Why invest in inventory optimization?

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Different players – different targets. For a profitable supply chain, effective inventory management is a key factor often challenged by conflicting requirements of the different players involved in the business planning process (Sales & Operations Planning).

The Sales department requires a high level of finished goods inventory in order to provide good customer service and satisfaction. Supply Chain Operations are interested in having high levels of raw material inventory allowing them to better react to uncertainties in supply. However, increased finished goods and raw material inventories will lead to higher inventory carrying costs, which will have a negative impact on financial performance.

In contrast to the sales and operations functions, the finance department will demand lower inventories to reduce the company is capital investment and improve cash flow.
If the competing objectives of high service levels and low inventory are not properly balanced, this will have a negative effect on customer service and financial performance with a corresponding loss of sales, reduced business confidence and profit.

What you will take out of this.

  • What are the conflicts between effective inventory management and sales & operations planning?
  • How to strike a balance between service level and cost in inventory management?
  • What are the steps that a best practice inventory optimization process entails?
  • What are the key components of inventory?
  • What are the major challenges that companies face during an inventory optimization initiative?
  • What are the key benefits of SAP IBP for inventory?
Westernacher White paper: Why invest in inventory optimization?

Start your digital transformation with Westernacher.

Westernacher has been innovating business and IT for almost 50 years. We are successful in helping our customers with many different transformation initiatives by providing solutions for operational, organizational and technical issues:

  • Technical:
    from implementing EWM, S/4HANA, SCE and other SAP solutions to developing custom ABAP and Fiori solutions.
  • Organizational:
    supporting businesses in the transformation to becoming a merchandise focused retail organization. Providing an engaging vision and training to realize quick wins and removing (cultural) barriers.
  • Operational:
    developing innovative business processes to make the most of the new technology and information. Improving KPIs and creating KPPs to move the company from a reactive stage to an orchestrating stage.

To provide you with a better understanding, we offer an Inspiration Day, where we show you what a Planning centered IT landscape looks like and how it might impact your company. This is achieved through demonstrations and discussions with our Planning experts.

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