Inventory optimization is essential to
retailers and manufactures to save costs and reduce safety stocks. Also, by
forecasting demands and supply through Analytics tools, companies are able to
improve the service level. Nowadays, I came to know about SAP inventory
optimization suite known as SAP Enterprise Inventory Optimization (EIO). This
software extracts data from ERP systems and imports the data to SAP EIO. This
software will automatically optimize stocks such as prebuild, safety, and
on-hand stocks based on lead time and service levels.
In addition, AIM (Analytics Intelligence
Module) enables end users to review which stocks have abnormal behaviors such
as high standard deviation. Based on this result of AIM, retailers and
manufacturers can predict and order stocks in a timely manner to reduce safety
stocks and improve service level.
SAP customers include Caterpillar, John
Deere, HP, Honeywell, Kellogg’s, Unilever, ConAgra.
The benefits of EIO:
Improved customer service levels
Significant lower inventory
Reduced operational costs
increased planner productivity
This inventory optimization software includes multistage inventory planning (MIPO). Instead of single stage inventory planning, MIPO has customer face nodes and internal stocking point nodes so that they can calculate different service levels of customer face (CF) and internal stocking point (ISP) nodes. Also, trimming algorithms will improve optimization process.
Today, we have access to tons of data. To make a difference in a competitive market, getting a competitive advantages by investing in supply chain planning cannot be overlooked. Most industries' IT spending has increased annually. Companies should acquire an ability to forecast future demand and supply of stocks and make a strategic plan for the future.
References
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