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Monthly Archives

April 2014

Driving Backwards in the Dark Without Lead Time Forecasting

Is Lead Time Forecasting Your Missing Link?

Lead Time is a critical link in your supply chain. For a service based inventory replenishment system, lead time is the indispensable piece to knowing when it is time to place the order. This week, we review why you should tighten this link in your supply chain.

Lead Time impacts when you place an order to avoid lost sales, it helps you avoid goods arriving early that create overstock, it helps you plan better, and drive better results…If you know the real lead time – you don’t, lead time forecasting solves the problem.
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Superior-Inventory-Optimization-Takes-Collaboration-Review-2-ThingsReview the Inventory Optimization Links in Your Chain

Inventory Optimization is often misunderstood due to the ‘creative marketing’ of many software companies that points people in the wrong direction. A well-known supply chain guru wrote an article recently stating that inventory optimization is dead. The reality is that inventory optimization should be a collection of math algorithms applied together to maximize your profit potential while meeting service goals for each product / location. The problem isn’t that this is new math; the issue is that enough people haven’t thought about the problem as a math problem. Most software isn’t written to handle the complex math fast enough to deliver dynamically updated answers to questions like ‘when should I order’ and ‘how much inventory should I carry?’
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3 Tricks to Fix the Bullwhip Effect and Smooth Inventory Replenishment

A Bullwhip Effect Creates Waves of Inventory Issues

Demand forecasting can eliminate a lot of your “wave riding” activities in supply chain planning. Your company invests significant resources, time and money, in planning and executing inventory replenishment and promotional events. You often experience service problems when your suppliers don’t have inventory in place to support your business. The suppliers operate their supply chain independent of yours and forecast demand from your purchase orders. This sales forecasting approach has a silo effect on information; your partners don’t get an accurate view of the end consumer’s demand. When suppliers see order quantities changing, up or down; how do they interpret the signal? Sometimes they view changes as trends or lumpy demand, and react by changing their production or inventory plans. This results in a wave of over-reaction called the “bullwhip effect.”
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Inventory Optimization Pieces that Disable Your Success

Inventory Optimization: Balance is Key for a Success

How can you ensure the highest levels of success? Merchandisers and Buyers are executing promotions, product assortment changes, and new product roll-out events throughout the year. Those events affect the flow of product into your DCs and stores. They can also affect vendor fill rates and lead time performance. The volume of product purchased from a vendor also changes with those events. Unless you monitor and adjust to those changes, you will lose margin and sales. Inventory Optimization solutions provide value by monitoring the on time performance and volumes of your suppliers and allow you to make adjustments along the way.

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