Summary
This screen controls how StockIQ determines what it thinks the order policy ought to be, as well as the target service level for a given ABC + XYZ class.
It is accessible by going to Admin --> System Configuration --> StockIQ Order Policy Settings.
If you wish to set defaults, see the Default Order Policy settings screen. If you wish to configure overrides to the order policy for an item, see Order Policy Overrides.
Similar to the Statistical Safety Stock Settings and how it controls the statistical safety stock, this controls what StockIQ's decision on the order policy should be. However, it is still subject to your Default Order Policy Settings as to whether or not StockIQ's recommendation is used or not, in the same way the Safety Stock Settings determine which source for a safety stock value is used.
NOTE: StockIQ is set up by default to use the StockIQ order policy when no value is sent from the ERP. however, many ERP integrations send an order policy at all times, so this should be investigated when considering using StockIQ order policies when available. See Default Order Policy settings for more.
Steps/Process
When you load this screen, you will see a grid at the top which may contain different groupings of products, e.g. by site, by price tier and/or by BoM position. This is controlled by the Global Order Policy Settings screen.
Select one of the groupings (or the first one will be selected for you), and a matrix appears at the bottom of the screen.
If settings exist for a given combination, you will see a checkbox in the "Settings Exist" column. If no checkbox appears, then no specific override has been created for that combo, and StockIQ will use the default settings for the matrix, where all items in the rows show as "<All>", e.g. the very top row in the grid.
The matrix represents the ABC and XYZ classes calculated for you by StockIQ using your Class Settings.
Use the select boxes to determine which order policy and target service level you want applied to each grouping of items.
Recommendations
Please contact us if you would like some assistance filling out your matrix(es) for your order policy and SL settings. Below are some guidelines.
- Higher class items like AX, AY, BX, BY, etc, are more likely to have normal stocking policies. For these items, you should tend towards Order Point, and Lot for Lot, which perhaps more variable items being Min/Max.
- Lower items, such as CY, CZ, DY, DZ should tend more towards Min/Max, Sporadic Sales, or even Buy To Order if you don't wish to stock those low volume, highly variable items.
- Similarly, for your top items, assign high service levels, since these are important to your business. As you move to the right (less forecastable, more variable), you may wish to lower service level targets, as maintaining service level on these can become very expensive.
- As you move down to lower ABC class items (C, D, X), make more use of the Sporadic, Min/Max and other policies that will be less reactive and possibly save some inventory.
- For sporadic items, we recommend NOT using an order policy that is based on forecast, so use min/max, sporadic, buy-to-order.
- If you are using price tier as one of your dimensions, generally you can use higher SL targets and more permissive order policies on your lower tiers (1, 2 = less expensive), and use lower SL targets and more cautious order policies on higher price tiers with more expensive items (3,4,5 = expensive).