Lifecycle Management with Prophet
Prophet by Baxter is a software as a service (SaaS) focused on field service inventory planning and execution to optimize service parts management operations. Prophet’s Lifecycle Management capabilities enable properly-forecasted NPI timing and quantities as well as optimal EOL last-time-buy or lifetime buy suggestions.
New Product Introduction (NPI)
The goal of the NPI process is to have sufficient inventory in the replenishment network to support the growing installed base of a new material. Inventory needs to be brought into the network prior to the start date of contractual service commitments and as supply orders often have long lead times, the orders must be placed long before the contracts are finalized. At the beginning of a product’s lifecycle, a service supply chain organization needs to predict the future demand requirements for materials with no demand history and few or no current contracts. Prophet supports two primary forecasting methods for calculating initial demand forecasts for new materials:
- The Installed Base Demand method forecasts based on the projected installed base growth and begins with projections from internal engineering and marketing departments. The engineering department will provide a failure rate projection based on benchmarks of similar materials and data from internal testing and quality analysis while the marketing department provides information about the number of units that will be under service contracts in the initial months of a product’s lifecycle. Engineering’s failure rate projection is used to determine the demand rate and marketing’s installed base projections will be added to Prophet’s forecast of the total installed base supported by a distribution center.
- The Similar Material method forecasts based on the actual demand history of a different material. By definition, a new material does not have any historical demand data so using a similar material with a similar function or product line as the new material simplifies the forecast creation process. Similar Material parameters allow the user to define which period of the similar material’s demand history is copied as the new material’s forecast, specify multipliers when there are volume differences between the new material and the similar material, and set smoothing parameters to even out the irregularity of the similar material’s demand history by averaging the history of multiple months in calculating the new forecast.
These methods are then used by Prophet to generate an initial forecast that triggers supply orders into the distribution center and calculates target stock levels at the field sites. Adoption of NPI best practices guarantees inventory availability at first customer ship without impacting service levels.
End of Life (EOL)
The End Of Life Planning (EOL) feature enables planners to manage materials at the end of their lifecycles. Statistical forecasts become less accurate as a material is phased out so Prophet leverages material information to forecast requirements at the end of their supportable life to make excess scrap recommendations and calculate lifetime buy quantities for suppliers that are not accepting orders after a specific date.
Prophet takes 3 key dates when calculating EOL requirements and then uses configurable fields to adjust how quickly a material goes end of life and how much of the material needs to be left for demand requirements after the EOL process has finished. The End of Production Date is the last date on which the material is produced by the manufacturer, the End of Support Date is the last date on which the material is supported in the region, and the EOL Last Order Date is the date that the last order for purchased materials must be placed. These 3 date fields along with optional fields that allow the user define how many months from end of production date until the demand takes a noticeable downward trend or which percentage of current demand is expected at end of life are used to generate an EOL forecast. From here, Prophet’s algorithmic capabilities streamlines the planning process. Prophet’s comprehends chaining relationships to simplify the review the superior material availability, stockout alerts monitor the need for additional procurement before the End of Production date, and Prophet plans for both new-buy and repair suppliers and for both good and defective inventory.
By following EOL best practice, forecasts can be shared with internal and external partners and purchase orders can be placed in a timely manner with enough quantity to meet lifetime needs.