Inventory optimization: Old in concept, but new in application. Chris Russell, vice president of Logility, discusses trends in the use of the practice, especially from a multi-echelon perspective.
Last year Target opened 124 stores across Canada, with disastrous consequences that are only just starting to be felt financially. Items were coming into the distribution centres sporadically and then piling up in storage, partly due to the barcodes not corresponding with the warehouse management system.
Analyst Insight: When asked why he robbed banks, Slick Willy answered, "Because that's where the money is!" Where's the money in your company? Capital for new projects is a real challenge, with an appropriation process that is complex, political and arduous, commanding the attention and scrutiny of the executive committee. Yet, planners and schedulers armed with custom spreadsheets routinely make million-dollar working capital decisions every day! - Rich Sherman, Principal Essentialist, Trissential
Analyst Insight: Inventory is the most visible dimension of supply chain performance. It is scrutinized on the balance sheet by the CFO and external analysts. However, inventory performance is more than a financial metric. Supply chain leaders who are charged to act as stewards for inventory performance must ensure sound planning and supply execution while collaborating to influence and align with demand and product managers. - Paul Lord, Research Director, Gartner Supply Chain
Will Benton, chief executive officer with GAINSystems Inc., defines the term "optimization" as it relates to inventory management, and shows how companies can reap big benefits from applying the concept to their operations.
The manufacturer of industrial safety products and cleaning supplies "didn't have a clue" about what was in its warehouses - until it implemented a new system for forecasting, purchasing and inventory control.
Hamish Brewer, chief executive officer of JDA Software, was giving a speech at the Economic Club of Phoenix last year, when the topic of global inventory levels came up. The question he posed: How much stuff is currently in transit or socked away in warehouses the world over? The answer: Nobody really knows.