October 4, 2020
Case Study – Integration & Optimisation
This customer owns, operates and maintains a regions electricity distribution network, connecting 2.4 million properties, and more than 5 million…
We forecast and plan demand and inventory so that stringent availability targets can be achieved with the minimum possible inventory, which means only holding the right amount of stock to meet customer demands based on analysis of trends and patterns in order history and known event planning.
A solution with TVS SCS’ Demand Forecast Planning application (Msys.DFP) increases the availability of products whilst achieving lower levels of inventory, which in turn will increase the levels of customer service you can provide to both your organisation and end customers.
We have years of experience in managing complex supply chains and have highly skilled practitioners who manage the system on an exception management basis, identifying outliers, whilst the system automatically identifies trends and seasonality in the data. Bespoke algorithms contained within the forecasting system can manage different types of inventory including slow-moving items, lifecycle planning and asset applicability.
Integration to the Enterprise Resource Planning application (Msys.ERP) recommends and automates purchase orders for products based on the agreed frequency of the material requirements planning. This ensures the optimum level of inventory and takes in to account any variation in demand seen in that period.
The cost-saving benefits are seen through optimising your stock levels. Furthermore, the system handles product change efficiently, thus decreasing the amount of obsolete or superseded stock which reduces the write off to the bottom line, leading to increased profit. An Inventory management solution can be seen as one of the most significant areas in the supply chain that can save you money.
Our Msys platform allows multiple applications to be integrated to create a more connected supply chain. For example, our Demand Forecast Planning tool (Msys.DFP) integrates with not only an ERP system but our Supplier Information Portal (Msys.SIP), which makes an efficient and seamless ordering process of specific parts and products. Having automation like this ensures you can focus on your business core and provides forward visibility to the supply chain improving the performance of the suppliers and increasing availability.
New parts, supersessions and demand consolidation are handled automatically, via integration with Msys.PDM, eliminating the risk of excess inventory and stock write off, reducing the level of working capital tied up in inventory.
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Supply Chain Inventory Management is a process of managing the ordering and demand of a company’s products. The process of inventory management includes correctly timing the ordering of products, taking into account factors like supplier lead time and includes analysing the historical data stored by a company, calculating seasonality and trends in demand. TVS SCS can manage these processes through a solution that integrates both our software and our experience in managing complex supply chains.
A supply chain inventory management solution is often needed when a company realises that they are struggling to keep on top of their inventory in many ways. If the ordering of products isn’t done at the correct time it could lead to stock turning up late which in turn will affect availability targets and damage the service level, likewise, stock can be ordered too far in advanced or over ordered as ‘safety stock’ but becomes obsolescent or superseded thus impacting your profitability.
Another sign of needing an Inventory Management solution is when too much human resource is required to forecast and plan demand manually, often using cumbersome and potentially error-prone spreadsheets developed in-house over time.
An inventory management solution is needed to optimise stock levels to minimise obsolescence and maximise availability.
Inventory Management software is necessary because it stores a multitude of data that otherwise would be hard to keep on record. It can take data and run it through a statistical algorithm that will help predict future demands of stock and take in to account the uncontrollable variables that may affect the availability of stock, utilising scenario planning.
TVS SCS’ Demand forecast planning application is a solution developed to reduce client inventory and deliver substantial improvements in product availability. The tool uses various demand data, e.g. trends, known events, seasonality and historical usage to derive time-based forecasts and safety stock.
Having an inventory management solution can bring a range of benefits to your business and supply chain operations, the first significant benefit being the cost-saving on your bottom line by optimising inventory, and also better controlling obsolescent and superseded stock. Inventory Management, as a solution, can be seen as one of the most significant areas in the supply chain to save you money. Another benefit is the added agility, resilience and visibility it brings to your business by having the data available to manage the planning team’s workload, and to cope with special events, customer growth and planned work seamlessly and automatically.
The improved level of service that can be offered from an accurate inventory plan can significantly grow the level of sales in an organisation due to increased product availability with a right-first-time approach.
Typically the biggest challenges in implementing inventory management software into your business are the integration of the systems, the structure of data and the employee training required to get the most out of your package. The time and cost needed to get an inventory management application running can sometimes outweigh the benefits of actually taking up this type of solution. We have seen this through our extensive experience in the integration of software in both our own and third-party applications; however, having this type of system in place can massively improve the operations of your business. Our inventory planning system is designed as part of the integrated IT infrastructure to be seamless when bringing onboard new clients with the process refined and improved over time with the significant number of successful implementations completed.
For our Demand Forecast Planning solution to be implemented into your business, there is some IT development required, thus making it part of a broader solution. Inventory management is part of a more comprehensive solution. The software often needs to be integrated into an Enterprise Resource Planning (ERP) system to run efficiently, delivering the material requirement planning element. A broader solution could see multiple integrations; for example, you can expect to see inventory management software integrate into supplier information portals, ERP systems, product data management and data analytics dashboards.
Several considerations need to be taken into account to ensure the management of your supply chain inventory is kept up-to-date and accurate.
Usually, processes need to reviewed and updated every 3-6 months to ensure they are correctly scaled to the demand flowing through your business.
Successfully managing inventory activities directly correlates to improved cash flow. Whilst purchasing activities affects cash flow as an expense, successfully forecasting the correct amount of stock helps your bottom line as products are not being over-ordered and sitting in a warehouse with the risk of becoming obsolete or superseded.
Integrating inventory management with a robust supply chain team, manages the receipt of a product on time and in full to both meet product availability and reduce the working capital in inventory.
Inventory management software can overcome many challenges in the supply chain, such as maximising the availability of products, ensuring that a high level of service is delivered to your customers. With that comes the improved profitability as customers will see you as a reliable source of their requirements. An effective inventory management solution can provide the streamlining of ordering processes and analysing trends in demand which allows for the correct amount of stock to be ordered at the right time to keep inventory to a minimum.
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