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Logistics Processes and IT tools Page 1 of 111
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Navision MV8 Handbook
Step 6
Efficient Goods Flow
Version 2.3
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This document is developed and produced through collaboration between Inter IKEA Systems B.V. and K3 Business Solutions B.V.
The content of this material is owned and updated by Inter IKEA
Systems B.V. in collaboration with K3 Business Solutions B.V.
Inter IKEA Systems B.V.
IKEA Concept and IKEA
Business Processes
Final document containing a
description of operating IKEA
business process in Navision
Master Version
Documentation of technical
work steps in Navision
Master Version in a number
of manuals
Documentation of IKEA
business process operations
in a number of manuals
K3 Business Solutions
B.V.
Navision Master Version
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Revision information
Edition Date Comment Author Verified Approved
1.0 17.10.2011 The document was
published
K3
2.0 30.08.2013 Restructured, Screen
shots updated
Processes included
Graphics included,
Service Pack 41
changes included
Holger
Peters
(HLGP)
Ron Tuk
(RONT)
Michael
Baron
(BARO)
2.1 30.03.2015 Restructured, Screen
shots updated,
Service Pack 50, 51
changes included
Ivaylo
Hristov
(IVHRI)
Ron Tuk
(RONT)
Holger
Peters
(HLGP)
2.2 20.05.2016 Updated with Service
Pack 55
Ivaylo
Hristov
(IVHRI)
Ron Tuk
(RONT)
2.3 01.04.2019 The document was
updated to Business
Central from NAV
MV6 Handbook step
6, v2.2
Ron Tuk
(RONT)
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Table of Contents
Efficient goods flow ................................................................................ 6
6.1 Introduction ................................................................ 6
6.1.1 Background ..................................................................... 6
6.1.2 Definition of terminology ................................................... 7
6.2 Pre-planning and setup ................................................. 9
6.2.1 Volume & resource planning ............................................... 9
6.2.1.1 Planning volume .................................................................... 9
6.2.1.2 Planning resources ............................................................... 10
6.2.2 Capacity planning ........................................................... 12
6.2.3 Traffic management ........................................................ 12
6.2.4 In-delivery planning ........................................................ 14
6.2.5 Graphical warehouse structure ......................................... 15
6.2.5.1 The Global Naming Convention .............................................. 15
6.2.5.2 Definition of the Retail Location ............................................. 20
6.2.5.3 Definition of the Retail Bin ..................................................... 23
6.2.5.4 Bin measurements ............................................................... 26
6.2.5.5 Buffer space set up .............................................................. 31
6.2.5.6 Bin Type ............................................................................. 34
6.2.5.7 Defining Sales Methods ......................................................... 34
6.2.5.8 Link Zones set up ................................................................. 35
6.2.5.9 Metal Profiles ....................................................................... 36
6.2.5.10 Weight limitation .................................................................. 39
6.2.6 Stack-in setup ................................................................ 41
6.2.6.1 Sales Method Selection Order ................................................ 41
6.2.6.2 Sales Method Extra Selection ................................................. 43
6.2.7 Pre-planning of internal replenishment .............................. 43
6.2.7.1 Set up of internal replenishment ............................................ 43
6.2.7.2 Pick decrease ...................................................................... 46
6.2.7.3 Days no Transfer.................................................................. 48
6.2.7.4 Flex Factor .......................................................................... 49
6.2.7.5 Full Pallet Direct % ............................................................... 52
6.2.7.6 Auto Stack In Container ........................................................ 52
6.3 Preparation ............................................................... 53
6.3.1 Special Handlings ........................................................... 54
6.4 Goods receiving ......................................................... 57
6.4.1 Introduction ................................................................... 57
6.4.2 Receiving shipment and consignment information ............... 57
6.4.2.1 Shipment and consignment ................................................... 60
6.4.2.2 Creating missing shipment in the consignment ........................ 61
6.4.3 Releasing in-deliveries ..................................................... 63
6.4.4 Receiving ....................................................................... 66
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6.4.4.1 Stack-in process .................................................................. 66
6.4.4.2 Pallet label .......................................................................... 67
6.4.4.3 Container manifest ............................................................... 71
6.4.4.4 Handling Discrepancies ......................................................... 75
6.5 Internal retrieval ........................................................ 85
6.5.1 Running internal replenishment ........................................ 85
6.5.2 Calculating the Need in the sales space ............................. 88
6.6 oving goods to destination .......................................... 90
6.7 Replenishment ........................................................... 91
6.8 Back flow .................................................................. 92
6.9 Order picking process in the Full Serve Warehouse ........ 94
6.10 Follow up .................................................................. 96
6.10.1 Key Performance Indicators connected to Goods flow .......... 97
6.11 Meeting activities connected to Goods flow .................... 98
Appendix I – Calculations and Formulas .................................... 99
A.1. Safety stock .............................................................. 99
A.2. Sales Space size limits .............................................. 101
A.3. EOQ calculations ...................................................... 105
A.4. Need calculation for internal replenishment ................. 106
A.5. Replenishment Level ................................................ 109
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Efficient goods flow
6.1 Introduction
Background
The Logistics operation in stores requires many resources. Approximately 20% of
the worked hours of a store are within Logistics, approximately 18% of the store
hours are used in Goods flow. Therefore achieving efficient goods flow for large
volumes needs careful planning. Planning of in-deliveries, of staff and equipment
needs to be considered. By finalizing replenishment every day before store opening
it will be ensured that products, which are in the store, will be available for the
customer to shop every day. Therefore efficiency of goods receiving, product
movement, retrieval and replenishment has a big impact on costs and customer
satisfaction.
The prerequisites to achieve efficient goods flow operation are a high quality level
of forecasting accuracy, ordering, sales space management and use of available
space.
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Definition of terminology
The goods flow process can be divided into different sub processes: pre-planning,
preparation, goods receiving, moving goods to destination, internal retrieval,
replenishment, goods flow processes in the warehouse and follow up.
The process of Pre-planning involves the planning of resources and the
configuration of the warehouse in the most efficient way in order to enable Navision
to steer and allocate the goods automatically. The pre-planning process will secure
that the following processes of goods receiving, moving goods to destination,
internal retrieval and replenishment will run smoothly and with the best quality and
at lowest possible cost.
The Goods receiving involves the physical unloading of the goods from a trailer or
container at the store loading dock and the receiving in the store Navision IT
system. In-deliveries need to be completed in their scheduled time slots because
space is limited and the goods need to reach their sales space before store opening.
The goods receiving area needs to be free from waste and handling aids before the
store opens.
Moving goods to destination is the process of moving the goods between the
different goods flow processes, e.g. from receiving to replenishment. The overall
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goal is to achieve a smooth flow of goods throughout the entire store. This requires
good coordinating between the processes of goods receiving and the following
processes. The majority of the goods should go straight to the sales location as this
avoids extra handling and saves cost.
Internal Retrieval is the process which describes the movements of goods out of
the store racking or the racking of the store’s external warehouse. The primary
purpose is to replenish sales spaces. There are four steps:
• Retrieve – moving products from a storage bin
• Check – verification of the products to ensure stock accuracy
• Move – moving products to a transfer area or sales space
• Confirm – confirmation to ensure the highest level of stock accuracy.
In the Replenishment process the goods are made available in the sales space for
the customer to shop. The goods arrive at their sales location either via internal
retrieval from the racking or directly from the receiving process. The efficiency of
this process is dependent on the sales space management process and the
cooperation within the Commercial Team.
The entire goods flow process should be one smooth flow without bottle necks. The
goal is to move in average 60m3/hour. The speed of the different processes needs
to be aligned so that the pallets travel with the same speed through the entire
goods flow process.
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6.2 Pre-planning and setup
Volume & resource planning
6.2.1.1 Planning volume
The first and most important prerequisite for a successful goods flow process is to
plan the expected volume which will flow through the store. This information will
be used to plan the available capacity but also resources of co-worker and handling
equipment.
The calculation of the yearly volume needs to be based on the annual sales forecast
and the forecasted price per m3. To break down the yearly forecast to monthly,
weekly and daily level other factors need to be considered. Those factors are the
Commercial Calendar, historical peaks, the store business plan, the direct supply
share and the weekly sales budget.
Example:
Planned sales budget: EUR 100,000,000
Planned price per m3: EUR 1,150
Calculated sales volume in m3: EUR 100,000,000/1,150=86,957m3
The planned volume for the year is 86,957m3.
Every month will have in average 86,957m3 / 12month = 7,246m3. Of course
not every month will have the same sales and volume.
December might have a higher sales of 12% share = 10,435m3
February 7% of the yearly share = 6,087m3
Therefore the planned volume between the months will be different depending on
the sales index. Take also into consideration that the inbound can deviate from the
sold volume. Campaigns or splits could be delivered before the goods will be sold.
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6.2.1.2 Planning resources
Co-workers
The most important resource we have within IKEA are the co-workers. With the
help of the planned volume and the planned productivity the required number of
worked hours can be defined.
Example:
Planned Logistics Productivity: 1.30 m3 / worked hour
Planned yearly volume: 86,957m3
Planned worked Logistics hours: 86,957m3 / 1.30 = 66,890 work hours are need.
Similar to the volume planning per month the hours can be broken down:
December: 10,435m3 / 1.30 = 8,027 worked hours
February: 6,087m3 / 1.30 = 4,682 worked hours
To calculate the contractual hours needed the share of leave needs to be added
to the worked hours. The share depends on sick leave rate and annual leave
which is different from store to store. In this example leave is 15%.
66,890 + 15% = 76,923
Therefore this store would need 76,923 contractual hours. Those ones can now be
broken down in actual contracts for full time or part time co-worker and number of
co-worker on yearly, monthly, weekly and daily level.
To gain the best flexibility, the share of part time co-workers in Logistics is usually
higher than in the store average. The recommendation is 70%. The actual share
per store depends on local legislation and the local cost per hour.
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During the actual year the used worked hours and the sold volume need to be
followed up, minimum on a monthly level in order to achieve the set goal for
logistics productivity.
To define the right goal for logistics productivity, the cluster approach of the Proven
Solution Toolkit for Logistics productivity should be used. This can be found in
Toolbox.
Handling equipment
The right amount of the handling equipment needs to be defined and secured. The
handled volume in a peak month is an important factor as well as physical
prerequisites and store specific goods flow processes. Therefore the different
needed types and the correct amount of every type need to be planned for.
For example the number of counter balances will be defined by the number of in
deliveries which will be unloaded at the same time. The number of power stackers
depends on the flooring in Market hall. If, as it is recommended, the flooring is
concrete then power stackers can be used in Market hall. Otherwise more pallet
jacks will be needed.
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The initial forecast for counter balances, reach trucks and power stackers for new
stores is given by the store order calculation tool but needs to be adjusted to the
specifics needs of the store and needs to be extended to manual equipment.
Capacity planning
With the forecasted volume per year, month and week the store capacity
throughout the year can be determined and potential bottlenecks can be identified.
In high sales and inbound periods the stock value in the store will increase and the
store might reach the maximum storage capacity. On the other hand, the expected
inbound into the store might be not in line with the maximum number of delivery
slots the store has. This needs to be planne for the next year.
