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Automatic order replenish following Min/Max inventories and EOQ method.
Automatic order replenish following Min/Max inventories and EOQ method.

12/13/2021. We implemented an automated replenish system that allows you to improve your requisition systems

R
Escrito por Rubén Mosqueda Herrera
Actualizado hace más de un año

With our new configuration of automated replenish, you will be able to create automated requisition orders according to your needs by following three different methods that can suit your warehouse needs the most. All of them can save you crucial time, compared with the manual order replenish method.

These three different methods are:

  • Economic Order Quantity warehouse system. Minimizes warehouse costs such as holding, costs, shortage costs, and order costs.

  • Maintaining maximum level. Maintains a constant maximum level of inventory for a certain product.

  • Below minimum levels of storage. Reorders each time your inventory has hit below your minimum amount of needed products for that warehouse.

Here below we will show you how to generate automatic requisition orders by following each of these three methods.

Economic Order Quantity

Economic Order Quantity is the inventory formula that minimizes warehouse costs such as holding costs, shortage costs, and order costs. All of this can be achieved by setting a Safety stock for each product in your inventories, this until our system calculates the Economic Order Quantity based on the flow of your inventories for a certain product.

By using this method, our system will automatically and with great efficiency calculate how much product you will require for a determined amount of time.

This formula consists of:

EOQ = square root of: [2SD] / H

Where:

S = Setup costs (per order, generally including shipping and handling)

D = Demand rate (quantity sold per year)

H = Holding costs (per year, per unit)

To set this method as your default requisition method, you only need to follow these steps:

1) Go to your Product Charge Master and search for a certain product.

2) You will be adressed to the Product Maintenance window, now choose the Storage/Replenish option, look for your warehouse with the arrows next to the save button and set all the following information. If your warehouse doesn't have this product, click on create button.

Now set all the following information:

  • Unit of measure

  • Type of Replenish: which will be Economic Order Quantity.

  • Set as Product default

  • Minimum, maximum and your safety stock amounts on inventory.

  • Save

3) Now go back to your Homepage and on your search bar type Automatic Product Replenish EOQ. Now set all the current ordering information for your product:

a) Replenish Type (Economic Order Quantity)

b) Warehouse

c) Product category and

d) Product name.

Click on the Context menu to the right of your screen and now click on Generate Reorder Point.

This Reorder will be sent to your Background Processes (White flag on top), you will receive a noitce once this process has been completed.

4) Now go to the Requisition window and search for your requisition and click on it, this will show your more information about it. Now click on the context menu to the right of your screen and now click on "Document action".

Once this action has been completed, click again on the same context menu and click "Generate order". This will generate your Purchase order.

Full process:

Maintaining Maximum Level

This inventory method will grant you always having a maximum amount of storage for a certain product that you consider as very necessary and required by your warehouse.

To set this method as your default requisition method, you only need to follow these steps:

1) Go to your Product Charge Master and search for a certain product.

2) You will be adressed to the Product Maintenance window, now choose the Storage/Replenish option, look for your warehouse with the arrows next to the save button and set all the following information. If your warehouse doesn't have this product, click on create button.

Now set all the following information:

  • Unit of measure

  • Type of Replenish: which will be Maintain Maximum Level.

  • Set as Product default

  • Minimum, maximum and your safety stock amounts on inventory.

  • Save

3) Now go back to your Homepage and on your search bar type Automatic Product Replenish EOQ. Now set all the current ordering information for your product:

a) Replenish Type (Maintain Maximum Level)
b) Warehouse

c) Product category and

d) Product name.

Click on the Context menu to the right of your screen and now click on Generate Reorder Point.

This Reorder will be sent to your Background Processes (White flag on top), you will receive a noitce once this process has been completed.

4) Now go to the Requisition window and search for your requisition and click on it, this will show your more information about it. Now click on the context menu to the right of your screen and now click on "Document action".

Once this action has been completed, click again on the same context menu and click "Generate order". This will generate your Purchase order.

Full process:

Below minimum levels replenish of storage

This requisition method waits until your inventory has gone below your minimum levels of inventory and is recommeded for when your warehouse doesn't have enough space for saving extra inventory.


To set this method as your default requisition method, you only need to follow these steps:

1) Go to your Product Charge Master and search for a certain product.

2) You will be adressed to the Product Maintenance window, now choose the Storage/Replenish option, look for your warehouse with the arrows next to the save button and set all the following information. If your warehouse doesn't have this product, click on create button.

Now set all the following information:

  • Unit of measure

  • Type of Replenish: which will be Reorder below Minimum level.

  • Set as Product default

  • Minimum, maximum and your safety stock amounts on inventory.

  • Save

3) Now go back to your Homepage and on your search bar type Automatic Product Replenish EOQ. Now set all the current ordering information for your product:

a) Replenish Type (Reorder below minimum level)

b) Warehouse

c) Product category and

d) Product name.

Click on the Context menu to the right of your screen and now click on Generate Reorder Point.

This Reorder will be sent to your Background Processes (White flag on top), you will receive a noitce once this process has been completed.

4) Now go to the Requisition window and search for your requisition and click on it, this will show your more information about it. Now click on the context menu to the right of your screen and now click on "Document action".

Once this action has been completed, click again on the same context menu and click "Generate order". This will generate your Purchase order.


Full process:

Jan. 23, 2022 Update: Automatic Replenish Report by Supplier Filter

Now you will be able to filter automatic replenish order in the search bar at the

Automatic Product Replenish menu, according to the designated supplier for such product.

This is how such filter will look like in your search panel (Automatic Product Replenish window) :


The results obtained will also show the amounts established in inventory for such product, facilitating the visualization of inventory levels in all the following columns:


Notes:

  • To link a product with a supplier, it is required to designate it in the Product Maintenance window, to which you will be able to enter through the Charge Master II window (as shown in the requisition examples from above).

  • The results shown in the Automatic Product Replenish EOQ window are of all the products that meet the search criteria so those products that already have requisitions will be shown as well (see the requisition column), a new requisition will not be created for them is not necessary.

  • Important: If your organization has this configuration for multiple products, it is suggested to apply all the search filters that are considered necessary and thus reduce the number of results that are displayed in this window, this to optimize the time it takes to Cirrus create all pending requisitions. See an example:

If we are more specific when searching for products by applying all of the needed filters (Replenish Type, Warehouse, Supplier, Product Category, Product) , results will be less than if we leave them blank so the time creating their requisitions will be shorter :

Product sale rules for products with these settings :

Direct Billing window will always allow sales for these products, if there is no stock and the hospital manages inventories (Improvement Settings) then it will create an adjustment with the shortage so that the stock remains zero and not negative and does not stop the sale.

This is not configurable.

In Encounter Charges, if there is no inventory available and hospital manages inventories (Improvement Settings), then it will validate if warehouse manages inventories, then it will perform the same as Direct Billing and will perform the adjustment so that its stock remains zero and not negative.

  • Cirrus will not display any alerts nor messages.

  • It is important that if any warehouse must perform charges or will move products, they must match with the hospital configuration (Improvement Settings).

Updates :

September 25, 2023.

We are passionate about improving your Cirrus experience. We appreciate you sharing this information with your team and ask us for help if they need it.

December 13th, 2021

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