This guide will walk you through the initial configuration settings to help you customize Recurrency to your business needs. Each section provides an overview of the settings, recommendations for common use cases, and key questions to help you tailor the platform effectively.
đ¨ Completing these configurations is a prerequisite for starting onboarding and training.
Inventory Mission Control
Show Buyer Filter
Does your organization have multiple buyers managing specific suppliers, and are they assigned accordingly in your ERP?
If yes, enable the âShow Buyer Filterâ option in dashboards to improve visibility and coordination.
If no, leave it disabled for simplicity.
Inventory Unit Cost
What is the best cost to utilize for global inventory reporting?
FIFO: Choose this if you track inventory based on oldest costs.
Moving Average: Ideal for fluctuating prices or prices that include supplier fees.
Last Purchase: Best if decisions are based on the most recent purchase cost.
Standard Cost: Suitable for consistent pricing models to simplify planning.
Dead Stock Interval
After how many months should an item without activity be considered dead stock?
Recurrency defaults to 12 months. Adjust based on your industry or organizational norms. Shorten the period for fast-moving industries or lengthen it for slower inventory cycles.
Demand Planning
Planning Unit Cost
What cost does your team want to use for planning recommendations?
Last Purchase Cost: Reflects current market conditions.
Supplier Cost: Basing recommendations on agreed supplier costs.
Standard Cost: Ensures consistency across reporting.
Moving Average Cost: Smooths price fluctuations for stable recommendations.
Economic Order Quantity
Recurrency uses Economic Order Quantity (EOQ) as one of the inputs that impact Max recommendations. We ask that you make initial configurations to holding costs and replenishment costs.
Holding Cost Ratio: Represents the annual percentage cost of holding inventory, covering expenses such as warehousing, insurance,(e.g., storage, insurance). Recurrency defaults to 20% of the unit cost as the industry standard.
Replenishment Costs: Represent the cost incurred each time an order is placed, including personnel time, administrative processes, and software usage. Recurrency defaults to $5 per order as the industry standard.
đĄ Most customers donât know these costs for their operations, and that is okay. Use the guidelines below to determine your initial setup.
Choose your top priority from the list below, which will guide the changes to make:
Minimize inventory holdings: Reduce inventory on hand to free up space for faster-moving items and encourage smaller, more frequent orders.
Action: Increase holding costs to 22-25%.
Optimize customer experience: Maximize in-stock availability to meet demand, even for slower-moving items.
Action: Decrease holding costs to 15-18%.
Maximize cost efficiency: Balance inventory and order costs for overall efficiency.
Action: Retain current settings.
Minimize stockouts for critical items: Ensure high service levels for customer-sensitive items.
Action: Decrease holding costs to 15-18% and increase replenishment costs to $6-$8.
Improve cash flow by reducing inventory investment: Lower overall stock levels while maintaining cost-effectiveness.
Action: Increase holding costs to 22-25% and decrease replenishment costs to $3-$4.
Sparse Months Worth of Stock
Recurrency uses a unique approach to calculate Min/Max recommendations for Sparse Itemsâthose with demand in six or fewer months over the past year. Sparse Items are notoriously difficult to predict and are often prone to manual errors, creating significant risks of overstock or stockouts. These items frequently represent the highest inventory management challenges pre-Recurrency.
đĄ To address this, recommendations follow your organizationâs risk profile, using transparent and predictable calculations rather than relying on demand forecasts.
Recurrency sets up a default grid that determines stock levels based on demand frequency (months of usage in the past year) and lead time. The grid corresponds to âmonthsâ worth of stock.â For example, items with demand in only 1-2 months over the past year and a lead time of 15 days or less default to maintaining one monthâs worth of inventory. However, teams can adjust the grid to better match their needs:
For fast-procuring items with low customer sensitivity to stockouts, keeping no stock may suffice.
For higher sensitivity items, even sparse ones, maintaining additional inventory ensures availability.
Key Questions to Guide Your Decisions:
â
ââ
How sensitive are my customers to stockouts?
If stockouts are critical (e.g., customer churn risks), maintain higher inventory levels, particularly for longer lead-time items.
If customers tolerate delays, you can keep lower stock levels, especially for short lead times and infrequent demand.
How do lead time dynamics affect inventory needs?
Short Lead Times (e.g., 7 days): Is a small buffer sufficient, or is immediate availability necessary?
Long Lead Times (e.g., 90+ days): Is the item a special order, or do you need extra stock to mitigate supplier risks?
Safety Stock
Do you have Safety Stock set up for most items in your ERP?
If yes: If your team prefers to continue using your established Safety Stock settings, no changes are necessary.
If no: Or if you have Safety Stock but would rather use Recurrencyâs dynamic calculations, enable the âUse Half of Lead Time Demand to Calculate Safety Stockâ checkbox.
Hub and Spoke Replenishment
Are you using a Hub-and-Spoke model for replenishment, when inventory is purchased to the Hubs and then transferred to the Spokes?
If not: No changes are needed.
If you sometimes use a Hub-and-Spoke model but want flexibility: Enable the âUse Flexible Hub and Spoke Modelâ option to allow ordering directly to spoke locations when needed.
If you always use a Hub-and-Spoke model: Enable the âUse Rigid Hub and Spoke Modelâ option to ensure planning and purchasing always follow this structure.
Replenishment Path Source:
If you enabled any Hub-and-Spoke model and want to use replenishment paths already set up in your ERP, select P21 as the path source.
If you prefer to manage replenishment paths in Recurrency, select Recurrency as the path source.
Review Thresholds
Recurrency flags items as âneeds reviewâ when there is a difference between your current Min/Max and Recurrencyâs recommendations. Default thresholds are:
5% Review Threshold: Applies to items not reviewed in the past month. This setting determines the percentage change required to flag an item for review.
Lower this threshold for more frequent alerts to smaller changes.
Raise this threshold for less frequent alerts, focusing only on significant changes.
30% Review Threshold: Applies to items reviewed within the last 30 days. This setting determines the percentage change required to flag an item for re-review.
Lower this threshold if you want to be alerted to smaller changes shortly after a review.
Raise this threshold if you prefer fewer alerts in the weeks following a recent review.
Demand Usage
Would you like to use the current usage data from your ERP system as it is? Is the usage in your ERP accurate and preferred?
If yes, make sure the âUse Imported Usage from ERPâ option is checked.
If no, uncheck this box and decide how youâd like Recurrency to manage the various usage components using the options below.