SAP Enterprise Inventory & Service-Level Optimization (formerly SmartOps) Education - Part 2 of 2
In 2013, SAP acquired SmartOps, Inc., a long time SAP solution extension and leader in the field of Inventory Optimization. Prior to that acquisition, SmartOps educational material was available through the SmartOps website. That material has been moved here. At SAP, SmartOps is now called Enterprise and Service Level Optimization (EIS).
Here you will find individual video vignettes on the building blocks of SAP EIS inventory optimization software. At SAP, we are now offering classroom training on EIS, with details found here. These videos serve as single serving size lessons. Click around, watch them in order or browse directly to a topic video. As always, if you have any questions contact your SAP representative or reach us through the education site referred above.
Key Inventory Factors
What is the impact your batch size setting are having on your inventory and safety sock? How are you determining your ERP batch size settings?
What is the impact that forecast bias is having on your safety stock? Do you trust the forecast from Sales? Marketing? Can you make adjustments and still hit your customer service targets?
Demand variability has an impact on the safety stock required in a supply chain. This session walks through some best practice techniques about understanding this variability and looks at common forms of uncertainty which exists across industries.
Forecast Bias is a consistent over or under estimate of a periodic demand. This bias will over or under adjust inventory requirements. Understanding and quantifying this bias and how it alters recommended safety stock values are discussed in detail in this session.
Suppliers are a large source of variability that can impact safety stock requirements. Quantity and lead time variability are both covered in this session. There are examples of how oversimplified assumptions of these sources of variability can quickly lead to incorrect inventory targets.
Supply capacity constraints exist when a supplier has a maximum amount of product that can be supplied in a single period. Due to this constraint it may require downstream customers to hold pre-build inventory. The outputs and mathematics behind pre-build are covered in this session.
Differentiated Demand Streams, or Hybrid nodes, are stocking nodes in a supply chain that service two or more downstream nodes with different service level targets. These differences may be because of both internal and external customer nodes or multiple external customers with different service level targets. This session looks closely at the challenges associated with setting inventory targets for these nodes.
Re-order point is a consumption based MRP procedure. This session walks through the calculations necessary to determine what inventory level should trigger a re-order. It contains insights into what key factors will drive re-order points to increase or decrease.
Batch size (lot size) requirements affect the quantity a stocking node is able to request from their suppliers. This quantity restriction can impact safety stock requirements for the supply chain. This session takes a deeper look into this concept and builds intuition on how batch size impacts safety stock targets.