Inventory planning - simple targets mean complex implementations
amis-delta has been designed to take a complex problem and break it down into bite size chunks that will link high level targets to the detail level to provide clear simple actions to achieve the desired inventory levels.
Finance functions plan inventory from a financial level and will view it as a cash liability. They will tend to request inventory reduction as a value or percentage.
Operations Management functions view inventory by groups and individual items where each has its own unique requirements. Any single part that is not available has the ability to stop the production line. Inventory reduction has to be implemented at the part number level.
The three aspects of inventory are management, control and planning.
- Management is about the day to day movements
- Control is about protecting the asset and keeping the physical and book record in line
- Planning (often simplified or overlooked) is about determining the appropriate level and then implementing the necessary changes
amis-delta focuses on the planning aspect and links the financial summary view to the detail operational view.
In simple terms, amis-delta extracts detail data and then summarises it into planning groups (customised to each individual business) which can then be planned using amis-delta algorithms (tried and tested over a number of years) to determine the optimum inventory level for each group - the way that finance will typically express the inventory target, which is easily summarised to the inventory total.
Once this is done, the detail of the optimised plan can then be exploded out at a part number level make the implementation much simpler.
Thus in summary the planning cycle becomes
- Extract / summarise / group
- Analyse and plan at a group level using inventory curve scenario planning
- Extract optimum planning rules for each part
- Compare stock level, batching rules and safety levels – for each part to identify where action is required
There are detail and summary level reporting tools available to facilitate communication with the operations and management staff.
To view Geoff Relph's full presentation delivered at the launch of the new amis-delta software please follow this link: amis-delta inventory management launch presentation
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