Traffic management
Planning of traffic management is needed to achieve a high level of efficiency and
safety during the goods flow operation. Traffic management includes the definition
of the goods flow routes, on which pallets will be moved either by handling
equipment or by co-worker, as well as transfer areas.
These include routes within the store going from receiving to the sales location or
buffer bins in the racking, or going from the sales location to the buffer bin. Goods
flow routes should be always as short as possible and should avoid cross traffic as
much as possible. Less cross traffic and defined drive ways will increase safety.
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Also transfer areas, where goods are handed over between co-workers and different
processes, need to be defined and recorded on a map. This map should be easy
accessible to all goods flow co-workers.
The goods flow routes and transfer areas will have an influence on the graphical
structure of the warehouse. They will determine Link Zones and storage location of
Market hall products.
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In-delivery planning
The IKEA tool to plan in-deliveries, is called Delivery Scheduler (DES). The IKEA
learning platform offers a self-learning training program, where users can obtain
information in how to use DES. In this tool the Goods flow manager of every IKEA
store has to provide the right amount of slots for in-deliveries. The number of slots
should be based on the number of expected in-deliveries and should be defined for
the full year. The slots need to be created in the Delivery Scheduler considering the
available time frames for unloading and the unloading capacity.
The purpose of the slots is to secure an even flow throughout the store and to
ensure that all incoming goods can be unloaded according to the target arrival date
of the lead time. Unloading goods too late might result in empty sales locations,
low service level and lost sales.
It does not support an efficient goods flow process if the receiving process will be
faster than the replenishment or the internal movement of goods. If this would be
the case bottlenecks will be created and the receiving area or transfer areas could
overflow.
Therefore the order and time of unloading during the day need be aligned with the
speed of the goods flow process in the store.
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A consistent even flow from the goods receiving to the sales space is always the
goal.
Graphical warehouse structure
6.2.5.1 The Global Naming Convention
The graphical structure of the warehouse is the physical layout of all picking and
storage locations within the racking in the Self-serve furniture area and the Full
Serve area. After ensuring that the graphical structure is in place, Navision
automatically allocates all incoming unit loads from the goods receiving or backflow
into the pre-defined areas.
The graphical warehouse structure consists of certain physical parameters of the
warehouse racking. In other words the IT system needs to know what number and
what kind of buffer bins the store warehouse racking has. This will secure efficiency
as well as health and safety.
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First the racking, the sales locations and the buffer bins need to be numbered. This
should be done according to the Global Naming Convention (GNC). The GNC is an
IKEA document which defines how sales spaces and storage bins should be defined
in every IKEA store worldwide. This defines a standard of a “language” in which the
physical prerequisites of the bin and the racking are “translated” to make it
understandable for the IT system.
The purpose of the Global Naming Convention is also to make it easy for co-workers
and customers to identify where an article is located and if an article has multiple
sales spaces.
The Global Naming Convention can be found in Toolbox.
Every sales location and storage bin in the warehouse racking is defined by a six
digit number. The first two digits define the aisle, the second two digits define the
row and the last two digits define the level.
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Example:
Sales space (picking bin): 24-02-10
24 – Aisle number 24
02 – Row number 02
10 – Level number 10 pick level
Storage bin: 24-02-30
24 – Aisle number 24
02 – Row number 02
30 – Level number 30 – bin level
In Self-serve level 00 and 10 are sales spaces. Level 20 and higher are storage
bins. Level 05 or 15 should only be used in exceptional cases for sales locations in
Self-serve. Otherwise the shopping experience could be impacted negatively.
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In the Full Serve warehouse the locations are also defined by a same six digit
number which follows the same logic as the ones in Self-serve. First the aisle
number, then row number followed by the level number.
Level 00, 05, 15 (exception) and level 10 are pick locations. Above level 10 are
usually storage locations.
Example:
Pick location: 39-03-00
39 – Aisle number 39
03 – Row number 03
00 – Level number 00 pick level
Storage location: 39-04-20
39 – Aisle number 39
04 – Row number 04
20 – Level number 20 bin level
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Before setting up the individual bins, a store layout with all the numbering should
be created.
The Self-serve furniture area for a standard store which has Self-serve and Full
Serve in the same building, not divided by a wall, should always be numbered in
odd and even numbers on either sides. This will help to operate efficiently with the
Sales Method Selection Order.
For non standard stores (e.g. with external warehouse or capacity solutions) the
numbering of the aisles is different, which is defined in the Global Naming
Convention as well.
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6.2.5.2 Definition of the Retail Location
To be able to control the inventory and stock movements all available retail
locations need to be set up. This should be done in Setup/Retail Locations or from
the Retail Location List.
In this page all the necessary information about the retail location such as code,
name and all attributes can be defined.
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External Warehouse
If this is ticked, this retail location is defined as being the External Warehouse
location.
Blocked
If the retail location is blocked, the stock on it is not considered as sellable stock.
Retail locations that are marked as blocked could be displays or damaged stock. If
this attribute is changed, Navision will also change all retail bins, item bins and all
entries belonging to this retail location. Depending on the number of entries
involved, this can be a very time consuming task which should be avoided during
store opening hours and coordinated with local IT.
Use as In-Transit
If this is ticked, this retail location is used as In-Transit retail location.
Include as Sellable
This can only be marked if the retail location is blocked. This means that even if the
retail location is blocked, the quantity on the retail location is considered as sellable
stock. This could be for example items which are in fumigation or in the external
warehouse. If this attribute is changed, the system will also change all the retail
bins, item bins and all entries belonging to this retail location.
Order No. Required
If the order number is required, an order number has to be specified if an item
should be moved to the retail location. This is used if one retail location is reserved
for customer reservations. In this case an item cannot be moved to this retail
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location unless a customer order for it is specified. This way it can be tracked which
customer has items on the retail location. This is not commonly used.
Retail Bin Code if Missing
If a retail bin is defined as “Missing”, any items sold, if there is no Picking bin
created, will be sold from the bin defined as “Missing”. If left blank, the Default
Retail Location if Missing under the Sale tab in the IKEA Sales Setup will be used.
Suggest Retail Bin Code
If a retail bin is defined accordingly, then this retail bin will be always suggested
when an item transfer is made to this retail location.
To Loc. Require Reason Code
If this parameter is ticked, every transfer to this retail location will require a reason
code.
From Loc. Require Reason Code
If this is ticked, every transfer from this retail location will require a reason code.
Days to keep Bin Entries
This parameter is used for date compressing of the retail bin entries. If this is not
zero then the retail bin entries will be compressed to the number of days specified.
Picking Priority
This parameter is used to set the priority for retrieval (here called “picking”) when
items are stacked out from buffer locations. The items on this retail location, which
has the lowest value for Picking Priority, will be retrieved first. If the retail location
has no picking priority Navision will not suggest to retrieve from it. Navision will
suggest what items to retrieve and where to take them from. Navision will first
suggest taking items from the retail location with picking priority 1, then 2,
etcetera, until the replenishment is fulfilled.
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6.2.5.3 Definition of the Retail Bin
Navigating to the Retail Bin List is possible via the ribbon, the navigation pane, and
from the Retail Location. The Retail Bin list shows all the retail bins that belong to
the retail location, including bin measurements and parameters.
The available parameters are:
Code
Code of the retail bin. For creation of new bins, please refer to Global Naming
Convention (see 6.2.5.1.).
Description
The description of the retail bin.
Type
This defines whether the retail bin is a picking bin or not. Picking bin means that
Navision always takes the needed stock from this bin when selling. All items must
have one picking bin. It’s not possible to have more than one. Other values are
‘blank’ or ‘Manual’. ‘Blank’ means it is neither ‘Manual’ nor ‘Picking’ (for details see
6.2.5.5.).
Check string
The value of this string is used to validate the retail bin during mobile stack in.
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Auto Create When this is marked, Navision automatically creates the bin as an
item bin when stock is transferred to it.
Allow Negative Transfer
The system will not allow a retail bin to go to a negative value. It is not possible to
transfer more stock from a retail bin than the actual value which is there already,
unless this field is marked. This could be used for temporary receiving locations.
Blocked
This is inherited from the Retail Location, but can be manually updated on retail bin
level if needed
Include as Sellable
Is inherited from the Retail Location, but can be manually updated on retail bin
level if needed.
Length
Defines the length of the retail bin. This limits the length of pallets which can be
stacked on this bin (see chapter 6.2.5.4.2).
Width
Defines the width of the retail bin measurement. This limits the width of pallets
which can be stacked on this bin (see chapter 6.2.5.4.1).
Height
Defines the height of the retail bin. This limits the height of pallets which can be
stacked on this bin (see chapter 6.2.5.4.3).
Weight
Defines the maximum weight of the retail bin to ensure that the racking limitations
are not exceeded.
Profile
Defines if the retail bin has metal profiles installed.
Linked Zone
The Link Zone (or Retail Bin Zone) to which the retail bin belongs to. Used in the
stack in process (see chapter 0)
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Picking Zone
The Picking Zone to which the retail bin belongs to. Used in the order picking
process. (see chapter 0)
SM Code
Defines the sales method that the retail bin belongs to (Market hall = 0, Self-serve
= 1 and Full Serve = 2)
Other fields
There are six other fields which are connected with the Sales Location Structure:
Range Group Code, Range Group Description, Division Code, Specialty Shop Code,
Specialty Shop Description, PTAG Code. Only Range Group Code can be set, the
other values are a result of this.
Fact box
At the right side, a fact box ‘Retail Bin – Details’ is shown per Retail Bin. The Fact
box shows the following parameters:
Items
This field shows how many items are stored in this retail bin. Selecting the number
shows the item numbers.
Qty. Coming In
The quantity in transfers to this retail bin. Clicking on the value shows the actual
item transfer.
Qty. Going Out
The quantity in transfers from this retail bin. Clicking on the value shows the actual
item transfer.
Stock
Shows how much quantity is stored on the retail bin. Clicking on the value shows
the actual articles/pcs in this retail bin.
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6.2.5.4 Bin measurements
As part of the graphical structure in the warehouse the measurement and
dimensions of the retail bins need to be defined. In order to automatically direct
every pallet into the most suitable location, all retail bin measurements need to be
setup correctly in Navision according to their physical dimensions, taking also into
consideration risk and safety requirements.
The measurements of pallets are provided by the suppliers and are used by
Navision. With this information Navision will ensure that every pallet will fit
efficiently and safely into its automatically selected bin location. Therefore the retail
bin measurements need to be planned and updated correctly.
Width of the retail bin
Normal racking beams in IKEA stores are 290 cm wide between the inner sides of
the vertical beams.
As a standard wooden pallet is 80 cm wide, usually three pallets can be stored on
a beam. The mathematical width of a bin is 290cm/3 bins=97 cm.
There are still goods which are wider than the actual wooden pallet of 80cm.
Therefore different bins with different width need to be set up in the graphical
warehouse structure to accommodate goods with different dimensions.
