inventory optimization

[Former Member]

Hi all,

I need ur inputs for the following sceanario.

Critical materials are kept in warehouses as safety stocks. Each location has its own safety stock for its own spare parts. That leads to duplicate stocking of similar materials at different locations. To optimize the inventories and reduce their costs, it is suggested to consolidate similar materials at certain locations and allow all other locations to use it. By doing so, huge cost savings can be realized.

Delays in delivery might have harmful effects on business. Assessment tool is required to find the best location to stock the consolidated safety stock considering cost of transportation, delivery time and criticalness of the location.

It is required to have a system at which locations are prioritized by some cost factor .

Another required functionality is to enable the decision of where to stock the safety stock considering the transportation cost, the delay penalty (risks) and the delivery time. Comparison of different stocking options is also required showing the cost and effect of each option. how to use the available APO functionality by enabling reporting, simulation and comparison.

regards

sankar.

[Former Member]

SAP Enterprise Inventory Optimization is SAP's solution for the problem being described. SAP EIO was recently added to the SAP price list. For additional information regarding Enterprise Inventory Optimization there is an SAP training course SSCM-EIO that is available, or you can contact your SAP account representative to arrange for a demonstration/workshop.

[Former Member]

Here's a link to some details about SAP Enterprise Inventory and Service-Level Optimization (SAP EIS) on the SAP website.  Inventory Management Software | Integrated Sales & Operations Planning | SAP

There is a lot of material available to explain the mathematics that looks at lead times, inventory costs, uncertainty, customer service level targets and more, to recommend optimal safety stock recommendation through your multi-echelon supply chain.  And EIS integrates with other SAP supply chain applications and has been leading the field for many years.  I am an SAP Solutions Consultant implementing SAP EIS at several SAP customers now and there are many references that have been successfully saving inventory dollars for many years with this application.

[srinivas_krishnamoorthy]

the link

would be helpful. I would recommend an IO tool to work on top of APO for your purpose. An SAP endorsed tool like SmartOps is something you should consider. If you do not want to go after such tools, I am afraid only Advanced SSP comes close to your requirement.

[Former Member]

sounds like a good case for optimization... if you can get the right costs and penalties in place

not sure of how your warehouses are modelled but would be good to model just your spare parts planning using SNP optimization