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Demand-Driven Inventory Optimization and Replenishment: Creating a More Efficient Supply Chain

Book Description

Use demand driven optimized inventory and replenishment to overcome your supply chain weaknesses, and deliver business-maximizing results

Reviewing the fundamentals of inventory optimization so that you can attain a demand-driven supply, Demand-Driven Inventory Optimization and Replenishment provides a business look at why present inventory systems sub-optimize the supply chain and faulty replenishment processes lead to wasted time and effort. Straightforward and clearly written, this book allows readers to come away with a good understanding of why optimized inventory and replenishment helps overcome in-system weaknesses and deliver results.

  • Discusses how multi-echelon inventory optimization and replenishment enables installed systems to go from a sequential, "islands of efficiency" approach to a systematic distribution system working as a complete network

  • Provides case studies throughout

  • Reveals how optimized inventory and replenishment delivers results across industry verticals

With a historical view of the three major supply chain efforts of the last thirty years, this book discusses mathematical shortcuts set up in the transitional and supply chain management systems that make it very difficult for companies to attain supply chain excellence.

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Dedication
  6. Foreword
    1. WHY DEMAND-DRIVEN INVENTORY OPTIMIZATION AND REPLENISHMENT?
    2. A PRIMER FOR ADVANCED INVENTORY OPTIMIZATION
  7. Preface
  8. Acknowledgments
  9. Chapter 1: Creating Demand-Driven Supply
    1. THE PATH TO DEMAND-DRIVEN SUPPLY
    2. SHIFTING FROM SUPPLY-DRIVEN TO DEMAND-DRIVEN METHODOLOGIES
    3. MOVING TO A DEMAND-DRIVEN SUPPLY
    4. CREATING MY ISLAND OF EFFICIENCY
    5. WHAT IS AN ISLAND OF EFFICIENCY?
    6. NOTES
  10. Chapter 2: Achieving Timely and Accurate Responses to Customer Demand
    1. PUSH AND PULL SUPPLY CHAINS
    2. ENTER TOYOTA AND THE KANBAN SYSTEM
    3. FROM KANBAN TO JUST-IN-TIME PRODUCTION
    4. WHAT IS NEEDED FOR A JIT SYSTEM TO WORK EFFICIENTLY?
    5. A BROADER VIEW OF JIT/KANBAN IN ACTION
    6. THE KNOWN DEMAND BECOMES THE PREDICTABLE DEMAND
    7. THE JIT PRODUCTION SUPPLY CHAIN WEAKNESSES BECOME AMPLIFIED IN THE DISTRIBUTION CHAIN
    8. SOME DISTRIBUTION ISSUES
    9. THE CUSTOMER PUSHES BACK
    10. THE SQUEEZE IS ON
    11. CREATING AN EFFICIENT SUPPLY CHAIN USING JIT FUNCTIONALITY
    12. PUSH-PULL TIPPING POINTS
    13. IN SEARCH OF TRUE DEMAND
    14. NOTES
  11. Chapter 3: Just-in-Time and Enterprise Resource Planning Rise Together
    1. DENORMALIZED TABLES
    2. SEQUENTIAL OPTIMIZATION
    3. UPSTREAM SERVICE LEVELS
    4. ACCUMULATED DEMAND VARIANCE
    5. MULTIPLE HIERARCHIES OF SERVICE LEVEL REQUIREMENTS
    6. THE EFFECTS OF ERP SHORTCOMINGS
    7. SHIFTING COSTS ON A BALANCE SHEET
    8. MOVING THE FOCUS AWAY FROM INVENTORY TO REPLENISHMENT
    9. THE LONG TAIL
    10. MAKING MISTAKES FASTER
    11. WORKING WITH ONE HAND TIED BEHIND YOUR BACK
    12. SO, HERE WE ARE
    13. NOTES
