Model for success
Inventory Op3miza3on

En3tlement
99.5 + % Availability
Compliments lean
Entitlement
Zero financial cost of inventory until usage
Right Product, at right place, at the right time
Goal
Rarely achieved, when achieved at high cost
Availability of Product ship cost are
Limited Stock-outs occur
is near perfect significantly reduced
60% to 80%
Desirable
Inv. Buffers adjust
OTIF
LT are reduced
Buffer are
according to to that of TPT days
correctly Sized
actual Demand
and Stabilized
SUPPLIERS

Hubbing
Model for success ‐ En3tlement
xx
Suppliers Customer
Intermediate Customer Plant
X
Warehouse Warehouse
x
Today
Planning & Admin
Planning & Admin
Supplier owned inventory
4PL HUB Customer
Suppliers Plant
Future
Supplier owned inventory

Supply chain strategy
Suggest it incorporates the following areas
• Excep3onal levels of service
• Quality
• OTIF
• Best prac3ce
• Customer and supplier recogni3on
Lean
•
Open to collabora3ve networks
•
Visionary / Innova3ve
•
Green
•
• Joined up approach pulling in the same direc3on
• Accountability

Inventory holding and replenishment
policy
• Put an inventory policy into ac3on based on “inherent
simplicity”
• Low cost, effec3ve, quick wins
• When the inventory posi3on per SKU decreases to the reorder
point, a replenishment order is placed. The replenishment
order has a calculated lot size, and un3l the order arrives,
inventory shortages are prevented through the use if
necessary of safety stock.
• Underpinned with robust process and mathema3cally tried
and tested replenishment algorithms.
• Implement with precision and control

Inventory holding and replenishment policy
Inbound and FG’s
2 Target inventory level at SKU level – calculated
Order quan+ty
(fixed or variable)
Opportunity over +me
to further reduce
inventory levels in the
supply chain by
Stock quan+ty
changing exis+ng
parameters, more
Stable demand
3 ROP
calculated paIerns, intelligent
transport planning
Replenishment
Lead +me
1 Safety stock at SKU level – calculated *
time

Inventory holding and replenishment policy
Supplier and product maintenance
99.5% + OTIF
Suppliers
files, parameters
Improved:
Stock availability, Lot size – Lead time etc
Controls, Visibility,
Traceability,
Transactional data – Usage - Forecast
S&OP
Challenging
paradigms,
ERP / WMS
Improve:
Inventory optimisation algorithms
communications,
Forecast accuracy,
Decision making
Setting safety stock, reorder point and
alignment,
Supplier
target levels
performance,
Client impact
Profitability per
Reporting – KPI’s - simulations S&OP
client (cost of client
service)

S&OP
Sales & Operations Planning (S&OP) is a business process that helps
companies keep demand and supply in balance
Used properly S&OP enables the company’s managers to view the business
holistically and gives them a window into the future
The processes involved in S&OP leads to one common plan for the
business that is achievable as it takes into account demand, available
capacity and business constraints. One plan is developed
collaboratively, including key
suppliers and customers with
Forecast
formal S&OP meetings attended
Review
by representatives of all internal
S&OP stakeholders, i.e. Sales,
Marketing, Logistics,
Operations Inventory
Manufacturing, Purchasing,
Review Review
Finance, Management.

S&OP
Input:
• customer demands, forecasts, draft master schedule, replenishment
plan, projected inventory plan, supply constraints, NPI, phase outs, slow
moving parts, inbound vendor OTIF, hub & client OTIF
Output:
• Agreed KPI’s, replenishment plans, shipping plans
• Target levels, OTIF measure and corrective action plan
• Forecast accuracy
• Continuous improvement plan

Stock management and controls
Current methods improved by
Implemen3ng a basic WMS with bar‐coding ‐ for inbound and
outbound stock
• Faster
• More accurate
• Improved traceability
• FIFO and quaran3ne controls
• Cycle coun3ng
• Replenishment trigger
• Repor3ng

Transport op3misa3on
An assessment has been carried out into the current transport
profile.
There are opportuni3es to improve current levels of
performance in terms or service, control, visibility and cost
although it is suggested the sub op3mal inventory situa3on is
addressed and treated as a pre‐requisite prior to
implemen3ng the transport op3misa3on recommenda3ons

1 ‐ Business case
 Define benefits and business case jus+fica+on
 Develop implementa+on plan with cri+cal tasks and +mescales
 Agreement to go forward
4PL / Project team
4 Months
4 ‐ Vendor
5 ‐ Systems 6 ‐ Design
3 ‐ Hub
2 ‐ Commercial
Engagement
Select appropriate System Integrated
Vendor Engagement
SLA site Implementa+on supply chain
Process
Cut over plan
Legal Agreement: Collabora+ve
Interfacing
Set‐up
Client/Hub provider &
Hub provider/
Vendor agreements
Environmental
If required