On-the-fly Material Requirement Planning using Microsoft Power BI

© 2019 Visual BI Solutions, Inc. All rights reserved. www.visualbi.comPowered by www.valq.com
Kunaal Jethwa
Sr. Manager Planning - COE www.valq.com
ON-THE-FLY MATERIAL REQUIREMENT PLANNING
USING MICROSOFT POWER BI
Webinar: Sales & Operation Series
Gopal Krishnamurthy
Founder/CEO

© 2019 Visual BI Solutions, Inc. All rights reserved. www.visualbi.comPowered by www.valq.com 1
Webinar
Speakers
Kunaal Jethwa
Sr. Manager – Center of Excellence
Visual BI Solutions
Gopal Krishnamurthy
Founder/CEO,
Visual BI Solutions
CORE DOMAIN:
⇢ Demand Planning
⇢ Forecasting
⇢ Supply Planning
⇢ Inventory Management
⇢ Production & Capacity Planning
⇢ Material Management
⇢ Distribution Planning
⇢ Key Account Management
INDUSTRY & MARKET EXPOSURE
⇢ Nutraceuticals
⇢ Pharmaceuticals
⇢ Invitro-Diagnostics
⇢ Life Science & Robotics
⇢ Specialty Chemicals
⇢ PP & Advanced PE resins

Agenda
Webinar: ValQ for Material Requirement Planning
Introduction
State of The Tools: Spreadsheets vs. Planning Software
MRP using Spreadsheets – A Sample Walkthrough
MRP Using valQ (Live Demo)
valQ Architecture & pricing
Getting Started with valQ
Q&A
1
2
3
4
5
6
7

Visual BI Solutions is a leading All-in-One Business Intelligence (BI) enablement firm specializing in BI &
Analytics services, solutions, trainings and products. We have proven expertise in enabling BI & Analytics
for 200+ world’s leading brands.
Trusted by
the industry
Integration and Partnership with
Microsoft and SAP is our forte
Trusted by leading companies world-wide
About Visual BI Solutions
All-in-One Partner For End-to-End BI & Analytics Needs
CONSULTING SERVICES
• Strategy
• Architecture Implementation
• Managed Services
• Visualization
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• Training
SOFTWARE PRODUCTS
• ValQ - Modern Digital Planning
• VBI View – Your Search Engine for All
Your BI Content
• xViz – Advanced Custom Visuals for
Microsoft Power BI
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TRAINING
• Microsoft Power BI
• Tableau
• SAP Analytics Cloud
• SAP BW4HANA / BusinessObjects

About Visual BI
Products Customer Portfolio

ValQ
Customer Portfolio

Q&A
Getting Started with ValQ
ValQ Architecture & Pricing
MRP Using ValQ (Live Demo)
MRP Using Spreadsheets – A Sample Walkthrough
State of the Tools: Spreadsheets vs. Planning Software
Introduction

Planning Software is Expensive
State of the Planning Tools: Spreadsheets vs. Planning Software
Source: BearingPoint Excellence in Demand Planning Survey 2015
Source: https://demand-planning.com/2018/07/12/how-much-does-forecasting-software-cost/
Typical planning software cost anywhere from $5,000 to $30,000 per user
use some kind of commercial software,
with almost all augmented by
spreadsheets
43%
companies use Excel & add-ins
as the primary planning tool
38%

And Yet Expensive Planning Software Lacks Key Capabilities
SPREADSHEETS PLANNING SOFTWARE
⇢ Easy to use
⇢ Independence
⇢ Connectivity to Systems
⇢ Better collaboration
⇢ Single version of Truth
Strengths
Key Challenges
⇢ Limitations while handling complex
scenarios
⇢ Poor user experience
⇢ Reliance on IT Support
⇢ Poor scenario planning capabilities
⇢ Not executive-friendly
⇢ Lack visualization capabilities

ValQ Delivers the Best of Both Worlds
Affordable even for small businesses
Rich user experience
IT-independent (like Excel
Instant Simulations & Scenarios
Can handle complex models
Connectivity, Export & Writeback
THE BEST OF BOTH WORLDS
SPREADSHEETS PLANNING SOFTWARE
⇢ Easy to use
⇢ Independence
⇢ Connectivity to Systems
⇢ Better collaboration
⇢ Single version of Truth
Strengths
Key
Challenges
⇢ Limitations while handling
complex scenarios
⇢ Poor user experience
⇢ Reliance on IT Support
⇢ Poor scenario planning capabilities
⇢ Not executive-friendly
⇢ Lack visualization capabilities

MRP - Driving Procurement, Production & Scheduling Decisions
The Big Picture
OPERATIONS
PLANNING
S & OP
Demand Planning
Capacity Planning
Material Requirement
Planning
Procurement
Scheduling &
Production
Supply Planning
Inventory
Management
1. Organization’s Goal
▪ Budgets – What do we aspire ?
▪ Targets – What do we chase ?
▪ Sales History – What do we
observe from past & plan for
future?
4. Distribution & Inventory
▪ Replenishment – How
much do I re-fill ?
▪ Distribution – Where do I
re-fill ?
▪ Delivery – What is my OTD
% ?
2. Capacity & Resource
Management
3. Material Management
▪ Raw Material – How much do we
have ?
▪ Purchase – What do we need ?
▪ Produce – What do we make ?
▪ Schedule – When do we make ?
▪ Capacity – How much can we
make ?
▪ Constraint – What are my
bottlenecks ?
▪ Output – How do I optimize
resources ?