290 cm
70-20-20 70-21-20 70-22-20
97 cm 97 cm 97 cm
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A wider range of measurements of bins will enable Navision to find suitable
locations. If only bins with dimensions smaller than the ones of the pallet are
available, then Navision will not be able to select a bin location automatically.
To achieve a wider range of bins with different dimension in width it is
recommended to use the below model as a standard for the majority of the bins:
With this set up the bins at both sides are wide enough for a standard pallet of 80
cm width. The locations in the middle can accommodate wider pallets. The
maximum possible width of a pallet which could fit in this bin depends on the
parameter “Width Buffer Space” which is explained in chapter 6.2.5.5.4.
Some extra wide bins need to be defined close to the sales location for extra wide
products. In that case the beam length of 290 cm will be split only in two extra
wide bin locations. The width of the bin in the middle will be reduced to 1 cm and
can therefore never be chosen by Navision.
Some bins cannot be used as standard due to physical obstacles like columns in the
racking or installations under the roof. Those bin dimensions need to be adjusted
to the physical available space.
Length of the bin
The racking bins need to be set up for a minimum of three different types of pallet
length. The first is the IKEA pallet type which is 200 cm long. To accommodate
longer products the length for this type should be set to 210 cm.
The second is IKEA XXL for extra long bins facing the wall. Depending on the store
those bin locations can be 230 to 250 cm long and will be needed for extra long
products like PAX.
290 cm
21-35-30 21-36-30 21-37-30
90 cm 110 cm 90 cm
290 cm
21-30-30 21-31-30 21-32-30
145 cm 1 cm 145 cm
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The other one is the EURO pallet which is 120 cm long. Since goods can be longer
than the pallet, the length for EURO bins is defined as 135 cm.
The defined length in Navision needs to consider obstacles like pillars or pipes and
the real available space.
Height of the bin
To define the height of the bins, for all levels - except the highest level - the exact
measurement between two beams needs to be used. The standard height of bins
in IKEA racking is 140cm minus the height of the beam, if no sprinkler is installed
in the racking. In case of in-rack sprinkler the usable height will be less and needs
to be measured.
For the highest level the exact distance between the beam and the first obstacle
needs to be measured, like installations under the roof (light installation or air
condition). Also local fire regulations need to be considered.
Bin measurements in Navision
The measurements of the bin can be updated from the Retail Location List with the
action Create Bins. Selecting Create Bins opens the page Setup Retail Bins, which
has two options: Create Selected Bins and Modify Selected Bins.
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The Create Selected Bins is used to create a range of new bins.
The Modify Selected Bins is used to update some or all fields on a range of bins.
Options:
Location Filter
The location code of the retail bins (see chapter 6.2.5.2).
Retail Location Filter
The retail location code of the retail bins (see chapter 6.2.5.2).
Bins:
Bin parameters which can be changed here are:
Type
The type has the options “No change”, blank, “Picking” and “Manual”. If the type is
“No change” then the type is left as it was and not updated.
Allow Negative Transfer
This has three options: “blank”, “yes” and “no”. If blank, no update will occur.
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Linked Zone
The Link Zone (or Retail Bin Zone) can be set for the range. If this is 0, no update
will be done (see chapter 0).
Picking Zone
The Picking Zone can be set for the range. If blank, no update will be done (see
chapter 0).
SM Code
The Sales Method Code can be set for the range. If blank, then no update will be
done.
Auto Create
The Auto Create has three options: “blank”, “yes” and “no”. If blank, no update will
occur.
Profile
The profile has three options: “blank”, “yes” and “no”. If blank, no update will occur
(see chapter 6.2.5.99).
Length of the bin
The length can be entered here. If this is 0, no update will be done.
Width of the bin
The width can be entered here. If this is 0, no update will be done.
Height of the bin
The height can be entered here. If this is 0, no update will be done.
Weight of the bin
This parameter defines the maximum weight of every of those bins in order to
ensure that the overall weight of the racking does not exceed a maximum. The
weight can be entered here. If this is 0, no update will be done.
Bin range selection
In order to update more than one bin at one time (multiple bins and aisles can be
updated at the same time), it is possible to select a range of bins.
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Aisle Selection
Aisle numbers are the first two digits of the 6-digit number according to the Global
Naming Convention. ‘From:’ is the starting aisle and ‘To:’ is the last aisle number
for the bin range.
Row Selection
Row numbers are digit 3 and 4 of the 6-digit number. ‘From:’ is the starting row
and ‘To:’ is the last row number for the bin range.
Increment
This field is used only by the action Create Bins. The action will create the first row
as the “from row” and then create the second row as the first row plus the
increment. **This can be used if only even or odd aisles need to be set up.**
Level Selection
Level numbers are the last 2 digits of the 6-digit number. ‘From:’ is the lowest level
and ‘To:’ is the highest level number for the bin range.
Increment
This field is only used by the action Create Bins. The action will create the first level
as the “from level” and then create the second level as the first level plus the
increment. The increment might differ when creating Picking levels and Buffer
levels.
6.2.5.5 Buffer space set up
Buffer space
The buffer space parameters ensure that sufficient buffer space will be secured in
between the racking, installations and/or the pallets, in order to be able to put the
pallets in the racking in a normal way without touching the neighbouring pallets,
pillars, beams or installations at the roof.
The additional needed space will be automatically added by Navision to the pallet
size information provided in the article supplier list when it calculates if the goods
fit into a certain bin. This needs to be defined for the height, the length and the
width of the bin.
The Buffer Space parameters can be defined in the Transfer Setup in the Setup-
section of the ribbon.
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Length Buffer Space
Length Buffer Space is the space in length needed to place the pallet in the racking
without touching the racking or having too much overhang in the aisle. 5 cm is
enough for the Length Buffer Space. The additional cm set in this parameter will be
automatically added to the length information provided in the article supplier list
when the system calculates if the article fits into a certain bin.
Be aware that the “space” parameters have meters as unit of measure. Therefore
a buffer space of 5 cm is set as 0,05. When setting up the buffer spaces, please
take into consideration your local fire and safety requirements.
Height Buffer Space
Height Buffer Space is the vertical space needed to place pallets in the racking
without touching the beam/sprinkler above or the roof (highest racking level). This
parameter should be set between 5 cm and 15 cm, whereas 5 cm is the minimum
for buffer space to be able to put the pallets in the racking in a normal way.
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The value set in this parameter will be automatically added to the height information
provided in the article supplier list when the system calculates if the article fits into
a certain bin.
The dimensioning information provided by the IKEA Supply Chain for articles does
not always include the pallet height. In this case it is possible to overwrite the height
of an article in the articles supplier list. However if this happens more frequently
and the buffer bins are high enough the height buffer space value can be increased.
Width Buffer Space
This is the horizontal space needed to place pallets in the racking without touching
the neighbouring pallets or pillars. 5 cm is enough for the Width Buffer Space. The
additional cm set in this parameter will be automatically added to the width
information provided in the article supplier list when the system calculates if the
article fits into a certain bin.
For example: a pallet is 80 cm wide. The 5 cm buffer space will be added:
80 cm + 5 cm = 85 cm.
Navision will now search for the best possible buffer bin which needs to have the
minimum width of 85 cm. A bin set as 90 cm wide will fulfil this criteria.
In case the information of the dimensions of the pallets, which is proved by the IXP
agreement from the supplier, is not correct, those ones can be overwritten in
Navision (please see chapter 6.2.5.9).
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6.2.5.6 Bin Type
The Usage Type of a bin is needed to identify if and which goods should be stored
in this bin location. The following Usage Types are available in Navision: “<blank>”,
“Picking” and “Manual”. If a bin location is set to “<blank>”, it can be used by
Navision to automatically stack in pallets in this bin. If the bin is set to “Manual”
this bin is not available for Navision for automatic stack in.
Bins which are set to “Manual” are usually the ones which are not easy to access
with reach trucks and the ones which are used for the storage of non-selling goods
(e.g. store equipment).
The share of bins used by non-selling goods should not exceed 3% of the total
warehouse racking. The majority of the retail bins should be set to “<blank>” in
order to give Navision a wider choice of bins to find the best suitable location.
The update can be done in Retail Bins, either via Retail Bins in the ribbon or Retail
Bin List in the navigation pane.
6.2.5.7 Defining Sales Methods
The Sales Method code for bins will ensure that articles will be allocated by Navision
in a bin which is in the same Sales Method as the sales space of this article. For
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example, Self-serve articles will be stacked in the racking in Self-serve furniture
area. 0 is for Market hall, 1 is Self-serve furniture area and 2 is Full Serve area.
The sales location of Market hall articles is not in the warehouse. Therefore it is
recommended that Market hall products (and satellite products from Showroom like
HFB 09) are stored close to the sales location which is either Market hall or
Showroom. This means either close to the entrance into Self-serve furniture area
from Market hall or - for stores with a second drive through between Self-serve and
Market hall - close to that one, or even – for stores with a hatch or balcony into
Showroom – close to that opening. The idea behind it is to have products stored as
close as possible to the sales location to reduce traffic time.
6.2.5.8 Link Zones set up
Link zones allow to group areas of the racking that are close together that may not
be close numerically. Link zones are used, for example, to separate the two sides
in Self-serve. Odd aisles are closer together than the even ones at the other side.
For example aisle 5 is closer to 7 than to 6.
In order to get link zones to work, both the picking bins and the buffer bins needs
to have an assigned link zone.
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Before updating in Navision the link zones should be defined and mapped for later
reference. For better maintenance the number of link zones should be limited.
Market hall HFBs should be grouped in link zones close to the nearest transfer area
for Market hall for short driving distances.
Every bin can have one link zone only. However different bins in the same aisle can
have different link zones.
Link zones can be set and updated in Navision in Setup Retail Bins/Modify Selected
Bins or directly in Retail Bin list.
6.2.5.9 Metal Profiles
IKEA has developed a paper pallet solution to replace wooden pallets. Eliminating
the transport of wooden pallets in the supply chain results in a higher transport
filling rate in containers and trailers and eliminates backflow of wooden pallets
within the supply chain. This results in cost savings for IKEA but also contributes to
use the environmental resources more efficiently.
To avoid the need of palletising all in-delivered pallets, stores can install metal
profiles in the store’s racking. This will contribute to maintain the efficiency in store
goods flow.
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The solution in the store is to stack in the goods on, by IKEA developed, metal
profiles without the wooden pallet. If possible, metal profiles should be installed on
60-80% of the warehouse racking. This includes all storage locations, except the
locations of the highest level which should be used for over-height pallets, like sofas
and mattresses (local regulations regarding health and safety need to be considered
in every country).
IKEA stores, which have metal profiles installed in the racking, should consider
those profiles as part of their graphical warehouse structure and update the related
parameter in Navision.
The parameter for metal profiles in Navision can be ticked in the Transfer Setup:
Profiles in Use. This will automatically steer the goods on paper pallets to racking
bins with metal profiles during stack in.
Pallets needing a wooden pallet will be steered automatically to bin locations
without profile. It should be activated if the store is equipped with storage bins with
metal profiles.
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Goods arrive on paper pallets at the store. The majority can be put on profile
locations without a wooden pallet. Due to non-standard dimensions, some pallets
cannot be stored on profiles due to safety risk, like sofas. Those ones need to be
palletised in the store.
