Connections 2011: A Preview

Logility

We are officially one week away from the kickoff of Connections 2011, our annual customer conference. A tour of the Interactive Solutions Center designed to help attendees explore S&OP, collaboration, demand planning, supply planning, inventory optimization, manufacturing planning, transportation management and much, much more. Attendance is up more than 40%. And, we have added 25% more sessions.

Connections 2011: A Preview

Logility

We are officially one week away from the kickoff of Connections 2011, our annual customer conference. A tour of the Interactive Solutions Center designed to help attendees explore S&OP, collaboration, demand planning, supply planning, inventory optimization, manufacturing planning, transportation management and much, much more. Attendance is up more than 40%. And, we have added 25% more sessions.

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Expert Interview: Inventory Optimization

Logility

Inventory Optimization (IO) is a loosely used term in the industry. You’ll see it used to describe tactical inventory management, warehouse operations and strategic network assessments as well as used to describe single stage as well as multi-echelon environments. Inventory optimization is so much more and impacts the supply chain at all levels. Karin: What is Inventory Optimization?

Multi-Echelon Inventory Optimization Gets Cool

Logility

We’ve been in the Multi-Echelon Inventory Optimization (MEIO) business for more than 10 years helping companies such as Procter & Gamble, HP and Stanley Black & Decker gain competitive value through reduced inventory, freed-up working capital and improved service levels. We, along with our customers, think Voyager Inventory Optimization is cool. We often hear companies say their current ERP provides inventory optimization.

Video Podcast: Five Core Competencies of Inventory Optimization

Logility

A key characteristic of best-in-class companies is their success in using inventory optimization (IO) and cash management techniques to free up working capital. The amount of a company’s working capital trapped in inventory can be expressed as days inventory outstanding (DIO). To combat these and other supply chain challenges, operations research experts developed a discipline called Inventory Optimization about a decade ago.

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Video Podcast: Five Core Competencies of Inventory Optimization

Logility

A key characteristic of best-in-class companies is their success in using inventory optimization (IO) and cash management techniques to free up working capital. The amount of a company’s working capital trapped in inventory can be expressed as days inventory outstanding (DIO). To combat these and other supply chain challenges, operations research experts developed a discipline called Inventory Optimization about a decade ago.

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Netsuite Expands Cloud-Based Inventory Management with New Demand Planning Capabilities

Supply Chain Network

Designed to enable wholesalers, manufacturers, retailers, and distributors to achieve best-in-class inventory management practices, NetSuite Demand Planning enables companies to forecast peaks and troughs in demand and minimize capital tied up in inventory. allowing companies to tightly align sales forecasts with inventory replenishment plans. This supports businesses with minimizing excess inventory, eliminating stock outs, and improving customer satisfaction.

MEIO By the Numbers

Logility

100 million – Amount Proctor & Gamble saved in just the beauty division from multi-echelon inventory optimization ( Link ) ( Video ). $50 50 million – Total savings HP realized from MEIO as well as a 30% inventory reduction ( Link ). 27% – Amount Stanley Black & Decker’s reduced its finished goods inventory ( Link ). 26% – Amount Boston Scientific reduced their inventory ( Link ). $20 The Good.

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A Q&A with Stanley Black & Decker and Boston University on Inventory Optimization

Logility

Inventory optimization (IO) has become an increasingly important topic of late as companies try to balance inventory (amount, location, etc.) Following the inventory slashing practices during the global financial crisis, many were left unable to respond quickly and cost-effectively to a rise in demand, leaving these companies at a disadvantage. For one, more than 60% of the attendees responded they perform “less than optimal” inventory optimization.

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The Efficient Frontier Awaits

Logility

I am going to use the “efficient frontier” concept in inventory optimization as an example. By adjusting stock buffers and inventory targets around the supply chain (driven by an analysis of the company’s actual supply and demand history) managers can create significant reductions in the overall amount of inventory required to meet current service levels. There is a natural trade-off between service level and inventory cost.

Innovation’s Impact on the High-Tech Industry

Logility

He mentioned how the supply chain organization, particularly aftermarket parts , has changed and how they have had to evolve their forecasting and inventory management practices. Then, just a couple of days later, a supply chain industry analyst mentioned how this SKU proliferation is becoming a key issue with increasing risk associated to obsolete inventory. This allowed companies to store higher inventories of parts knowing they would be used.

VMI Today

Logility

VMI was widely hyped to dramatically reduce inventories, cut costs and improve efficiency across the supply chain. After reasonable fan-fare, these initiatives were more like “moving the inventory burden upstream” than reducing inventory throughout the network. Recently we conducted a survey on the use of vendor managed inventory. Is it really so one-sided or has Vendor Managed Inventory changed? Removal of 7 full days of inventory from the network.

