Why Have We Not Reduced Inventory?

Supply Chain Shaman

This year supply chain leaders will celebrate thirty years of progress in supply chain management; but we have not made progress on one of the funamentals: inventory management. Have the early adopters of inventory optimization seen a reduction in inventory on their balance sheets?”

Three Lies and a Truth

Supply Chain Shaman

Here is the list: Supply chain technology implementations have reduced inventory. Here they are: The Lie of Inventory Reduction. Repeatedly, I heard that supply chain applications have saved costs, reduced inventory and improved customer service.

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Like A Green Lump of Clay….

Supply Chain Shaman

Q: Is it only inventory disrupting the agility resulting from inaccurate forecasts by S&OP? There are seven primary agility levers: Analysis of Form and Function of Inventory: Form of inventory is the decision of what form to hold the inventory in: raw material, semi-finished good or finished good. The less conversion of materials in the inventory strategy, the greater the flexibility of the supply chain. My iphone buzzed on my nightstand. I groaned.

Managing a Third Party Logistics Partnership

The Logistics of Logistics

When you have chosen a 3PL partner, insure that you have an effective Service Level Agreement (SLA) with accompanying Key Performance Indicators (KPIs) to manage the Service Level of the 3PL. This SLA/KPI has to be negotiated and agreed upon by you and your 3PL partner.This negotiation time can take three (3) to Six (6) months. If you do not want to start at the 3PL as a contact customer with a SLA/KPIs, you can ship your goods and become a public account.

Gartner: The Supply Chain is Getting Harder

Logility

That was the question Michael Uskert, managing vice president, Gartner, asked at the end of the day 1 keynote at Gartner’s 2012 Supply Chain Executive Conference. What is your moon?

Gartner: The Supply Chain is Getting Harder

Logility

That was the question Michael Uskert, managing vice president, Gartner, asked at the end of the day 1 keynote at Gartner’s 2012 Supply Chain Executive Conference. Specifically she points out demand sensing and shaping, end-to-end supply chain planning, inventory optimization, segmentation, network design, and appropriate functional and cross-functional KPIs and metrics. What is your moon?

The Challenges of Global S&OP

Logility

According to Gartner a “demand-driven S&OP processes can improve revenue from 2% to 5%, reduce inventories by 7% to 15% and improve the success of new product launch commercialization by 20%.” If you ask each department in your business how much inventory you need, the answers will be vastly different. Sales will say it needs “a lot” of inventory to ship every product, every day with no view of obsolescence, capital or investment required.

Global 100

Why Segmentation and Profitability Go Hand in Hand

Supply Chain Nation

The conference format and size were just right to allow comfortable sharing of ideas and lessons learned about various topics from S&OP and supply chain planning, to inventory optimization and transportation.

Lean and Agile Performance Measurement Governance (Part 1)

Supply Chain Nation

At a recent industry conference, I asked my 80-plus audience to raise their hands if they were “OK” with the current status of their performance measurement governance practices – including Metrics Identification, Measuring, Tracking, and Controlling. Systemized metrics tracking.

Announcing the Supply Chains to Admire for 2019

Supply Chain Shaman

It is not as simple as trading-off inventory, cost, and customer service. In the Supply Chains to Admire analysis, the focus is to understand the relative performance of a company within a peer group of growth, operating margin, inventory turns, and Return on Invested Capital (ROIC). (We

Part 2: How the Cloud Impacts the Software Lifecycle

Supply Chain Nation

For example, improving inventory management may lead to opportunities to deliver more efficiency from transportation operations. KPIs also enable you to demonstrate the value of IT to business users and management through metrics that are meaningful to the business community.

Guest Post: Ignoring this Performance Metric is Risky

TMC

Companies can then prioritize their mitigation efforts based on parameters such as value-at-risk, customer importance, and field inventory. When Cisco saw news of wildfires in Colorado in 2012, it wasn’t concerned, because it had no manufacturing or suppliers in the area.

