Inventory Planning Blog

Aftermarket Service Parts Planning Concepts Pt. 1

Posted on Tue, Oct 06,2020@06:45 AM

stamp-114438_1920Aftermarket service or spare parts inventory management is a prime candidate for advanced inventory planning software. With many diverse parts to manage and a lack of power tools, most companies with parts inventories have too many of the wrong parts. The result is unnecessary inventory expense, while still suffering service-limiting stock-outs.

Manual efforts to improve this situation fail, because of the time-intensive nature of the problem. A large number of parts, each with special considerations, quickly bog down someone trying to improve the parts purchases.

Read More

Tags: inventory optimization, SPARE PARTS INVENTORY PLANNING

Why Inventory Optimization Algorithms Are Important

Posted on Tue, Jul 07,2020@08:15 AM

Complexity around the world due to social, medical and confrontational disruption seems to be the new norm. Serious viral infections have been on the rise for many years and will be with us forever. Now, is the time to advance the state of your inventory planning by incorporating solutions based on scientific inventory optimization algorithms.

Read More

Tags: inventory optimization

Inventory Planning in Global Crisis with Advanced Inventory Planning

Posted on Fri, Apr 10,2020@12:48 PM

COVID-19 is presenting a challenge we have never experienced before. Supply chains across the globe have been upended. Companies are struggling to make sense of their inventory demand forecasting and stock replenishment planning.  Cases range from plummeting sales to unprecedented peak sales and to longer lead times, to unavailable stock. This may become the new normal. 

Read More

Tags: inventory optimization, Inventory Planning Solutions, supply chain planning

Why are Inventory Optimization Algorithms Important?

Posted on Tue, Oct 08,2019@11:26 AM

There are a lot of inventory planning solutions from all around the world. Many are designed for large enterprise companies. They cost hundreds of thousands of dollars and are highly complex. Some are so complex a math or science degree is required just to operate the system. Others, at the low end, may only be point solutions for forecasting, as an example, or offer individual modules you need to buy separately. Several of these solutions include a forecasting capability either their own platform or from an included third-party provider. Most have you select the appropriate forecast method and require you to manually set replenishment levels, like min & max. How is this any better than using a spreadsheet?

How many offer real inventory optimization and why is this important? There are many reasons why inventory optimization is critical for conducting business in today’s ever challenging economic and consumer-oriented climate. An advanced supply chain planning system should also rationalize the inventory levels and investment in light of the expected demand and other variable conditions.

First, what is the cost of carrying, holding and managing an inventory?  The costs for most items are steadily increasing, real estate costs and taxes are up and shipping costs are through the roof. Inventory optimization provides a great balanced inventory to meet expected demand, while reducing costs and better controlling spend for additional stock purchases. Planning in a timelier manner reduces the need for expediting orders in from vendors, which in-turn reduces the need for expediting shipments to customers.

Second, inventory optimization dramatically improves the financial performance of an inventory because buying and stocking are more in-line with expected customer demand. It helps to reduce and almost eliminate the future build-up of excess inventory and dead stock.

Third, there are too many known and unknown variables that can affect your inventory and subsequent customer service levels to manage properly. Just forecasting and planning your inventory leaves you wide-open to problems in meeting both your financial goals and customer expectations.

Read More

Tags: inventory optimization

Valogix customers tell their inventory planning success stories Part 2

Posted on Tue, Oct 09,2018@01:18 PM

Herramientas Poderosas (HP)

Read More

Tags: SAP Business One, inventory optimization, Spreadsheets, inventory management

Smart Inventory Planning in the Cloud

Posted on Tue, Aug 02,2016@10:29 AM

Read More

Tags: Inventory Planning, inventory optimization, SaaS, cloud computing

Inventory Forecasting Overview Part 2

Posted on Tue, Jul 05,2016@10:13 AM

The first forecasting blog covered an overview to inventory forecasting and the techniques available. This post continues to review the approaches to inventory forecasting.

Read More

Tags: inventory optimization, Forecasting Inventory, stock forecasting, inventory forecasting

Inventory Forecasting Overview Part 1

Posted on Tue, Jun 07,2016@09:47 AM

This is Part 1 of a two-part series on inventory forecasting. This blog provides some basic information about viable inventory forecasting techniques. Forecasting is a key step in inventory planning but not the only one. There are other key variables and processes that come into play in good supply chain replenishment planning including inventory rationalization and optimization..

