Search Results for: inventory-optimization

  • How to Understand Redeployment for Slow Moving Inventory

    ByPrimary Researcher

    … normally run into great limitations.
    This a greatly underemphasized area of supply planning software development. Every client I have consulted with needs redeployment. The lack of enterprise software solutions is why this is a common area for custom development.
    The History of Redeployment and Inventory Analysis
    The original work on inventory optimization and multi echelon planning was developed for service parts network which needs redeployment. Many of the RAND Corporation papers that set the basis for modern MEIO had a strong emphasis on redeployment as this was a requirement of the US Air Force (the party paying for the research …

  • How to Use Order Fill Rate Versus Backorder as a Service Measurement

    ByPrimary Researcher

    … based upon backorders. In this article, you will learn about the order fill rate versus the backorder. Backorder is a measurement that has advantages over the order fill rate. You will learn about backorder as a service level measurement.
    Backorders or Order Fill Rate
    The majority of early work on inventory optimization and multi echelon planning began in the late 1950s and now drives the best breed service parts planning software applications designed around backorders as a service measurement. This is because the research was primarily paid for by the Air Force and carried out by the RAND Corporation. The …

  • Why Target Stock Level Not Safety Inventory is the Right Focus of Supply Planning

    ByPrimary Researcher

    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 Focus
    https://youtu.be/j3JBLt-6XfM
    Text Introduction (Skip if You Watched the Video)
    Safety inventory or safety stock is widely misunderstood and with many problems in setting the value logically. Safety stock often becomes a point of overemphasis in companies for reasons that we …

  • The Trouble with SAP APO Add-Ins

    ByPrimary Researcher

    … are very significant. One of the Add-Ins promises inventory optimization. I happen to focus on inventory optimization and know that SAP does not have a product in this area. Therefore, this PDF’s information seems to indicate that they do, which would be surprising to their main partner in inventory optimization, which is SmartOps. This brings up the question of how reliable the information is about these Add-Ins.
    It also makes the message coming from SAP Product Management even more confusing. Before, they declared no intent to offer inventory optimization and that SmartOps was their single partner. Now …

  • How to Best Understand a Heuristic Algorithm for Service Parts

    ByPrimary Researcher

    … local newspapers to figure out where is the better place to live. Then you move over there, check around again, narrow the scope further down, or even jump out to the next location.
    Meta-Heuristics
    So, inventory optimization is meta-heuristic. METRIC, it is using margin analysis as the criteria of heuristic.
    It starts by searching for the part that provides the best value to increase its inventory, the next one, the next one believing that we will stop at some point, and that will be the optimal inventory position overall.
    Most people who work in this area are …

  • SCM Books

    ByPrimary Researcher

    … However, as of 1/30/2012 both have been through the final edits. So publication should not be that far off. 
    Inventory Optimization and Multi Echelon Software
    This books explains the emerging technology of inventory optimization and multi echelon (MEIO) supply planning. The book describes with text and graphics how inventory optimization allows the entire supply plan to be controlled with service levels, and how multi echelon technology answers the question of where to locate inventory in the supply network. The only book on inventory optimization and multi echelon planning which compares how different best of breed vendors apply MEIO …

  • The Rise and Decline of Supply Chain Cost Optimization

    ByPrimary Researcher

    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 tricky to implement than initially thought. Optimization, where the company must agree internally to set costs, is far harder to implement than where the optimization is mostly a black box. When one hears the term “optimization” in supply chain planning, in the vast majority of …

  • How to Understand SmartOps MIPO

    ByPrimary Researcher

    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 major vendors in this space, and currently gets the majority of the press, one for this reason for this being that they have very tightly tied themselves to SAP.
    See our references for this article and related articles at this link.
    MIPO
    MIPO is optimization …

  • How to Better Understand Effective Lead Time

    ByPrimary Researcher

    … most important thing to consider is that while lead times between locations do not change (in the short term) effective lead times do change.
    For software to be considered multi echelon, it must have the ability to reflect the changes in effective lead time in its planning. This, combined with inventory optimization, is what allows the software to properly
    This, coupled with inventory optimization, is what allows the software to properly position, inventory to the right location, and in the right quantity based upon the demand, the current stocking position, and the service level.

    It can also be described graphically …

  • Why It Is Time for the SAP xApps Program to be Terminated

    ByPrimary Researcher

    … does.
    xApps for Inventory Optimization
    I believe at one time there somewhere around 140 xApps. How many there are currently is unknown to us as we no longer hear the term, and the term may have been changed by SAP and the program renamed. The area we know best is inventory optimization where SAP partnered with two firms, SmartOps and MCA Solutions. The three-year agreement with MCA has now expired. In the example of SmartOps, they provide the inventory optimization and SAP integrates to them. It’s important to understand that the inventory optimization capability is part of SmartOps …