Business Policy Blog

Pursuing Best practices in demand planning, forecasting and inventory optimization

The 3 Types of Supply Chain Analytics

The 3 Types of Supply Chain Analytics

The three types of supply chain analytics are “descriptive”, “predictive”, and “prescriptive.” Each plays a different role in helping you manage your inventory. Modern supply chain software lets you exploit all three helping you to reduce inventory costs, improve on time delivery and service levels, while running a more efficient supply chain.

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Protect your Demand Planning Process from Regime Change

Protect your Demand Planning Process from Regime Change

No, not that kind of regime change: Nothing here about cruise missiles and stealth bombers. And no, we’re not talking about the other kind of regime change that hits closer to home: Shuffling the C-Suite at your company. In this blog, we discuss the relevance of regime change on time series data used for demand planning and forecasting.

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Undershoot is Sabotaging your Service Level!

Undershoot is Sabotaging your Service Level!

Undershoot means that the lead time begins not at the reorder point but below it. Undershoot happens every time the demand that breached the reorder point took the stock down below (not down to) the reorder point. Undershoot picks your pocket before you even begin to roll the dice. It deludes the inventory professional into thinking his or her reorder points are sufficient to achieve their targets, whereas actual performance will not make the grade.

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Reveal Your Real Inventory Planning and Forecasting Policy by Answering These 10 Questions

Reveal Your Real Inventory Planning and Forecasting Policy by Answering These 10 Questions

In this blog, we review 10 specific questions you can ask to uncover what’s really happening with the inventory planning and demand forecasting policy at your company. We detail the typical answers provided when a forecasting/inventory planning policy doesn’t really exist, explain how to interpret these answers, and offer some clear advice on what to do about it.

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The Trouble With Turns

The Trouble With Turns

In our travels around the industrial scene, we notice that many companies pay more attention to inventory Turns than they should. We would like to deflect some of this attention to more consequential performance metrics.

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Recent Posts

  • Epicor Prophet 21 with Forecasting Inventory PlanningExtend Epicor Prophet 21 with Smart IP&O’s Forecasting & Dynamic Reorder Point Planning
    Smart Inventory Planning & Optimization (Smart IP&O) can help with inventory ordering functionality in Epicor P21, reduce inventory, minimize stockouts and restore your organization’s trust by providing robust predictive analytics, consensus-based forecasting, and what-if scenario planning. […]
  • Supply Chain Math large-scale decision-making analyticsSupply Chain Math: Don’t Bring a Knife to a Gunfight
    Math and the supply chain go hand and hand. As supply chains grow, increasing complexity will drive companies to look for ways to manage large-scale decision-making. Math is a fact of life for anyone in inventory management and demand forecasting who is hoping to remain competitive in the modern world. Read our article to learn more. […]
  • Mature bearded mechanic in uniform examining the machine and repairing it in factoryService Parts Planning: Planning for consumable parts vs. Repairable Parts
    When deciding on the right stocking parameters for spare and replacement parts, it is important to distinguish between consumable and repairable servoce parts. These differences are often overlooked by inventory planning software and can result in incorrect estimates of what to stock. Different approaches are required when planning for consumables vs. repairable service parts. […]
  • Four Common Mistakes when Planning Replenishment TargetsFour Common Mistakes when Planning Replenishment Targets
    How often do you recalibrate your stocking policies? Why? Learn how to avoid key mistakes when planning replenishment targets by automating the process, recalibrating parts, using targeting forecasting methods, and reviewing exceptions. […]
  • Smart Software is pleased to introduce our series of webinars, offered exclusively for Epicor Users.Extend Epicor Kinetic’s Forecasting & Min/Max Planning with Smart IP&O
    Epicor Kinetic can manage replenishment by suggesting what to order and when via reorder point-based inventory policies. The problem is that the ERP system requires that the user either manually specify these reorder points, or use a rudimentary “rule of thumb” approach based on daily averages. In this article, we will review the inventory ordering functionality in Epicor Kinetic, explain its limitations, and summarize how to reduce inventory, and minimize stockouts by providing the robust predictive functionality that is missing in Epicor. […]

    Inventory Optimization for Manufacturers, Distributors, and MRO

    • Blanket Orders Smart Software Demand and Inventory Planning HDBlanket Orders
      Our customers are great teachers who have always helped us bridge the gap between textbook theory and practical application. A prime example happened over twenty years ago, when we were introduced to the phenomenon of intermittent demand, which is common among spare parts but rare among the finished goods managed by our original customers working in sales and marketing. This revelation soon led to our preeminent position as vendors of software for managing inventories of spare parts. Our latest bit of schooling concerns “blanket orders.” […]
    • Hand placing pieces to build an arrowProbabilistic Forecasting for Intermittent Demand
      The New Forecasting Technology derives from Probabilistic Forecasting, a statistical method that accurately forecasts both average product demand per period and customer service level inventory requirements. […]
    • Engineering to Order at Kratos Space – Making Parts Availability a Strategic Advantage
      The Kratos Space group within National Security technology innovator Kratos Defense & Security Solutions, Inc., produces COTS s software and component products for space communications - Making Parts Availability a Strategic Advantage […]
    • wooden-figures-of-people-and-a-magnet-team-management-warehouse inventoryManaging the Inventory of Promoted Items
      In a previous post, I discussed one of the thornier problems demand planners sometimes face: working with product demand data characterized by what statisticians call skewness—a situation that can necessitate costly inventory investments. This sort of problematic data is found in several different scenarios. In at least one, the combination of intermittent demand and very effective sales promotions, the problem lends itself to an effective solution. […]

      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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