What is GMDH & Streamline?
GMDH is a software company out of New York that provides forecasting software for many well-known brands. The GMDH modeling and forecasting is powerful because it provides accurate and flexible forecasting for various businesses.
Streamline is another software product that is developed as a Windows desktop solution. It is a purposeful demand planning and inventory management solution, which allows businesses to maximize their return on investment.
It allows you to put data in for your sales, for your bill of materials, for your inventory levels, and for your purchasing plans. It then allows us to crunch the numbers to calculate how that will affect your inventory position and then give you suggestions on what to purchase.
If you would like to learn more about GMDG and Streamline in an in-depth walk through on how the software works, check out our previous video here. We discussed about a very simple model of purchasing and sales- making sure that you have the right amount of supplies for your forecasted sales.
Today, we will be discussing what happens when we need raw materials to produce the finished goods.
Producing Finished Goods With Raw Materials
There will be a few things that you need to have before getting started:
You can go to their website and download the software, and register for a free license. They will give you a 50-item limit, which allows you to play around with the software before you decide to fully buy it.
ILC GMDH Streamline Workbook:
You can download our workbooks for free here, and take a look at our video above to see screenshots of how the software works.
Customers with the Fishbowl Inventory can connect this software to your system.
Bill Of Materials Demo
For our demo, we will start with a hypothetical pizza manufacturing company. We will go ahead and set up a Fishbowl file for this company. We will sell two products: 10-inch pepperoni pizza and 12-inch margarita pizza.
Each product has a “bill of materials.” Some of the raw materials may be cardboard box support, pepperoni product box, tomato paste, oregano, onion powder, salt, sugar, mozzarella, pepperoni, and pizza dough.
You are also able to set up the historical sales for your company. In the video above, you will see that we have gone ahead and created 12-sales orders for the pepperoni product for every month of 2016.
After that is set up, you can go ahead and connect the GMDH Streamline to all of the data that you input into Fishbowl. In Streamline, we created separate files for finished goods, and raw goods. Under Finished Goods we’ve gone ahead and created about a years worth of forecasted sales at 500 units per month, 700 units per month, and 725 units of sales per month and so on. After this, you are able to go ahead and ask GMDH to generate a forecast based on your sale numbers before.
If you have a small amount of data entered in, the numbers may be inaccurate. But once you continue inputting sales data, the more realistic it will be. With this software you are able to use it’s forecasting abilities, but also be able to generate “what ifs.”
If you click to view the Inventory Report, you are able to see a lot more details. You have your finished goods at the top (the specific pizza), and raw materials at the bottom (the materials it takes to make the pizza). Streamline actually takes the sales forecast of each pizza, and forecasts the “demand” of each raw material you would need for each month ( how much of the pepperoni product box, tomato paste, oregano, onion powder, etc).
If you don’t agree with the forecast the system predicted, you and go ahead and input the data of what you think the numbers may be. What if you believe that in January you would have 660 sales instead of 500 sales due to a promotion? If you add the changes and go back into the Inventory Report, you will see that all of the raw material numbers are significantly different.
What if you are adding in a new product that has a similar bill of materials, but no sales? You can always add slight adjustments- instead of having a statistical forecast of zero, you and input some sale numbers into the system. It will adjust the numbers in your inventory report so you have something to work with.
So now what can we do with that data? We can export that information to Excel, but we could also export the Purchase Orders. Having the business intelligence like GMDH allows companies to make certain kinds of decisions based on your forecasted numbers.
Our company, ILC, is planning to actually allows the companies to click the purchase order button, export that file into Excel or CSV, and then import that back into the Fishbowl Inventory system.
This software may not be a fit for everyone as there are a few limitations in the GMDH Streamline. The GMDH Streamline software only works well with certain types of “bill of materials”.
There is a challenge with some bill of materials if the user wants to make things in a batch. For example, if you are making pizza dough, or creating a base sauce in a batch, you need to make sure that the intermediate bills use it correctly. However, if you are manufacturing a hard product like nuts and blots, this system will work great for you because everything is a “one to one” production batch.
GMDH does not consider time factors to produce, how to expire inventory, or how long it takes for an item to be ready to sell. If your materials arrive in January, and then you use a little bit of product in February, but the actual product won’t be ready until March, you will have a challenge with this system. However, if you’re forecasting co-packers and your production time is within the same month, this system will work great for you.
Say a company has their raw material inventory in Norwalk, has their kitchen in Santa Ana, and a large distribution warehouse in Upland—this will confuse the system. The biggest challenge with GMDH is that it doesn’t know how to handle different physical locations because it does not process how routing works.
If you keep the limitations in mind: if your business can support this kind of manufacturing with simple locations, simple bill of materials, and one month timing—this system will work great for your company!
If you want to read more information on how GMDH plans it’s own material requirements, and how the limitations affect the software, you can read the public web view below:
If your business data is clean, but you have many different products…we strongly recommend taking a look at the Streamline system to see if it would work for you.
If your company needs help with GMDH Streamline, or Fishbowl, we are happy to help! We have years of experience in the manufacturing space, and we provide consulting services for problems like this.
At Israel Lopez Consulting, you will find that we’re easy to talk to and always ready to help foster intelligent business solutions. Whether your needs are Information Technology, ERP Implementation, business logistics or custom software solutions, we’ll help maximize your bottom line.
We work with Fishbowl Inventory, QuickBooks and a host of other applications that drive many of today’s modern businesses. Aside from our professional expertise, it is our overall business acumen and quality of service that truly sets us apart from the competition.