Supply Chain Management (SCM) is a strategic technique used by businesses across the globe to improve performance. Both manufacturing and service organizations utilize operational performance as an evaluation metric. Implementing SCM effectively is crucial for firms to achieve their performance and growth objectives.
Learn industry best practices on how to Increase Supply Chain Performance below.
The flow of items, information, and money are the three most important factors of supply chain management. The efficiency and profitability of an enterprise are directly proportional to the quality of management of these resources. To Improve the efficiency and productivity of every step in the supply chain it is important to think about the following factors:
· Strategy
· Planning
· Organization
· Management
· Control Activities
Direct to the Brain of the Boss – Inventory Analytics and Reporting
In this blog, the spotlight is cast on the software that creates reports for management, the silent hero that translates the beauty of furious calculations into actionable reports. Watch as the calculations, intricately guided by planners utilizing our software, seamlessly converge into Smart Operational Analytics (SOA) reports, dividing five key areas: inventory analysis, inventory performance, inventory trending, supplier performance, and demand anomalies.
You Need to Team up with the Algorithms
This article is about the real power that comes from the collaboration between you and our software that happens at your fingertips. We often write about the software itself and what goes on “under the hood”. This time, the subject is how you should best team up with the software.
How Are We Doing? KPI’s and KPP’s
Dealing with the day-to-day of inventory management can keep you busy. But you know you have to get your head up now and then to see where you’re heading. For that, your inventory software should show you metrics – and not just one, but a full set of metrics or KPI’s – Key Performance Indicators.
Confused about AI and Machine Learning?
Are you confused about what is AI and what is machine learning? Are you unsure why knowing more will help you with your job in inventory planning? Don’t despair. You’ll be ok, and we’ll show you how some of whatever-it-is can be useful.
How to Forecast Inventory Requirements
Forecasting inventory requirements is a specialized variant of forecasting that focuses on the high end of the range of possible future demand. Traditional methods often rely on bell-shaped demand curves, but this isn’t always accurate. In this article, we delve into the complexities of this practice, especially when dealing with intermittent demand.
Everybody forecasts to drive inventory planning. It’s just a question of how.
Often companies will insist that they “don’t use forecasts” to plan inventory. They often use reorder point methods and are struggling to improve on-time delivery, inventory turns, and other KPIs. While they don’t think of what they are doing as explicitly forecasting, they certainly use estimates of future demand to develop reorder points such as min/max.
Recent Posts
Why Inventory Planning Shouldn’t Rely Exclusively on Simple Rules of ThumbFor too many companies, a critical piece of data fact-finding ― the measurement of demand uncertainty ― is handled by simple but inaccurate rules of thumb. For example, demand planners will often compute safety stock by a user-defined multiple of the forecast or historical average. Or they may configure their ERP to order more when on hand inventory gets to 2 x the average demand over the lead time for important items and 1.5 x for less important ones. This is a huge mistake with costly consequences. […]
Direct to the Brain of the Boss – Inventory Analytics and ReportingIn this blog, the spotlight is cast on the software that creates reports for management, the silent hero that translates the beauty of furious calculations into actionable reports. Watch as the calculations, intricately guided by planners utilizing our software, seamlessly converge into Smart Operational Analytics (SOA) reports, dividing five key areas: inventory analysis, inventory performance, inventory trending, supplier performance, and demand anomalies. […]
You Need to Team up with the AlgorithmsThis article is about the real power that comes from the collaboration between you and our software that happens at your fingertips. We often write about the software itself and what goes on “under the hood”. This time, the subject is how you should best team up with the software. […]
Rethinking forecast accuracy: A shift from accuracy to error metricsMeasuring the accuracy of forecasts is an undeniably important part of the demand planning process. This forecasting scorecard could be built based on one of two contrasting viewpoints for computing metrics. The error viewpoint asks, “how far was the forecast from the actual?” The accuracy viewpoint asks, “how close was the forecast to the actual?” Both are valid, but error metrics provide more information. […]
Using Key Performance Predictions to Plan Stocking PoliciesI can't imagine being an inventory planner in spare parts, distribution, or manufacturing and having to create safety stock levels, reorder points, and order suggestions without using key performance predictions of service levels, fill rates, and inventory costs. […]
Inventory Optimization for Manufacturers, Distributors, and MRO
Top Differences Between Inventory Planning for Finished Goods and for MRO and Spare PartsIn today’s competitive business landscape, companies are constantly seeking ways to improve their operational efficiency and drive increased revenue. Optimizing service parts management is an often-overlooked aspect that can have a significant financial impact. Companies can improve overall efficiency and generate significant financial returns by effectively managing spare parts inventory. This article will explore the economic implications of optimized service parts management and how investing in Inventory Optimization and Demand Planning Software can provide a competitive advantage. […]
Centering Act: Spare Parts Timing, Pricing, and ReliabilityIn this article, we'll walk you through the process of crafting a spare parts inventory plan that prioritizes availability metrics such as service levels and fill rates while ensuring cost efficiency. We'll focus on an approach to inventory planning called Service Level-Driven Inventory Optimization. Next, we'll discuss how to determine what parts you should include in your inventory and those that might not be necessary. Lastly, we'll explore ways to enhance your service-level-driven inventory plan consistently. […]
5 Steps to Improve the Financial Impact of Spare Parts PlanningIn today’s competitive business landscape, companies are constantly seeking ways to improve their operational efficiency and drive increased revenue. Optimizing service parts management is an often-overlooked aspect that can have a significant financial impact. Companies can improve overall efficiency and generate significant financial returns by effectively managing spare parts inventory. This article will explore the economic implications of optimized service parts management and how investing in Inventory Optimization and Demand Planning Software can provide a competitive advantage. […]
Bottom Line Strategies for Spare Parts PlanningManaging spare parts presents numerous challenges, such as unexpected breakdowns, changing schedules, and inconsistent demand patterns. Traditional forecasting methods and manual approaches are ineffective in dealing with these complexities. To overcome these challenges, this blog outlines key strategies that prioritize service levels, utilize probabilistic methods to calculate reorder points, regularly adjust stocking policies, and implement a dedicated planning process to avoid excessive inventory. Explore these strategies to optimize spare parts inventory and improve operational efficiency. […]
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.