Inventory Balancing & Optimization

Multi-site company : Optimize your inventory!

 

Based on 15 years experiences in Supply Chain Management, DOWAP has designed a pragmatic and Ad Hoc solution in SAP APO and ECC that allows optimizing inventory positioning on the Supply Chain network.

  • inventory balancing fast

    Fast Implemention

    implementation in a few weeks and  immediate return on investment (ROI)

  • inventory balancing visualisation

    Flexible Tool

    Find a specific product all around your network

  • inventory balancing simulation

    Simulation

    Simulate an unexpected customer requirement
    (take into account product switch)

Inventory Balancing & Optimization ?

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  •  You have a good supply chain set up. Supply Chain processes are in place. Your planners are fully skilled and well trained on your supply chain solution.

    However: 

    • Despite a global good stock availability (sum of all location’s available stock), you regularly experience miss-positioning of inventory versus customer orders, representing a mismatch of stock and demand from a geographical perspective.
    • Despite you have the necessary global stock, you keep on getting production requirements at source, sometimes even in urgent mode because of safety stock violation downstream, which forces you to go expediting productions and procurements
    • Your supply chain network strategy wants you to locate stock close to customer (target service level) however demand being volatile, you struggle matching demand and supply
    • Your network is able to produce/distribute the same products but no communication or transfer exist between them especially in order to balance raw material or (semi) finished product.
Reasons:

In fact DRP root concepts were not designed to rebalance stock position, just propagate requirement upstream, whereas fair share rule would apply in case of shortage scenario, when deploying goods from factory to DC or Regional DC to sub-DC.

Inventory balancing: align stock and demand through repositioning inventory and / or relocating demand

Inventory Balancing is a SAP ECC or APO add-on that analyzes all net demand and available inventory in your network. Regarding your selections (Country, location type), your planning horizon and your supply rules (priority, inventory strategy) Inventory Balancing help you to balance your stock inside your network. This solution generates What-If analysis to provide visibility into potential scenarios that allow you to balance your stocks directly by creating a simple and automatic Transportation Order (STO STR).

Inventory balancing has been designed to allow supply chain strategy to encompass short term expediting of miss-located stock positions as well as allowing redeploying either demand or stock to the proper point of demand. Inventory Balancing is simple ready to use solution with a very quick ROI. 

Benefices:

  • Optimise utilization of stock by redeploying your invested capital instead of replenishing from source
  • Organize redeployment of goods from source using your own business rules and formulas to calculate what is available and what you is required from a rebalancing perspective, however remaining consistent from DRP calculation
  • Take full advantage of your supply chain engine like MRP in ECC or APO, lowering short term requirement source.

  • Scenarios: Inventory Balancing as a pre-planning engine

    inventorybalancingtrans SAP

    In this case, Inventory Balancing engine is run ahead of your normal DRP planning run. It analyses stock availability over your network, as well as existing demand. This analysis is determined thru multi-selection parameters that scope the span of the analysis.

    Comparing available and requirement with a priority based approach, It then create proposition of stock transfer (planned or firmed) to redistribute available stock where demand exists. These proposition can be validated interactively or in batch, becoming additional supplies at destination.

    This redistribution process being done, the normal DRP planning engine runs, creating new supplies from source, only to cover remaining requirements. This lower much requirements on factories or vendor.

  • Scenarios: Inventory Balancing as a Deployment/planning engine

    inventorybalancing CT SAP

    Inventory Balancing is the only tool used by your Supply Chain department, to deploy available supplies from registered source toward given destination locations. It is considered as the company deployment cockpit.

    This process of redeployment, dynamically determines sourcing arcs (links between sources and destinations), according to given location range allowed to be source and/or allowed to be destinations. This is done using the multi-criteria selection. No need to create complex set of sourcing data to determine each location’s role, to be source or destination. This is dynamically done within feasibility ranges. Thank to Inventory Balancing, a particular location may be a considered as a source during a period of extra supplies, and later be considered as a destination when requirement appear.

Both can be used together, according to business context evolving over time.

 

Solutions Comparison

Features

ECC Standard

Inventory Balancing

APO SNP

APO SNP Optimizer

Complexity

Simple High Complex

Implementation Effort

1-10 days > 1 month > 9 months

Master Data Maintenance

Low Medium High

Skills Requirement

Low High Very High

Solution Stability

Robust Average Fragile

Rule-based

Yes None Cost

ROCE (Return On Capital Employed)

Good Low Good