Inventory optimization through Turbodata

Are you a customer having the following issues:

Having issues with large value of  slow moving inventory
Have issues with cash flow cycles
Do not have clarity regarding product profitability

Our product Turbodata can help your firm with resolving the above issues. The product is inspired by philosophy of The Goal by Eliyahu Goldratt and Profit Beyond Measure by Thomas Johnson and Ander Brohms(please see the appendix 1 for a summary of the philosophies)

Both the philosophies imply that the end client should use the order line profitability instead of using the periodic calculations. Only then would the end client get complete visibility into its operations and profitability by customer, region etc.

What is required for determining the orderline profitability?

For determining the same the end client needs to have valuations of inventory using perpetual method instead of the periodic method.

As a case to the point, consider the following:

In the attached scenario of an item, the valuation using weighted average/FIFO has been done on periodic basis. Hence the end client looses the orderline profitability details by using the same.

However in the snapshot below using Turbodata, the weighted average calculations are done on a daily basis(as in the attached snapshot)

 

This enables the end client to calculate orderline profitability.

Issues with calculating the orderline profitability:

v  In some of the software,  negative stock is allowed.  Because of the same orderline profitability calculations might be impacted. The sample below gives the first instance of negative stock for an item.

Sample attached below:

v  The physical stock entries valued at 0(zero) value can create discrepancies in the stock valuations.

v  Data consolidation from multiple systems could be required for calculating the same.

v  Data transformation in terms of business logic of the end client needs to be done so that the required calculations come into force.

By using Turbodata, the end clients shall be able to achieve the following:

v  Go towards orderline profitability by getting an estimate of cost of goods sold based on perpetual FIFO and weighted average calculations.

v  Achieve the following activities

o   Data consolidation

o   Data cleansing: clean the master data before reporting is done

o   Data profiling: find the first instance when the closing stock of an item turned negative at godown or consolidated level.
       Data analytics: have consolidated dashboards along with predictive analytics facilities at economical costs.

v  Better management of inventories: by finding the profitability of the sale of items at the orderline level for a given set of customers.

v  Prepare the data for predictive analytics and forecasting through data compression and sql reduction. The predictive analytics and forecasting is required to capture the variations from the standard values for sales. A significant variation is to be captured early so that the end client could take the corrective actions quickly.

Interested in moving towards orderline profitability:

v  Deployment of Turbodata solution(for testing sample data): USD 3000/-(USD Three thousand only)+taxes as applicable. Contact us for a sample demo

v  Buy our standard book based on Turbodata project experiences: USD 5/-(five) dollars

Please contact the following for the above for a demo

Name: Apoorv Chaturvedi

Email: support@turbodatatool.com;support@mndatasolutions.com

Phone:+91-8802466356

Appendix 1

What do the above management philosophies say?

The Goal:

The Goal is inspired by the theory of constraints. This implies that there are 3 parameters that are critical for any firm:

v  Throughput: the rate at which the system generates the sales(our definition of cash sales)

v  Inventory: the input material required to convert the inputs material to final product for generating throughput.

v  Labor: The manpower required for converting inventory to throughput.

The protagonist Jonah in ‘Goal’ also insisted on standard deviations and variations to be part of the process. The variations to be detected on a close to real time basis so that any errors are caught beforehand.

Profit Beyond Measure:

Profit Beyond Measure  is inspired by the Toyota Production system. It emphasizes that the manufacturing company should function like a human body. The functional managers should account for self sustainability(standard cycle times), diversity and interdependence( the manufacturing managers need to look at the whole system like a human body and not just a single component).

The book emphasizes that there should be a reduction in inventory by reducing a changeover times at each of the working station. That is the manufacturing process should start once the customer order has come into the system. The book further looks at ‘Design to order’ by designing multiple configurable modules to offer the end clients multiple types of products.

The system emphasizes catching the errors in production cycle quickly so that there is reduced material wastage.

Sample example of inventory optimization:Inventory optimization of large trading company

FOR FREE MICROSOFT POWERBI DASHBOARDS: please do one of the following:

Email: support@mndatasolutions.com;support@turbodatatool.com 

Capturing Data Entry errors for audit purposes

 A number of times the end client types in wrong data into the source ERP system thereby resulting in wrong outputs and results. Junk inputs imply junk outputs.  The ETL team would recommend an auditable output from Turbodata to be used as part of the reporting purposes.  Wrong data inputs can impact the end client in one or more of the following ways:

•        Wrong tax filing specifically in online scenario.
•         Wrong business picture
•         Wrong predictive analytics.

As per the Toyota ProductionSystem, bad inputs should not be processed further as it adds to the final costs.

The ETL team(my firm) has found the following errors with regards to the data entry inputs specifically with Tally ERP 9.0.  

·         Stock input has been in one godown but stock outward movement has been from other godowns:

·         Missing purchase or sales order entries resulting in negative stocks at given points in time. One cannot have negative stock balances at any point in time.

Other data input errors that we have commonly seen are as follows:

•       Duplicate payment entries
•      Duplicate sales entries
•        Receipt note entries but no purchase invoice entries
•         Payments not having the required bill reference numbers.