Next-generation supply chains: Efficient, fast and tailored

Global Trade Management

Friday, 7 December 2012. inventory turns, while the Laggards achieve only 3.8. metrics that really impact the bottom line; the Leaders in our survey. ▼ 2012. (1). Global Cargo Monitoring / Cargo Tracking. International trade is the engine of global prosperity today. The size of global trade has nearly doubled since 1990. The healthy growth continues as world merchandise trade continues to grow with an average of 10% per year.

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Supply Chain Management:Rapid Innovation will Differentiate the.

Infosys Supply Chain Management

That in-turn raises the challenge of the ability to manage inventories across cross-channel commerce, along with the ability to position and deploy inventory to the most profitable channel and associated store outlets. Insuring that each function, including online marketing, store operations and supply chain have common objectives, metrics and aligned rewards for the coming year. Posted by Bob Ferrari on August 10, 2012 1:21 PM | Permalink. December 2012.

Supply Chain Management:Supply Chain Visibility: The need.

Infosys Supply Chain Management

As a result, organizations end up either under stocked (that leads to lost customers) or overstocked (leading to unwanted inventory carrying costs). It is imperative then, that companies can no longer bank on traditional solutions that only track inventory and its associated cost within the companys boundaries. Posted by Naveen Polyamut on May 9, 2012 11:10 AM | Permalink. December 2012. November 2012. October 2012. September 2012. August 2012.

Public Markets Reward Supply Chain Alignment

Supply Chain Shaman

The relationship between corporate financial performance and supply chain metrics was complex; and in my first attempts, I was unable to derive a correlation. I wanted to better understand which metrics truly mattered. The Metrics That Matter Are Different by Industry Sector.

Financial Benchmarking for Inventory Turns and Working Capital

Arkieva

Using so called orbit charts, we have benchmarked companies on EBIT% versus Inventory Turns. That benchmark helped to reveal the ‘best practice frontier’, which in turn helped in setting aggressive but aligned targets for EBIT% versus Inventory Turns.

Novo Nordisk: A Story of a Supply Chain Leader

Supply Chain Shaman

Note that neither company is making progress at the intersection of operating margin and inventory turns. Performance of BMS and Merck at the Intersection of Inventory Turns and Operating Margin. She joined Novo Nordisk in 2012.

Demand Planning - Practicing the Best Practices - Infosys Blogs

Infosys Supply Chain Management

In this blog I will focus on first couple of sub process of demand planning cycle - 1) Setting up demand planning objectives and metrics for different business units/customers/key items/locations 2) Setting up the frequency of the forecasting process (create/review/publish) with the time horizons. Hence it is not recommended as a single metric to be followed. Hence it is also not recommended as single metric to be followed. December 2012. November 2012.

Why?

Supply Chain Shaman

Early 2012 marked the end of the third decade and 2013 finds us into the fourth. It comes in many flavors–increase in inventory, changes in sales policies, new product lines– all add to the complexity.

The Best Practice Frontier in the 3D Supply Chain Triangle

Arkieva

Ensure continued alignment by sharing inventory turns as a KPI. Figure 1 shows it for inventory and service. The idea is that more service, typically comes with a higher inventory (or lower turns). They increase the service but require a higher inventory.

What About the Supply Chain Index?

Supply Chain Shaman

It is a quest and the subject of my next book, Metrics That Matter , that will publish in September, 2014. We used the period of 2006 to 2012 to build the model and we used the formula to attempt to predict 2013. I have traveled 12,000 miles this week.

New Bookends: The Tale of Supply Chain Global Leaders in Consumer Products

Supply Chain Shaman

Overall Results on the Supply Chain Metrics That Matter. These giants drove slight improvements in operating margin, inventory turns and Return on Invested Capital (ROIC) despite a slowing economy. I was challenged on this in 2012 by a client, and it forced me to do deeper research.

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Demand-Driven Transformation at Shell

Supply Chain Shaman

Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. They saw a steady drop in inventory and reduced working capital by about 50% over the period of 2011-2015. Impact of Demand Sensing on Inventory Levels.

What Should Be the Role of the Store?

