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What is the difference between Demand planning and Inventory optimization ?

The Smart Forecaster

Pursuing best practices in demand planning,

forecasting and inventory optimization

What is the difference between Demand planning and Inventory optimization ? 

The Smart Demand Planning app (SDP) provides demand forecasts. The SDP forecasting engine is also the core of the Smart Inventory Optimization app (SIO), which stress-tests various inventory policies using a number of demand scenarios to find optimal inventory policy settings.

 

 

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Direct to the Brain of the Boss – Inventory Analytics and Reporting

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

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  • Rethinking forecast accuracy, A shift from accuracy to error metricsRethinking forecast accuracy: A shift from accuracy to error metrics
    Measuring 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 Policies
    I 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. […]
  • Every forecasting model is good for what it is designed forEvery Forecasting Model is Good for What it is Designed for
    With so much hype around new Machine Learning (ML) and probabilistic forecasting methods, the traditional “extrapolative” or “time series” statistical forecasting methods seem to be getting the cold shoulder. However, it is worth remembering that these traditional techniques (such as single and double exponential smoothing, linear and simple moving averaging, and Winters models for seasonal items) often work quite well for higher volume data. Every method is good for what it was designed to do. Just apply each appropriately, as in don’t bring a knife to a gunfight and don’t use a jackhammer when a simple hand hammer will do. […]

    Inventory Optimization for Manufacturers, Distributors, and MRO

    • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
      In 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. […]
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    • 5 Steps to Improve the Financial Impact of Spare Parts Planning5 Steps to Improve the Financial Impact of Spare Parts Planning
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      Forecasting Techniques for a more profitable business

      The Smart Forecaster

       Pursuing best practices in demand planning,

      forecasting and inventory optimization

      Improve Forecast Accuracy, Eliminate Excess Inventory, & Maximize Service Levels

       

      In this Video Dr. Thomas Willemain, co–Founder and SVP Research, defines and compares the most useful Forecasting Techniques: Exponential Smoothing, Single Exponential Smoothing, Holt’s Method and Winter’s Method.  These videos explain the basic thinking under each technique as well as the math behind them, how they are used in practice and the tradeoff of each method.

      Forecasting Techniques for a more profitable business
      Leave a Comment

      RECENT POSTS

      Direct to the Brain of the Boss – Inventory Analytics and Reporting

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      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.

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        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. […]
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      • Rethinking forecast accuracy, A shift from accuracy to error metricsRethinking forecast accuracy: A shift from accuracy to error metrics
        Measuring 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 Policies
        I 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. […]
      • Every forecasting model is good for what it is designed forEvery Forecasting Model is Good for What it is Designed for
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        • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
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          In 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. […]
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          TOP 3 COMMON INVENTORY POLICIES

          The Smart Forecaster

           Pursuing best practices in demand planning,

          forecasting and inventory optimization

          Inventory control policies and strategies for a more profitable business

          In this Video Dr. Thomas Willemain, co–Founder and SVP Research, defines and compares the three most used inventory control policies. These policies are divided into two groups, periodic review and continuous review. There is also a fourth policy called MRP logic or forecast based inventory planning which is the subject of a separate video blog that you can see here. These videos explain each policy, how they are used in practice and the pros and cons of each approach.

          Leave a Comment

          RECENT POSTS

          Direct to the Brain of the Boss – Inventory Analytics and Reporting

          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

          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.

          Using Key Performance Predictions to Plan Stocking Policies

          Using Key Performance Predictions to Plan Stocking Policies

          I 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.

          Recent Posts

          • Direct to the Brain of the Boss- Inventory AnalysisDirect 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 for Inventory ManagementYou Need to Team up with the Algorithms
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          • Rethinking forecast accuracy, A shift from accuracy to error metricsRethinking forecast accuracy: A shift from accuracy to error metrics
            Measuring 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 Policies
            I 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. […]
          • Every forecasting model is good for what it is designed forEvery Forecasting Model is Good for What it is Designed for
            With so much hype around new Machine Learning (ML) and probabilistic forecasting methods, the traditional “extrapolative” or “time series” statistical forecasting methods seem to be getting the cold shoulder. However, it is worth remembering that these traditional techniques (such as single and double exponential smoothing, linear and simple moving averaging, and Winters models for seasonal items) often work quite well for higher volume data. Every method is good for what it was designed to do. Just apply each appropriately, as in don’t bring a knife to a gunfight and don’t use a jackhammer when a simple hand hammer will do. […]

            Inventory Optimization for Manufacturers, Distributors, and MRO

            • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
              In 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 ReliabilityCentering Act: Spare Parts Timing, Pricing, and Reliability
              In 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 Planning5 Steps to Improve the Financial Impact of Spare Parts Planning
              In 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 Planning SoftwareBottom Line Strategies for Spare Parts Planning
              Managing 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. […]

              Share, develop, and manage consensus demand plans

              The Smart Forecaster

               Pursuing best practices in demand planning,

              forecasting and inventory optimization

              Share, develop, and manage consensus demand plans to ensure inventory policy matches business strategy.