In order to enable Navision to buffer suitable pallets only directly into a storage
location with profile, the information regarding the pallet type will be sent in an IXP
agreement together with the pallet measurements from the supplier. While creating
the transfer journal from the shipment, Navision checks if the pallet is a paper
pallet, which is suitable for profiles. Only if this is the case, it will stack the pallet
into a bin with a metal profile.
The information if the pallet is suitable for profiles or not, can be seen on article
and supplier level in the Article Supplier List. This can be found from the ribbon via
Supply Communication/Regular Range Information/Article Suppliers.
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In case the information for Pallet Type or Article dimensions (width, height, length,
weight) provided by the supplier is not correct, it can be overwritten manually in
the Article Supplier List (accessible from the ribbon in the Item Card), valid until
the next update coming from the IXP agreement.
A onetime overwrite can be done in the Item Transfer Journal.
6.2.5.10 Weight limitation
Due to limitations regarding the weight a floor or a racking is designed to handle,
there can be maximum weight limits of the racking. In addition, sometimes the
machines which are used to lift the goods have some weight limitations above a
certain height. It is also possible that local regulations will dictate what weight can
be stored on which height.
The parameter “Weight limitation” makes it possible for stores with weight limits in
the racking to record this on bin level in Navision. Navision will then consider this
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weight parameter automatically during the stack in process and will support, if set
correctly, to be conform to regulations.
The parameter can be turned on by ticking it in the Transfer Setup.
The Weight parameter can be used in the Sales Method Selection Order.
In order to enable Navision to steer goods in relation to its weight, the limitation of
the racking or of the single bins need to be defined via Create Bins or directly in
the Retail Bins.
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Stack-in setup
6.2.6.1 Sales Method Selection Order
If all parameters of the graphical warehouse structure are defined as described in
the chapters above, Navision has all the information of all bins including their
attributes of the warehouse.
In order to enable Navision to self dependently decide which product fits in which
storage bin, the logic which Navision uses to stack in pallets has to be defined. This
logic is called Sales Method Selection Order and will be based on priorities which
the user has to define.
It needs to be defined per Sales Method, in page Sales Method, under the action
button Sales Method Selection Order.
It is possible to have different stack in priorities per Sales Method, because the
Sales Method Selection Order can be set per Sales Method.
Selection 1 should always be Sales Method as the first criteria is to have the goods
allocated close to the destination where the sales space is allocated: in Full Serve,
in Self-serve furniture area or close to Market hall.
Selection 2 should be link zone to keep the goods in the designated area or in the
correct side of the aisle.
The other 5 selections should be selected according to the specifics of every store.
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The following seven parameters are available:
SM
SM stands for Sales Method. With this option bins are selected according to the
setup Sales Method and will allocate either in SM 0 (Market hall), 1 (Self-serve
furniture area) or in 2 (Full Serve area).
Link zone
Link zones are used to group storage bins. When having very long aisles or aisles
in different directions, it can happen that the logical numbering of the aisles is not
always reflecting the shortest distances to a sales space. With link zones groups of
buffer bins can be defined that are close together. Giving link zones a high priority
will minimize driving distances.
Distance to pick
Distance to pick will calculate the distance between the buffer bin and the picking
bin. Giving ‘distance to pick’ a high priority will minimize driving distances. Unlike
the other criteria, ‘distance to pick’ always has 1 best bin and this bin will be
assigned to the pallet. Criteria below distance to pick are then not used. As a
consequence the closest bin might not be the narrowest fitting bin, which might
lead to “wasting” the available space.
Length
Navision compares the length of the pallet with the length of the storage bins. The
smallest bin in which the pallet fits (including the Length Buffer Space) will be
selected.
Width
Navision compares the width of the pallet with the width of the bins. The smallest
bin in which the pallet fits (including the Width Buffer Space) will be selected.
Height
Navision compares the height of the pallet with the height of the bins. The smallest
bin in which the pallet fits (including the Length Buffer Space) will be selected.
Weight
Weight compares the weight of the pallet with the weight of the bins. The bin with
the lowest weight bigger than the weight of the pallet will be selected.
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6.2.6.2 Sales Method Extra Selection
If the parameters described above are set according to the best possible set up,
Navision will automatically ensure efficient stack in and retrieval processes.
However, it can happen that Navision cannot find a suitable empty bin within the
Sales Method. For this case there is an extra parameter available, called Sales
Method Extra Selection.
The selection needs to be done according to the Sales Method. In case Navision
cannot find a free bin in the article’s own Sales Method area, Navision will select a
free bin in the next Sales Method according to the extra selection order.
In the example above: if no storage bin is available in Full Serve, Navision will try
to allocate the pallet in Self-serve. If there is still no suitable bin found, it will try
to allocate in the bins defined as Market hall.
Pre-planning of internal replenishment
6.2.7.1 Set up of internal replenishment
With the graphical warehouse structure and the Selection Order in place, Navision
is set up for an efficient automatic stack in process. In order to enable Navision to
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also operate the retrieval process efficiently and automatically, Navision needs to
be set up for this process as well.
This is called replenishment setup and needs to be done in Replenishment Batches.
Here it can be set up which replenishment batches are to be executed when the
replenishment function is run. The following fields are a part of the setup:
Transfer Journal Batch Name
This specifies the batch name to be used for the replenishment. Existing batches
can be selected or if the batch does not exist, it will be created when the
replenishment is executed.
Item No. Filter
This sets a filter on item numbers.
HFB Filter
This parameter sets filters on Home Furnishing Business area.
RA Filter
This sets filters on Product Range Area.
PA Filter
This sets filters on Product Area.
SM Filter
This sets filters on Sales Method level.
Location Filter
This filters on destination Location level.
To Retail Location Filter
This filters based on destination Retail Location.
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To Retail Bin Filter
This filters based on destination Retail Bin.
From Location Filter
This filters based on current Location.
From Retail Location Filter
This filters based on current Retail Location.
From Retail Bin Filter
This filters based on current Retail Bin.
Document No.
The document number that the Item Transfers are to be posted with.
Posting Date
Replenishment posting date. If left empty, the date of execution will be used.
Execute
If marked, the replenishment function will execute the replenishment batch,
otherwise it will skip it.
Replenishment Priority
Defines what type of replenishment should be calculated – from store storage
locations, from external warehouse, or a combination of both. There are four
available options:
1. Store – defines replenishment from store buffer bins only
2. EW – defines replenishment from external warehouse bins only
3. Store-EW – runs the first two jobs in the following sequence – first
replenishment from store, then from external warehouse bins
4. EW-Store - runs the first two jobs in the following sequence – first
replenishment from external warehouse, then from store bins
Compare Store Stock
This parameter can only be applied when the Replenishment Priority is on external
warehouse (scenarios 2 and 4 above). It defines if the job will consider the entire
sellable stock in the store (when ticked) or only the stock in the picking bin (when
unticked). The decision if this feature should be enabled or not should be based on
the cost of storage and available capacity in both the store and in the external
warehouse. It can also be applied periodically. For example when there is available
capacity in the store and stock from the external warehouse needs to be redirected.
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Scheduler Job Code
Defines a scheduled job that will run the replenishment calculation for the batch at
a pre-selected time. This is an optional field.
Type
In the Replenishment setup it is possible to select between two types of
Replenishments: “Filling” and “Space”.
With “Filling” Navision will replenish a sales space based on the sales space size
and the filling rate. An internal order will only be created if Navision identifies a
need in the sales space. This is the most efficient way to order and replenish.
If the Replenishment type is set to “Space”, Navision will try to free up as much
space in the buffer as possible. It will do that by checking for every article if the
stored quantity in the buffer bins can be accommodated in the sales space, starting
with the smallest quantity. It is not the most efficient way because it will result in
a more frequent replenishment of a sales space. “Space” should be used in case
the store has capacity problems only.
Time Executed
The time when the replenishment was executed.
Date Executed
The date when the replenishment was executed.
Total Records Store / EW
The number of replenishment lines generated in each batch after execution,
separate columns for replenishment from Store buffer and EW buffer.
6.2.7.2 Pick decrease
The pick decrease is a percentage on which Navision decides whether the remaining
quantity of the total Replenishment Need of the item will be picked or not. This is a
parameter which supports to optimise efficiency and to keep handling costs as low
as possible by avoiding partial picks from a stored pallet.
The parameter is set as a percentage in the Replenishment Setup. The
recommendation value is <=10 (%).
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Example:
The need for internal replenishment = 100
Pick decrease factor = 10%
To fulfil the need, Navision has to retrieve quantities from more than one bin
location. To free up space in the racking it will start retrieving quantities from the
retail bin with the lowest number of pieces.
Pieces Bin Yes/No priority Total picked
pieces
10 50-10-30 Yes 2 15
20 50-10-20 Yes 3 35
20 46-12-40 Yes 4 55
20 46-12-50 Yes 5 75
5 46-15-30 Yes 1 5
20 44-04-30 No - -
20 44-09-40 Yes 6 95
The item is stored in seven bins. Navision has retrieved from six different bins and
the total number of picked pieces is 95. This is still 5 short to the need of 100. To
retrieve the last 5 pieces Navision would have to retrieve from a pallet of 20 pieces
which would result in 15 pieces backflow.
The picking decrease of 10% means in the above example that if the total retrieved
pieces are minimum 90 (100 pieces – 10%) and the next pallet to be retrieved will
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result in a higher amount than the need is, Navision will stop retrieving. It will not
take the last pallet of 20 pieces down in order to avoid backflow.
6.2.7.3 Days no Transfer
The parameter Days no Transfer is available in Navision to ensure that products do
not stay in buffer locations longer than the defined number of days. This is needed
in order to avoid that the quality of the products or pallets will be compromised due
to a long stay in the buffer bin.
The parameter can be changed in the Transfer Setup and should be set to 120 days.
Example:
The need for internal replenishment = 100
Pick decrease factor = 15%
Days no Transfer = 120
As described above, to fulfil the need Navision has to retrieve quantities from more
than one bin location. To free up space in the racking it will retrieving quantities
from the bin with the lowest number of pieces.
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However, first Navision needs to consider the parameter Days no Transfer and will
chose the bin with the article stored in the bin longer than 120 days.
Bin Qty Days No
Transfer
A 260 20
B 13 3
C 39 121
D 13 12
E 26 36
F 104 48
To replenish a 100 pieces Navision will first check containers that are marked for
unloading. In case there are no containers available it will then check if there are
bin locations which have not been transferred for more than 120 days.
This is the case for bin C with 39 pieces. Therefore Navision will first retrieve from
this bin. This leaves 61 pieces still needed. It will now start to take the smallest
quantities first to free up as much space as possible.
It will first take bin B then bin D then bin E which leaves 9 pieces still needed (39
+ 13 + 13 + 26 = 91). The system will perform a check on Pick Decrease every
time a new location is needed. Original need was 100 pieces. The Pick Decrease in
this example is set to 15%, therefore 15 pieces (15% out of 100 pieces).
