Optiant LFM Webcast 3.14.03 (partial) - LGO

Jim Lawton, VP Product Management, (781) 238-4112; [email protected]
LFM Webinar Series on Supply Chain Strategies:
Leveraging Design to Tame Inventory Management
©2003 Optiant, Inc.
Topics
• Supply Chain Design
• Case Studies
è
Industrial Equipment Manufacturer
è
Computer and Office Equipment Company
è
Industrial and Consumer Packaging Manufacturer
• Q&A
2
©2003 Optiant, Inc.
Recent survey shows minimal savings in inventory
While companies achieved 70+% of their on-time delivery (OTD) goals, they reached
only 25% of their inventory targets — the most-cited reason for investment in supply
chain planning tools!
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: PRTM, March 2002
3
©2003 Optiant, Inc.
Reduce
inventory
Reduce supply
chain costs
Improve ontime delivery
Forecast
accuracy
Improve
flexibility
Inventory Planning and Policy Design
The primary cause of not reaching inventory targets is that a critical aspect of
comprehensive inventory management is often ignored.
Supply Chain
Strategy
Inventory Plan
Execution
4
©2003 Optiant, Inc.
•
•
•
•
•
What inventory mix?
Inventory
Planning
Where
to put
it?
and Policy Design
When to put it there?
How much?
Who owns it?
Inventory Tracking
and Costing
Inventory Planning
and Policy Design
A New Class of Solutions
Traditional supply chain management solutions have typically not addressed these
questions…
ERP / MRP / DRP
Inventory Planning
and Policy Design
APS / Supply Planning
Warehouse Mgmt
Mfg / Shop Floor
•
•
•
•
•
What inventory mix?
Where to put it?
When to out it there?
How much?
Who owns it?
…yet making optimal inventory planning and policy decisions can deliver 10% to 30%
inventory savings.
5
©2003 Optiant, Inc.
Traditional Approach
END CONSUMERS
COMPONENT SUPPLIERS
Inventory policy is often established on criteria that has little to do with desired
performance.
COMPONENT PLANTS
6
©2003 Optiant, Inc.
ASSEMBLY
DISTRIBUTION
CUSTOMERS
Better Approach
Optimizing inventory consists of routine planning and flawless execution, built on
optimal design.
Defining the optimal
inventory policy on a cyclical
basis
§ Build a repeatable planning process that reflects
the realties of your given industry (seasonality,
product lifecycle, etc.)
§ Re-plan as often as required to reflect required
changes in inventory policy (based on supply
and demand variability)
§ Differentiate between safety stock and cycle
stock
§ Optimize mix and location, where postponement
may be an opportunity or multiple sources for
inventory exist
Optimal
Supply Chain
Design
7
©2003 Optiant, Inc.
Deploying visibility and
adaptive processes to
respond to real-time changes
§ Implement appropriate technology to collect,
manage, and disseminate information regarding
inventory and related metrics
§ Design and implement adaptive business
processes and organizational structures that
support real time identification and resolution of
problems
§ Create balanced performance objectives so that
all stakeholders at different levels stay aligned
by design
§ Implement demand-supply balancing
§ Begin with an inventory strategy that compliments
sourcing, manufacturing, and deployment objectives
§ Develop inventory policy that reflects differentiated
customer service priorities
Case Study
Industrial Equipment Manufacturer
©2003 Optiant, Inc.
Case Study
Computer and Office Equipment Company
©2003 Optiant, Inc.
Case Study
Industrial and Consumer Packaging Manufacturer
©2003 Optiant, Inc.
Leveraging Design to Tame Inventory Management
An optimal plan, routinely executed, will yield best-in-class supply chain performance.
Supply Chain
Strategy
Inventory Plan
Execution
11
©2003 Optiant, Inc.
Inventory Planning
and Policy Design
Inventory Tracking
and Costing
Repeatable,
Adaptive Process for
Inventory Planning
and Execution
§ Visibility into current inventory
and inventory exceptions or
problems
§ Continuous alignment of supply
(inventory) with demand
§ Measured performance to
continuously set and optimize
inventory
§ Regular process for
establishing inventory levels
(inventory management is a
continuous process!!!)
About Optiant
History:
Recognition:
Offices:
Products:
Example
Customers:
12
©2003 Optiant, Inc.
Built on 10+ years of MIT research and
development partnerships with multiple
Fortune 500 manufacturers
Industry Week – 2002 Technology of
the Year
Boston (HQ), Chicago, Rochester,
Columbus, Los Angeles, San Francisco
PowerChain™ Suite: includes Inventory
and Architect modules
Imation, CNH, Kodak, Sonoco, St.
Gobain/CertainTeed
TECHNOLOGY
OF THE
YEAR
2002
Questions?
Contact Info:
Jim Lawton
VP Product Management
Optiant, Inc.
(781) 238-4112
[email protected]
13
©2003 Optiant, Inc.