Deere & Co. Division Finds Inventory Optimization

Sept. 1, 2003
PITTSBURGH, PA August 27, 2003 SmartOps Corporation, the leading provider of enterprise-class supply chain optimization software solutions, today announced

PITTSBURGH, PA – August 27, 2003– SmartOps Corporation, the leading provider of enterprise-class supply chain optimization software solutions, today announced that Deere & Company’s (NYSE: DE) Commercial and Consumer Equipment (C&CE) Division has implemented the latest version of the SmartOps Multistage Inventory Planning & Optimization (MIPO) software solution, which offers improved inventory planning decision support. The C&CE group has been using the MIPO product since 2002 to help the company meet its goal of reducing inventory.

Deere C&CE implemented MIPO to determine the optimal level of inventory needed for each product, across stocking locations and stages, over time, given their supply chain’s high seasonality and demand uncertainty.

“SmartOps looks forward to continuing and expanding our partnership with the Deere C&CE team, who are not only leaders in their industry but have one of the best-known consumer durable brands. We are confident that the SmartOps MIPO application will continue to help them achieve their goals of freeing up working capital and ensuring high service levels to their dealers and customers,” said Dr. Sridhar Tayur, CEO and Founder of SmartOps.

As Larry Lapide, Vice President of Research at AMR Research, said in his July 22, 2003alert titled Don’t Slash Inventory, Make it More Efficient, “The secret to inventory is to treat it like cholesterol. Much like cholesterol, you want to keep the total as low as possible, but you don’t want the good component to get too low, because that is the inventory component that most closely supports customer fulfillment requirements. Good inventories are needed to cover supply and demand needs, as well as account for uncertainties in both. For example, safety stocks -- be they in the form of raw materials, components, work-in-process, subassemblies, or finished goods -- are good because they cover the vagaries in customer demand and unreliability in supply.”

MIPO enables customers to achieve both a rapid ROI and a long-term competitive advantage by determining the best possible inventory and order fulfillment plans given inherent uncertainties, multi-location and inventory stage complexities, and aggressive customer service goals. MIPO dynamically generates optimal inventory targets for each stage of the supply chain, while providing visibility into each reason inventory is needed -- including safety, cycle, pre-build, in transit and merchandising stock requirements, by item or stock-keeping unit (SKU) -- to meet desired service levels and response goals.

MIPO 3.1’s optimized inventory targets serve as critical inputs into Enterprise Resource Planning and Advanced Planning & Scheduling systems so they function efficiently, delivering better intelligence for inventory planning and execution.