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Going Lean? Don’t Leave Money on the Table

Logility

Demand signals are ignored and individual inventory buffers are based on lead times and lot size requirements throughout the supply chain. This means inventory and capacity have to be buffered in anticipation of actual demand. As lean initiatives are implemented, the delay between order and delivery shortens yet you still must ensure the gap is covered with the right amount of inventory. The prophets of lean manufacturing methods usually scorn planning systems.

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Sales and Operations Planning Summit

Logility

Talk in the lobby confirmed that one of the highlights was the session conducted by Logility's Sean Willems, Chief Scientist, Inventory Optimization Solutions. Sean was entertaining and informative, as usual, covering some of the history of IO, and an amusing but very compelling argument for how crucial multi-echelon inventory optimization (MEIO) is to S&OP success. There is value in jointly optimizing production and inventory planning.

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Reflective Thinking: Complexity

Logility

Webcast: Inventory Management: Balancing Fast and Slow-Moving Products. com-plex-i-ty [k uh m- plek -si-tee]. noun, the state or quality of being complex; intricacy. Source: Dictionary.com. As today’s networks grow and interaction with partners across the world becomes the norm, it is your ability to identify complexity and then develop a strategy to manage it that can make or break your competitiveness.

Seeing Around the Corner

Logility

With the benefit of 20/20 hindsight, we can see that many businesses didn’t properly anticipate the dramatic magnitude of change; many waited too long and then took drastic actions that impacted all inventory policies and all customer service goals. Inventories were slashed, cost cutting was the mantra and the result…inventory couldn’t meet demand and customer service levels began to decline…a loss of control.

ERP versus Best-of-Breed?

Logility

Supply chain modules from ERP providers are more challenging to integrate with their own financial, inventory, and order management modules than leveraging a best-of-breed provider. To improve their supply chain and drive more tangible value, the supply chain team at this well-known company is now spearheading efforts in inventory optimization and Sales & Operations Planning with complimentary best-of-breed providers.

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ERP versus Best-of-Breed?

Logility

Supply chain modules from ERP providers are more challenging to integrate with their own financial, inventory, and order management modules than leveraging a best-of-breed provider. To improve their supply chain and drive more tangible value, the supply chain team at this well-known company is now spearheading efforts in inventory optimization and Sales & Operations Planning with complimentary best-of-breed providers.

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Escaping the Cold

Logility

OK, enough about dreaming of warmer days … Connections 2011 is set to be our largest user conference to date with record registrations and 25 percent more sessions to accommodate our growing audience. The weather, even here in Atlanta, has been crazy and the thought of Spring and its warmer temperatures makes me long for my childhood home in South Florida. Just the other week we saw upwards of 7 inches of snow here, which closed the city for four days!

Network Design and MEIO: the Next Buddy Movie?

Logility

The classic buddy movie is based on a perfect synergy of two very distinct characters, and when Hollywood starts to cast that big supply chain epic (any day now), they should go with Network Design and Inventory Optimization as their Hope and Crosby. Network design (ND) and multi-echelon inventory optimization (MEIO) are certainly distinct—they can’t be captured under a single mathematical model. Ruggedly independent, yes, but they know they can rely on each other, too.

Three Steps to a Better Supply Chain

Logility

Each stage became a potential holding point for safety-stock inventory and can be connected to several upstream stages, such as multiple inputs for assembly, and several down-stream stages (for example, internal customers). The second is that each stage had direct costs associated which, in turn, drove the value of items held in inventory. Inventory optimization has proven to be a key driver in striking a balance across the network.

S&OP: An Interview with Nari Viswanathan, Aberdeen Group

Logility

The strategic shift is not only in response to the economic upheaval of the last 24+ months but also a strategic change in philosophy where companies are using information in place of inventory. With better and timelier information, you can more tightly manage your inventory. In case you missed it, I recently spoke with Aberdeen Group’s Nari Viswanathan about the change in S&OP strategy. Here is some of what we discussed.

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So You think You Can Replenish?

Logility

Factoring individual DCs’ inventory positions into replenishment decisions. When an enterprise with multiple tiers of locations uses a true multi-echelon approach to manage inventory, the primary objective is to minimize the total inventory in all echelons while meeting service commitments to end customers. How to excel at the Replenishment Shuffle.

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S&OP: Are You Prepared?

Logility

To construct the best overall plan based on sound business decisions, the S&OP team must have accurate, reliable and consistent information – the current status, future conditions, constraints, and concerns about demand, production, inventory, procurement, and finance. Supply Review – identify how to meet the demand through production/procurement optimization along with inventory optimization. High customer service is expensive without an optimized inventory plan.

