Demand-Driven Inventory Optimization and Replenishment E-Book

Robert A. Davis

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: SAS Institute Inc
• Sprache: Englisch

Seitenzahl: 431

Veröffentlichungsjahr: 2015

Beschreibung

Remove built-in supply chain weak points to more effectively balance supply and demand Demand-Driven Inventory Optimization and Replenishment shows how companies can support supply chain metrics and business initiatives by removing the weak points built into their inventory systems. Beginning with a thorough examination of Just in Time, Efficient Consumer Response, and Collaborative Forecasting, Planning, and Replenishment, this book walks you through the mathematical shortcuts set up in your management system that prevent you from attaining supply chain excellence. This expanded second edition includes new coverage of inventory performance, business verticals, business initiatives, and metrics, alongside case studies that illustrate how optimized inventory and replenishment delivers results across retail, high-tech, men's clothing, and food sectors. Inventory optimization allows you to avoid out-of-stock situations without impacting the bottom line with excessive inventory maintenance. By keeping just the right amount of inventory on hand, your company is better able to meet demand without sacrificing the cost-effectiveness of other supply chain strategies. The trick, however, is determining "just the right amount"--and this book provides the background and practical guidance you need to do just that. * Examine the major supply chain strategies of the last 30 years * Remove the shortcuts that prohibit supply chain excellence * Optimize your supply/demand balance in any vertical * Overcome systemic weaknesses to strengthen the bottom line Inventory optimization is benefitting companies around the world, as exemplified here by case studies involving Matas, PWT, Wistron, and Amway. When inefficiencies are built into the system, it's only smart business to identify and remove them--and implement a new streamlined process that runs like a well-oiled machine. Demand-Driven Inventory Optimization and Replenishment is an essential resource for exceptional supply chain management.

Leseprobe

Table of Contents

Wiley & SAS Business Series

Title Page

Copyright

Preface

Acknowledgments

About the Author

Chapter 1: Creating Demand-Driven Supply

The Path to Demand-driven Supply

Shifting from Supply-driven to Demand-driven Methodologies

Moving to a Demand-driven Supply

Creating My Island of Efficiency

What Is an Island of Efficiency?

Notes

Chapter 2: Achieving Timely and Accurate Responses to Customer Demand

Push and Pull Supply Chains

Enter Toyota and the Kanban System

From Kanban to Just-in-time Production

What Is Needed for a Jit System to Work Efficiently?

A Broader View of Jit/kanban in Action

The Known Demand Becomes the Predictable Demand

The Jit Production Supply Chain Weaknesses Become Amplified in the Distribution Chain

Some Distribution Issues

The Customer Pushes Back

The Squeeze Is On

Creating an Efficient Supply Chain Using Jit Functionality

Push-pull Tipping Points

In Search of True Demand

Notes

Chapter 3: Just-in-Time and Enterprise Resource Planning Rise Together

Denormalized Tables

Sequential Optimization

Upstream Service Levels

Accumulated Demand Variance

Multiple Hierarchies of Service Level Requirements

The Effects of ERP Shortcomings

Shifting Costs on a Balance Sheet

Moving the Focus Away from Inventory to Replenishment

The Long Tail

Making Mistakes Faster

Working with One Hand Tied Behind Your Back

So, Here We Are

Notes

Chapter 4: How Does Days of Supply Wreak Havoc on the Supply Chain?

Rule-of-thumb Days/weeks of Supply Exposed

Inefficiencies of Rule-of-thumb Days of Supply

Turning Days of Supply on Its Head

Creating the Efficiency Envelope

The Journey, so Far

Notes

Chapter 5: What Will You Accomplish with Inventory Optimization?

How Does Inventory Optimization Improve the ERP Systems?

Development of the Inventory Policies and Replenishment Plans

The Network Structure

The Service Level

The Lead Time and Lead-time Variance

Ordering Rules

Demand

Developing Policy Outputs

Chapter 6: Shifting the Focus from an Algorithm Discussion to a Business Discussion

Putting the Algorithms into the Hands of the Business Users for Best Results

Working in a Business User Environment

Working in the Technical Analyst Environment

The Business and Analyst Persona Chasm

Chapter 7: Fitting Unlimited Optimization into a Constraining World

The Current State of Affairs in Replenishment Planning

How Alerts Take on More Significance When Customer Service Is Paramount

Time

Space

The Comingling of Demand

The Short Supply or Allocated Product

Where Does “optimized” Replenishment Need to Go in Order to Encompass the Entire Distribution Chain?

