solutions inventory reduction

Inventory Reductions Remain Elusive

Inventory reduction has plagued companies for years. It is not easy. In a perfect world, you would not have inventory. When you received and order, you would receive the required supply at that time and only retain the inventory as long as it took to manufacture and ship the product to your customer. But, we don't live in a perfect world.

So, you have implemented vendor managed inventory (VMI) programs, supplier pull programs, just in time inventory and reduced lead times but you're still banging your head against the wall trying to achieve meaningful inventory reductions. Perhaps there is a better way. Imagine if you could compress your cycle time such that the moment you take a new order, or change a forecast the planner and your supplier are notified. How much of your inventory is there because you weren't able to respond fast enough?

What about engineering changes? Excitement builds for the launch of the "next big thing." You are impressed by your ability to design, develop and start manufacturing the new product to meet your very aggressive time to market objectives. Then the surprise comes….excess inventory on the old product that is being phased out that significantly impacts your margins. What if you had known sooner? Could you have cancelled material? Or extended the old build for a couple more weeks?

Avoid Unnecessary Inventory Spend

Kinaxis™ RapidResponse™ takes inventory management to new levels, driving aggressive inventory reductions without sacrificing customer service requirements. RapidResponse empowers your supply chain professionals with detailed multi-enterprise and multi-tier supply chain visibility so they know just what inventory you have where. Adequate visibility is a pre-requisite to efficient use of the inventory you have. RapidResponse also enables your staff to simulate the impact of demand, supply or product changes to their impact on inventory and other key performance indicators (KPI) and to develop viable course corrections, again with full insight into their impact on your corporate objectives.

Meaningful inventory reductions also require the ability to consider changes to things such as order policies. RapidResponse provides the ability to analyze your supply chain design. Do your existing policies support your projected inventory goals? If not you may want to model a change to your policies and see the projected impact immediately before you implement them in your transaction system. This ensures that supply chain design decisions are going to yield the required results.

While inventory reductions are the goal, they must be achieved in concert with other goals since too little inventory can translate to more stock outs, delays, late shipments and customer dissatisfaction. RapidResponse Live Scorecard ensures a balanced approach is taken by reviewing all potential actions against key performance indicators (KPIs).

RapidResponse is the inventory management software today's supply chain professionals need to realize potential inventory reductions without sacrificing customer service levels.