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More About This Title Demand-Driven Inventory Optimization and Replenishment: Creating a More Efficient Supply Chain
English
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 networkProvides case studies throughoutReveals how optimized inventory and replenishment delivers results across industry verticalsWith 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.
English
ROBERT A. DAVIS is a Principal Product Manager in the Supply Chain Management Solutions group at SAS Institute. Prior to joining SAS, Davis worked for over twenty years with Nestlé and ConAgra in their Grocery Products Divisions. During that time, he helped develop best practices in account management, trade spending analysis, and replenishment planning. He has been recognized with national awards for excellence in sales and business management. At SAS, he has helped develop expertise in supply chain cost analysis in the fast-moving consumer products industry, inventory optimization, service parts optimization, and sales and operations planning. He is a recognized global expert in multi-echelon inventory and replenishment optimization.
English
Foreword xiii
Preface xvii
Acknowledgments xix
Chapter 1 Creating Demand-Driven Supply 1
The Path to Demand-Driven Supply 3
Shifting from Supply-Driven to Demand-Driven Methodologies 4
Moving to a Demand-Driven Supply 9
Creating My Island of Efficiency 11
What Is an Island of Efficiency? 13
Notes 16
Chapter 2 Achieving Timely and Accurate Responses to Customer Demand 17
Push and Pull Supply Chains 18
Enter Toyota and the Kanban System 20
From Kanban to Just-in-Time Production 22
What Is Needed for a JIT System to Work Efficiently? 23
A Broader View of JIT/Kanban in Action 25
The Known Demand Becomes the Predictable Demand 26
The JIT Production Supply Chain Weaknesses Become Amplified in the Distribution Chain 29
Some Distribution Issues 29
The Customer Pushes Back 30
The Squeeze Is On 31
Creating an Efficient Supply Chain Using JIT Functionality 32
Push-Pull Tipping Points 34
In Search of True Demand 35
Notes 38
Chapter 3 Just-in-Time and Enterprise Resource Planning Rise Together 39
Denormalized Tables 40
Sequential Optimization 43
Upstream Service Levels 44
Accumulated Demand Variance 46
Multiple Hierarchies of Service Level Requirements 47
The Effects of ERP Shortcomings 48
Shifting Costs on a Balance Sheet 49
Moving the Focus Away from Inventory to Replenishment 50
The Long Tail 53
Making Mistakes Faster 57
Working with One Hand Tied behind Your Back 58
So, Here We Are 60
Notes 61
Chapter 4 How Does Days of Supply Wreak Havoc on the Supply Chain? 63
Rule-of-Thumb Days/Weeks of Supply Exposed 64
Inefficiencies of Rule-of-Thumb Days of Supply 68
Turning Days of Supply on Its Head 74
Creating the Efficiency Envelope 77
The Journey, So Far 80
Notes 82
Chapter 5 What Will You Accomplish with Inventory Optimization? 83
How Does Inventory Optimization Improve the ERP Systems? 84
Development of the Inventory Policies and Replenishment Plans 85
The Network Structure 85
The Service Level 86
The Lead Time and Lead-Time Variance 87
Ordering Rules 88
Demand 89
Developing Policy Outputs 90
Chapter 6 Fitting Unlimited Optimization into a Constraining World 105
The Present State of Affairs in Replenishment Planning 106
How Alerts Take on More Significance When Customer Service Is Paramount 107
Time 108
Space 109
The Comingling of Demand 110
The Short Supply or Allocated Product 112
Where Does “Optimized” Replenishment Need to Go in Order to Encompass the Entire Distribution Chain? 114
The Upstream Reaction 115
Moving Upstream Reactions into Real Replenishment 119
Replenishment as a Means to Inventory Optimization Harmony 123
Chapter 7 Reviewing the Three Proof of Value Engagements 125
Proving That Inventory Optimization Is a Good Business Rationale 126
The Good: When Proof of Value Engagements Work 127
The Bad: When Proof of Value Engagements Don’t Work 133
The Best: A Complete Proof of Value Engagement 139
Looking Back 155
Chapter 8 Inventory Optimization in the Real World: Matas A/S 157
Matas A/S: Automated Forecasting and Replenishment 159
What Were the Problems at Matas? 160
DC Replenishment 161
Store Replenishment 162
A Project in Inventory Optimization 163
A Pilot Program versus a Proof of Value Process 167
Rolling the Project Out to the Enterprise 169
The Matas Network 171
A Closer Look at the Optimization Process 172
The Ultimate Matas Goal 177
The Matas Results 178
Reflections on the Project 180
Chapter 9 A Consultant’s View of Inventory Optimization 181
Who Is Anders Richter? 182
In Closing 199
Note 200
Chapter 10 Pulling It All Together 201
Aligning the Inventory Optimization Goals to Correct Deep-Seated Business Actions in a Company 204
Inventory Optimization Can’t Do What Was Done Before 204
How to Change the Playing Field 205
Overarching Business Issues Impede Positive Inventory Control 206
Supply Chain Inventory Strategies Benchmark Report Recommendations 210
In Closing 213
Notes 214
Epilogue 215
About the Author 219
Index 221