The Upstream Reaction

Moving Upstream Reactions into Real Replenishment

Replenishment as a Means to Inventory Optimization Harmony

Chapter 8: Reviewing the Three Proof of Value Engagements

Proving That Inventory Optimization Is a Good Business Rationale

The Good: When Proof of Value Engagements Work

The Bad: When Proof of Value Engagements Don't Work

Viewing the POV from a Project Management Perspective

The Best: A Complete Proof of Value Engagement

Proof of Value Steps that Lead to Success

A Different Product Perspective

The Eye-opening Moment: Discovery and Insight

Why the ERP System Had Trouble With Most of the MRO Products

Simulation of the Replenishment Policies

Simulation of the ERP/SCM Module Reaction

Simulation of the Optimization System

The Effect of Policy

POV Results: Inventory Optimization Enhances The ERP System

How Long Will It Take to Achieve the Reductions?

Were there Improved Buyer Efficiencies?

Looking Back

Chapter 9: Inventory Optimization in the Real World: Matas A/S

Matas A/S: Automated Forecasting and Replenishment

What Were the Problems at Matas?

DC Replenishment

Store Replenishment

A Project in Inventory Optimization

A Pilot Program Versus a Proof of Value Process

Rolling Out the Project to The Enterprise

The Matas Network

A Closer Look at the Optimization Process

The Ultimate Matas Goal

The Matas Results

Reflections On the Project

Chapter 10: The Strategic Value Assessment

Looking Beyond the Request for Proposal

The Strategic Value Assessment

The Results of the SVA

Strategic Value Assessment Benefit Analysis

So, What Does the SVA Accomplish?

Chapter 11: A View of an Inventory Optimization Installation

What Does an Inventory Optimization Project Look Like?

In Closing

Note

Chapter 12: Inventory Optimization in Supply Chain Verticals

Retail: Life at the End of the Chain

Retail Benefits of Inventory Optimization

Distribution: Being in the Middle of Siblings Who Don't Play Well with Each Other

Distributor Benefits of Inventory Optimization

Consumer Packaged Goods Manufacturing: Where It All Began

Consumer Packaged Goods Manufacturing Benefits of Inventory Optimization

Hey, Wait a Minute: Where Are You Getting These Time-Phased Numbers?

Notes

Chapter 13: Pulling It All Together

Aligning the Inventory Optimization Goals to Correct Deep-seated Business Actions in a Company

Inventory Optimization Can't Do What was Done Before

How to Change the Playing Field

Overarching Business Issues Impede Positive Inventory Control

Supply Chain Inventory Strategies Benchmark Report Recommendations

In Closing

Notes

Epilogue

Index

End User License Agreement

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Guide

Cover

Table of Contents

Begin Reading

List of Illustrations

Chapter 1: Creating Demand-Driven Supply

Figure 1.1 Inventory Bleed-Off of Davis Product Portfolio

Figure 1.2 The Kanban System

Figure 1.3 Unintended Island of Efficiency

Chapter 2: Achieving Timely and Accurate Responses to Customer Demand

Figure 2.1 Push-Pull Quadrant

Figure 2.2 Inventory Decision Points

Chapter 3: Just-in-Time and Enterprise Resource Planning Rise Together

Figure 3.1 Normalized Tables Grab Small Bits of Data to Complete a Transaction

Figure 3.2 Denormalized Tables Process

Figure 3.3 Sequential Optimization Process

Figure 3.4 Upstream Service Level Assumption

Figure 3.5 Demand Variance Assumption

Figure 3.6 Unique Downstream Service Level Process

Figure 3.7 The Long Tail Visualized

Figure 3.8 Economic Order Quantity Decision Model

Chapter 4: How Does Days of Supply Wreak Havoc on the Supply Chain?

Figure 4.1 Rule-of-Thumb Inventory Levels

Figure 4.2 The Goldilocks Effect

Figure 4.3 Increasing Service Level by Raising Days of Supply

Figure 4.4 Reducing Inventory by Lowering Days of Supply

Figure 4.5 Cost of Inventory against Service Level Based on Rule-of-Thumb Days

Figure 4.6 Sequential Optimization/Bullwhip Effect

Figure 4.7 False Demand Signals Due to Echelon Leveling

Figure 4.8 Uniquely Optimized Inventory Levels Based on a Balance of Service Level and Costs

Figure 4.9 Adjustment of Inventory by SKU/Location Granularity

Figure 4.10 The Efficiency Envelope

Figure 4.11 Effects of Optimized Inventories on the Balance Sheet and Income Statement

Chapter 5: What Will You Accomplish with Inventory Optimization?

