Behind ToolsGroup’s elegant simplicity is a powerful engine, capable of optimizing each item in your SKU portfolio to achieve target service levels. It doesn’t just independently calculate inventory targets for each item in isolation, but simultaneously optimizes your entire global assortment of SKU-Locations.
What’s more, our service-driven approach positions inventory across the network to efficiently meet high customer service level objectives. Instead of simply creating a “one size fits all” inventory mix, it identifies different service level targets for each individual SKU by location to achieve a blended service level target aligned with the high-level marketing/business objective. For instance, instead of assigning all SKUs in a class a 98% service level, a global 98% target is achieved by optimally setting individual SKUs service levels at 99%, 97%, 99.5%, etc., achieving the same overall objective with far less inventory expense.
With today’s large SKU portfolios and fast replenishment cycles, it’s not unusual for companies selling anything from home goods to spare parts to face intermittent demand patterns with up to 80 percent of their items. Our inventory optimization solution was engineered for this challenge. It analyzes a company’s entire SKU portfolio and recommends the optimal inventory level for each item to achieve the target service level. Most tools employ a top-down approach that assigns safety stock levels based on aggregate order volumes. ToolsGroup’s bottom-up, statistical approach provides much greater accuracy by factoring in demand signal details (such as order frequency) and supply variables (such as lead time variation).
To truly serve the end customer, the entire network, from raw materials suppliers and factories through distribution centers and wholesalers, needs the right stock. This is no easy task. Our MEIO solution proposes optimal inventory levels at each stage of the supply chain, simultaneously balancing across multiple echelons, locations and different Bill-of-Material (BOM) levels. It finds the most globally efficient balance between upstream and downstream stock while optimizing safety stocks and cycle stocks (optimal postponement). It also supports centralized demand planning, lowers costs across the supply chain and streamlines operations.
It is not sufficient to know that an inventory plan was put together taking all supply chain parameters into consideration. The proof of the plan is in what it delivers by way of service and inventory levels in the future, when new business situations are encountered, new demand signals hit, and the characteristics of the supply chain change. SO99+ has the unique capability to simulate the past under different inventory policies to see how they would have performed. This feature, with its visual animation, allows an enterprise to confirm and validate that the supply chain solution is indeed delivering to the planned parameters.
Whether delivered in the cloud as a cost-effective managed service or via hosted or on-site software, our inventory optimization ‘low touch’ and low cost. It routinely delivers fast, multi-million dollar ROIs by improving customer service levels and inventory turns while reducing stock-outs.