What is a Min/Max policy? How do you know is working well for you? Smart IP&O gets Min/Max right!
The Min/Max inventory policy is one of four available Replenishment methods in SIO. When the inventory level drops to or below the Min, a replenishment order is generated. The reorder quantity is the number of units needed to raise the stock up to the Max. How do you know your Min/Max settings are working well and triggering replenishment orders at the right time and for the right quantities? If you are like most companies, setting Min/Max levels is based on rules of thumb or simple averaging techniques that don’t expose the trade off curve between service level and inventory cost. This makes it impossible to predict which items are likely to have overstocks and shortages in the future. In this Video Blog we elaborate on this and describe how Smart Inventory Optimization can help.
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What is Inventory Planning? A Brief Dictionary of Inventory-Related Terms
People involved in the supply chain are likely to have questions about various inventory terms and methods used in their jobs. This note may help by explaining these terms and showing how they relate.
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.
Centering 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.
Recent Posts
What is Inventory Planning? A Brief Dictionary of Inventory-Related TermsPeople involved in the supply chain are likely to have questions about various inventory terms and methods used in their jobs. This note may help by explaining these terms and showing how they relate. […]
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. […]
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. […]
How to Forecast Inventory RequirementsForecasting 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. […]
Six Demand Planning Best Practices You Should Think Twice AboutEvery field, including forecasting, accumulates folk wisdom that eventually starts masquerading as “best practices.” These best practices are often wise, at least in part, but they often lack context and may not be appropriate for certain customers, industries, or business situations. There is often a catch, a “Yes, but”. This note is about six usually true forecasting precepts that nevertheless do have their caveats. […]
Inventory Optimization for Manufacturers, Distributors, and MRO
- 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. […]
Prepare your spare parts planning for unexpected shocksIn 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. […]