  12. Chapter 4: How Does Days of Supply Wreak Havoc on the Supply Chain?
    1. RULE-OF-THUMB DAYS/WEEKS OF SUPPLY EXPOSED
    2. INEFFICIENCIES OF RULE-OF-THUMB DAYS OF SUPPLY
    3. TURNING DAYS OF SUPPLY ON ITS HEAD
    4. CREATING THE EFFICIENCY ENVELOPE
    5. THE JOURNEY, SO FAR
    6. NOTES
  13. Chapter 5: What Will You Accomplish with Inventory Optimization?
    1. HOW DOES INVENTORY OPTIMIZATION IMPROVE THE ERP SYSTEMS?
    2. DEVELOPMENT OF THE INVENTORY POLICIES AND REPLENISHMENT PLANS
    3. THE NETWORK STRUCTURE
    4. THE SERVICE LEVEL
    5. THE LEAD TIME AND LEAD-TIME VARIANCE
    6. ORDERING RULES
    7. DEMAND
    8. DEVELOPING POLICY OUTPUTS
  14. Chapter 6: Fitting Unlimited Optimization into a Constraining World
    1. THE PRESENT STATE OF AFFAIRS IN REPLENISHMENT PLANNING
    2. HOW ALERTS TAKE ON MORE SIGNIFICANCE WHEN CUSTOMER SERVICE IS PARAMOUNT
    3. TIME
    4. SPACE
    5. THE COMINGLING OF DEMAND
    6. THE SHORT SUPPLY OR ALLOCATED PRODUCT
    7. WHERE DOES “OPTIMIZED” REPLENISHMENT NEED TO GO IN ORDER TO ENCOMPASS THE ENTIRE DISTRIBUTION CHAIN?
    8. THE UPSTREAM REACTION
    9. MOVING UPSTREAM REACTIONS INTO REAL REPLENISHMENT
    10. REPLENISHMENT AS A MEANS TO INVENTORY OPTIMIZATION HARMONY
  15. Chapter 7: Reviewing the Three Proof of Value Engagements
    1. PROVING THAT INVENTORY OPTIMIZATION IS A GOOD BUSINESS RATIONALE
    2. THE GOOD: WHEN PROOF OF VALUE ENGAGEMENTS WORK
    3. THE BAD: WHEN PROOF OF VALUE ENGAGEMENTS DON'T WORK
    4. THE BEST: A COMPLETE PROOF OF VALUE ENGAGEMENT
    5. PROOF OF VALUE STEPS THAT LEAD TO SUCCESS
    6. A DIFFERENT PRODUCT PERSPECTIVE
    7. THE EYE-OPENING MOMENT: DISCOVERY AND INSIGHT
    8. WHY THE ERP SYSTEM HAD TROUBLE WITH MOST OF THE MRO PRODUCTS
    9. SIMULATION OF THE REPLENISHMENT POLICIES
    10. SIMULATION OF THE PRESENT “ERP/SCM MODULE” REACTION
    11. SIMULATION OF THE OPTIMIZATION SYSTEM
    12. THE EFFECT OF POLICY
    13. POV RESULTS: INVENTORY OPTIMIZATION ENHANCES THE ERP SYSTEM
    14. HOW LONG WILL IT TAKE TO ACHIEVE THE REDUCTIONS?
    15. WERE THERE IMPROVED BUYER EFFICIENCIES?
    16. LOOKING BACK
  16. Chapter 8: Inventory Optimization in the Real World: Matas A/S
    1. MATAS A/S: AUTOMATED FORECASTING AND REPLENISHMENT
    2. WHAT WERE THE PROBLEMS AT MATAS?
    3. DC REPLENISHMENT
    4. STORE REPLENISHMENT
    5. A PROJECT IN INVENTORY OPTIMIZATION
    6. A PILOT PROGRAM VERSUS A PROOF OF VALUE PROCESS
    7. ROLLING THE PROJECT OUT TO THE ENTERPRISE
    8. THE MATAS NETWORK
    9. A CLOSER LOOK AT THE OPTIMIZATION PROCESS
    10. THE ULTIMATE MATAS GOAL
    11. THE MATAS RESULTS
    12. REFLECTIONS ON THE PROJECT
  17. Chapter 9: A Consultant's View of Inventory Optimization
    1. WHO IS ANDERS RICHTER?
    2. IN CLOSING
    3. NOTE
  18. Chapter 10: Pulling It All Together
    1. ALIGNING THE INVENTORY OPTIMIZATION GOALS TO CORRECT DEEP-SEATED BUSINESS ACTIONS IN A COMPANY
    2. INVENTORY OPTIMIZATION CAN'T DO WHAT WAS DONE BEFORE
    3. HOW TO CHANGE THE PLAYING FIELD
    4. OVERARCHING BUSINESS ISSUES IMPEDE POSITIVE INVENTORY CONTROL
    5. SUPPLY CHAIN INVENTORY STRATEGIES BENCHMARK REPORT RECOMMENDATIONS
    6. IN CLOSING
    7. NOTES
  19. Epilogue
  20. About the Author
  21. Index