Consumer Products companies (and others) face pressure to reduce costs, have customers demanding better availability, and have an ever-expanding global supply chain. In this environment, managing inventory is difficult. However, by optimizing inventory by determining the best buffers, the location of the push/pull boundaries, and the correct amount of inventory and safety stock at each location for each SKU.
To address these needs, IBM has pulled together a solution to help firms optimize inventory on an on-going basis. This solution pulls together IBM's optimization technology (IBM ILOG Inventory and Product Flow Analyst), our expertise in inventory optimization, our expertise in integration to ERP systems, and other capabilities such as SPSS's predictive analytics. Click here for a paper on this solution.
The benefits of inventory optimization can be significant:
- Studies suggest that reducing inventory can increase share price.
- Large firms can free up $100M in cash
- But, inventory optimization is not just about reducing inventory. For some SKU's, you may need to increase inventory to drive up revenue and reduce expediting costs.