Monday, August 24, 2009

Inventory Optimization Hierarchy

Supply chain strategies can be as innovative as a business man can imagine, yet it can also be as rigid as a formula. Once you get the formula correct, you shall have the correct answer. On the other hand, if things were wrong from the beginning, that does not always mean there is no other way to alter/improve the circumstance.
Similar thought in inventory, "Companies usually move through a progression in their Inventory Optimization programs, beginning first with optimization of inventory and safety stock policies, next moving to optimization of deployment and replenishment strategies across the supply chain, and finally segmenting customers and using "service policy" optimization to further improve results."

http://www.scdigest.com/images/misc/Inventory-Optimization-Hier_000.jpg
[ Source: Chainalytics ]

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