranked columns, see if any of the columns have all zeroes.
👉 If you see all zeros in any of the columns, especially the Cumulative Column, it means Demand Forecasting has not been run for the period.
How Often Should You Rank Inventory?
Prophet 21 users have many different protocols for when they run their rankings—some people rank every month and some prefer to rank only once a quarter.
👉 I am in the once-a-quarter camp as I believe it helps avoid the over-inventory or under-inventory issues that may be caused by ranking every month.
Reclassifying Your Inventory Into New ABC Classes
The next step is to reclassify your inventory based on the new rankings.
- To do this, right-click and select “Reclassify” from the menu.
- This will open up a report that lists all of the inventory items that have been reclassified according to your criteria.
- The system shows you the item’s current Class and then its suggested Class.
- If you want to reclassify according to what the system suggests, you can go to the select column, right-click, and hit Select All.
- This action goes through and highlights the new column.
Note: You can also print this report for future reference.
- Alternatively, you can manually change the classes of individual items within the New Class column before saving the reclassification.
- Once you are comfortable with your changes, the last thing you do is right-click and hit Apply Changes.
Note: Depending on the size of your location and the number of items, it could take anywhere from a minute all the way up to five minutes and longer to apply the changes.
👉 I would not recommend applying Class changes in the middle of business because of the potential delay.
To recap, ABC Class Reranking with Prophet 21 involves creating Ranking Criteria and Location Ranking, selecting Rank Values, and applying them to your system.
👉 The result is an effective inventory management process that helps provide an accurate and up-to-date view of your inventory within P21.
Continue Learning: How to use ABC Class Maintenance in P21 Purchasing.
If you like this video or want to see other training videos on the Prophet 21 Purchasing functions, comment below.