A Few good SKUs

Logility

But you need to know where, why, and how much inventory is spread throughout the supply chain , and how to reduce the C items without destroying crucial customer service levels. This advice jibes with our recent paper “ What Every CFO Should Know About Inventory Optimization.” Walmart Wammy Teaches a Lesson in SKU Rationalization. To rationalize or not to rationalize: that is the question.

HCL Tech signs global alliance agreement with JDA Software Group

Supply Chain Network

The alliance addresses the unique supply chain challenges for business in the areas like planning, procurement, production, distribution, warehousing, inventory, transportation and customer services. Emerging Trends Information Technology News & Info Professional Communications Supply Chain Management cloud distribution inventory planning procurement production transportation warehousing

Checkpoint Launches First RFID-Based EAS Solution for Apparel Retailers

Supply Chain Network

NYSE:CKP), a leading global supplier of shrink management, merchandise visibility and apparel labeling solutions for the retail industry, today announced here at NRF Loss Prevention Conference & Expo its RFID Overhead EAS Solution, delivering benefits both for loss prevention and inventory visibility at the point-of-exit. Emerging Trends Information Technology Inventory News & Info RFID RFID Information Security Supply Chain Fraud Checkpoint Systems, Inc.

Who said supply chains are boring?: Reader Email

Supply Chains Rock

Thursday, September 29, 2011. But plastic can also be recycled, and it doesn’t break (loss of inventory). Who said supply chains are boring? Whenever I tell a friend, colleague or family member about my job as soon as the words "supply chain" are muttered I immediately see glassy eyes followed by a yawn or two. Little do they realize that every time they discard or recycle a carton of milk they are completing the end of the supply chain cycle.

Activant Anticipates More Virtual Collaboration in B2B Distribution

Supply Chain Network

a leading technology provider of Enterprise Resource Planning (ERP) software for distributors and specialty retailers, shared its vision for using ERP systems of record in combination with social media to help wholesale distributors improve efficiencies, customer engagement and collaboration at Summit 2011, held in Orlando, Florida, earlier this month. ” Attendees were impressed by the presentations, as well as the opportunities for hands-on training and networking at Summit 2011.

Toyota expects to halt production at some North American factories

Supply Chain Network

Toyota and Honda executives said they still have enough parts in inventory to sustain normal production until sometime next month, according to a report by Reuters. Toyota said it expects to halt production at some of its North American factories due to shortages of parts from Japan following the devastating earthquake. The automaker said it was unclear which facilities would be affected or how long the suspension might last.

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IBM Helps Danone to Accelerate and Secure Order Processing and B2B Interactions Through a Smarter Commerce Partner Network

Supply Chain Network

“Success in the fast-moving consumer goods sector depends entirely on the ability to communicate immediately and effectively with different partners across the supply chain to gain control over processes and inventory,” said Ronald Teijken, IBM EMEA manufacturing industry executive.

ScottsMiracle-Gro Improves Distribution System in Sustainability and Customer Service

Supply Chain Network

Improve inventory turns at retail by reducing fertilizer order minimums. A new 100,000-sq. warehouse will be added to The Scotts Miracle-Gro Company’s operation in Lebanon, Conn. to service the Company’s home center retail customers in northeastern U.S.

Supply Chain Management:The Real Headline for the 2011 Holiday.

Infosys Supply Chain Management

» The Real Headline for the 2011 Holiday Buying Season- Need for Balancing Retailer Online and Fulfillment Process Investments. In late November Supply Chain Matters penned a guest commentary on the Infosys Supply Chain Management blog that outlined our belief that retailers should anticipate different supply chain fulfillment capabilities for the upcoming 2011 holiday buying season. Posted by Bob Ferrari on December 30, 2011 6:54 AM | Permalink. December 2011.

Supply Chain Management:The Upcoming 2011 Holiday Buying.

Infosys Supply Chain Management

Main | Demand Planning in CPG industry - Practising the Best Practices » The Upcoming 2011 Holiday Buying Season will again Test Retailer MCO and Supply Chain Capabilities. 3.The state of product demand planning and inventory management among retailers becoming more advanced. As we approach the 2011 holiday season, the environment has somewhat changed, requiring retailers to adjust their supply chain fulfillment strategies.On December 2011. November 2011.

Logistics Industry’s Slow Economic Comeback Continues in Spite of Challenges

Supply Chain Network

Inventory carrying costs increased 10.3 percent last year due to higher costs for taxes, obsolescence, depreciation, and insurance, which were offset by a further drop in the inventory carrying rate and warehousing costs. We’ve also witnessed the resilience and importance of how well-managed, dynamic supply chains help companies drive down costs, manage inventories, respond to recalls, and adjust to sudden economic shifts and global crises.”.