How to resolve the errors:

·         In an object oriented program it is difficult to catch the errors on a real time basis. The ETL team recommends using the relational databases for catching the errors. The real time extraction module for Turbodata should be used for the same.

·         Transferring the data onto the third normal database is recommended. This helps catch data duplicity based on the composite keys.

For example if an end client has made the same amount payment for a given voucher on a given fiscal date, then the same should come as part of the discrepancy report. It is possible that the end client could be correct. There is also a possibility that the payment entries have been made by 2 different resources. Further handling of the given situation is as follows:

·         If the end client desires to catch the following error then the username by which the data entries have been done shall not be added to the composite key. In such a scenario there is a discrepancy between the Turbodata ledger balance output and the Tally report. The end client to approve the discrepant entry before the data is input into the system for auditing purposes.

Using perpetual valuations for ledger and inventory instead of periodic valuations. For example if an end client relies on periodic valuations for ledger balances then a duplicate payment entry then the periodic balances at the end of the fiscal month are difficult to catch. For example if an end client has a duplicate entry of Rs. 100k(One hundred thousand  only) over a balance of say Rs. 15000k(One fifty million only).

However using the perpetual system it is easy to catch the data entry errors.

Matching the consolidated trial balances and closing stock balances at the database level with the on fly calculations at the software level.

A small story for the end user: as Yuval Harari is Sapians says that mankind is primarily driven by myths. Hence many a managers are driven by myths regarding software or the consulting companies having the right audit numbers(with the managers inputting junk numbers).

A small story from one of my favourite books(Raag Darbari by Srilal Shukla) could best illustrate the point.

The protagonist Ranganath had gone from the city to visit his relative, an aunt’s husband , in the village. During the course of the village fair, it was suggested that the group goes and sees the village temple for the local goddess. At the temple Ranganath found that the statue instead of been of a goddess was of a soldier( for a goddess he was looking for two lumps  in front and two lumps in the back). The priest asked for donations for the goddess. To this request Ranganath refused saying that the statue was not of a goddess but of a man. There was an ensuing scuffle between the villagers and Ranganath. Ranganath was eventually rescued by his cousin. On going out and meeting other people, the cousin mentioned the following:

"My cousin has come from the city and is very well read. That is why he talks like a fool."
The author has always associated himself with Ranganath.

Apoorv Chaturvedi

Email: support@mndatasolutions.com;support@turbodatatool.com

Website: https://mn-business-intelligence-india.business.site/

Blogspot: http://mndatasolutionsindia.blogspot.in/

Phone:+91-8802466356

Turbodata Inventory Module Sales Partnership

 M&N Business Intelligence India LLP is looking for sales partners for its inventory analytic modules.

The inventory analytic modules help the end clients optimize the following:

·        Inventory turnover: 

o   Perpetual valuations help the end client get inventory turnover based on A,B,C classifications over daily, monthly, quarterly and yearly basis.

o   Slow moving analysis can be done over varying time periods

·        Contribution margin: 

o   Perpetual valuations help at getting the cost of goods sold analysis on a daily/real time basis.

o   Roll up of the gross profit can be done at any level aggregation.

·        Optimizing the inventory by predicting the sales :

o   ‘The Goal’ by Eliyahu Goldratt believes that the variances are the causes of rising inventory rather than simply the averages. Turbodata helps the end client with the same using the following methodology:

§  ARIMA(Auto regressive integrated moving average analysis) is built into the same for single(level), double(trend) and triple(seasonality) exponential smoothing.  Each client shall get the solution as part of the offering.

o   Removing the slow moving inventory by using the Market basket analysis.

Modular addition for industries such as hospitals and construction. The flow for the complete implementation of the Turbodata inventory analytics module is given thus:

Why Turbodata?

Free Business Intelligence Component: Due to data compression and sql reduction enabled by data normalization, the Business Intelligence component for the end clients could be largely free. Once can download the sample Power BI dashboards from the link attached herewith:

 http://mnnbi.com/microsoft_power_bi_download.html

·        Connectivity to databases:

o   Tally: within a period of 8(eight) hours the entire datawarehouse shall be populated. Two day project(Rs. 30,000/- or USD 600/- )[Data auditing ,data profiling and data consolidation from multiple data sources  to be handled separately]

o   SAP: within 15(fifteen) fiscal days the datawarehouse shall be loaded.(15 day project: USD 5000/-). Pre requisite details to be given separately.

o   Navision and other ERPs: within a period of 30(thirty), the ETL team shall be able to load Turbodata.(approximate cost: USD 3000/-)

·        Co labelling/proprietary labelling of the solutions is possible: the partner can label the solution in its own brand and sell the same.

·        Cloud based option is possible with Tally and SAP: commercials can be discussed separately.

·        Prior companies that have used/using  Turbodata: Tableau, EY, SAS

Sample case study: 

http://mndatasolutionsindia.blogspot.in/2018/02/Inventoryturnoverexample.html

The data load comes with data auditing, data consolidation and data cleaning.

Target client: CFO, CEO of mid sized firms(turnover between 10 and 500 Million USD)

For connectivity of your database to the Turbodata, please contact the following:

Name: Apoorv Chaturvedi

Email: apoorv@mnnbi.com

Phone: +91-8802466356

Blogs: http://mndatasolutionsindia.blogspot.in/