Navision MV8 Handbook Step 6 Efficient Goods Flow

Logistics Processes and IT tools Page 1 of 111

Navision master version

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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



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



00 – Level number 00 pick level

Storage location: 39-04-20



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 =


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


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


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]


[(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


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]


[4 * 102,4] + [10 * 102,4] => 440 + 1024 = 1464


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


Example:

MaxSaspQtyWeeks = 4; AWS = 102,4: MPQ = 40

4 * 102.4 = [409.6] => 440

Max Buffer = Calculation:

MaxBuffer * AWS


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:


Flex Factor = 40

Pallet Quantity = 180

120 > 180 ? No => 120 * 40 / 100 = 48

Example 2:


Flex Factor = 40


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 =


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



Qty going out = 0

Qty coming in = 30

200 – (100 – 0 – 20 – 0 + 40) = 80



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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




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


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


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:




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


92 / 200 * 100 = 46

Replenishment

Point =

Calculation:

(Calculated Replenishment Level % * Total Sales Space Size) /

100 + Product Dominance

Example:

Calculated Replenishment Level % = 46


Product Dominance = 30

(46 * 200) / 100 + 30 = 122

Navision MV8 Handbook Step 6 Efficient Goods Flow

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