Executive Summary Safety stock is set in practice far differently than how it is explained in books. To understand safety stock, it is helpful to consider the target stock level. Safety stock, target stock level is connected to inventory optimization and multi echelon. Video Introduction: Why Target Stock Level Not Safety Inventory is the Right…
Executive Summary Supply chain segmentation is a method of inventory classification. Supply chain segmentation is employed in niche supply chain vendors. Introduction to Segmentation Supply chain segmentation (also known as inventory segmentation) is a method of dividing the product location database so that different product location combinations can have different supply planning methods and different supply…
Executive Summary Optimization became a prominent component in supply chain planning software. However, optimization struggles with unintelligibility, and there are major challenges in getting cost optimization to work in SAP. We cover implicit versus explicit costs, how cost optimization compares to inventory optimization, and the current state of optimization. Introduction Optimization has proven much more…
Executive Summary This is an introduction to inventory optimization that explains where MEIO fits into the supply chain planning space. There is a relationship between service level and inventory strategy. Introduction to Inventory Optimization Inventory optimization is one of the vital supply planning methods. You will learn how inventory optimization works. See our references for…
Executive Summary MIPO is the SmartOps inventory optimization and multi echelon application. MIPO has a specific software design that is discussed in this article. SmartOps SmartOps is a software company which makes several products, but the subject of this post will be their MIPO product (Multistage Inventory Planning and Optimization). SmartOps is one of the…
Executive Summary What is ILOG? How do the products that IBM acquired work, and how are they different from other inventory optimization and multi echelon planning offerings? What is the problem with the ILOG acquisition by IBM? What Is ILOG? IBM ILOG, formerly just ILOG, which includes the merged LogicTools, which ILOG purchased in 2007,…
Executive Summary What is Effective Lead Time? How is Effective Lead Time Different From “Normal” Lead Time? What is the Similarity to the Delivery Lead Time or Order Lead Time? Why is Effective Lead Time Central to Multi Echelon Planning and the Key to Understanding the Topic? Introduction Interestingly, the term “effective lead time“ is…
Executive Summary The xApp program was developed to allow SAP to co-opt competing vendors and to enable them to take the IP of these xApp vendors. Why is the xApp program such a problem and so anti-competitive? Introduction The SAP xApp program has been a commercial failure. This is good because the xApp program is…
Executive Summary Multi echelon planning uses advanced mathematics to perform supply planning with each location, knowing the inventory of other locations in the supply network. There are specific tests that can be applied to any multi-echelon system. Introduction Multi echelon planning is an advanced method of accounting for location dependencies during supply planning. Multi echelon planning…
Executive Summary Multi echelon inventory optimization MEIO is one of the significant methods of supply planning. MEIO is related to effective lead time. Multi-echelon versus DRP for deployment. Introduction: What Multi Echelon Answers The short answer is that multi-echelon inventory optimization answers the question of “where” in the supply network should inventory be located. Multi-echelon is a…