Read More

Tags: inventory optimization, stock forecasting, inventory forecasting, warehouse management

Wholesalers Facing Greater Pressures Managing Inventory

Posted on Tue, Jun 02,2015@10:00 AM

Read More

Tags: Inventory Planning, inventory optimization, Demand Planning, Supply Chain, spare arts inventory planning, inventory management

Performance Improved with Inventory Optimization & Analytics

Posted on Tue, May 05,2015@10:00 AM

Inventory Performance Improved with Inventory Optimization & Analytics

In simple terms, inventory optimization balances the investment in an inventory to achieve a targeted service level or order fill-rate. There are also financial considerations, constraints that can also be applied in the development of the algorithm. These highly complex algorithms work behind the scene so as not to confuse the user or make them fearful of using optimization to help manage their inventory.

Read More

Tags: Inventory Planning, inventory optimization, Forecasting Inventory, Inventory Planning Solutions

Inventory Optimization & Analytics

Posted on Tue, Apr 07,2015@10:08 PM

Read More

Tags: Inventory Planning, inventory optimization, Forecasting Inventory, Spreadsheets

How Advanced Inventory Planning Helps Enhance the MRP Planning

Posted on Tue, Feb 03,2015@10:00 PM

Advanced inventory planning and optimization solutions enhance the MRP process by automating inventory planning and replenishment.  It automatically selects the best forecast algorithm for every item at every location and creates a rolling forecast of from 12 to 36 months.  The solution then calculates an optimal stocking quantity for each item based on many critical variables like the lead time, order frequency, and target service level.  Variability in demand is also considered along with other key factors ensuring the right amount of stock is available without creating an overstocked situation.

Read More

Tags: Inventory Planning, inventory optimization, manufacturing

Happy New Year for Inventory Planning!

Posted on Tue, Jan 06,2015@10:05 AM

The year 2015 brings a solid outlook of improving global economies and growth opportunities. Balancing near term resilience with longer-term objectives is what is needed now.  Reducing costs, buying less, increasing productivity, improving cash flow are critical. Keeping these inventory objectives balanced and in perspective, you need an effective way to rationalize and prioritize important business demands.   Improve your competitive advantage responsibly and efficiently without incurring major costs should be at the top of your list.  Waiting until its too late in your ordering cycles will invite your customers to buy elsewhere. Reducing the wrong items at the wrong time only exacerbates the issue.
 
If your company tends to reduce items with the highest investment because it creates a larger reduction faster, what it actually does is create potential stock outs, more backorders and increased expedited shipping – and, even more importantly, customer dissatisfaction.  We all know that when customers are unhappy they become former customers.  Randomly cutting inventory has been proven repeatedly to be the wrong strategy as does overstocking your inventory. As supply chains grow more complex, manual planning using spreadsheets can cause losses. Yes, you can create them to be specific to your business but they are hindering your growth.

Now, more than ever, you have many affordable choices for improving your inventory investment and performance. The Cloud is a viable alternative to investing in On-Premise inventory software. Software-as-a-Service (SaaS) provides an affordable and flexible way to utilize some of the most powerful inventory planning solutions on the market.

Why should you be interested? SaaS applications provide many benefits you just cannot achieve on-premise.  Benefits include:

Lower upfront capital: By going to a SaaS model, you avoid the up-front capital requirements and funding requests, and pay for the software as an on-going expense.

Faster implementation: There is generally less overall set-up time, and in some cases, companies can often leverage the hosted solution’s existing integrations with existing key ERP solutions.

Faster “time-to-value”: Given a more rapid implementation, the time-to-value and positive cash flow returns are more rapid than a traditionally deployed on-premise implementation.

Reduced internal IT resource requirements: No installed application software or hardware to manage over time.
 
Overcome objections to best-of-breed software: Some companies are finding that they are able to overcome the objections or rules against implementing software that does not come from the company’s ERP provider if they use a SaaS model.
 
Fit for “on-demand” usage: Users can truly access these solutions when they need them anytime and anywhere 24x7.

Staying current with technology: The software will periodically be automatically upgraded with enhancements to functionality. This should serve to keep users on the current platform, and keep them from falling behind the state of the art over time, sometimes badly so.

So, before you wait another moment, do yourself, your employees, and your customers a favor. Take a serious look at Cloud-based inventory planning and optimization solutions and begin 2015 with a clear path to success.

Read More

Tags: inventory optimization, SaaS, SaaS, Savvis, Valogix, Inventory Planning Solutions

Advanced Inventory Planning the Easy Way for SAP Business One

Posted on Mon, Oct 06,2014@10:00 AM

SAP Business One includes an MRP module for planning needs in a manufacturing environment. retailers and wholesale distributors also use the on-board functionality. Discover an affordable, seamlessly integrated inventory optimization solution to SAP Business One from Valogix.

