Business Policy Blog

Pursuing Best practices in demand planning, forecasting and inventory optimization

Top 3 Most Common Inventory Control Policies

Top 3 Most Common Inventory Control Policies

To make the right decision, you’ll need to know how demand forecasting supports inventory management, choice of which policy to use, and calculation of the inputs that drive these policies.The process of ordering replenishment stock is sufficiently expensive and cumbersome that you also want to minimize the number of purchase orders you must generate.

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Ten Tips that Avoid Data Problems in Software Implementation

Ten Tips that Avoid Data Problems in Software Implementation

Once a customer is ready to implement software for demand planning and/or inventory optimization, they need to connect the analytics software to their corporate data stream.This provides information on item demand and supplier lead times, among other things. We extract the rest of the data from the ERP system itself, which provides metadata such as each item’s location, unit cost, and product group.

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Riding the Tradeoff Curve

Riding the Tradeoff Curve

In the supply chain planning world, the most fundamental decision is how to balance item availability against the cost of maintaining that availability (service levels and fill rates). At one extreme, you can grossly overstock and never run out until you go broke and have to close up shop from sinking all your cash into inventory that doesn’t sell.

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Stop Leaking Money with Manual Inventory Controls

Stop Leaking Money with Manual Inventory Controls

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.

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Key Considerations When Evaluating your ERP system’s Forecasting Capabilities

Key Considerations When Evaluating your ERP system’s Forecasting Capabilities

Consider what is meant by “demand management”, “demand planning”, and “forecasting”. These terms imply certain standard functionality for collaboration, statistical analysis, and reporting to support a professional demand planning process.  However, in most ERP systems, “demand management” running MRP and reconciling demand and supply for the purpose of placing orders

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Recent Posts

  • professional technician engineer planning spare parts in industrial manufacturing factory,Prepare your spare parts planning for unexpected shocks
    In today's unpredictable business climate, we do have to worry about supply chain disruptions, long lead times, rising interest rates, and volatile demand. With all these challenges, it's never been more vital for organizations to accurately forecast parts usage, stocking levels, and to optimize replenishment policies such as reorder points, safety stocks, and order quantities. In this blog, we'll explore how companies can leverage innovative solutions like inventory optimization and parts forecasting software that utilize machine learning algorithms, probabilistic forecasting, and analytics to stay ahead of the curve and protect their supply chains from unexpected shocks. […]
  • Uncover data facts and improve inventory performanceUncover data facts and improve inventory performance
    The best inventory planning processes rely on statistical analysis to uncover relevant facts about the data. When you have the facts and add your business knowledge, you can make more informed stocking decisions that will generate significant returns. You'll also set proper expectations with internal and external stakeholders, ensuring there are fewer unwelcome surprises. […]
  • Electricity problems. Repairman is working indoors with Software for spare partsElectric Utilities’ Problems with Spare Parts
    Every organization that runs equipment needs spare parts. All of them must cope with issues that are generic no matter what their business. Some of the problems, however, are industry specific. This post discusses one universal problem that manifested in a nuclear plant and one that is especially acute for any electric utility. […]
  • Correlation vs Causation Relevant to your demand planning businessCorrelation vs Causation: Is This Relevant to Your Job?
    Outside of work, you may have heard the famous dictum “Correlation is not causation.” It may sound like a piece of theoretical fluff that, though involved in a recent Noble Prize in economics, isn’t relevant to your work as a demand planner. Is so, you may be only partially correct. […]
  • Downtown Miami skyline panorama and with software guided lights on at duskSmart Software Customer, Arizona Public Service to Present at USMA 2023
    Smart Software CEO and APS Inventory & Logistics Manager to present USMA 2023 Session on APS supply chain transformation project and the role of inventory optimization technology in their new process. […]

