Adexa Planning Webinars<br />MEIO Series:<br />The Optimization<br />Engine<br />
Better Service with Less Inventory<br />Multi-Echelon Inventory Optimization considers the following when optimizing inven...
Lower Cost</li></li></ul><li>What the MEIO Optimizer Considers<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC...
+<br />+<br />       56 Days<br />     17 Days	          2 Days            =  75 Days<br />2 Days<br />Shorten Lead-times ...
2 Days<br />Shorten Lead-times to Reduce Inventory<br />Fabrication<br />Assembly<br />DC<br />Customers<br />Canada<br />...
          $30<br />        $45		              $70	           $90	<br />Buffer With Less Expensive Inventory<br />Fabricati...
Inventory Pooling Gains the Advantage of Large Number Averages<br />Calculate the variation in demand using the BOM and so...
Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<...
Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<...
Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<...
For More Information<br />Visit: www.adexa.com<br />Supply Chain <br />Planning Blog:http://web.adexa.com/adexa-blog/<br /...
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MEIO Optimization Engine

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MEIO Optimization Engine

  1. 1. Adexa Planning Webinars<br />MEIO Series:<br />The Optimization<br />Engine<br />
  2. 2. Better Service with Less Inventory<br />Multi-Echelon Inventory Optimization considers the following when optimizing inventory targets<br />Forecast error and Stock out costs<br />Reducing Manufacturing and Distribution Lead Time<br />Reducing Inventory Costs with Postponement<br />Lowering Volatility with Inventory Pooling<br /><ul><li>Same Service Level
  3. 3. Lower Cost</li></li></ul><li>What the MEIO Optimizer Considers<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<br />$ Stock out<br />Electronics Inc.<br />Canada<br />PC Inc.<br />% Service Level<br />$ Stock out<br />Computek<br />HD Supplier<br />USA<br />CM2<br />% Service Level<br />$ Stock out<br />Supplier<br />Japan<br />
  4. 4. +<br />+<br /> 56 Days<br /> 17 Days 2 Days = 75 Days<br />2 Days<br />Shorten Lead-times to Reduce Inventory<br />Fabrication<br />Assembly<br />DC<br />Customers<br />Canada<br />Electronics Inc.<br />PC Inc.<br />Computek<br />USA<br />HD Supplier<br />CM2<br />Supplier<br />Japan<br />Safety Stock levels will increase with lead-time<br />
  5. 5. 2 Days<br />Shorten Lead-times to Reduce Inventory<br />Fabrication<br />Assembly<br />DC<br />Customers<br />Canada<br />Electronics Inc.<br />PC Inc.<br />Computek<br />USA<br />HD Supplier<br />CM2<br />Supplier<br />Japan<br />Safety Stock levels will increase with lead-time<br />
  6. 6. $30<br /> $45 $70 $90 <br />Buffer With Less Expensive Inventory<br />Fabrication<br />Assembly<br />DC<br />Customers<br />Canada<br />Electronics Inc.<br />PC Inc.<br />Computek<br />USA<br />HD Supplier<br />CM2<br />It is critical to set expectations on lead-time<br /> for order when postponing and pooling<br />Supplier<br />Japan<br />
  7. 7. Inventory Pooling Gains the Advantage of Large Number Averages<br />Calculate the variation in demand using the BOM and sourcing <br />Fabrication<br />Assembly<br />Hubs<br />DC<br />Canada<br />Electronics<br />Inc.<br />PC Inc.<br />USA<br />Computek<br />HD Supplier<br />Japan<br />CM2<br />Supplier<br />Less variation at common storage<br />
  8. 8. Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<br />$ Stock out<br />Electronics Inc.<br />Canada<br />PC Inc.<br />% Service Level<br />$ Stock out<br />Computek<br />HD Supplier<br />USA<br />CM2<br />Supplier<br />% Service Level<br />$ Stock out<br />Japan<br />
  9. 9. Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<br />$ Stock out<br />Electronics Inc.<br />Canada<br />PC Inc.<br />% Service Level<br />$ Stock out<br />Computek<br />HD Supplier<br />USA<br />CM2<br />Supplier<br />% Service Level<br />$ Stock out<br />Japan<br />
  10. 10. Balancing All the MEIO Factors<br />Total L/T 75 Days<br />Component<br />Assembly<br />DC<br />Hubs<br />% Service Level<br />$ Stock out<br />Electronics Inc.<br />Canada<br />PC Inc.<br />% Service Level<br />$ Stock out<br />Computek<br />HD Supplier<br />USA<br />CM2<br />Supplier<br />% Service Level<br />$ Stock out<br />Japan<br />
  11. 11. For More Information<br />Visit: www.adexa.com<br />Supply Chain <br />Planning Blog:http://web.adexa.com/adexa-blog/<br />For Questions:http://adexa.com/contact/contact.asp<br />Bill Green at: wgreen@adexa.com<br />U.S. © 2010 Adexa, Inc. All rights reserved.<br />
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