Search Results for: inventory-optimization

  • Brightwork Explorer for MRP and S&OP

    ByPrimary Researcher

    … measurement is where Brightwork Explorer comes into play. Lost sales + sales orders can be fed into Brightwork Explorer, and its error checked against the forecast. This provides a far more accurate representation of the relevant forecast error and allows companies to focus on forecasting shortcomings rather than be misdirected into focusing on areas where the unconstrained forecast is inaccurate due to capacity constraints.
    Using the Brightwork MRP + S&OP Explorer
    The Brightwork MRP Explorer does something that no other software on the market does. That is right, not software that uses MRP, heuristics, allocation, cost optimization, or inventory optimization …

  • How to Create a Functional Relationship with Service Levels

    ByPrimary Researcher

    … optimal safety stock placement is the first step. Once these parameters are defined service level optimization is run. The model considers the cost of safety stock for each product type and target average service level across products as defined by user.
    And Toolsgroup
    Typical inventory “segmentation” approaches (often incorrectly labeled “inventory optimization”) group SKU-Locations (SKU-L) into arbitrary “segments” and then apply “one size fits all” logic by assigning all SKU-Ls within the segment the same service level target. These approaches lead to poor recommendations, very distant from the optimum. ToolsGroup’s MEIO instead automatically assigns a different …

  • What is the Accuracy of CONSILIO IT on MRP on HANA Performance?

    ByPrimary Researcher

    … they were developed not because of performance problems with MRP but because the methods were considered improvements on MRP regarding the planning output. These methods are covered in the book Supply Planning with MRP, DRP, and APS Systems. But how does running MRP faster address those deficits? For instance, unlike inventory optimization and multi echelon planning, MRP does not know the stocking levels of locations surrounding a particular planning location. Running MRP faster does not change that limitation. Running MRP faster also does not allow MRP to constrain resources.
    CONSILIO IT seems deeply confused about the issue of MRP processing …

  • How to Understand DDMRP as Yet Another Repackaging of JIT and Lean

    ByPrimary Researcher

    … I know there are projects to be sold, but let us keep it within the realm of sanity.
    So, according to this quotation, only DDMRP can synchronize supply and demand over volatile supply networks. This is quite interesting because MRP is not the most sophisticated matching supply and demand method. Inventory optimization and multi-echelon planning methods are far more advanced than MRP.
    MRP Versus More Advanced Supply Planning Methods
    Unlike MRP, it has the math to compare stocking locations across the network and can set stocking positions while cognizant of the stocking locations around the stocking location. Overall, it …

  • How to Replace the Optimizer in SNP and PP/DS

    ByPrimary Researcher

    … same approach from cost optimization applied to production scheduling. Cost optimizers never really worked very well for supply planning applications. I have thought that perhaps a better approach to optimization is optimization around service levels, and which can treat locations as interdependent stocking locations. The category of software is called inventory optimization and multi echelon planning. These are two different technologies or sets of mathematics in one application. The definition of each is listed here and here.
    However, there is a catch….the implementation of these optimizers takes a significant amount of time. It would mean throwing away the logic …

  • How to Best Understand Gartner's Magic Quadrant

    ByPrimary Researcher

    … category within the software category. For instance, here is a quotation from Gartner’s Magic Quadrant write-up on supply chain planning.
    “SAP has a stronger focus that Oracle on business process and a well-established, capable platform in Advanced Planning and Optimization (APO), which covers all the functional areas of supply chain planning, according to Payne. But SAP APO lacks depth in inventory optimization and production scheduling.”
    Is This Quote Correct?
    I have written four books on modules in SAP’s supply chain planning suite and one on the overall suite. When looking at the above quote, it …

  • How Gartner Research Compares to Real Research Entities

    ByPrimary Researcher

    … was created over sixty years ago before think tanks had acquired their poor reputation. RAND is a “real” think tank, following—and often exceeding—academic research standards. Although they are highly productive, they employ only roughly 1,700 people. Upon occasion, I have read RAND’s research and was most impressed with their work quality. They were a significant innovator in software. I have written a book (Inventory Optimization and Multi-Echelon Planning Software), and their research was featured prominently in that book.
    The RAND Corporation began its life primarily researching the Pentagon. Some of their best-known research …

  • Intimidating SAP Business Objects Trainers With Fake Threats to Fair Use Law

    ByPrimary Researcher

    … and coverage were sufficiently definite. Indeed, they would then be able to ask for written material to be changed or rewritten by SAP until it was sufficient to their liking. Therefore, SAP desires to publish false information through its marketing and influence with publishers and any independent author.
    SAP’s One Way View on This Topic
    Interestingly I was contacted by SAP before my book, “Inventory Optimization and Multi-Echelon Planning Software,” being published and asked if they could receive an advanced copy. I denied the request, and SAP proceeded to tell me that since they were partners with …

  • How To Best Understand SAP as Legacy for Software Companies

    ByPrimary Researcher

    … could do.
    One example of this is in the service parts planning space.
    The MCA Solutions Story
    In 2006, a vendor called MCA Solutions had one of the highest-rated applications I had ever tested called SPO. SPO focused on the most challenging problem in supply planning, called service parts planning. SPO performed service parts planning using two sets of advanced mathematics called inventory optimization and multi-echelon planning.

    *I have an article here that provides an overview of this category of software.
    *See my book on this topic if you have an interest.

    SAP developed a partnership with MCA

  • How to Supply Plan Long Lead Time vs Short Lead Time Items

    ByPrimary Researcher

    … most important thing to consider is that effective lead times change while lead times between locations do not change (in the short term).

    For software to be considered multi-echelon, it must have the ability to reflect the changes in adequate lead time in its planning. This is combined with inventory optimization, which is a different mathematics set. It allows the software to position inventory in the right location properly. Select the correct quantity based on the demand, the current stocking position, and the service level.
    It can also be described graphically, allowing the reader to understand what adequate lead …