INVENTORY OPTIMIZATION TOOL

 

Overview

It is critical for manufacturers of all kinds to have a clear and constant understanding of the gaps between consumption and on-hand inventory. This requirement is complicated because of three factors:

  • The difficulties inherent in quantifying the variability of actual consumption
  • The need to receive and accurately interpret visual clues about the amount of on-hand inventory and safety stock
  • The frequency and accuracy with which re-computation of safety stocks and replenishment-loop sizing must be accomplished

 

Identify Opportunities to Cut Inventory Expense

Ultriva’s Inventory Optimization Tool (IOT) uses powerful simulation capabilities that uncover opportunities to reduce inventory expense. The IOT system makes the critical determination of which parts and materials handled by the supply chain are suitable for transition to Kanban-based replenishment.

 

Analyzing Supply Chain History and Simulating Supply Chain Future

IOT simulates consumption and on-hand inventory for each day in a pre-specified interval of time. For historical data, IOT identifies realized and missed inventory savings, while simulating future part shortages based on activity assumptions worthy of cost-saving exploration. Ultriva’s IOT simulation capabilities highlight the potential weaknesses in current replenishment methodologies.

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IOT

 

See estimated inventory savings for your project

Then drill down to savings by part or by supplier.

  • Load your data, run the simulation, see your savings
  • Compute safety stock and your Kanban loop sizing
  • Export your kanban variables to Ultriva’s Collaborative Supply Portal to setup kanban items and then realize the savings

Transition to Demand-Driven Manufacturing

The IOT will systematically identify opportunities for inventory reduction as a result of transitioning from MRP-Forecast to Demand-Driven Pull.

Key Capabilities 

 

Simulate Impacts on Supply-Chain Partner Performance 

IOT simulates the impacts on supplier performance such as changes in supplier lead-time, lot size, and safety stock. IOT simulations are shared with other managers and categorized for planning and archival purposes.

 

IOT Provides a Roadmap to Supply-Chain Effectiveness

IOT quickly determines which parts are good candidates for Kanban replenishment based on potential savings and variability of consumption. The system estimates these potential inventory savings at an aggregate level and then drills down to identify savings by part or supplier.

 

Critical Metrics

IOT delivers up-to-the-minute, accurate information about the following key measures:

  • Consumption volume for each day of the interval in the data load
  • Actual on-hand inventory for each day based on current replenishment methodology
  • Projected on-hand inventory for each day as if Kanban replenishment methodology were utilized 

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How to Right-Size the Inventory 

Learn how a consumption-driven replenishment model establishes a true pull process across the value chain. Your goal is to right-size the inventory whether it is finished goods, work-in-process, or raw materials.

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