Leonard explained, “An effective way to determine optimal replenishment for inventory is by a computer simulation of historical inventory data. First, assessing inventory savings, via simulation or any other method, requires that the definitions of all measures are presented in a mutually understood Supply Chain Analyst Dashboard.”
Leonard explored how accurate inventory analysis requires measurements including consumption volume, actual on-hand inventory for each day based on current replenishment methodology, and projected on-hand inventory for each day. The simulation highlights the potential weakness in current replenishment methodologies. A good simulation tool should also measure the effect of changes in supplier lead time, lot size, and safety stock.
“The simulation should include an easy to read dashboard, preferably with clear visuals. The visuals should quantify the variability of actual consumption, provide visual clues on the amount of inventory being carried on-hand, and the amount of safety stock held,” shared Leonard.
Ultriva’s Inventory Optimization Simulation Tool integrates with many existing ERPs such as Oracle’s E-Business Suite and NetSuite Cloud ERP. Historical data from the ERP can be easily transmitted to the Ultriva Inventory Optimization Tool, and easy to read reports with actionable business intelligence can be generated to include recommendations that will improve inventory management and supply chain performance, while freeing-up operating capital to redeploy into the manufacturing business.
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Ultriva’s (www.ultriva.com) cloud-based platform leverages and seamlessly integrates with leading ERP and MRP systems, to deliver an end to end pull based replenishment model. Ultriva, based in Cupertino, CA, implemented a global demand driven manufacturing model by providing full visibility, scheduling, and sequencing of production of customer orders. Ultriva was recently named one of the Great Supply Chain Projects of 2014 by Supply & Demand Chain Executive magazine. The company’s global footprint is increasing rapidly with implementations in wide variety of industry sectors and enterprises such as ATK, CareFusion, Emerson, Ingersoll Rand, McKesson, Magellan, Regal Beloit, Thermo Fisher and more. Follow Ultriva on Twitter at @Ultriva.