Improve Forecast Accuracy, Eliminate Excess Inventory, & Maximize Service Levels
How the Smart IP&O Platform Can Help
Smart IP&O, a Digital Supply Chain Platform
“Smart is the only one out there that has really licked the intermittent demand modeling challenge. We get accurate information and more importantly at the lowest dollar. Without Smart, I think we would have seen continued growth in our inventory and not necessarily gotten any greater benefit for service.”
“Smart IP&O enabled us to model demand at each stocking location and, using service level-driven planning, determine how much to stock to achieve the service level we require. By running and comparing different scenarios we can easily define and update optimal stocking policies for each tech support rep and stockrooms.”
“Smart IP&O allowed us to transform our manually maintained stocking levels to a service level-based model that drove significant improvements in fill rates while optimizing total inventory on hand. The accurate forecasts of stocking levels provided fact-based data that allowed us to strategically phase the consolidation effort where warehouse space was at a premium.”
Demand Forecasting and Inventory Optimization for Manufacturers, Distributors and MRO
Pursuing best practices in Demand Forecasting and Inventory Optimization for Manufacturers and MRO
Those who produce forecasts owe it to those who consume forecasts, and to themselves, to be aware of the uncertainty in their forecasts. This note is about how to estimate forecast uncertainty and use the estimates in your demand planning process. We focus on forecasts made in support of demand planning as well as forecasts inherent in optimizing inventory policies involving reorder points, safety stocks, and min/max levels.
An inventory professional who is responsible for 10,000 items has 10,000 things to stress over every day. Double that for someone responsible for 20,000 items. In the crush of business, routine decisions often take second place to fire-fighting: dealing with supplier hiccups, straightening out paperwork mistakes, recovering from that collision between a truck and the loading dock.
You may remember the story of Goldilocks from your long-ago youth. Sometimes the porridge was too hot, sometimes it was too cold, but just once it was just right. Now that we are adults, we can translate that fairy tale into a professional principle for inventory planning: There can be too little or too much inventory, and there is some Goldilocks level that is “just right.” This blog is about finding that sweet spot.
AUTOMATED STATISTICAL ANALYSIS DRIVES INVENTORY MANAGEMENT
Inventory managers struggle with the conflicting priorities of customer satisfaction and cost control. The featured article shows how to harness customer demand data to craft optimal inventory policies:
Measure current inventory policy performance: service levels, fill rates, inventory turns, and ordering costs.
Identify improvement goals: Assessing tradeoffs between inventory investment and the risk of running out.
Find the optimal balance point: Setting reorder points and order quantities that will achieve the results you require and much more in this article.
What Do You Need to Know About Forecasting and Planning Service Parts?
This paper describes Smart Software’s patented methodology for forecasting demand, safety stocks, and reorder points on items such as service parts and components with intermittent demand, and provides several examples of customer success.