Inventory optimization is a recurring process aimed at setting the optimal inventory policies and stocking levels throughout the supply chain to meet required service levels. The optimal positioning of inventory in the supply chain triggers a significant performance improvement by increasing both customer service levels and supply chain velocity. Such an improvement has a major impact on the financial performance of the company.
- What is the optimal inventory policy that minimizes inventory holding cost while maintaining or improving serviceability and financial performance?
- At which node(s) in the supply chain should the inventory of each product or component be positioned?
- What is the optimal safety stock level for each product or component?
SimFlex Inventory Optimization Solution#
SimFlex proprietary Inventory Optimizer considers customer demand variability and lead-time fluctuations to define the optimal safety stock levels for each product and component at each site in the supply chain. As a result, customer service levels can be increased, while reducing the amount of capital tied up in supply chain inventories.Inventory optimization requires granularity of data, and a holistic view of the supply chain. SimFlex offers a robust solution which considers multiple echelons in the supply chain, and complicated bills of material with hundreds of components. SimFlex also considers seasonality of demand, allowing for optimized inventory levels to be calculated for different time periods across multiple periods. As inventory optimization is a recurring process, SimFlex allows for rapid, automated integration to a variety of data sources like ERP, data warehouses and spreadsheets. SimFlex solutions are also Powered By SAP NetWeaver certified. Various scorecards and dashboards show the required inventory levels and stocking locations to move along the "Efficient Frontier".