This means that the minimum to pick is 100 – 15 = 85. As this quantity has been
reached Navision will not break down the pallets on the next bin location but only
replenish 91 pieces.
According to this logic Navision has secured that the goods stored longer than 120
days have been replenished and through the Pick Decrease that backflow will be
avoided.
6.2.7.4 Flex Factor
One important part of Sales Space Management is the concept of flexible sales
spaces. This means that the physical sales spaces are dimensioned to accommodate
half of the in-delivery amount. The other half will be replenished in the sales spaces
in the neighbourhood locations (see chapter 5). The calculated flexible size of the
sales space, referred to as Flex Capacity is shown on the redesigned form Item
Calculations, also known as “SSM-card”.
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Navision has a built in functionality to ensure that the flex concept is considered for
internal replenishment. If the Total sales space Size of an article is smaller than or
equal to the pallet quantity, a parameter called Flex Factor is used. It is defined as
a percentage by which the Total Sales Space Size is increased if the Sales Space
Type is set to “Flexible”. The result of this calculation is defined as Flex Capacity.
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The Flex Factor value is set in the Ordering Setup. The recommended value is 40.
If the Total sales space Size is larger than the pallet quantity, the Flex Capacity is
equal to 50% of the pallet quantity, rounded up to the next unit of measure.
The complete calculation for Flex Capacity and Need can be found in Appendix I.
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6.2.7.5 Full Pallet Direct %
The aim of this parameter is to increase the door-to-floor share of full pallets. When
executing the function “Receive Shipment”, the system will check if the set
percentage of the pallet quantity will fit in the sales location for every full pallet that
was not already suggested for replenishment. The recommended value is 85 (%),
which means that the remaining part of the pallet quantity, being 15 percent, needs
to be handled flexibly.
6.2.7.6 Auto Stack In Container
In the same setup is the parameter Auto Stack in Container. When this field is
marked, Navision will automatically assign buffer locations to pallets that do not fit
into the sales locations when the Receive Shipment functionality is ran.
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6.3 Preparation
Pre-planning, as explained above, is a very important prerequisite to ensure an
efficient goods flow process. The pre-planning however is a midterm-planning. Once
set up for a new store, it will be adjusted until the best possible setup for every
store is found. This, of cause, need to be done very considered and in conjunction
with the support of the Country Super User. Afterwards it usually will be revised
once per year in preparation for every new Fiscal Year. Pre-planning secures the
goods flow operation midterm.
However in the goods flow process it is needed to do short term planning of the
operations as well. Short term in this content means the next days, up to one week.
This is called Preparation and involves all the following sub processes.
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This process of preparation needs to involve the consideration of the number of
containers or trucks which are expected to arrive the next days and the resources
which will be available for unloading those expected in deliveries.
Also the decision of how many counter balances are needed to unload, how many
reach trucks are needed for the internal movement of the pallets to the transit area,
how many reach trucks are needed for the internal retrieval operation and how
many replenishment co-worker are needed for the internal movement of the goods
from the transit area to the specific areas in the store and the actual replenishment
of the sales spaces.
The correct amount of needed resources has to be allocated to the sub processes.
The relevant IT tools which are used are the Delivery Scheduler and Navision which
has information regarding the expected in deliveries.
Special Handlings
Sometimes, due to local regulations, articles need to be sorted and handled
additionally before placing them on the shop-floor. These actions can include –
re/labeling, certification, picking of samples for testing or calibration, fumigation
etcetera. Since these articles cannot be replenished directly, an indication on the
pallet label is needed for the Goods Flow co-workers in order to sort them for the
designated areas. This is achieved by defining Special Handling Options. Each
option must contain the destination Retail Location and Retail Bin in either the store,
the external warehouse or both, depending on where the handlings take place.
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Each handling option can then be assigned to an article in the Item Card. Since an
article can have only one assigned option, combinations can be created when it
needs to be handled twice. For example: relabeling and test compliance. The
handling options are only indicated on the pallet label when they are set to Active.
This is also visible in the Item Card/Ordering.
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Upon receiving, the destination retail bin for the special handling will be visible on
the label, together with an indicator that the article has a special handling assigned
(T).
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6.4 Goods receiving
Introduction
The process of goods receiving starts with receiving a container or truck in Navision.
The container or truck can be seen as the initiator of the goods flow process. The
unloading schedule and planning of resources are essentials to a successful
operation which leads to refilled sales spaces before store opening.
The receiving and internal movement should be
synchronized with the replenishment of the
sales spaces. The goods flow process can be
seen as a pipeline; therefore congestions in the
unloading area, transit area or on the sales floor
should be avoided. The more even the pallet
flow is, the better and more efficient the total
process is.
To receive goods the containers has to be
released first, an item transfer journal has to be
created, labels have to be printed and the
container receiving needs to be confirmed.
6.4.1.1 Goods Receiving Setup
The following setups apply to goods receiving and need to be set in IKEA setup.
The setup has an effect on when and how to post Receiving documents: Item
transfer Journal, Purchase Receipt and Purchase Invoice.
Receiving documents can be posted manually (set Manual) or automatically (set
Receive or Receive and Invoice). If Receive or Receive and Invoice is selected,
receiving documents will be posted automatically after user creates Purchase Order
from the Container card.
The setup is under Departments/InStore Logistics/Setup --> Receive Setup -->
Automatic Purchase Order Posting
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There are three options to choose from:
Manual – when this option is set, Receive and Invoice needs to be posted in the
related Purchase Orders manually by the user after unloading process is complete
and Purchase Orders are created. After posting, Item transfer Journal should be
posted as well manually.
Receive (recommended) – when this option is set, Item transfer Journal and
Purchase Receipt will be posted automatically when user creates Purchase Order
from Container Card. Only Purchase Invoice will remain to be posted manually in
the related Purchases orders after verifying it complies with invoices received.
Receive and Invoice – when this option is set, Receive and Invoice will be posted
automatically when user creates Purchase Order from Container card.
The Below table summarizes
6.4.1.2 Delivery Terms
There are two delivery terms that can be agreed upon CPT or DDP. They are
described below and it is important you are aware what terms you are using.
CPT Delivery Terms
In case goods are received with delivery terms CPT, invoice will be authorized and
sent to the store immediately after goods are dispatched. Therefore store has time
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to follow up on the invoice in case it is missing. A follow up report can be run to
identify which IXP agreement is missing for each delivery.
The report can be found under Departments/ Supply Communication/ Invoicing/
Follow-up Missing Invoices.
In case ICI header agreement is missing – a tick in column F6752 IXP Agreement
Missing field will be ticked. If this agreement file has been imported to NAV, the
tick from this field will be removed.
In case ICI Line agreement is missing – a tick in column F6752 IXP Agreement
Missing field will be ticked. If this agreement file has been imported to NAV, the
tick from this field will be removed.
The list will show only deliveries that are missing both or one of the ICI files.
DDP Delivery Terms
In case goods are received with delivery terms DDP, invoice will be authorized and
sent to the store only after goods arrive to the store and Goods Flow user enters
arrival time to ITM. In this case user will not be able to follow up missing invoice in
advance, only after arrival date is registered in ITM.
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Receiving shipment, consignment and Invoice information
6.4.2.1 Shipment, consignment and Invoice
To be able to receive a container, the information regarding the shipment and
consignment in the container must be available. When a shipment is created, a
purchase invoice for the container will be created from all the purchase orders that
the shipment contains. There can be items from many purchase orders in one
consignment. Many consignments can be in one container. In general, shipments,
consignments and purchase invoices are processed automatically through the IXP
platform (processing the purchase invoice can vary depending on the country).
The moment a supplier closes the doors of the container or truck, information about
content and arrival week becomes available in the IKEA transport systems (DES,
CNS, ITM) and is sent to Navision of the receiving store. Before unloading the user
needs to verify if correct consignments are connected to the shipment and if
quantities and amounts in those deliveries are as on the delivery information
received from ICI (pdf document will be sent by email to agreed recipients).
To verify delivery prior to unloading, there is a new fact box in the Shipment
Container card – Linked Consignments. In this tab user can find columns:
Consignment No. – shows consignment numbers that are connected to this
Container card/Shipment.
Container No. – Loading Unit ID number.
ICI No. – ICI number that comes from the ICI. This information is populated from
the pre-invoice information. Certain users will also receive a delivery note from ICI
and can compare the information is aligned.
Invoice Total Amount – Total amount of the Invoice. This information is populated
from the pre-invoice information. Certain users will also receive a delivery note
from ICI and can compare the information is aligned.
Invoice Total Quantity – Total Quantity on the invoice from the ICI
Authorized – this column will be ticked only when the Invoice for consignment is
Authorized and IXP file for that invoice is received in NAV.
To be able to post received stock, invoice must be authorized (tick Authorize is Yes)
and received to NAV (IXP agreements for ICI invoices imported).
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6.4.2.2 Creating missing shipment in the consignment
In some cases it can happen that the shipment is missing in Navision. In this case
a specific procedure has to be followed in Navision in order that the receiving
process can continue. However consignment card must be available in the system.
This procedure starts in Instore Logistics/Consignments.
Open the consignment from the consignment list. Once the consignment is open
you can then create the shipment:
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Table Create Shipm. from CSM opens.
Leave Shipment No. blank and press OK. New Shipment was created and
Consignment is now connected to that Shipment.
The new Shipment No, will be now displayed on the Consignment card:
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6.4.2.3 Connecting and Disconnecting Consignments
In case user needs to connect more consignments to existing Shipment (Container
card) or identifies that wrong consignments are connected to the Container card,
he can connect consignments to the correct Container card by himself.
If more consignments should be connected to the same container card, the same
steps as 6.4.2.2 need to be repeated. Find relevant consignment cards, press
Create Shipment but instead leaving Shipment no. blank, existing Shipment no.
should be selected from the drop down list.
Sometimes consignments need to be reconnected to different container card. This
as well can be done by the user from the Consignment card press Create Shipment
function by selecting the Shipment no. from the drop down list that this
consignment should belong to and then press OK.
To disconnect consignments from the Shipment there is a function in the ribbon of
Shipment Container card. Press Disconnect Consignment and select consignment
that should be disconnected from this shipment. Then confirm by pressing OK.
Releasing in-deliveries
Releasing in-deliveries means providing Navision information about the date of
unloading of a container and confirming that it can be replenished on the next
morning. This needs to be done in order to ensure that:
Incoming quantities and date are confirmed and visible for Sales co-
workers.
Internal orders can be placed against incoming stock.
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The process is completed in three steps – setting the Planned Unloading Date,
marking the container as Available for Replenishment and setting Date Unloading.
Sales co-workers should provide reliable information to the customer on the date
that an item will be received in the store. This information is made available by
setting the Planned Unloading Date in the Container Card. That is why it is critical
that it is registered as early as possible.
Once the date is set, the container status will change to ‘Confirmed’ and the arrival
information will be available in the Retail Item Card.
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The next step is to make the container available for replenishment. Although not
efficient, sometimes containers need to be unloaded during store opening hours.
Since these articles cannot be replenished before store opening, you need to
indicate which containers should be taken into consideration for the next day
replenishment (see chapter 6.5.1.). This is done by marking the field Available for
Replenishment.