Supply Chain Shaman

More and more companies are struggling to make progress in operating margin and inventory cycles. To understand the pervasive nature of this change, consider Amazon’s 2012 announcement: “We now have more than 15 million items in Amazon Prime, this is up 15x since we launched in 2005.

Changing Mental Models

Supply Chain Shaman

Be sure to not overlook the inventory carrying costs and the impact of demand latency. Some helpful reports include: Supply Chain Metrics That Matter: The Cash-to-Cash Cycle. Published by Supply Chain Insights in November 2012.

Top 10 Mistakes You’re Making Right Now as a Wholesaler and Distributor

EMERGE App

As some of you may know, EMERGE App was born out of an in-house inventory management solution for a custom t-shirt printing business that our founder ran while in school. But it ultimately brought respectable profits and a pivot to the inventory management solution that you see today.

Kimberly-Clark: A Demand-driven Leader

Supply Chain Shaman

In the Supply Chain Metrics that Matter table, we can clearly see that “operating margin” and “inventory turns” matter to public financial performance. Note the trends in operating margins and inventory turns. Reduction of Inventory.

Making Cents Out of Demand Sensing

Logility

I was guilty of this from time to time when I led a demand-planning group because we were evaluated on forecast accuracy as one of our key metrics. “ Gartner reports that the predominant inputs to demand-sensing solutions are daily point-of-sale (POS), customer inventory, transactional data, and order and shipment history. Demand sensing does not help supply planning and has no effect on inventory management.

Lora Cecere Asks: Why Do People Question the Value of S&OP?

Logility

The two companies’ results on operating margin and inventory turns are shown in figure 1. Owens Illinois is investing 3X more in R&D than Sonoco Products; yet Sonoco products had 5X greater growth with 1/2 the inventory. Alignment on a Metrics Portfolio.

Themes from the 2018 SCM World Leaders Forum

Kinaxis

In 2012, 59 percent of surveyed supply chain leaders answered yes. In addition, supply chain leaders should translate those metrics into frameworks for daily decisions at individual DC, plant, and production line levels. by Dr. Madhav Durbha.

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Is A Customer-Centric Strategy the Same as Demand-Driven? Outside-In?

Supply Chain Shaman

In 2012 I built on these concepts to define the market-driven value network. The focus is on channel data: price; inventory positions; and policies. It is about much, much more than Vendor Managed Inventory (VMI ) or Collaborative Forecasting and Replenishment.

50 warehouse automation stats you should know

6 River Systems

Since 2012, rents have increased by 5.6% Human error is the most frequent cause of inventory and fulfillment issues. 62% of respondents reported human error from manual process management as the #1 root cause of inventory fulfillment issues.

Lora Cecere Asks: Why Do People Question the Value of S&OP?

Logility

The two companies’ results on operating margin and inventory turns are shown in figure 1. Owens Illinois is investing 3X more in R&D than Sonoco Products; yet Sonoco products had 5X greater growth with 1/2 the inventory. Alignment on a Metrics Portfolio.

Nine Myths of S&OP Technology Selection

Supply Chain Shaman

I have done this report twice before–once in 2012 and again in 2013. In addition, 85% of the vendors in the multi-tier inventory optimization market that I wrote about in 1995, are now part of larger platforms. Sales and Operations Planning (S&OP) is in a renaissance.

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Top 10 Features of an Autonomous Warehouse

3PL Insights

Amazon is on the forefront of automation in the warehouse , currently using 45,000 Kiva Robots, after purchasing the company Kiva Systems in 2012 (they’re now renamed “Amazon robots”). The information received can be checked for accuracy with the company’s inventory software. This allows for inventory to be viewed in “real time.”. Real time inventory : Lost inventory can become extremely expensive.

And I thought last year’s Top 25 Supply Chain was a surprise

Kinaxis

I am bolder on Samsung, simply because they had the highest 2016 Inventory Turns aside from McDonalds. This, my friends, is why we need to get back to CORE supply chain metrics when measuring the Top 25.