|
AMR Research has found that deploying multi-enterprise inventory optimization solutions delivers a 3 to 6 month Return on Investment and produces a dramatic improvement in perfect order performance and supply chain agility. To achieve true inventory optimization, consumer products companies must model the entire supply chain, end-to-end, to ensure that inventory strategies simultaneously optimize inventory at all echelons of the supply chain. Optimizing one echelon at a time disregards the impact each echelon has on the others.
Multi-Enterprise Inventory Optimization (MIO) optimizes inventory across all echelons of the supply chain, from raw materials to warehouses to retailers. By modeling the entire supply chain, MIO generates an inventory strategy that decreases safety stock requirements by 10 percent or more without compromising service levels. Easy to use and scalable, MIO provides root cause analysis for changes in safety stock and simulation capability for improved planning and analysis.
MIO helps consumer products companies decrease costs and increase revenues by:
More accurate estimates of inventory requirements result in less unnecessary production, lower inventory targets and less inventory.
Carrying the right level of inventory yields fewer incomplete orders and higher perfect order percentages.
Fewer stock-outs and improved perfect order percentages make retailers more willing to participate in promotions.
Producing only required inventory delivers quicker inventory depletion and increases inventory turns.
Inventory is produced as needed, without excess, so write-offs for spoilage, shrinkage and obsolescence decrease and the costs of manufacturing unnecessary products are avoided.
Request more information about Multi-Enterprise Inventory Optimization.
|
|
Today, even the best CPG supply chain performers will suffer out-of-stocks averaging 10% (and as much as 20% on promotions) – yet on the whole,
they’re still sitting on 74 days of inventory.
Consumer Goods & Retail Report
The 21st Century
The latest GMA study on out of stocks indicates that manufacturers lose revenues of 3 to 4 % through out of stocks – translating to approximately
$9 to $10 million in lost profits for every $1 billion in sales.
“Supply Chain: A Source of Growth – Or a Sticking Point,”
Forum for Consumer Products and Retail Leadership, Volume 7, No. 2
On average retailers lose the sale 41% of the time when consumers are confronted with out of stocks. Brand loyalty is at risk if a consumer encounters 2 or 3 out of stocks.
"Inventory is the blessing and the curse of the supply chain. The overall deployment of optimal
inventory and safety stock is the blessing that many supply chain managers desire. The deployment of too much or the wrong mix of inventory is the curse that can derail any company."
"Have You Considered Inventory Optimization?"
The AMR Alert on Supply Chain Management
April 30, 2001
|