Once the container has physically arrived, you need to confirm the actual date in
the field Date Unloading. If a different date than the Planned Unloading Date is
registered, it will also update the Next Arrival Information in the Item Card.
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Receiving
6.4.4.1 Stack-in process
When the containers and trucks are released and the internal replenishment has
been run (see chapter6.5.1), the receiving of goods can start. This means the
physical unloading and moving from the loading dock towards the final destination
including the use of relevant IT tools.
There are certain success factors in order
to achieve a successful receiving
process. One is the number and location
of the loading doors in relation to the
final destination of the products as well
as having the right equipment and
avoiding bottlenecks. Communication
with external partners like the transport
provider is very important.
To receive an in-delivery in Navision and to print the pallet labels the function
Receive Shipment on the Container Card needs to be used.
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Running this function will create an Item Transfer Journal batch which is based on
the need calculation for the sales spaces. Navision will automatically direct pallets
to sales spaces with a need. Articles in mixed pallets (Unit Type=P or E) will be
steered to the Picking bins automatically. A Full Pallet Direct % check is also
performed (see 6.2.7.5).
If the Auto Stack In Container parameter is marked (see 6.2.7.6.), articles on
pallets without a need in the sales space will be directed to the best suitable storage
bin in the buffer. To secure this Navision will use defined parameters of the
graphical warehouse structure and the Sales Method Selection Order.
Articles that are marked for Special Handling in the store will get the defined
destination for the respective Special Handling ID. This is valid for mixed pallets,
as well as for full pallets.
6.4.4.2 Pallet label
Pallet labels should be printed for the receiving process and need to be attached to
every pallet while unloading. Pallet labels contain all the necessary information to
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move pallets quickly throughout the entire goods flow process to their final
destination. The pallet label consists of two parts, a big left part and a small tear
off part at the right.
Full pallet label to buffer:
The full pallet label contains the following information:
1. Article number
2. Article name
3. Picking location
4. Picking Bin
5. Destination Bin
6. Ordered quantity
7. Page Number
8. Entry number
9. Document Number
10. Printing date
11. Quantity on the pallet
12. Quality Stop (Q will be shown if the article has a Q-stop)
13. Sales Stop (S will be shown if the article has a Sales stop)
14. NEWS (N will be shown when article comes in for the first time)
15. Profile on destination bin (Profile)
16. Quantity in Picking Location
17. Sales Space Capacity (SSC:)
18. Flex capacity (FlexCap:)
19. Total add-on sales space capacity (Add-on cap:)
20. Number of Add-On locations (Add-on loc:)
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21. Actual Quantity on Pallet (to be filled in manually in case of backflow)
The final destination of all 50 pieces of this pallet will be the buffer bin 53-11-20.
Nothing will be replenished in the picking bin, which is in Self-serve furniture area
01-01-00.
Full pallet label to picking:
The destination of this pallet will be Location: Fullserve, Bin: 36-01-00.
The label below is an example of a label for a mixed pallet. All mixed pallets should
go directly to the picking bin for replenishment. Therefore the final destination will
always be the picking bin, not the storage bin.
Mixed pallet label:
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The Mixed pallet label contains the following information:
1. Article Number
2. Article Description
3. Received Quantity
4. Abbreviation of the Picking Location
5. Picking Bin
6. Total Sales Space Size and Flexible Capacity
7. Add-On Capacity and number of Add-On bins
8. Indicators for Quality Stop / Sales Stop / NEWS
The Item Transfer Journal batch will have the same name as the Invoice Header for
the selected container/truck.
If the setting “Print Pallets on Receive” in the Receive Setup is activated, the pallet
labels will be printed in the step Receive Shipment as described above.
1 2 3 4 5 6 7 8
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If this box is not checked then labels will not be printed. However, it is still possible
to print the pallet labels from the Item Transfer Journal belonging to the chosen
container/truck in Item Transfer Journal (the button Print). You have the option to
print Labels for the entire batch or for one specific item.
6.4.4.3 Container manifest
For the unloading process a container manifest can be created. This is a list of order
lines of goods which are on the container or truck. The manifest can be used by the
unloading co-worker to check and confirm if all products and the right amount have
been received or if there have been any deviations. However, the better way of
inbound check is done via checking the goods with the pallet label. Missing or extra
labels while unloading indicate an over- or under-delivery.
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The container manifest can be printed by selecting the particular container and then
from the ribbon Report / Container Manifest Receiving.
In this screen all the items that are arriving in the container can be seen.
In the Container Manifest all the purchase order lines that exist in this purchase
invoice can be seen. It is possible to get more than one order line for one invoice
line. Reason being is that when the order is created it splits into lines with maximum
1 pallet per line. In the invoice it is all summed up but in the printout it is easier to
acknowledge pallet lines instead of having manually to calculate what has been
counted.
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The printout of the container manifest is used by the unloading co-worker to verify
that the physically received stock (article number and quantity) is the same as in
Navision. This information is used to update and confirm the received stock in
Navision.
After unloading is complete NAV needs to be updated with quantities actually
Received. To do that, function Update Qty On Consignment must be used. This
function will update the quantity in the Received Quantity column equal to the
quantity shown in the Item Quantity Dispatched column.
If any discrepancy in quantity received is identified, the quantity needs to be
manually updated by the user in the Received Quantity column. After the quantity
is updated, confirmation table will open and should be confirmed by pressing Yes.
If an item was received in the truck/container that was not in the container card,
invoice, it should be added to the item card manually by using function Add Items.
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Choose consignment number, Item number and the qty. in the table that opens
and press OK to confirm.
In the Consignment card Discrepancy code and discrepancy qty will be shown the
same way as in the Container card:
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If deviations are found, those need to be adjusted as described below (section
6.4.4.4) and need to be reported to the supply chain. The used tool for this is CASY
and relevant training material can be found on the MyLearning platform. This will
ensure stock accuracy in the store.
6.4.4.4 Create Purchase Order and Post
Once all the received quantities have been updated, the received stock needs to be
updated in Navision by clicking Create Purchase Order
Message will appear to confirm if Purchase Order should be created. Press Yes.
Once the purchase order is created the following fields should be marked in the
purchase order, Order lines Updated, Consignment Updated and Discrepancy. This
can be found through the following path InStore Logistics/Purchase Orders/Comm.
Supply
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Purchase order’s will be created on Consignment / Invoice level. Based on the
Receiving Setup chosen described in 6.4.1.1, the following outcomes will exist and
actions will need to be taken by the user if necessary.
If in the setup is Receive or Receive and Invoice, as soon as user presses Create
Purchase Order, related documents will be posted automatically and the received
stock available in the store.
Automatic
Purchase Order
Posting Setup
Post RECEIVE
part
Post INVOICE
part
POST Item
Transfer Journal
*
MANUAL Manually by user
in Purchase Order
Manually by user
in Purchase Order
Automatically when
user press “Post
Receive”
RECEIVE Automatically
when user press
“Create Purchase
Order”
Manually by user
in Purchase Order
Automatically when
user press “Create
Purchase Order”
RECEIVE &
INVOICE
Automatically
when user press
“Create Purchase
Order”
Automatically
when user press
“Create Purchase
Order”
Automatically when
user press “Create
Purchase Order”
* - when Receive part in Purchase Order is posted, all lines in Item transfer Journal,
that were to that Purchase order, will be posted and disappear from the Item
transfer Journal. In the Item Transfer Journal only those items will remain that have
Purchase order not yet posted as Received.
After receive part is posted in Purchase order (either automatically or manually,
depending on the setup) OK To Send Receiving Report will be ticked in the
Consignment card, meaning that receiving report will be generated and sent from
NAV next time IXP export job runs.
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6.4.4.5 Handling Discrepancies
In case that the physically arrived and unloaded goods are different to the ones
shown in Navision, this discrepancy needs to be registered straight away. Always
securing the highest level of stock accuracy will ensure a high quality of the ordering
process and will ensure the availability of the stock in the store.
When handling discrepancies there are three ways this can be handled and they are
described below. Selection can be done in the Receive Setup / Discrepancy handling
/ Discrepancy Posting:
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To explain every option, the same delivery will be used and posted two times with
different option selected:
Original Consignments and Invoice includes 2 items in:
80193231 (purchase price 300 Eur) – 2 pcs
10193239 (purchase price 420 Eur) – 4 pcs.
Total amount of the invoice – 2.280,00 Eur.
When receiving this delivery, discrepancy was identified – 4 pcs of item 80193231
were unloaded and only 3 pcs of item 10193239.
Option 1 – No Discrepancy Posting. No change for how the posting is done today.
Qty received will be posted as physically received and will be different from original
ICI invoice. Amount in the posted Invoice will be different from the original ICI
invoice received for this delivery.
Example how Purchase Invoice lines after posting (option 1):
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Posted invoice quantity and price is different from Original Invoice due to the
discrepancy.
Option 2 – Discrepancy to G/L. Discrepancy Qty will be posted into separate G/L
account. Using this option, line in Purchase order will be created for discrepancy
amount and will create a record in pre-selected G/L account. Amount in the posted
Invoice will be the same as in the original ICI invoice received for this delivery.
When selecting this option in Discrepancy setup, G/L accounts have to be selected
accordingly:
Example how Purchase Invoice lines after posting (option 2):
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Posted invoice amount is the same as in the Original Invoice after discrepancy got
posted.
Discrepancies are registered and visible for following up in a dedicated G/L
accounts.
Option 3 – Discrepancy to Stock. Discrepancy Qty will be posted as an adjustment
after posting of original invoice. Using this option, Purchase order will be created
equal to Original invoice. During posting discrepancy will be posted as adjustment
(positive or negative), so the stock will be registered correctly.
When selecting this option in Discrepancy Handling setup, Item Journals have to
be selected accordingly:
There are few reports that can be pre-selected to be auto-printed when Purchase
Order is being posted automatically.
Invoice Discrepancy Amounts (78117)
Invoice Discrepancy Amounts is showing qty and amount discrepancy for this
specific delivery, if discrepancy was identified when unloading.
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Invoice Price Difference (78118)
Invoice Price Difference is showing differences for prices comparing price on the
invoice with Yearly/Tertial price. Direct Unit cost – cost from the invoice. Supp Cost
– Cost from Tertial/Yearly price table.
Purchase - Receipt (408)
Shows qty received and posted within delivery
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Purchase - Invoice (406)
Shows posted Invoice details
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To select reports to be printed there is a setup:
– InStore Logistics/IKEA Report Selection/PurchaseOrder to select reports
“Invoice Discrepancy Amounts” (78117) and/or “Invoice Price Difference”
(78118)
– InStore Logistics/ IKEA Report Selection/PO.Receipt to select report
“Purchase – Receipt” (408)
– InStore Logistics/ IKEA Report Selection/PO.Invoice to select report
“Purchase - Invoice” (406)
The generation of these print outs will be triggered by the Automatic Purchase Order
Posting in IKEA Setup/Purchase upon creation of the Purchase Order from the
Container Card. When the parameter is set to Receive it will generate the
documents assigned to PurchaseOrder and PO.Receipt, when the parameter is set
to Receive and Invoice, it will generate the reports assigned to PurchaseOrder,
PO.Receipt and PO.Invoice.
