MEIO Introduction

Adexa Planning Webcasts
Introduction To:
Multi-Echelon
Inventory Optimization

Keeping The Customer Happy At What Cost ?
The decision on how much inventory to hold is a trade off between customer service and the level of working capital
Finance looks to keep costs down, and Customer Service wants high levels of service.
Cost
Savings
Customer
Service

How Much Inventory Is Right?
To decide how much inventory is right we need to understand the strategy for the business, then perform tactical calculations to translate the strategy into policy.
The cost of inventory , like any other insurance must be weighed against the value of what is at risk and the chance of a loss happening
Strategy
Tactical
Inventory
Cost of
Inventory
Commodity
Make-to-Stock
Demand Variability
=
Cost of
lost Sales
Specialty
Lead Time
Make-to-Order

What Are Enterprises Doing Wrong?
By not measuring these critical factors a company will not have the right amount of inventory for each product.
As risk increases the amount of weeks of inventory should increase.
Just right
Too Much
Too Little

Is There A Magic Formula For The Right Amount?
With the right data we can calculate the right amount of inventory to achieve a targeted level of service.
By putting in place a system and process to calculate optimum inventory targets, we can raise service and lower inventory
Same Service Level
Lower Cost

How Do You Do the Calculations For A Full Supply Chain?
Inventory can be buffered throughout the entire supply chain to increase service and keep costs low.
Multi-echelon inventory optimizations (MEIO) look at the key inventory factors to determine where to best buffer inventory.

For More Information
Visit: www.adexa.com
Supply Chain
Planning Blog:http://web.adexa.com/adexa-blog/
For Questions:http://adexa.com/contact/contact.asp
Bill Green at: wgree@adexa.com
U.S. © 2010 Adexa, Inc. All rights reserved.

MEIO Introduction

by Adexa, Inc. on May 14, 2010

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