Inventory Optimization Software: Early Adopters Reaping Major Benefits

Vendors’ advances in making software more usable and in implementing compelling proof of concept projects suggests that inventory optimization investments should be on the radar screen of many make-to-forecast manufacturers. This conclusion is based on a series of qualitative interviews with early adopters and software vendors conducted as independent research by Industry Directions, Inc. (Boston, Mass.).

The research shows that early adopters of inventory optimization software are coping with market uncertainty more effectively. They are currently realizing a number of significant benefit streams, including: simultaneous and meaningful improvement in inventory and service levels; cost savings resulting from moving production to lower-cost areas; an ability to increase sales volume while maintaining less inventory; reduced finished goods safety stock; more efficient warehouse operations; and lowered expediting costs.

The research revealed that a number of common factors driving volatility in corporate supply chains include: proliferation of SKUs; increasing regulatory complexity related to globalization; increasing use of outsourcing and off-shore production; shorter product lifecycles; and rapidly shifting customer requirements. This research examined the experiences of corporations using inventory optimization software based on stochastic algorithms to address strategic and tactical inventory issues in production and distribution.

Source: Industry Direct

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