Camelot ITLab - Advanced Inventory Management

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Today’s central challenges in supply chain management are …

Today’s central challenges in supply chain management are
shorter product lifecycles which evolve higher demand uncertainty
and acting on global markets which increases supply
chain complexity. Most companies have to face high inventory
level or dropping service levels as a result. Therefore inventory
optimization is one of the main topics in supply chain management
today since it is possible to reduce current inventory
levels by up to 30 % by applying state of the art inventory
concepts.

This importance is reflected by a current study of Aberdeen
Group which places inventory management software at the
top of the list for supply chain technology investments. Within
that category, the highest priority is clearly multi-stage inventory
optimization, which generates optimal inventory levels
for each item across each of the stages or tiers within an
organization's supply chain network. More than 80 % of
respondents cited multi-stage inventory optimization as a
top priority.

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  • 1. CAM EL O T I TL AB sol u tion s _Technologies _Products & Solutions _SAP Applications Advanced Inventory ManagementAn integrated user-centeredapproach in combination withlatest technology support andmethodologyInventory Management ChallengesToday’s central challenges in supply chain management areshorter product lifecycles which evolve higher demand uncer-tainty and acting on global markets which increases supplychain complexity. Most companies have to face high inventorylevel or dropping service levels as a result. Therefore inventoryoptimization is one of the main topics in supply chain man-agement today since it is possible to reduce current inventorylevels by up to 30 % by applying state of the art inventoryconcepts.This importance is reflected by a current study of AberdeenGroup which places inventory management software at thetop of the list for supply chain technology investments. Withinthat category, the highest priority is clearly multi-stage inven-tory optimization, which generates optimal inventory levelsfor each item across each of the stages or tiers within anorganizations supply chain network. More than 80 % ofrespondents cited multi-stage inventory optimization as atop priority.From Innovations to Solutions.
  • 2. CAM EL O T I TL AB sol u tion s Advanced Inventory Management Creating a fully integrated S&OP process with full transparency about effects on your total chain inventories Supplier Intermediates Logistics Specialities Specialities RDC LDC Logistics Customer synthesis Production Production Uncertainty of supply Uncertainty of Demand As supply chains grow global, the complexity of managing • Segmentation of the supply chain taking into account appropriate, time-varying inventory targets for each prod- demand as well as supply side uct at each point along the way becomes unmanageable • Integrate inventory management into the overall demand for standard advanced planning systems. At the same time, and supply planning processes the inherent risks and uncertainties at each point based on • Aligning supply chain strategy with inventory planning increasing product variants, shorter lifecycles and growing processes using tailor made KPI frameworks number of supply chain partners virtually ensure the occur- • Build up cross-functional teams and introduce new roles rence of shockwaves running up and down the supply chain. like end-to-end inventory managers • Embed the new processes in the overall organization by Consequences change management and extensive knowledge transfer • Supporting the inventory planning process with a user- • Increasing demand and supply variability is still managed cen­ ered tool based on the latest principles and technol- t using outdated inventory planning approaches which are ogy equally applied to all products along the supply chain. • Close the skill set gap with a managed service approach This results in wrong inventory placements and high to implement advanced inventory management overall stock levels. • Local optimization of inventory levels has to be replaced Moving inventory optimization to the next level is likely to by a total chain view. entail integrating it with sales and operations planning in • Separating inventory and sales & operations planning order to create dynamic, ongoing planning capability and to lacks the ability to gain advantage of a holistic overall optimize the planning parameters. This enables the organi- profit maximizing approach. zation to position resources where and when they are most needed and will turn the best profit. By applying the Camelot Camelot ITLab has developed and adopted within numerous ITLab inventory management approach, inventory optimiza- projects a portfolio of methods and services that enables a sys- tion is shaped into a core competency of the company that tematic approach that integrates stock optimization within the organization can call upon as it grows, innovates and your S&OP processes: affirms its leadership in its industry.2
  • 3. Supporting inventory optimization with latest principles and technologies – Camelot Multi Echelon Inventory Optimization (CMEIO)The challenges of managing every type of inventory that an Camelot ITLab and the University of Cologne have jointlyorganization maintains at multiple locations and/or stages in developed a user-centered tool for inventory optimizationits supply chain are indeed formidable. The complexity of the based on latest principles and technology:task has clearly outgrown many of the planning processes andtools that organizations have adopted even in just the past • Quick parameterization of all products based on easilyfew years. Subsequently, customers are sorced to align their creatable segments enabling simple creation of tailor madeorganizational structure and business process flows to the fea- replenishment policiestures and functions of the software products due to the low • Multistage inventory optimization taking into account alllevel flexibility of the involved technologies. Applying these stock types along the whole supply chaintools often goes along with old-fashioned inventory policies • User-centered stock planning and reviewing of optimiza-like fixed safety stocks or safety days of supply which lack the tion results – all relevant information on one screenconsider-ation of supply and demand uncertainties. Further- • Workload reduction by applying management by exceptionmore the relevant parameters in SAP for these models are based on predefined alertsreviewed in-sufficiently or not at all. • Gapless setup process from organization and business pro- cesses through a role concept and business process execu-Consequences tion to the tailor-made integration and implementation • Value added based on business process compositions and• Companies lack an implementation of inventory planning orchestration of existing heterogeneous enterprise services processes with a total chain view. • Easy adaptable cockpits and task oriented user interaction• As a result high overall stock levels exist in order to manage interfaces based on rapid prototyping concept the complexity. • Seamless integration into enterprise system landscapes• Bad service levels based on not anticipated variability based on the service oriented architecture within the supply chain.• High overall inventory holding cost. By implementing latest technology the aligned S&OP and• Inflexibility of the used technologies incapacitates the inventory management processes can be supported compre- evolutionary change in the inventory management hensively. Inventory holding costs and service levels can easily organization and processes and leads to lower end-user be optimized facing today’s demand and supply variability acceptance. within your supply chain. The close integration with the SAP environment leverages the SAP infrastructure investment. 3
  • 4. CAM EL O T I TL AB sol u tion s Advanced Inventory Management Benefits at a glance • Integration of inventory manage- ment into the overall demand and supply planning processes creates additional value • Multistage inventory optimization for all stock types along the whole supply chain reduces overall assets • Process support by easy adaptable and user-centered software tools which is part of the SAP ecosystem Advanced Inventory Management with Camelot ITLab Camelot follows a holistic inventory management approach. Camelot ITLab GmbH is the leading man- From value adding business concepts to implementation and agement consultancy for strategic and managed services. We integrate a tailor-made inventory man- organizational services and is a member of agement into the overall planning processes and support them the Camelot International Group. with easy adaptable and fully integrated software solutions.• Business Consulting Camelot ITLab GmbH Industry expertise and inventory management know-how en- Office Mannheim ables us to provide customized concepts which we realize in sus- Theodor-Heuss-Anlage 12 tainable solutions for your success. We are in a position to coach 68165 Mannheim you and to run inventory management as managed service. Germany Phone +49 621 8 62 98-800 Fax +49 621 8 62 98-850• IT & Technology Consulting www.camelot-itlab.com We understand the importance of latest technology in inven- tory management and through our close partnership with SAP Contact we are involved in development of innovative products at an Ralf Stiegele early stage. Head of Sales & Business Development office@camelot-itlab.com This combination enables us to provide best in class inventory management consultancy and we look forward to support your ambitions to optimize the inventories of your company.