This article guides you through Buymanager's "Quota" feature, an essential tool for optimizing component procurement.
What is it?
In a context of global component shortages, where finding stock is difficult and time-consuming, Buymanager's "Quota" function helps you consolidate available stock from multiple suppliers.
Why do you need it?
The main objective is to solve availability problems by allocating quantities of stock from different sources. This allows you to meet your component needs even when no single supplier can provide the total required quantity.
Who is this for? / Prerequisites:
- Audience: Buymanager users involved in quoting and procurement.
- Technical Prerequisites: The "Quota" feature relies on "Internet" prices (WebQuote and Alternative Solution) and requires these price sources to be configured and available in your quote.
How Does the "Quota" Feature Work?
The "Quota" function complements the automatic valuation process of your quote. If certain items are not automatically valued and the "Quota" function is active, Buymanager will calculate quota proposals.
In Practice: The Workflow
1. Launch Automatic Valuation: You start by running an automatic valuation of your quote.
2. Activate Quota: click on the "supplier stock above"
3. Define a Stock Margin: You can add a safety margin (e.g., the required quantity + X% extra) to refine the stock and lead time strategy.
4. You can click on "Allocate stock quota across suppliers based on supplier strategy" if you want to allocate stock across multiple suppliers.
5. Click on "supplier strategy". A pop up will open with the list of your supplier available for this costing> for each you can choose a priority between 1 (highest) and 3 (lowest) or 0 to not consider.
6. View in Quote: Once selected, the quota will appear in your quote as a manually entered price.
Technical Details of Quota Calculation
- Price Sources: Quota exclusively uses "Internet" prices, i.e., prices from WebQuote (WQ) and Alternative Solution (AS), specifically based on the SUPPLIER stock of the quoted part numbers (MPN).
- User Parameters: Quota calculation is based on the user parameters defined for the automatic quote valuation. The goal is to meet the required quantity, considering a stock tolerance threshold, by aggregating stock from multiple suppliers if a single one cannot cover the total.
- Criteria Considered: Quota takes into account available stock quantity, best unit price, MOQ (Minimum Order Quantity), MPQ (Minimum Pack Quantity), etc.
- Note: Quota does not take packaging into account. The selection of packaging remains at your discretion. For example, for 1500 pieces, you could select a quota with an MOQ of 1000 per reel and 500 pieces with an MOQ of 500 in cut tape.
- Supplier Management: Buymanager considers identical stock sources as a single supplier (e.g., Digikey (Public Direct), Digikey (Negotiated Direct), Digikey (FindChips) will be grouped under "Digikey"). However, some suppliers may appear multiple times if their stock comes from different entities (e.g., Arrow via Vertical).
3. How to Use and Configure the "Quota" Feature
3.1 Prerequisites for Using Quota
For the Quota function to be operational, ensure that:
Your quote contains prices from WebQuote(WQ)" and/or Alternative Solution (AS).
3.2 Quota Configuration
Quota parameters are configured via the automatic valuation settings:
1. Stock Margin: Define a stock margin (as a percentage) for either the lead time or stock strategy. This adds a safety quantity to the initial requirement.
2. Selection Priority: The "Selection with priority" for the price strategy must be configured. Ensure that WebQuote and Alternative Solution prices have a priority greater than zero to be included in the calculation.
3. Lead Time Strategy:
- You can define a maximum negotiated lead time (e.g., 1 week) if supplier or ERP stock reaches a certain percentage of the required quantity.
4. Stock and Quota Strategy:
- Stock Coverage: Check "Supplier stock above" and define a minimum percentage of the required quantity. If supplier stock does not cover this percentage, the price will not be used.
- Supplier Strategy: Assign a priority (from 1 to 3) to available suppliers. A priority of 0 means the supplier will not be considered.
Important: The "allocate quotas by supplier according to supplier strategy" checkbox must be active
Specific Quota Rules
-Prices: Quota uses the "Unit Price (Currency)" columns, the required quantity, and the supplier stock.
- Sources: Stock sources are grouped by identical MPN (Manufacturer Part Number).
- MOQ & MPQ: This data is used to optimize prices and manage remnants.
- Suppliers: One quota is generated per supplier.
4. How to Select a Quota?
After automatic valuation, the quota window appears, allowing you to manually choose a quota proposal per part number. Buymanager does not automatically select quotas; the final decision is yours.
Selection Options
You have two main options for each defined supplier strategy (1 to 3):
- Best Price: Proposes the quota with the lowest total price.
-Best Supplier/Price Ratio: Proposes the quota that optimizes both price and the number of suppliers.
Tip: Hover your mouse over a quota proposal cell to view the detailed list of prices and suppliers associated with that quota.
Explanation of Background Colors
The background colors in the selection window indicate the stock coverage level relative to the required quantity and the defined stock margin:
- Blue: The required quantity is fully covered (including the stock margin).
- Orange: The required quantity is partially covered.
- Gray: There is no stock available to cover the required quantity.
Example: If an item requires 100 pieces with a 50% stock margin, the required quantity is 150 pieces.
- Blue: Available stock is at least 150 pieces.
- Orange: Available stock is less than 150 pieces, but greater than 0.
- Gray: There is no stock available.
Explanation of the Top Banner
The top banner of the quota selection window provides key indicators:
- Possible Quotas: Shows the total number of possible quota combinations.
- Selected Quotas: Indicates the number of quotas you have already chosen.
- Stock Coverage: Represents the overall stock coverage for the selected quotas
- Unique Suppliers: The number of quotas that use only one supplier.
- Revenue: The total revenue generated by the selected quotas.
Explanation of the "Selected Quotas" Table
This table details the quota proposals based on supplier strategies:
- Prio 1 Suppliers: Quotas using only priority 1 suppliers.
- Prio 1 to 2 Suppliers: Quotas using priority 1 and 2 suppliers.
- Prio 1 to 3 Suppliers: Quotas using priority 1, 2, and 3 suppliers.
- Best Price: The quota offering the lowest price (with stock margin if active), without restriction on the number of suppliers.
- Best Supplier/Price Ratio: The quota offering the best price while optimizing the number of suppliers.
- ...%: Percentage of stock coverage relative to the required quantity (without the stock margin).
- Suppliers: Indicates the number of suppliers included in the quota.
Note: You can view the details of each quota by hovering your mouse over it.
5. How Does the Quota Appear in the Quote?
Once a quota is selected, it is integrated directly into your quote with the following characteristics:
- Price: The quota appears as a key in price.
- Supplier: The displayed supplier will be "Quota".
- Unit Price: The unit price is calculated and displayed by the quota.
- Standard Lead Time, MOQ, MPQ: These values correspond to the highest value among the suppliers comprising the quota.
- Stock: The displayed stock is the sum of the stocks from the suppliers included in the quota.
- Packaging: The packaging of the different suppliers is concatenated.
- Technical Reserve: The "Technical Reserve" section of the quote will display all detailed quota information, including stock coverage, suppliers used, individual prices, stocks, and MOQs.
