Ongoing Inventory Optimization
What is it?
For most, inventory optimization means “inventory reduction”. While always a component, it’s not the whole story. A well-designed inventory optimization program should be focused on improving inventory mix, ensuring you have what you need to support ongoing operations – allocating finite working capital where it matters most to ensure the right part is in the right place, at the right time.
All too often key ordering values such as Mins / Max and lead times for inventory items are set during system implementations and never revisited. We work in a dynamic environment with variables such as vendor performance, equipment base, maintenance plans, transportation modes, and internal processes changing constantly. Given this variability how accurate do you think ordering values set 5-7 years ago will be today?
The answer is not very accurate – upon review of our client’s data, we typically find over 90% of ordering values are no longer representative leaving operations exposed to both stock-out and obsolescence risk.
At Xtivity we work with our clients to update core ordering values on a monthly basis, ensuring critical values such as Min/Max and Lead-times are reflective of changes in supply and consumption patterns to ensure target service levels are met.
We have proprietary tools to supporting data extraction, analysis, client review and system uploads to make the process as seamless as possible so our clients can focus their time and efforts on the exceptions – making the most of their limited time.
It starts with booking a demo where we will take you through the details of a program and share with you the insights, reports and workflow functionality our clients are leveraging.
Improved visibility to inventory performance through customizable reports and dashboards.
Clients typically see a reduction of 10% in moving inventory value as mix changes over the first year of service.
Improve inventory availability – ability to set target services levels and actively track attainment
Reduced Expedited Freight – 2-4% reduction in expedited freight are common resulting from improved stocking levels.
Reduced equipment downtime through improved part availability
Less administrative effort reviewing ordering values through application of machine learning and targeted review.