Consumer goods companies must carry inventory to maintain high
service levels in an uncertain world. Even the best CPG supply
chain performers will suffer out-of-stocks averaging 10%, and as
much as 20% on promotions, while sitting on 74 days of
inventory. $69 billion of sales are lost annually. (Consumer
Goods & Retail Report, The 21st Century) Simply put, consumer
products companies are not holding the right inventory in the
right locations, so sales are lost while unnecessary inventory
is sitting in warehouses.
Real-Time Inventory (RTI) is a multi-echelon inventory
optimization solution proven to reduce inventory by 10% or more.
RTI cuts inventory levels without compromising service levels by
applying better mathematics to calculate inventory requirements.
- Lower inventory costs – More accurate
estimates of inventory requirements results in less
unnecessary inventory produced and stocked on shelves.
- Increased promotional opportunities –
Fewer stock-outs and improved perfect order percentages make
retailers more willing to promote products.
- Improved customer service levels –
Producing the right level of inventory yields fewer
incorrect or incomplete orders and higher perfect order
percentages.
- Increased inventory turns – Producing
only required inventory delivers quicker inventory depletion
and increases inventory turns.
- Increased profits – Inventory is produced
as needed, without excess, so write-offs for spoilage,
pilferage and obsolescence decrease and the costs of
manufacturing unnecessary products are avoided.
- Updates inventory targets every day, not
once every quarter
- Fully integrated with all conventional
planning systems
- Calculates inventory using actual demand,
not average demand
- Measures actual error over actual lead
time
- Similar SKUs grouped together for
lead-time determination
- In-season and out-of-season lead-time
difference calculated for high volume SKUs
- Service levels determined by SKU
characteristics and lifecycle position
- Automatic adjustment for shutdowns
- Rich modeling of time-phased equipment
constraints across multiple SKUs
- Manufactured and sourced SKUs are treated
differently
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