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6.5 Internal retrieval
The internal retrieval is the process that handles the picking and movement of
stored goods from buffer. The primary purpose of this is to replenish the sales space
as part of the replenishment process. Goods are stored in the buffer because their
sales spaces cannot accommodate the in-deliveries. In general this is the case when
articles have sales spaces which are classified as “indirect”, “too small” or “missing”.
The process of replenishment consists of two different flows. First the “direct” also
called “door-to-floor” flow from the container or truck directly to the sale space,
secondly the “indirect” flow from the buffer bins to the sales space.
The process of internal retrieval consists of four sub processes: retrieve, check,
move and confirm. Retrieval of goods means moving the goods from a storage bin
as a result of an internal order process or by any other request. Checking the
retrieved goods is important to verify if the retrieved quantity is matching with the
ordered and actually needed quantity. This will ensure efficiency and stock
accuracy. After the checking process the goods will be transported directly to the
sales space or a transfer area.
The retrieved stock needs to be confirmed in Navision. Otherwise the stock accuracy
would be compromised and the ordering process would not work correctly anymore.
Running internal replenishment
Once you have set up the filters in the Replenishment Setup (as described in
chapter 6.2.7.1) you are able to run a Replenishment Proposal or a Replenishment
order.
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From the Actions in the ribbon in the Replenishment Batches you choose: Create
Replenishment Proposal or Replenish According to Setup. Running the
replenishment or the proposal will clear the current replenishment or proposal.
The first step in the process is to run the Replenishment proposal. The purpose of
this document is to provide information to Sales for the next replenishment
quantities, so that sales spaces can be prepared. It also gives a chance for update
of parameters (for example Sales Space Size, Sales Space Type, Product
Dominance etcetera) in case an abnormality is identified or signalisation for
inventory discrepancies.
The execution of the proposal generation needs to happen after the releasing of in-
deliveries is completed (see chapter 6.4.3). The timing must be agreed within the
Commercial Team and defined in the Internal Service Agreement.
The proposal will include all articles in mixed pallets from the containers that are
available for replenishment (consignment lines with Unit Type P, E or BLANK) as
these will be steered to the picking locations during the receiving process.
The next step is to run the replenishment order (Replenish According to Setup).
This document is used for the execution of the internal retrieval. It needs to be
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generated as late as possible, recommended after closing hours, in order to capture
all the sales of the day
It is possible to run an internal replenishment order in two ways: Either from
Replenishment Batches/Replenish according to Setup or from Item Transfer
Journals.
If it is run from the Replenishment it will run all the setups that are marked as
“Execute”.
If it is run from the Item Transfer Journal, it will only run for that batch and only
when the batch has been set up and marked as Execute. Therefore this is not
recommended as it requires manual work.
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Calculating the Need in the sales space
The main trigger for an internal replenishment order is the need in a sales space.
This means the decision if a sales space has enough stock for the next day’s sales
or if the stock level is so low that it needs to be replenished. As the first step
Navision will identify if there is a need in the sales space. If the actual stock level
is equal to or lower than the replenishment point, then there is a need.
Secondly, if a replenishment need exists the actual need in pieces will be calculated
and a replenishment order either from the in-delivery or from storage location will
be done. The need calculation for articles with flexible sales spaces is different to
the calculation for non-flexible ones.
The detailed calculation can be found in Appendix I.
When the replenishment journal has been created the picking list for the items that
are not taken from containers can be printed by selecting Warehouse Item Transfer
in the ribbon of the Item Transfer Journal: either in the tab Home or the tab Report.
This picking list will be used by the reach truck driver for the retrieval of ordered
products.
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If the container is late or cannot be handled before opening hours, it needs to be
de-released. This is done by removing the Available for Replenishment mark. After
confirmation Navision will check if there are any internal orders outstanding for this
container and if so, create a substitute internal order for it if stock is available in
the buffer. The batch name will be “S-” (meaning “substitute batch”) plus the
container number. If there is no available stock in the buffer, then the lines will be
removed from the replenishment lines. The user will be notified if a substitute batch
is created, how many lines were created and what the batch name is.
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6.6 Moving goods to destination
Moving goods to different destinations connects the sub processes of goods flow.
Goods need to be move to storage bins from the receiving process, to sales areas,
either from receiving or from storage bins. Also the reverse flow of empty pallets
and waste needs to be moved as well as backflow.
The efficiency of this flow is determined by the planning of the goods flow layout,
the routines and the setup and the quality of the graphical warehouse structure and
sales space management.
Therefore the correct parameters in the Navision setup will influence the amount of
goods which have to be moved and the distances which the goods will travel. The
use of the automatic stack in and internal ordering system including pallet label
increases the efficiency of moving goods within the store.
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6.7 Replenishment
The main purpose of replenishment is making the goods available for our
customers. It is the last part of a long supply chain from developing the products,
sourcing raw material, production and transport from the supplier until the sales
location where it is sold.
The process of replenishment is part of the goods flow process and consists of the
following sub processes: moving goods from the staging area to the sales space,
refilling the sales space, transport and recycling of waste. Those sub processes need
to be coordinated to avoid bottlenecks. For example: there should always be a
reasonable number of pallets in each department of Market hall to enable the
replenishment co-worker to work efficiently. On the other hand too many pallets
could block access to sales spaces.
Information in Navision and the pallet label provide useful information for the
replenishment co-worker in order to replenish within a given time. This information
is:
Home location of the product
Ordered quantity
Add on locations
Quantities on the pallet and multipack
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6.8 Back flow
In some cases it is needed, as for backflow, to stack in products into a buffer bin.
In deliveries of articles with sales space sizes which are indirect or too small will
not entirely fit into the sales space. A certain part needs to be stored in a buffer
bin.
This can be done via the actions Stack In Line or Stack In Batch in the Item Transfer
Journal ribbon. Navision will automatically find and assign an available location.
This is also possible for more than one pallet at the same time.
For a manual transfer the location and the bin need to be registered. It is strongly
recommended to let Navision suggest a storage bin as this will be optimal according
to the defined parameters of the graphical warehouse structure and the logic of the
Sales Method Selection Order.
To ensure an efficient logistics process in the store it is required to analyze backflow
on a daily level. Generally it can be separated between two types of backflow.
Backflow of articles which have the sales space classification ‘indirect’ or ‘too small’
is accepted. The reason being is that articles with a sales space size smaller than
‘direct’ will order more stock than what will fit in the sales space. This is defined by
the parameter MaxBuffer and is usually 4 weeks of stock (see chapter 5).
Backflow due to wrongly registered parameters in Navision, inventory differences
or lacking preparation of sales spaces needs to be rectified every day straight away.
A co-worker from Sales together with a co-worker Logistics should evaluate
backflow daily. Actions to rectify the problem and to avoid future backflow need to
be initiated.
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The Navision report Back Flow Analysis gives an overview of the backflow of the
day:
The report can be created in Navision directly in the Role Center, from the ribbon
in the tab REPORT, Back Flow Analysis:
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6.9 Order picking process in the Full Serve Warehouse
For the process of picking Full Serve orders (Cash & Carry orders) in the warehouse,
a print out of the picking list needs to be produced in Full Serve. This needs to be
set in Setup for Sales Methods by ticking Print Picking List for code F (Sales Method
Type 2).
Once activated, a Picking List form will be automatically printed in Full Serve area
for products with the Picking Bin allocated in Full Serve. There is one printout per
transaction/receipt.
Using the picking list the goods are picked by the warehouse co-worker and handed
over to the goods handout co-worker from customer relations. The goods hand out
co-worker hands out the goods to the customer.
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If the quantity in the picking bin is insufficient, the system will print an extra page
showing where the buffer stock is located. This page can be handed to a reach truck
driver and the item can be transferred from the buffer to the picking location. This
is only a suggestion from Navision. No transfer line will be created. The item
transfer should be registered manually in Navision.
Once the items are handed over to the goods handout co-worker he/she checks if
the picked quantity matches the picking list. If this is the case the goods are ready
to be handed over to the customer where they should be checked again.
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6.10 Follow up
The goods flow operation needs to be followed up regularly to ensure that it always
works in the best possible way. There are different ways to do the follow up of the
operation. Whatever way is chosen it should reflect the following different success
criteria:
Has the operation finished at opening hour of the store?
Walk the floor: Can the sales areas be handed over to visitors and sales co-
workers according to the agreements between the Commercial Team?
Fulfills the store every day the criteria of Store In Shape As New?
Goods flow KPIs
Health and Safety
Internal Service Agreement
One example of how to follow up is to measure the amount of movements, working
hours, counter balances, reach truck and pallet jacks. Having a daily record of these
figures will give not only the productivity but also the opportunity to schedule the
needed hours according to the incoming container and/or trucks.
WHAT WHO WHEN
Report Back Flow Analysis Logistics-Sales Daily after replenishment
Report Stock In, stock out Logistics Weekly
Follow up on GF KPIs Logistics Weekly
Internal Service Agreement Commercial Team Tertialy
Safety Logistics Daily
Global Service Protocol Logistics Monthly
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Key Performance Indicators connected to Goods flow
KPI SM 0 SM 1 SM 2
Ready for opening 100%
Logistics Productivity
TBD per store/country
Accumulated number of picked
order lines per sold M3 in the
store (internal handlings)
<= 0.8 <= 1.0 <= 1.0
Local local shortage
<= 0.1% <= 2.0%
Local local shortage top 100
articles MH and SS/FS
= 0%
Share of automatic orders >= 80%
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6.11 Meeting activities connected to Goods flow
WHAT WHO WHEN
Walk the sales floor Commercial Team Daily after replenishment
Follow-up on daily
operations
Logistics & Sales Daily
Replenishment Proposal Goods flow & Sales Daily
Backflow analysis Logistics & Sales Daily after replenishment
KPIs Goods flow Commercial Team Weekly
Follow-up of Internal
Service Agreement
Commercial Team Tertially
Operational meeting with
Distribution and transport
Logistics Monthly
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Appendix I – Calculations and Formulas
A.1. Safety stock
Mathematical
safety stock =
K-factor * SQRT((Lead Time * (1.25 * Forecast Error))² +
(Expected Weekly Sales² * Lead Time Variation²)
Auto Bin =
Calculation Non-flexible:
Total Sales Space Size – Minimum of (Maximum of (Max SASP
Qty Weeks * Average Weekly Sales and Multipack) and Pallet
Qty)
Calculation Flexible:
Total Sales Space Size – (Minimum of (Maximum of (Max SASP
Qty Weeks * Average Weekly Sales and Multipack) and Pallet
Qty)/2)
Minimum
Safety Stock =
Manually set, default value = 2
Maximum
Safety Stock =
Max Safety Stock Factor * Average Weekly Sales
Lowest Sales
Quantity =
Average sales receipt quantity + 1.25 * Mean absolute
deviation of the sales receipt quantity
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Used Safety
Stock =
Calculation:
Safety Stock1 = Max (Mathematical Safety Stock, Autobin)
Safety Stock2= Min (Safety Stock1, Maximum Safety Stock)
Safety Stock3 = Max (Min Safety Stock, Lowest Sales Quantity)
Used Safety Stock = Max (Safety Stock2 , Safety Stock3)
Example:
Mathematical Safety Stock = 231
Auto Bin = 320
Minimum Safety Stock = 2
Maximum Safety Stock = 612
Lowest Sales Quantity = 3
Safety Stock1 = Max (231, 320) =320
Safety Stock2 = Min (320, 612) = 320
Safety Stock3 = Max (2, 3) = 3
Used Safety Stock = Max (320, 3) = 320
*All results are rounded up to Unit of Measure
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A.2. Sales Space size limits
Min =
Calculation Non-flexible:
Min = Average Weekly Sales
If Min > 2 * Pallet Qty => Min = Average Weekly Sales / 2
[Rounded up to Unit of Measure]
Example Non-flexible:
AWS = 102,4; Pallet Qty = 40; MPQ = 40
Min = 102,4
102,4 > 2 * 40 = 80 ? Yes => Min = AWS/2 = 51,2
Rounded up to pieces => Min= 52
Calculation Flexible:
Min = Average Weekly Sales / 2
If Min > 2 * Pallet Qty => Min = Average Weekly Sales/4
[Rounded up to Unit of Measure]
Example Flexible:
Min = 102,4/2 = 51,2
51,2 > 2 * 40 = 80 ? No
Rounded up to pieces => Min = 52
In this examples the result for Min Flexible and Non-flexible is
the same.
