Our Multi-Echelon Inventory Optimisation (MEIO) routinely generates million dollar ROIs via increased service levels, reduced stock-outs and improved inventory turns. This unparalleled effectiveness is the result of unique demand and inventory modelling technology specifically designed to overcome the gross approximations (and limitations) of traditional inventory approaches. Its proprietary analytical relationships between inventory levels and customer service have proven to be highly reliable, even for very slow moving and intermittent demand items. This allows us to optimise even very large assortments, including products in the “long tail”.
Typical inventory “segmentation” approaches (often incorrectly labeled “inventory optimisation”) group SKU-Locations (SKU-L) into arbitrary “segments” and then apply “one size fits all” logic by assigning all SKU-Ls within the segment the same service level target. These approaches lead to poor recommendations, very distant from the optimum. SO99+ automatically assigns a different service target to each individual SKU-L, achieving the desired global service level while simultaneously yielding the mathematical optimum for the objective function chosen (options include minimum inventory investment, minimum storage space, maximum net margin, minimum obsolescence, maximum freshness and more).
SO99+ effectively optimises even complex supply chains, including multiple distribution and manufacturing echelons. It can automatically suggest the right “decoupling points” and the adequate levels of materials, components, sub-assemblies and finished goods in any location of the entire supply chain, by optimising the balance of inventories across different locations (optimal staging) and different Bill-of-Material (BOM) levels (optimal postponement).
Despite its power and level of sophistication, SO99+ is highly automated for an extremely low cost of ownership.
See Nucleus Research report on the value of inventory optimsation
For most businesses, the “long tail” is growing, read our white paper: 'Mastering the Long Tail & Intermittent Demand'
Findus AB is the largest frozen food company in the Nordic countries, read how we helped with Inventory Optimisation