Aberdeen Group report highlights the need for inventory optimisation to manage supply chain complexity

Send to friend

According to Aberdeen Group's latest Analyst Insight Report, "Inventory Optimisation Strategies for the Chief Supply Chain Officer" key to managing the growing complexity of today's supply chains, reducing costs and improving customer service levels is the use of best-of-breed inventory optimisation software. The report, sponsored by Logility and published by Nari Viswanathan, vice president and principal analyst, Aberdeen Group, found that best-in-class companies were five times more likely to use a best-of-breed solution for their multi-echelon inventory optimisation initiative.  

In response to global economic pressures such as demand volatility and the need to reduce operating costs, companies are turning to advanced supply chain solutions such as inventory optimisation to manage these challenges. A company's reliance on spreadsheets, an ERP or APS solution will place them at a competitive disadvantage without access to the breadth and depth of functionality a true multi-echelon inventory optimisation (MEIO) tool provides. The use of these specialized solutions differentiates best-in-class companies from those that Aberdeen defines as either industry average or laggards.

"In the current business climate where companies are sitting on cash, hesitant to hire and facing general uncertainty, an Inventory Optimisation project is a very prudent approach to improve working capital and customer service levels," said Nari Viswanathan, vice president and principal analyst, Aberdeen Group.  "The advantage of an Inventory Optimisation initiative is that it can be done in a multi-phased manner where process changes can be implemented first followed by finished goods inventory optimisation and then finally network wide inventory optimization. Companies should be cautious to select a technology approach that can scale to address the organization's most complex multi-echelon inventory network.  Additional benefits come when the solution is integrated with the rest of the supply chain software like Demand Planning, Supply Chain Planning, etc."

The report also features an interview with Stanley Black & Decker which, through the use of inventory optimization, was able to reduce inventory on hand and simultaneously improve fill rates. Readers will learn about the challenges the company faced, its process for identifying the need for multi-echelon inventory optimisation and the results gained deploying Logility Voyager Solutions Inventory Optimisation.. In addition, you can view an on-demand webcast with Michael Martin, manager, global supply planning strategy, Stanley Black & Decker where he elaborates on the company's implementation and use of MEIO here

"In the current global economy, it is important for companies to identify how to profitably grow, manage demand and supply volatility, and meet increasing customer expectations," said Mike Edenfield, president and CEO, Logility. "As this report indicates, multi-echelon inventory optimisation can have a dramatic impact on an organisation's supply chain performance and provide the platform needed to meet business and service level objectives for complex supply chains with multiple stages of inventory."  

Recognized industry-wide for its rapid implementation, quick ROI, ease-of-use, and ability to solve complex problems, Logility Voyager Solutions is a comprehensive supply chain solution suite which features performance monitoring capabilities to increase supply chain visibility and boost performance in key areas including demand, inventory and replenishment planning, sales and operations planning (S&OP), manufacturing planning and scheduling, supply and inventory optimisation, transportation planning and management, and warehouse management.

Click Here to download your complimentary copy of this report.

Comments (0)

Add a Comment

This thread has been closed from taking new comments.