By Ciara O’Brien, The Sequoia Partnership
If you’re in the business of making, moving and selling you’ll inevitably have had the conversations about inventory: Finance worry that there’s too much, Sales feel there’s never enough of the right stuff and the Supply Chain team are often just trying to survive.
At The Sequoia Partnership we believe in a structured approach to Inventory Optimisation:
Gain Control >> Maintain Control >> Improve Performance >> Optimise
By working systematically it’s possible to build an integrated commercial and supply strategy and begin the journey away from short-term tactical actions.
The Factors That Can Impact Your Inventory Optimisation
Over the past 25 years we have worked with some of the world’s largest FMCG and CPG companies to design, configure and embed solutions that enhance business understanding of total cost-to-serve. Some of the functionality we offer within our OnTarget® tool includes:
- Seasonality: flexing safety and cycle stock levels to reflect seasonal volume and variability
- Lead Time Simulation: changing supplier and production lead-times to assess working capital impact
- Obsolescence: constraining inventory policies to limit obsolescence costs while maintaining availability
Visualisation & Simulation
In many businesses inventory hides sub-optimal processes. In addition to our proprietary algorithms, OnTarget® offers insight into the levers which drive inventory levels and provides simple yet powerful analytics from operations to sales and marketing. Some of the optimisation opportunities our clients use include:
- Forecast Value Add (COV)®: does your forecasting process add value or noise? OnTarget® identifies which SKUs benefit from forecasting and which should follow demand
- The Impact of Promotions: do you know which customers add variability? Have you priced accordingly? OnTarget® uses Customer Demand COV to illustrates this cost
- Supply Error: do you know which suppliers/sites deliver on-time in-full? With OnTarget® you can clearly see the supply chain cost of incomplete supply
The Capability Question & Stakeholder Management
We believe that our tools are the best in the market. We are also strong advocates for the right people in the right roles within your supply chain. Our technology deployment is often combined with capability training to give you that unique individual: ‘Statistician, Economist and Diplomat’. With this winning combination of skills, stakeholders outside the Supply Chain function can be engaged with:
- Cycle Based Scheduling: balancing changeovers with inventory holding costs to set regular production cycles
- New Product Launch Inventory: simulating expected sales volumes and calculating both upside and downside risk against availability and obsolescence metrics
- Economic Order Quantities: marrying replenishment frequency and tiered pricing with logistics optimisation and inventory holding costs to provide an optimised trade-off
The Sequoia Partnership is proud to present OnTarget®, a cloud-based inventory and supply chain optimisation tool that automatically integrates transactional data from your system for both raw materials and finished goods. OnTarget® provides intuitive insights and enables robust debate and decision-making among supply chain and non-supply chain professionals.
If you would like to know more about how we can support your business to bring inventory optimisation into the heart of your commercial and planning processes and peel back the inventory duvet please contact Ciara O’Brien at The Sequoia Partnership, firstname.lastname@example.org and visit our website https://www.sequoiaontarget.com/.