Read More

Tags: Inventory Planning, SAP, SAP Business One, cloud, inventory optimization

Multi-Echelon Inventory Planning for NetSuite

Posted on Tue, Sep 02,2014@10:09 AM

NetSuite inventory management software offers inventory management, manufacturing, and purchasing capabilities that can help improve supply chain management. Now, available with multiple location capabilities it offers more for growing and larger companies.

However, you may want to explore how a more advanced inventory planning and optimization solution can further improve your supply chain performance. NetSuite recognized Valogix with their 2013 Supply Chain Partner of the year Award for successfully providing dynamic, automated multi-echelon planning and optimization.

Organizations with large inventory operations work with multiple levels of supply.  Central sites purchase and stock most of the items.  Slow-moving and less important items can be sent quickly to remote sites when needed, while fast-moving items are stored closer to the customer to enable more rapid customer service.

Advantages of the “multi-echelon” supply chain planning include:
  • Consolidating inventory reduces the quantity required
  • Consolidating purchasing gives greater leverage to obtain discounts from suppliers
  • Balanced stock mix at all locations
However, multi-echelon planning brings considerable complications as well.  How much of a particular item should be stocked at each location?  How should the company support transfers of stock from one location to another?  If an item is on short supply, how should it be allocates down from the central warehouse to other locations? How does multi-channel selling (know an omni-channel) to the customer effect the distribution of stock?

Inventory planning for finished goods has become more complex and costly. The ever-increasing number of new Items (SKUs), changing demand patterns, and increasing transportation costs are taking a toll on a distributor’s bottom line.  Especially difficult is planning items used both in kits and sold separately. Further complexity comes from planning for multiple locations and accounting for substitutes and supersedes. 

Assume we have three locations supplied by a master warehouse, which has a planning horizon of 90 days. It also has a forecast of 90 units for that three-month period for an item.

Through the advanced algorithms in VALOGIX Inventory Planner, we can predict that:

• Location 1 will place a replenishment order for 30 units 16 days from now;
• Location 2 will place an order for 20 units in 27 days;
• Location 3 will place an order for 40 units in 7 days.

It is not just about having visibility and the capability to manually set safety stock and min/max levels for multiple locations. It is about having the right, balanced mix of items at the proper location at the right time. Using inventory optimization to dynamically plan and replenish multiple locations is a much better, proven method. That fact that the optimization is automated dramatically improves productivity and reaction time to changing demand.

What inventory optimization does is balance the investment in an inventory with the fill-rate (service level) goals of a company across all locations. There are also financial considerations, constraints that can also be applied in the development of the algorithm. These highly complex algorithms work behind the scene so as not to confuse the user or make them fearful of using optimization to help manage their inventory.

We have determined that you can dramatically improve the effectiveness of the optimization algorithms by adding heuristics into the overall process equation. Heuristic refers to experience-based techniques for problem solving, learning, and discovery. Heuristic methods are used to speed up the process of finding a satisfactory solution, where an exhaustive search is impractical. Valogix incorporates heuristics into all processes.

So consider the capabilities carefully when planning multiple locations:

Valogix automates the entire inventory planning process:
  • Forecasting & Planning – every item at every location
  • Stock Level Setting – considers forecast, lead time, order frequency,
  • Desired service level and variability in demand
  • Replenishment - Purchase Orders, Production Orders, Stock Transfers
Optimization – cost reduction & control - strategic planning analytics
  • Easy to use and highly effective
  • Avoids disruptions from costly stock-outs
  • Exception based – alerts warn of potential future issues
  • Planning Groups give unparalleled planning control & flexibility
Time-phase plans all items at all locations simultaneously
  • Items used in B.O.M.s and Kits as well as those sold independently
  • Back-schedules to cover longest lead time of components
  • Considers substitutes and supersedes
  • Synchronized planning for smooth-flow inventory availability
The customer results of using Valogix inventory planning and optimization show they achieve:
  • Reduced inventory by 20% to 40% or more usually within 6 months or less
  • Reduced expediting and emergency shipments by 35% or more
  • Improved productivity by reducing planning time by 60% to 80% or more
  • Controlled and reduced replenishment spending by 15% or more
  • Improved service levels by having the right items available when your customers want them by 5% to 15% or greater
  • Reduced stock-outs by 15% - 30% or higher
  • Increased sales of 15% to 15% or more
  • Reduction in cost of goods by 5% to 10% due to improved vendor relations

Download our e-book  The State of Inventory Planning

   
Read More

Tags: Inventory Planning, cloud, inventory optimization, SaaS