              Smart Inventory Optimization (SIO) creates planning scenarios. SIO starts with a “Live” scenario that shows where you are now. Various team members can create their own scenarios, perhaps dividing the work by product line or sales territory. One decision maker can then merge these scenarios into a consensus plan that becomes the “Goal” scenario, which drives the ERP system’s replenishment planning.

              Leave a Comment

              Related Posts

              Direct to the Brain of the Boss – Inventory Analytics and Reporting

              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

              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.

              Using Key Performance Predictions to Plan Stocking Policies

              Using Key Performance Predictions to Plan Stocking Policies

              I 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.

              Recent Posts

              • Direct to the Brain of the Boss- Inventory AnalysisDirect 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 for Inventory ManagementYou 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. […]
              • Rethinking forecast accuracy, A shift from accuracy to error metricsRethinking forecast accuracy: A shift from accuracy to error metrics
                Measuring 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 Policies
                I 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. […]
              • Every forecasting model is good for what it is designed forEvery Forecasting Model is Good for What it is Designed for
                With so much hype around new Machine Learning (ML) and probabilistic forecasting methods, the traditional “extrapolative” or “time series” statistical forecasting methods seem to be getting the cold shoulder. However, it is worth remembering that these traditional techniques (such as single and double exponential smoothing, linear and simple moving averaging, and Winters models for seasonal items) often work quite well for higher volume data. Every method is good for what it was designed to do. Just apply each appropriately, as in don’t bring a knife to a gunfight and don’t use a jackhammer when a simple hand hammer will do. […]

                Inventory Optimization for Manufacturers, Distributors, and MRO

                • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
                  In 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 ReliabilityCentering Act: Spare Parts Timing, Pricing, and Reliability
                  In 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 Planning5 Steps to Improve the Financial Impact of Spare Parts Planning
                  In 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 Planning SoftwareBottom Line Strategies for Spare Parts Planning
                  Managing 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. […]

                  FORECAST DRIVEN INVENTORY MANAGEMENT

                  The Smart Forecaster

                   Pursuing best practices in demand planning,

                  forecasting and inventory optimization

                  Improve Forecast Accuracy, Eliminate Excess Inventory, & Maximize Service Levels

                  In this Video Dr. Thomas Willemain, co–Founder and SVP Research, talks about forecast-based inventory management policy, also known as MRP logic. This is the fourth in our series on major approaches to managing inventory.  We begin by looking at some very simple and then more robust models of inventory dynamics that help us determine how much to order or manufacture and when. We then consider how to calculate lead time and account for lead time variability. Tom concludes by describing the importance of safety stock, it’s role in properly buffering against demand and supply uncertainty, and how best to calculate it. 

                   

                  Leave a Comment

                  RECENT POSTS

                  Direct to the Brain of the Boss – Inventory Analytics and Reporting

                  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

                  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.

                  Using Key Performance Predictions to Plan Stocking Policies

                  Using Key Performance Predictions to Plan Stocking Policies

                  I 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.

                  Recent Posts

                  • Direct to the Brain of the Boss- Inventory AnalysisDirect 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 for Inventory ManagementYou 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. […]
                  • Rethinking forecast accuracy, A shift from accuracy to error metricsRethinking forecast accuracy: A shift from accuracy to error metrics
                    Measuring 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 Policies
                    I 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. […]
                  • Every forecasting model is good for what it is designed forEvery Forecasting Model is Good for What it is Designed for
                    With so much hype around new Machine Learning (ML) and probabilistic forecasting methods, the traditional “extrapolative” or “time series” statistical forecasting methods seem to be getting the cold shoulder. However, it is worth remembering that these traditional techniques (such as single and double exponential smoothing, linear and simple moving averaging, and Winters models for seasonal items) often work quite well for higher volume data. Every method is good for what it was designed to do. Just apply each appropriately, as in don’t bring a knife to a gunfight and don’t use a jackhammer when a simple hand hammer will do. […]

                    Inventory Optimization for Manufacturers, Distributors, and MRO

                    • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
                      In 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 ReliabilityCentering Act: Spare Parts Timing, Pricing, and Reliability
                      In 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 Planning5 Steps to Improve the Financial Impact of Spare Parts Planning
                      In 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 Planning SoftwareBottom Line Strategies for Spare Parts Planning
                      Managing 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. […]