Objectives – Optimal Inventory Levels & On-Time Production
Material Requirement Planning
Material Requirement Planning
▪ Manages Procurement, Production & Scheduling to fit Demand Plan
▪ Manages Inventory flow
▪ Backbone of Operations Planning
A desired MRP should also enable quick reaction to the
dynamic market trends

Cement Manufacturing Company – A Simple Example
How MRP is typically done using spreadsheets
This firm produces cement using 11 raw material ingredients, each with its own
characteristics such as composition % in the end-product, price, vendor location,
procurement lead times, etc.

FG Forecast (Cement) 11
FG Inventory 4.8
Open Demand 1.2
Net Available FG Inventory 3.6
RM Description RM Forecast RM Inventory RM Open Supply Composition Inventory Lead Time (Days) Optimum Coverage (Days)
Lime (CaO) 6.71 3.66 1 61.0% 2.20 10 30 2.83
Silica (Sio2) 2.3 0.42 0 20.9% 0.75 10 30 2.15
Alumina (Al2O3) 0.68 0.12 0.12 6.2% 0.22 42 30 0.76
Magnesium Oxide (MgO) 0.22 0.04 0 2.0% 0.07 42 30 0.29
Iron Oxide (Fe2O3) 0.28 0.05 0 2.5% 0.09 42 30 0.36
Calcium Sulphate (CaSO4) 0.42 0.04 0.04 3.8% 0.14 21 30 0.44
Sulphur Trioxide (SO3) 0.2 0.02 0 1.8% 0.06 21 30 0.23
Alkaline (NaOK2O) 0.07 0.01 0 0.6% 0.02 21 30 0.08
Admix-Air 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Water 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Adhesive 0.04 0.01 0 0.4% 0.01 14 30 0.04
FG to RM conversion Base Stock Calculation
Kanban Calculation
15
MRP using spreadsheets
Conventional Method
Step 1
Start with Demand forecast for cement
Step 2
Calculate net available FG stock to meet demand (= Inventory – Open Demand)

FG Inventory 4.8
Open Demand 1.2
Lime (CaO) 6.71 3.66 1 61.0% 2.20 10 30 2.83
Silica (Sio2) 2.3 0.42 0 20.9% 0.75 10 30 2.15
Alumina (Al2O3) 0.68 0.12 0.12 6.2% 0.22 42 30 0.76
Iron Oxide (Fe2O3) 0.28 0.05 0 2.5% 0.09 42 30 0.36
Alkaline (NaOK2O) 0.07 0.01 0 0.6% 0.02 21 30 0.08
Admix-Air 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Water 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Adhesive 0.04 0.01 0 0.4% 0.01 14 30 0.04
Kanban Calculation
16
Conventional Method
Step 3
Compute forecast by raw material (RM) based on finished
goods (FG) forecast & RM composition

FG Inventory 4.8
Open Demand 1.2
Lime (CaO) 6.71 3.66 1 61.0% 2.20 10 30 2.83
Silica (Sio2) 2.3 0.42 0 20.9% 0.75 10 30 2.15
Alumina (Al2O3) 0.68 0.12 0.12 6.2% 0.22 42 30 0.76
Iron Oxide (Fe2O3) 0.28 0.05 0 2.5% 0.09 42 30 0.36
Alkaline (NaOK2O) 0.07 0.01 0 0.6% 0.02 21 30 0.08
Admix-Air 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Water 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Adhesive 0.04 0.01 0 0.4% 0.01 14 30 0.04
Kanban Calculation
17
Conventional Method
Step 4
Compare RM Forecast with RM Inventory, Open Supply & FG Inventory to
compute RM requirement (when availability < Forecast).
Consider lead time & coverage to maintain a comfortable minimum stock

FG Inventory 4.8
Open Demand 1.2
Lime (CaO) 6.71 3.66 1 61.0% 2.20 10 30 2.83
Silica (Sio2) 2.3 0.42 0 20.9% 0.75 10 30 2.15
Alumina (Al2O3) 0.68 0.12 0.12 6.2% 0.22 42 30 0.76
Iron Oxide (Fe2O3) 0.28 0.05 0 2.5% 0.09 42 30 0.36
Alkaline (NaOK2O) 0.07 0.01 0 0.6% 0.02 21 30 0.08
Admix-Air 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Water 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Adhesive 0.04 0.01 0 0.4% 0.01 14 30 0.04
Kanban Calculation
18
Conventional Method
Example – MRP calculation of Lime (Cao)
Given Values
Forecast = 6.71
Inventory in RM form = 3.66
Inventory in FG form – 2.20
Open Supply Order = 1
Kanban Cycle Time = 10 + 30 = 40 Days
Calculation
Forecast – Inventory – Open Supply Order + (Daily
Average Q1 Forecast x 40 Days)
i.e.
6.71 – 3.66 – 1-2.2 + ((6.71/90) x (40)) = 2.83

