Inventory Management Optimization Features and Functions
Inventory planning and optimization sytems allow the organization to create an inventory supply network from multi-tier or n-tier suppliers through to multi-channel to customers. ERP systems not only do not have such modeling and graphic capbility, but they also do not have the ability to integrate data from many sources through the supply chain to create these kinds of models. Inventory management strategies need to be thought through both at the strategic and tactical levels. What are the right approaches to inventory stocking both at the raw, component, or WIP levels, as well as for finished goods? What are the right hedging strategies as a product moves through its lifecycle: from new product or market introduction, to seasonalities, to end-of-life? What are the right staging and pipeline levels? What is the right replenishment level by channel or customer to meet market share, revenue, proffit targets, and customer service levels, while minimizing obsolescence. Planning inventory at the right stage--raw, partical assembly, or finished goods--has huge implications for a firm's responsiveness and profitability. Strategically, inventory planning and optimization systems work well in partnership with forecasting systems. Long-term forecasting, analyzing, and determining demand, lets the optimizer set a profitable supply plan for the market.
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- Input preexisting network models (or create graphical models)
- Input data from MRP, ERP, APS, costing system, and rating system sources
- Rationalize and model for I push models versus lean pull models
- Model and create multi-stage flow process recommending consolidation, intransit merge or single site assembly strategy based on lead-times, costs, inventory turn targets, carrier cost objectives, and cycle-times
- Create inventory policy by facility, product, and SKU
- Create inventory policy from strategic long-term (years) to tactical, considering market conditions, product life cycle, product inventory profiles (fast or slow moving and seasonal)
- Create a supply chain-wide inventory master plan
- Model and determine postponement points
- Model inventory/service level trade-offs
- Model inventory/capacity trade-offs to increase throughput considering demand variability, manufacturing's current capacity, reliability, uptimes, service levels, ABC cost inputs, yields, and batch or lot sizes
- Model pipeline and determine pipeline inventory positioning raw, WIP, and assembly level with consideration to service levels, flexibility and responsiveness, profit, and inventory turns targets
- Determine safety stock replenishment levels (min/max), order frequencies by channels or customer with consideration to customer service levels, turns objectives, previous shortages, or overstocks
- Ability to download policies as input to planning systems
- Solve for optimal batch sizes to support pull manufacturing
- Model inventory use-up strategies for product end-of-life
- Ability to create optimal supplier policy by supplier considering supplier lead times, supplier performance, demand fluctuations, and enterprise inventory turns objectives
- Calculate and generate accurate lead-times by each product/SKU
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Supply Chain Optimization Features and Functions
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