Inventory Optimization

Inventory tends to oscillate between being a curse and a savior. Inventory optimization aims to find the optimum between high availability of items and tied capital. Purchasers are often required to process more than 500,000 stock items under dynamic market conditions while maintaining the balance between availability and tied capital. Companies can no longer master this challenge without the use of specialized software.

Overview

Forecasting, planning and controlling - inventory optimization is most efficient when these three disciplines are integrated into one strategic process.

All three of these elements must be combined in such a way that they complement each other, in order to produce meaningful outcomes. Through this three-step approach, companies can, for example, identify the impact of setting a higher service level on inventory development. This increased transparency will help ensure that adjustments to the procurement policy will lead to the accomplishment of inventory goals.

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Andreas Schäfer

Andreas Schäfer
Consultant
Tel: +49 (0) 2408 / 9456 - 1333 A.Schaefer@informinform-software.com

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Solution add*ONE Features

Using add*ONE Inventory Optimizer, variable consumption patterns and deviations from the inventory plan can be managed in a target-oriented and dependable way. The software system helps inventory managers find the right balance between low stocks, high product availability and improved liquidity. Top features include:

  • Self-adapting forecasts

    Detailed determination of the future demand situation with no manual maintenance required, including the identification of trends, outliers, seasonality and sporadic demand

  • Calculation of cost-effective order proposals

    Dependable decision proposal for each article using an intuitive workflow that identifies the need for immediate action or controlling

  • Management by exception

    The software eliminates routine tasks, automatically showing planners which actions need to be taken to avoid i.e. stock-out situations. Intuitive graphical displays show planners the most urgent tasks to complete, enabling them to manage by exception.

  • Integrated inventory controlling function

    All controlling analyses are directly performed in add*ONE. Various operative controlling functionalities allow for the comprehensive tracking of all planning figures. Sophisticated simulation functions enable testing and various "if-then" analyses.

  • High degree of automation

    Simple control and maintenance of a large assortment of items through automated processes, i.e. automatic order approval for items with high forecast quality – this frees up time for inventory planners, allowing them to focus on more important tasks.

  • Intuitive operation

    Easy-to-understand workflows and uncluttered user interfaces provide users with valuable decision support and create maximal transparency of the company's planning processes.

Benefits

add*ONE provides users with a sustainable optimization of their inventory management process. With add*ONE Inventory Optimizer you can expect to:

  • Minimize planning effort

    Reduce your planning effort by 25 to 50% through the reliable automation of purchasing decisions.

  • Reduce inventory

    Reduce your inventory by up to 40% while at the same time increasing availability.

  • Increase product availability

    Obtain a delivery capacity of close to 100% through high-quality planning.

  • Reduce procurement costs

    Cut procurement and inbound logistics costs with optimized orders and batch sizes

  • Increase flexibility

    Make efficient management decisions with optimal transparency of complex interrelationships

  • Recoup investment

    Experience a return-on-investment within months of your purchase

Manufacturing

Material availability in manufacturing

The major goal in manufacturing is demand-oriented production. Shorter production times can be achieved with continuous optimization of production planning; if the production flow is disturbed, it is most often due to insufficient availability of purchased parts. The common strategy to avoid such disturbances is to build up a large safety stock; however this is not practical in times of increasing cost pressures.

add*ONE provides production managers with all of the important data, such as the availability of raw materials and components. Based on this data, the software calculates the optimal demand coverage, which then forms the basis for reliable capacity planning.

More on inventory optimization for manufacturers here.

Wholesale

Secure planning with foresight

Wholesalers are faced with the challenge of conforming to increasingly faster market demand changes. Customer service requirements are on the rise while at the same time, internal cost pressures remain. The need for sufficient product availability with regard to cost factors is thus a key function both in the technical and consumer goods trades.

add*ONE for wholesalers is a functional package tailored to the specific challenges of wholesale operations. The add-on software provides support in all purchasing processes. In a trading company, specially developed methods help planners and demand managers with forecasting, planning and controlling.

Learn more about managing inventory in wholesale here.

Spare Parts

Strategic decision making

Functional failures in plants, machines and equipment are very difficult to predict and are often associated with the need for a last-minute spare part. Managing spare parts with add*ONE provides planners with optimal availability while keeping inventory levels low using mathematically sound forecasts, even in sporadic demand situations.

add*ONE Spare Parts Management supports the planning process in the following core areas:

  • Forecasting future demand
  • Product lifecycle specific management strategy
  • Transparency across a wide variety of spare parts

Find out more about spare parts management with add*ONE here.

Simultaneous Master Production Scheduling

Plan simultaneously - work productively

A cost-optimal production plan - without the frequently occurring problem of rescheduling in the production control stage - cannot be established with conventional step-by-step planning methods (e.g. MRP). Simultaneous master production scheduling considers both the capacity of the production equipment and material availability at the beginning of the planning process. The result is an achievable, capacity-oriented and cost-optimal production schedule across all stages of production. The concept offers many advantages for production planning:

  • precise forecasts of future demand behavior
  • early consideration of capacity bottlenecks and the respective adjustment of the production schedule
  • shorter processing times
  • quick calculations of alternative planning scenarios
  • strict adherence to delivery dates

Learn more about simultaneous master production scheduling here.

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