    Inventory Optimization for Manufacturers, Distributors, and MRO

    • professional technician engineer planning spare parts in industrial manufacturing factory,Prepare your spare parts planning for unexpected shocks
      In today's unpredictable business climate, we do have to worry about supply chain disruptions, long lead times, rising interest rates, and volatile demand. With all these challenges, it's never been more vital for organizations to accurately forecast parts usage, stocking levels, and to optimize replenishment policies such as reorder points, safety stocks, and order quantities. In this blog, we'll explore how companies can leverage innovative solutions like inventory optimization and parts forecasting software that utilize machine learning algorithms, probabilistic forecasting, and analytics to stay ahead of the curve and protect their supply chains from unexpected shocks. […]
    • Electricity problems. Repairman is working indoors with Software for spare partsElectric Utilities’ Problems with Spare Parts
      Every organization that runs equipment needs spare parts. All of them must cope with issues that are generic no matter what their business. Some of the problems, however, are industry specific. This post discusses one universal problem that manifested in a nuclear plant and one that is especially acute for any electric utility. […]
    • Worker maintenance industrial machine robotic Forecasting Spare PartsHow to Forecast Spare Parts with Low Usage
      What do you do when you are forecasting an intermittently demanded item, such as a spare part, with an average demand of less than one unit per month? Most of the time, the demand is zero, but the part is significant in a business sense; it can’t be ignored and must be forecasted to be sure you have adequate stock. […]
    • Spare Parts, Replacement Parts, Rotables, and Aftermarket PartsSpare Parts, Replacement Parts, Rotables, and Aftermarket Parts
      Those new to the parts planning game are often confused by the many variations in the names of parts. This blog points out distinctions that do or do not have operational significance for someone managing a fleet of spare parts and how those differences impact inventory planning. […]

    Problem

    What is my inventory position today, on any item?  Where are we stocking out and how often? What are my delivery times?  Why did we ship late?  Do we have too much inventory in one location, not enough in another?  What are my real supplier lead times?   These are obvious, daily questions, and the answers can reveal underlying root causes that when resolved will improve supply chain performance.  But these answers are elusive, often because data is locked up in your ERP and only accessible via limited reporting views or spreadsheets.  Creating these reports manually using Excel requires data imports, reformatting, and distribution to key stakeholders, wasting countless hours of valuable planning time. This means that getting updated information, when you need it, is not always possible. Not having access to these answers means that problems reveal themselves only after it is too late, and opportunities for improving the inventory planning process are overlooked, further contributing to poor performance.

    Solution

    Smart Operational Analytics (SOA™) is a native web reporting solution available on Smart’s Inventory Planning and Optimization Platform, Smart IP&O.  It provides a fast, easily understood, current perspective on the state of your inventory, its performance against critical metrics, actual supplier lead times, opportunities to rebalance stocks across facilities, and helps you uncover root causes of operational inefficiencies.  SOA automatically refreshes as often as you’d like providing all stakeholders immediate, up-to-date reporting on your operations and performance.  You’ll have constant visibility of inventory levels, orders, shipments, and supplier performance to ensure you’ll always be in tune with the state of your operations and resolve issues before they become problems. Enhance visibility. Improve responsiveness. Increase your bottom line.

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      Smart Operational Analytics

      Inventory Analytics

      Quantify inventory value
      Inventory segmentation
      Inventory classification
      Trend metrics over time

      Operational Performance

      Measure service level performance
      Measure fill rate performance
      Calculate turns, holding & ordering costs
      Trend metrics over time

      Supplier Insights

      Measure supplier performance
      Compare supplier lead times
      Rank suppliers across available metrics
      Trend metrics over time

      Who is Operational Analytics for?

      Smart Operational Analytics is for executives, planners, and operations professionals who seek to:

      • Measure inventory costs and performance in real time.
      • Assess and compare Supplier performance.
      • Identify root causes of stockouts, excess inventory, and late deliveries.
      • share KPI’s such as service levels, turns, costs, and more across the organization.
      What questions can Operational Analytics answer?
      • What does my inventory look like? By value, count, classification?
      • Is my inventory trending up, down, or the same?
      • How much of my inventory is overstocked, understocked, or acceptable?
      • Can inventory be transferred from overstocked locations to under stocked locations?
      • Can existing supplier orders be cancelled or deferred?
      • What are my current turns, service levels, and fill rates and how do they trend over time?
      • How many out of stock events occurred this week, this month, this quarter?
      • How are my suppliers performing, how do they compare?
      • What is my supplier lead time and how has it changed over time?
      Inventory and supplier reporting for your enterprise

      Smart Operational Analytics empowers you to:

      • Benchmark service performance and inventory costs.
      • Benchmark supplier performance.
      • Assess and Classify Inventory by class, stage, and more.
      • Share metrics with the organization.

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