Inventory of Ideas and Comments
This section of our web site has been dedicated to the concept of sharing new information on our product, the industry, and general observations on inventory management over the years. There are a lot of unique ideas in here. Please enjoy.
Soft Allocation and the Intelligent License Plate
In my last post, I described a need for a Processing Engine. This processing engine needs to support very fast operations as well as more loosely defined operations that can only operate more slowly. By expanding the traditional definition of a license plate, since we now can support more complex collections of goods that are associated with this license plate via the processing engine, we can look at a more complex scenario known as soft allocation.
To explain soft allocation, is to look at a high volume, customer driven (retail) supply chain that must ration its supply. Large FMC (food mass club) and big box consumer goods challenge the supply chain with concepts such as just in time inventory. The art of soft allocation is figuring out as quickly as possible the best way to divvy products up based on orders in the system. Data points such as what supply is on hand and not allocated, who ordered it, how much, and when are typically considered when planning how to distribute these limited products. Even manual judgements can drive how much the supplier is willing to short a given requester and how quickly more supply is available can define the contents or collection known as virtual license plate.
If an order is treated as a license plate, it can contain quantities and locations of items that are ear marked for that specific order. There is no requirement for a license plate to contain physical inventory and in this case the license plate would be virtual. It can itself contain a reference to an item and quantity that has been soft allocated based on both system algorithms as well as manual tweaking of who gets what and when. After this planning occurs, the application does a virtual move of the physical inventory into these “virtual license plates” that are tied to a particular order. This process clears unallocated inventory found within 1 to many locations (bins, zones, license plates) and moves them to this virtual license plate. To eliminate the risk of accidently misappropriating inventory to the wrong customer, this virtual license plate can be put onto hold automatically upon creation.
Here is an example of 2 customers both requesting widget A which has limited supply. Shortages can be common place.