FG Inventory 4.8
Open Demand 1.2
Lime (CaO) 6.71 3.66 1 61.0% 2.20 10 30 2.83
Silica (Sio2) 2.3 0.42 0 20.9% 0.75 10 30 2.15
Alumina (Al2O3) 0.68 0.12 0.12 6.2% 0.22 42 30 0.76
Iron Oxide (Fe2O3) 0.28 0.05 0 2.5% 0.09 42 30 0.36
Alkaline (NaOK2O) 0.07 0.01 0 0.6% 0.02 21 30 0.08
Admix-Air 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Water 0.04 0.01 0 0.4% 0.01 14 30 0.04
Admix-Adhesive 0.04 0.01 0 0.4% 0.01 14 30 0.04
Kanban Calculation
19
Conventional Method
1. How complex is it to perform MRP for a scenario involving multiple Products (5), Product variants
(15), Plants (3), Warehouse locations (7) and Higher raw material count (250)?
2. How would you perform Scenario Planning, say for varying demand?
3. How would you analyze variance within & across scenarios?
Spreadsheet models become exponentially complex as the number of variables > 30

Top 5 Practical Limitations of Planning Using Spreadsheets
Material Requirements Planning
▪ Very complex models, especially with larger number of variables
▪ Lacks in critical planning capabilities such as scenario planning, variance analysis etc.
▪ Hard to visualize – can be understood only by the person who create it
▪ Handling multiple versions, sharing & collaboration
▪ Connectivity to systems & databases
Yet spreadsheets are successful as they are easy to use, offer independence & control
Can we address these limitations while retaining the flexibility of spreadsheet modeling?

ValQ for MRP
First Cut
Model MRP scenario in hours,
not days or weeks

Use Excel-Like Formulae & Functions
ValQ for MRP

Formulae allows you to visualize various supporting KPIs
Functions & Derivatives
Logical
Functions
Math
Functions
Finance
Functions
Expressions
Functions
⇢ IF
⇢ AND
⇢ OR
⇢ & More…
⇢ SUM
⇢ AVERAGE
⇢ MIN/MAX
⇢ & More…
⇢ IRR
⇢ NPV
⇢ PMT
⇢ & More…
⇢ Custom
Expressions
Target
Specific
Region
Specific
Product
Specific
Period
Specific

Download simulation results in Excel
ValQ for MRP
Click to download Downloaded Sheet

Customize Process Flow and Calculate Derivatives
ValQ for Material Requirement Planning
FG
100 ml
RM 1
60 ml
RM 2
25 ml
RM 3
15 ml
FG
200 ml
RM 1
120 ml
RM 2
50 ml
RM 3
30 ml
$
Demand Forecast
FG Inventory
RM Inventory
Lead Time
RM Cost
Iteration Impact
Simulation
• Simulations
• Visualizations
• Scenario Comparison
• Writeback

Microsoft Power BI
ValQ available for the leading & fastest growing self-service reporting & visualization software
Power BI Desktop
FREE
Power BI Pro
$9.99 / mo
• Single user scenario
• Office 365 Integration
• Collaborate & Share
Download Microsoft Power BI Desktop for free: https://powerbi.microsoft.com/en-us/downloads/

ValQ is Serverless; It does not require any additional server, service, database or IT support
ValQ is a fully contained add-on for Microsoft Power BI

Try out ValQ Today
ValQ Available for FREE with Microsoft Power BI
1
2
3

VALQ
Support
42

Option 1: Do It Yourself
How can I get started?
Follow instructions in our Getting
Started Page
https://valq.com/get-started/
Get help from
https://community.valq.com/
Download ValQ for FREE
https://valq.com

Option 2: ValQ QuickStart: Go Live With Your First MRP Model In 5 Days
How can I get started?
Bring Your Own
Spreadsheet
Model Your
Scenario Using
ValQ
Receive guided
training for building
more models
independently
Showcase to Your
Business
5 Days
Deliverables
• A fully functional ValQ model based on your data
• Hands-on at-site/remote training with documentation
• (Optional) Update the spreadsheet demos to consume
data directly from your systems (additional cost)

Q&A
Reach out for Sales Enquiries
sales@valq.com
Reach out for Support Enquiries
support@valq.com

Upcoming Webinars in 2020
Sales & Operation Planning Series
Q1
Production Planning
Demand Planning
Supply Planning
Inventory Control
Replenishment Planning
Q2
Capacity Planning
SKU Classification Planning
Distribution Planning
Category & Geo Planning
Value Chain Planning

www.visualbi.com
THANK YOU!
gopal
@visua
li.com
www.visualbi.com
Kunaal Jethwa
Sr. Manager Planning Center of
Excellence
kunal@visualbi.com
Gopal Krishnamurthy
Founder/CEO
gopal@visualbi.com

On-the-fly Material Requirement Planning using Microsoft Power BI

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