Inventory Optimization Archives

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Multi-echelon Inventory Optimization vs Inventory Optimization

24 March 2021

The subway system is the lifeblood of New York City, pre-COVID carrying an average of 5.5 million people per day in 6,684 cars across 472 stations¹. Each station is part of a larger system and operates on a set schedule[...]

3 March 2021

Fashion Industry Challenges Require Elegant Demand Planning

When you’re perusing luxury handbags online, or testing which cocktail dress suits you the best, you probably don’t pause to consider all the supply chain complexities and analytics required to ensure the fashion items you’re craving are in-stock. While sophisticated[...]

23 February 2021

Inventory Planning vs. Inventory Optimization: What’s the Difference?

What’s the difference between traditional inventory planning and inventory optimization? Anyone can come up with a plan. The real challenge is making sure it’s a good plan. Optimizing your inventory is a different beast than simply planning your inventory. If[...]

11 June 2019

Five Things You Need to Know about Inventory Optimization in the Digital Age

With all the buzz around digital transformation, someone peering in from outside supply chain may assume most businesses have already digitized essential tasks like inventory planning. The reality is that this transformation takes time and a change of mindset. It’s[...]

14 May 2019

The Absolut Company: Balancing Service and Inventory Creates a Delicious Mix

The world’s #2 selling vodka brand leaves nothing to chance when it comes to quality and sustainability. Here’s how they teamed up with ToolsGroup partner Optilon for a seamless supply chain planning process. With continuously shifting consumer preferences and brands[...]

12 April 2019

How to Make Supply Chain Complexity Work to Your Advantage

With supply chain complexity increasing at an unprecedented rate, perhaps the biggest challenge for businesses is figuring out how to navigate this uncertainty to deliver service profitably. Amazon sells more than 3 billion products through 11 different country marketplaces globally.[...]

5 February 2019

Design, Operating and Situational Inventory Trade-Offs

Gartner analyst Paul Lord has developed a framework to better understand inventory trade-offs by categorizing those decisions according to the objectives they are meant to achieve: structural, operational and situational. Many companies struggle with decisions such as “How many days of[...]

13 November 2018

Why Probabilistic Forecasting Is Better for Inventory Optimization

Last month we published a primer on probabilistic forecasting, an alternative to deterministic or ‘single number’ forecasting. In this post we’ll explore how probabilistic forecasting not only creates better forecasts, but also improves inventory optimization by improving the stock levels[...]

25 September 2018

Balancing Service Levels and Supply Chain Costs

Editor’s Note: Last year ToolsGroup became Microsoft’s partner for Multi-echelon Inventory Optimization (MEIO) in Industrial accounts. We collaborated on a blog about how to solve the often difficult challenge of balancing service levels with supply chain costs. You can see[...]

28 August 2018

How Manufacturers Optimize Their Inventories

Editor’s Note: Microsoft’s Colin Masson, Global Industry Director of Manufacturing Solutions, sat down with me to discuss how manufacturers optimize their inventories. You can see a longer version of the interview on the Microsoft website or my slightly abridged version[...]

19 June 2018

Still Managing Your Inventory with Spreadsheets?

Most companies are still trying to use Excel to optimize their inventories. Supply Chain Insights’ 2018 Inventory Optimization Technologies Study suggests the number may be as high as 75%. These companies struggle to meet service level requirements while respecting financial impacts, and[...]

8 June 2018

Segmenting Your Inventory by Gross Margin and Demand Variability

Gartner Research analyst Paul Lord has developed a thought-provoking approach (shown in the below diagram) for tailoring supply and inventory tactics to different inventory segments based on gross margin and demand variability. Traditional ABC inventory models segment inventory into A,[...]

Demand Sensing reduces demand variability by extracting signals out of noisy demand, provides earlier demand insights, and enables more accurate short-term plans and faster reactions to market changes.

ToolsGroup’s Sales & Operations Planning (S&OP) solution helps companies achieve both higher levels of S&OP maturity and better business outcomes by bridging the gap between strategic planning and operational execution.

Promotions Planning gives cross-functional teams the visibility to synchronize demand shaping campaigns and promotions with supply chain operations ensuring that inventory is in the right place to meet demand on a daily basis, right down to the store level.

Production Planning provides unparalleled visibility, insight and control of the entire production process to improve efficiency and quality control, and service demand.

Inventory Optimization factors in multiple planning variables and probabilities to generate an optimal multi-echelon inventory plan for every item in a portfolio to achieve target service levels.

Allocation and Replenishment automatically calculates optimal inventory levels for both existing and new items to create a time-series plan that achieves target service levels even in the face of demand variability and distribution complexity.

Demand Forecasting and Planning automates the creation of demand plans using machine learning and empowers demand collaboration reducing forecast error and optimally deploying inventory.

Supply Planning provides visibility across vendors and warehouses, simplifies collaboration with suppliers, optimizes the supply network and leverages machine learning to continually improve planning by analyzing a wide range of variables and data across the supply chain.