Figure 5.1 Input and Output Flows of Inventory and Replenishment Optimization

Figure 5.2 Single-Echelon Input Data

Figure 5.3 Single-Echelon Data Output

Figure 5.4 Possible Algorithm Variables

Figure 5.5 Dual or Two-Echelon Input Data

Figure 5.6 Dual or Two-Echelon Output Data

Figure 5.7 Single-Echelon Inventory Policies

Figure 5.8 Single-Echelon Order Suggestion

Figure 5.9 Single-Echelon Reporting

Figure 5.10 Sequential Optimization Based on Hierarchies Being Optimized without Visibility Upstream or Downstream: Islands of Efficiency

Figure 5.11 Multiechelon or Systematic/Network Optimization Where the Entire Network Optimizes as One Entity

Chapter 6: Shifting the Focus from an Algorithm Discussion to a Business Discussion

Figure 6.1 Hype Cycle and Acceptance Rates

Figure 6.2 Ad-hoc Scenario

Figure 6.3 Ad-hoc Results

Figure 6.4 RDC Results

Figure 6.5 Promoting the Results

Figure 6.6 Customer-Facing Scenario

Figure 6.7 Budget Constraint

Figure 6.8 Budget Constraint Results

Figure 6.9 Promoting the Results

Figure 6.10 Lead-time Change

Figure 6.11 Lead-time Results

Figure 6.12 RDC Results

Figure 6.13 Effecting Other Nodes

Figure 6.14 Individual Product Results

Figure 6.15 FORECASTED_DEMAND_FACT Properties

Figure 6.16 The SERVICE_LEVEL Properties Table

Figure 6.17 The ARC Properties Table

Chapter 7: Fitting Unlimited Optimization into a Constraining World

Figure 7.1 Turn and Promotional Volume Is Usually Treated Differently When Large Promotional Orders Are Placed

Figure 7.2 Using Turn Volume Variance to Recognize and Act on Promotional Orders

Chapter 8: Reviewing the Three Proof of Value Engagements

Figure 8.1 Inventory Profile over Time

Figure 8.2 The POV Roadmap

Figure 8.3 Buyer Focus Quadrant

Figure 8.4 Inventory by Quadrant

Figure 8.5 Using Min-Max Inventory Policies, the Inventory Reaction Was Lagging

Figure 8.6 Inability to React to Anomalies in Time

Figure 8.7 Application of the Base-Stock Inventory Policies

Figure 8.8 Inventory Velocity Review

Figure 8.9 Historical Comparison to SAS Inventory Optimization

Figure 8.10 Inventory Bleed-Off Schedule

Chapter 9: Inventory Optimization in the Real World: Matas A/S

Figure 9.1 The Matas KPI Metrics over a Three-Month Period

Figure 9.2 Where Inventory Optimization Fit into the Matas System

Figure 9.3 The Matas Distribution System

Figure 9.4 The Optimization Process Flow

Figure 9.5 Capturing the Min-Max Ordering Process

Figure 9.6 The Old Matas Ordering System

Figure 9.7 The New Matas Ordering System

Chapter 10: The Strategic Value Assessment

Figure 10.1 Benefits of the SVA

Figure 10.2 Projection Assumptions

Figure 10.3 Time-Phased Financial Benefits Analysis

Chapter 11: A View of an Inventory Optimization Installation

Figure 11.1 Project Management Workflow

Figure 11.2 Pilot Decision Point

Chapter 12: Inventory Optimization in Supply Chain Verticals

Figure 12.1 Inventory Optimization Study / Supply Chain Insights / Lora Cecere / May 2015

Figure 12.2 Long-tail products are slower moving and more difficult to forecast, resulting in higher-than-normal safety stocks.

Figure 12.3 Retailers have effectively pushed inventory risk back onto the vendors.

Figure 12.4 “Let's Put Working Capital to Work,” Lora Cecere, August 30, 2011

List of Tables

Chapter 8: Reviewing the Three Proof of Value Engagements

Table 8.1 The POV Results

Table 8.2 Overall Results of Inventory Optimization POV

Table 8.3 Breakout by Buyer Category Portfolio

Chapter 12: Inventory Optimization in Supply Chain Verticals

Table 12.1 Supply Chain News: Inventory Performance by Industry 2005 to 2010 / July 27, 2011

Table 12.2 Time-Phasing Inventory Benefits for a Retailer

Table 12.3 Time-Phasing Inventory Benefits at a Distributor

Table 12.4 Time-Phasing Inventory Benefits at a Consumer Packaged Goods Manufacturer

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