Min Dir = Calculation Non – flexible:
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Min Dir = (Min QTY Weeks * Average Weekly Sales) [Rounded
up to Multipack] + Biggest value of Mathematical Safety Stock
and Lowest Sales Quantity
If Min Dir > 2 * pallet qty=>
Min Dir = Average Weekly Sales / 2 [Rounded up to pallet qty]
with a minimum of two pallets
If Min Dir < Min => Min Dir = Min
Example Non – flexible:
Min Qty Weeks = 2
[2 * 102,4] + 25 = [204,8] + 25 => 240 + 25 = 265
265 > 2 * 40 ? Yes =>
[102,4/2] = [51,2] = 80
80 < 52 ? No=> 80
Calculation Flexible:
Min Dir = (Min QTY Weeks * Average Weekly Sales) [Rounded
up to Multipack] / 2 + Biggest value of Mathematical Safety
Stock and Lowest Sales Quantity
If Min Dir > 2 * pallet qty =>
Min Dir = Average Weekly Sales / 4 [Rounded up to pallet qty]
If Min Dir < Min => Min Dir = Min
Example Flexible:
[(2 * 102,4)]/2 + 25 => [204,8]/2 + 25 => 240/2 + 25 = 120
+ 25 = 145
145 > 2 * 40 ? Yes =>
[102,4/4] => [25,6] = 40
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40 < 52 ? Yes => 52
Suggestion =
Calculation Non – flexible:
Suggestion = (Max SASP Qty Weeks + Min QTY Weeks) / 3 *
Average Weekly sales + Mathematical Safety Stock [Rounded
up to Multipack]
If Suggestion > 2 * pallet qty => Suggestion = Average Weekly
Sales / 2 [Rounded up to pallet qty]
If Suggestion < 110% * Min Dir => Suggestion = 110% * Min
Dir [rounded up to next UoM]
Example Non – flexible:
[(4 + 2) / 3 * 102,4 + 25] = [229,8] = 240
240 > 2 * 40 ? Yes => [102,4/2] = [51,2] = 80
80 < 110% * 80 ? Yes => = [110% * 80] = 88
Calculation Flexible:
Suggestion = (Max SASP Qty Weeks + Min QTY Weeks) / 3 *
Average Weekly Sales / 2 + Mathematical Safety Stock
[Rounded to Multipack]
If Suggestion > 2 * pallet qty => Suggestion = Average Weekly
Sales / 4 [Rounded to pallet qty]
If Suggestion < 110% * Min Dir => Suggestion = 110% * Min
Dir [rounded up to next UoM]
Example Flexible:
[(4 + 2) / 3 * 102,4 / 2 + 25] = [127,4] = 160
160 > 2 * 40 ? Yes => [102,4 / 4] = [25,6] = 40
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40 < 110% * 52 ? Yes => [110% * 52] = 58
Max =
Calculation Non – flexible:
Max SASP Qty Weeks = 4
Max Safety Stock Factor = 10
Average Weekly Sales = 102,4
Max = Max SASP Qty Weeks * Average Weekly Sales [Rounded
up to Multipack] + Max Safety Stock Factor * Average Weekly
Sales [rounded up to the next UoM]
Example Non – flexible:
[4 * 102,4] + [10 * 102,4] => 440 + 1024 = 1464
Calculation Flexible:
Max = (Max SASP Qty Weeks * Average Weekly Sales)
[Rounded up to Multipack] /2 + Max Safety Stock Factor *
Average Weekly Sales [rounded up to the next UoM]
Example Flexible:
[(4 * 102,40]/2 + [10 * 102,4] = 220 + 1024= 1244
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A.3. EOQ calculations
Minimum
Order
Quantity =
Calculation:
MinQtyWeeks * AWS
[rounded up to the next multipack quantity]
Example:
MinQtyWeeks = 2; AWS = 102,4; MPQ = 40
2 * 102.4 = [204.8] => 240
Max Order
Quantity =
Calculation:
MaxSaspQtyWeeks * AWS
[rounded up to the next multipack quantity]
Example:
MaxSaspQtyWeeks = 4; AWS = 102,4: MPQ = 40
4 * 102.4 = [409.6] => 440
Max Buffer = Calculation:
MaxBuffer * AWS
[rounded up to the next multipack quantity]
Example:
Max Buffer = 4; AWS = 102,4; MPQ = 40
4 * 102.4 = [409.6] => 440
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A.4. Need calculation for internal replenishment
Total Sales
Space Size
Flex =
Calculation:
Total Sales Space Size + Flex Capacity
Note: Total Sales Space Size (or Capacity) equals the capacity
of the “home” picking bin, including all Add-on bins.
Example:
Total sales space size = 100
Flex Capacity = 40
100 + 40 = 140
Flex
Capacity =
Calculation:
If Total sales space size < Pallet Quantity = >
Total sales space size * Flex Factor / 100
If Total sales space size > Pallet Quantity = >
Pallet Quantity / 2
Example:
Total sales space size = 120
Flex Factor = 40
Pallet Quantity = 180
120 > 180 ? No => 120 * 40 / 100 = 48
Example 2:
Total sales space size = 420
Flex Factor = 40
Pallet Quantity = 180
420 > 180 ? Yes => 180 / 2 = 90
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Need
identification
=
Calculation:
Stock – Qty sold not posted – Qty going out + Qty coming in <
Total Sales Space Size * Replenishment Level % / 100 + Product
Dominance
Example:
Stock: 100
Product Dominance: 20
Total Sales Space Size: 200
Replenishment Level: 50%
Qty sold not posted = 0
Qty going out = 0
Qty coming in = 0
100 – 0 – 0 + 0 = 100 ? 200 * 50 / 100 + 20 = 120
100 < 120 ? Yes => need identified
Calculation of
the need =
Calculation Non-flexible:
Need = Total Sales Space Size – (Stock – Qty Sold Not Posted
– Product Dominance – Qty Going out + Qty Coming In)
[rounded up to the next Multipack Quantity]
Example Non-flexible:
Stock: 100
Total Sales Space Size: 200
Multipack Quantity = 20
Product Dominance: 20
Qty sold not posted = 0
Qty going out = 0
Qty coming in = 30
200 – (100 – 0 – 20 – 0 + 40) = 80
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Calculation Flexible:
Need = Total Sales Space Size Flex – (Stock – Sold Not Posted
– Product Dominance – Qty Going Out + Qty Coming In)
[rounded up to the next Multipack Quantity]
Example Flexible:
Stock: 35
Total Sales Space Size Flex: 100
Multipack Quantity = 20
Product Dominance: 20
Qty sold not posted = 0
Qty going out = 0
Qty coming in = 40
100 - (50 – 0 – 20 – 0 + 40) = 100 – 30 [rounded up] = 70
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A.5. Replenishment Level
Minimum
Internal
Replenishment
Level =
Calculation:
Maximum of (Minimum Safety Stock and Lowest Sales
Quantity) + Rounded forecast of next opening day.
Example:
Minimum Safety Stock = 2
Lowest Sales Quantity = 3
Forecast of next opening day = 7,13
Max (2, 3) + 7,13 [rounded to UoM] = 3 + 7 = 10
Maximum
Internal
Replenishment
Level =
Calculation:
Total Sales Space Size Flex – Multipack quantity
Example:
Total Sales Space Size Flex = 100
Multipack Quantity = 25
100 – 25 = 75
Commercial
Internal
Replenishment
Level =
Calculation:
Total Sales Space Size Flex - Rounddown [(Total Sales Space
Size Flex – Maximum (Auto Bin, Default Replenishment Level
% * Total Sales Space Size/100) ) / Multipack Quantity] *
Multipack Quantity
Example:
Total Sales Space Size Flex = 220
Total Sales Space Size = 200
Auto Bin = 120
Default Replenishment Level % = 50
Multipack Quantity = 20
220 – [(220 – Max (120, 50 * 200 / 100)) / 20] * 20 =
220 – (220 – 120) / 20 * 20 = 120
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Calculated
Replenishment
Level =
Calculation for Sales Method 0 or 1:
Maximum of [Minimum of (Commercial Internal
Replenishment Level and Maximum Internal Replenishment
Level), Minimum Internal Replenishment Level]
Example:
Commercial Internal Replenishment Level = 60
Maximum Internal Replenishment Level = 115
Minimum Internal Replenishment Level = 22
Max [Min (60, 115), 22] = 60
Calculation for Sales Method 2:
If Total Sales Space Size < Pallet quantity =>
Maximum of {[EWS * Daily index for next day/100]; [Total
Sales Space Size – Rounddown with a minimum of 1 (Total
Sales Space Size / Multipack Quantity) * Multipack Quantity]}
If Total Sales Space Size >= Pallet quantity =>
Total Sales Space Size Flex - Pallet quantity
Example:
Total Sales Space Size = 20
Pallet Quantity = 48
Multipack Quantity = 1
EWS = 15
Daily index for next day = 20
20 > 48 ? No =>
Max {[15 * 20/100]; 20 - Rounddown (20/1) * 1 =
Max (15 * 0,2 ; 20-20) = Max (3 ; 0) = 3
Calculated
Replenishment
Level % =
Calculation:
Calculated Replenishment Level / Total Sales Space Size * 100
Example:
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Calculated Replenishment Level = 92
Total Sales Space Size = 200
92 / 200 * 100 = 46
Replenishment
Point =
Calculation:
(Calculated Replenishment Level % * Total Sales Space Size) /
100 + Product Dominance
Example:
Calculated Replenishment Level % = 46
Total Sales Space Size = 200
Product Dominance = 30
(46 * 200) / 100 + 30 = 122