According to both Aberdeen Group and AMR Research, Inventory Optimization is currently the #1 supply chain initiative that companies are pursuing to improve efficiency and increase shareholder value. The reason is that it can quickly and effectively increase customer service levels while simultaneously lowering inventory levels over the entire supply chain. It is a relatively low risk high return project with a short implementation time since it can be easily added to your current ERP or Adexa suite of Supply Chain Planning solutions.
Adexa’s Inventory Planner optimizes your inventory investment, balancing working capital levels and customer service objectives. It goes beyond traditional inventory planning systems by understanding how to manage multi-echelon supply chains that can employ inventory pooling and postponement strategies.
ERP systems require inventory targets, safety stock levels, and order quantities as inputs, but provide no help in setting these critical values that drive the quality of the planning solution. With millions of possible SKU/storage location combinations, the best your planners can do is estimate these trade-offs at a high level and then apply broad brush rules to fill in the lower level data. The result is wasted money, poor service levels,, or if you are a retailer, discounting Inventory. The Multi Echelon Inventory Optimization (MEIO) capability of the system automatically and expertly identifies these trade-offs, sets the key inventory parameters for each item and location, and feeds it into your current system.
You are probably aware of the pressures from your most demanding clients for 99% + reliability on orders – but you may not be aware of the price you are paying to achieve this using your current systems, in inventory and expediting costs.
The Inventory Planner is an important part of Adexa’s S&OP solution and can be easily added to your existing execution systems, which means that it can be put into place fast, without disrupting your operations or requiring large IT resources.
How it works:
Adexa’s Inventory Planner employs a powerful optimization engine to create a global inventory mix that achieves outstanding customer service levels while simultaneously reducing inventory. Reliable analytics define the precise relationships between inventory behavior and the target service level for each individual SKU location. Behind the scenes, millions of SKUs are modeled against variables like volumes, lead times and lot sizes, to establish the right stock level and replenishment rate for each product in each location. The model handles a wide variety of challenges such as promotions, product phase in & phase out, product expiration and shelf life, end of season closure, and sophisticated product launch profiles.
Adexa’s Inventory Planner solution dynamically generates optimal inventory targets and feeds them back to the Adexa supply chain planning systems or the ERP system. Now the supply chain, finance and marketing organizations have the right S&OP tools for setting global service levels and a powerful optimization engine for operationally delivering on their goals.