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Demand-Driven Inventory Optimization and Replenishment

Book Description

Remove built-in supply chain weak points to more effectively balance supply and demand

Demand-Driven Inventory Optimization and Replenishment shows how companies can support supply chain metrics and business initiatives by removing the weak points built into their inventory systems. Beginning with a thorough examination of Just in Time, Efficient Consumer Response, and Collaborative Forecasting, Planning, and Replenishment, this book walks you through the mathematical shortcuts set up in your management system that prevent you from attaining supply chain excellence. This expanded second edition includes new coverage of inventory performance, business verticals, business initiatives, and metrics, alongside case studies that illustrate how optimized inventory and replenishment delivers results across retail, high-tech, men's clothing, and food sectors.

Inventory optimization allows you to avoid out-of-stock situations without impacting the bottom line with excessive inventory maintenance. By keeping just the right amount of inventory on hand, your company is better able to meet demand without sacrificing the cost-effectiveness of other supply chain strategies. The trick, however, is determining "just the right amount"—and this book provides the background and practical guidance you need to do just that.

  • Examine the major supply chain strategies of the last 30 years
  • Remove the shortcuts that prohibit supply chain excellence
  • Optimize your supply/demand balance in any vertical
  • Overcome systemic weaknesses to strengthen the bottom line

Inventory optimization is benefitting companies around the world, as exemplified here by case studies involving Matas, PWT, Wistron, and Amway. When inefficiencies are built into the system, it's only smart business to identify and remove them—and implement a new streamlined process that runs like a well-oiled machine. Demand-Driven Inventory Optimization and Replenishment is an essential resource for exceptional supply chain management.

Table of Contents

  1. Wiley & SAS Business Series
  2. Title Page
  3. Copyright
  4. Preface
  5. Acknowledgments
  6. About the Author
  7. 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
  8. 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
  9. 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
  10. 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
  11. 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
  12. Chapter 6: Shifting the Focus from an Algorithm Discussion to a Business Discussion
    1. Putting the Algorithms into the Hands of the Business Users for Best Results
    2. Working in a Business User Environment
    3. Working in the Technical Analyst Environment
    4. The Business and Analyst Persona Chasm
  13. Chapter 7: Fitting Unlimited Optimization into a Constraining World
    1. The Current 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
  14. Chapter 8: 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. Viewing the POV from a Project Management Perspective
    5. The Best: A Complete Proof of Value Engagement
    6. Proof of Value Steps that Lead to Success
    7. A Different Product Perspective
    8. The Eye-opening Moment: Discovery and Insight
    9. Why the ERP System Had Trouble With Most of the MRO Products
    10. Simulation of the Replenishment Policies
    11. Simulation of the ERP/SCM Module Reaction
    12. Simulation of the Optimization System
    13. The Effect of Policy
    14. POV Results: Inventory Optimization Enhances The ERP System
    15. How Long Will It Take to Achieve the Reductions?
    16. Were there Improved Buyer Efficiencies?
    17. Looking Back
  15. Chapter 9: 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 Out the Project 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
  16. Chapter 10: The Strategic Value Assessment
    1. Looking Beyond the Request for Proposal
    2. The Strategic Value Assessment
    3. The Results of the SVA
    4. Strategic Value Assessment Benefit Analysis
    5. So, What Does the SVA Accomplish?
  17. Chapter 11: A View of an Inventory Optimization Installation
    1. What Does an Inventory Optimization Project Look Like?
    2. In Closing
    3. Note
  18. Chapter 12: Inventory Optimization in Supply Chain Verticals
    1. Retail: Life at the End of the Chain
    2. Retail Benefits of Inventory Optimization
    3. Distribution: Being in the Middle of Siblings Who Don't Play Well with Each Other
    4. Distributor Benefits of Inventory Optimization
    5. Consumer Packaged Goods Manufacturing: Where It All Began
    6. Consumer Packaged Goods Manufacturing Benefits of Inventory Optimization
    7. Hey, Wait a Minute: Where Are You Getting These Time-Phased Numbers?
    8. Notes
  19. Chapter 13: 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
  20. Epilogue
  21. Index
  22. End User License Agreement