Consultancy

Support from a Subject Matter Expert (SME) in various areas such as:

  • Setting up inventory calculation models using simple tools, finding the balance between availability of product to the customers (customer service) and cost of capital (financial aspects)

  • Defining and implementing the inventory policies and process, ensuring all involved understand the role they play

  • Defining the right replenishment model based on the characteristics of the portfolio. Examples include: Fixed Cycles, Fixed Quantities, Fill-up, Kanban, Production Wheels.

Consultancy: inventory planning

Deciding how much inventory to keep and at which location in your network, is a tricky thing to work out. It is important to have a good understanding of your demand (what do the customers want and what can we learn from the past) and of your supply performance (how long does it take to deliver the products and what are the risks en route from the source of the product to the customer). You need to determine at what service level you want to operate at each location and how much you are able to invest in stock holding to support this service level.

In this process, IPREM Consulting can support with the following:

  • Deliver training on the principles of inventory planning;

  • Analyse historic demand data and determine the reliability of demand data;

  • Define the demand parameters required as input to the inventory calculations;

  • Map the supply chain network and determine the preferred stock locations;

  • Determine the supply lead time and supply lead time risks;

  • Define the supply parameters required as input to the inventory calculations;

  • Explain the pros and cons of the difference levels of service (90-99.9%);

  • Calculate the stock holding investment required to support the chosen service level;

  • Calculate the stock parameters per SKU of group of SKU’s per stock location (safety stock, average stock, maximum and minimum stock).

Consultancy: replenishment models

Replenishing is the process that decides when you are going to order (or supply to a warehouse, or produce a product) and how much you need to order to have enough until you order again (or supply, or produce). Depending on the value, volume, predictability and frequency of the demand, as well as the cost and reliability of supply, there are different replenishment strategies possible for a product.

Examples include:

  • Fixed Order Cycle Planning, ordering the product at a predefined rate (typically every month or every week), and calculating the required quantity based on the use or forecasted demand. Most often in this model you will replenish what was sold in the previous period, as you fill up the stock to an agreed top-up level.

  • Fixed Order Quantity Planning, ordering a predefined fixed amount (typically a lot size, full container, or one unit in Kanban) whenever you hit a trigger point, the reorder point. This means sometimes you may order very frequently, while at other times you order only once in a while.

  • Fill-up Replenishment, used for products with low or irregular demand. Stock is kept at a certain level, and when a sales has happened, the stock will be replenished to its original level.

  • Distribution Requirement Planning, a continuous process of calculating the stock requirements per location based on the forecasted demand, and pushing this stock requirement back up the supply chain to calculate an aggregated, time-based view of demand and supply for each stock point in the network.

In this process, IPREM Consulting can support with the following:

  • Determine which replenish model works best in your supply environment. This may be different per location, customer or product group.

  • Set up the calculation model to help determine when to order and how much to order, either as a one off exercise to determine the parameters, or as a daily tool to support the people responsible for creating the replenishment orders.