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Solutions

Inventory Planning

Solvoyo’s advanced analytics will help you set the optimal inventory investment for your customer service strategy and also recommend the best customer service targets for your inventory investment target while protecting your target performance from forecast error and supply variability.

DEFINITION

Inventory Planning is deciding on the right level of inventory investment at the right location for the right mix of products. Inventory is a managed buffer in the supply chain network that protects customer service performance from forecast errors, operational inefficiency, supply variability and vendor performance. It needs to be tightly coupled with demand and supply planning, as they share common planning parameters and influence each other.  

What Can You Achieve With Solvoyo's Inventory Planning Solution?

1. Segment your products and customers beyond the classical A-B-C

Not all products are equal in profitability and not all customers have the same priority. Although this premise is commonly accepted, few companies take the time to differentiate their customer service targets and the corresponding inventory investment. Solvoyo platform has built-in analytics to segment your products and customers based on the following measurable dimensions: Total revenue, total profit, incremental profit, hit rate (market basket analysis), order reliability, forecast error, supply variability, life-cycle state of a product and life-cycle state of a customer.

Even though our main goal engaging Solvoyo as an ecommerce retailer was managing growth, after we went live our inventory turns improved by 61% while our availability increased by 44% and our sales almost doubled.

Director, Category Management
E-Commerce Retailer

2. Adjust your safety stocks dynamically across the supply chain

Safety stock protects customer service performance from forecast errors, operational inefficiency, supply variability and vendor lead-time performance.  Therefore, when one of these measures changes for any product, then the safety stock for that product should be dynamically recalculated. However, most companies use a set-it-and-forget-it approach in safety stock targets and fail to adjust to the rapidly changing business conditions. Solvoyo platform provides the ability to measure each of these input parameters or receive them as input from other systems, recalculate the safety stock values automatically and reconcile them based on investment targets across the network. Solvoyo will also adjust stock targets in different echelons of the same network (commonly called Multi-echelon Inventory Optimization), protecting service levels dynamically and in certain cases, totally autonomously. 

3. Maintain full visibility of and take proactive actions on your network inventory

Inventory is like cholesterol: there are good and bad kinds and the ratios matter.  Inventory loss tree is a way of differentiating all of your physical inventory based on its purpose:

  • Safety stock to protect against errors and variability
  • Cycle stock to cover demand until next supply event (e.g., replenishment, procurement or production)
  • Allocated inventory for unshipped orders or planned production
  • In-transit inventory that is on the way
  • Excess stock that is eating into your cash pile
  • Dead inventory that should be cleared out of the storage and the books
  • Investment inventory for seasonal pre-builts or opportunity buys 

Solvoyo platform has analytic capabilities to give you a real-time high resolution view of your inventory profile and proactively warn you on stock-outs before the stock-out event, and on excess stock before they become excess. 

4. Align the inventory planning decisions across strategic, tactical and operational dimensions

The strategic decision starts with the fundamental one: should I keep inventory or rely on the supplier? If you decide to keep inventory, then there are several tactical and operational decisions you should be aligned on:

  • Where in the network should I keep inventory?
  • How much safety stock should I keep and when should I reorder?
  • How do I balance my investment across finished goods, semi-finished good and materials?

Rules of thumb and intuition are still common in making inventory investment decisions. Do not leave money on the table or suffer service failures by ignoring scalable data-driven approaches and machine learning applications for inventory planning. Solvoyo platform gives you a quantitative basis to answer all inventory investment questions with both state-of-the-art optimization and advanced AI/ML methods, and to keep the decisions consistent across time horizons.   

Improved Business Outcomes

Using our Inventory Planning platform, our customers experience immediate and measurable business value with us and have typically seen powerful results in 3-6 months.

  • Inventory target setting at SKU level for raw material, work-in-process, finished goods, and packaged materials.
  • Display of inventory loss tree (distribution)  for history and the forecasted horizon including safety stock, cycle stock, pre-build stock, etc.
  • Review alerts regarding future stock cover risks.
  • Use of Inventory targets as input to
    • Replenishment alerts in case of potential revenue loss.
    • Promotion recommendations in businesses where dynamic pricing decisions can be made.
    • Purchasing and Production Planning considering different MOQ
0%
Inventory Reduction
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On-Time Fulfillment & Availability Increase

4 Step End-to-End Analytics Journey

Solvoyo combines the best of supply chain planning and supply chain analytics into one integrated platform. It is not a black box but rather a platform to provide views and insights on your end to end supply chain to drive timely management decision making.

Step 1: Descriptive

"What Happened?"

Our configurable UI display of real-time updated inventory levels for different sales units and multi-currency, and provides reporting about historical stock levels. It allows the observation of chronic problems such as over/under stock incidences.

Step 2: Diagnostic

"Why Did It Happen?"

We diagnose root causes of incidents such as stock-out due to supplier/vendor performance and machine breakdown in the production facility, or excess stock due to competitors’ promotion activity resulting in lower demand than expected.

Step 3: Predictive

"What Will Happen?"

We evaluate what-if scenarios using different input metrics in order to give insights and Predictive alerts for potential excess stock or out-of-stock incidences taking into account customer orders and forecasts.

Step 4: Prescriptive

"How Can We Make It Happen?"

We generate actionable recommendations regarding product segmentation and inventory targets to balance stock and costs while ensuring availability. Automated decisions can be made by taking advantage of these recommendations in replenishment planning, purchasing and production planning as part of this stage.

Start Your Journey Now!

CONCURRENT OPTIMIZATION

All the solutions you need.
Under one platform.

Our platform concurrently plans and optimizes orders, inventory, and transportation in a holistic approach that’s far more effective than attempting to optimize each discretely. Solvoyo provides its solutions in one model across strategic, tactical, and operational time horizons.

CASE STUDY

Fortune 100 Global CPG Company

End-to-End Autonomous Planning and Analytics

FLYER

Automated Decision-Making for CPG Companies

End-to-End Supply Chain Planning & Analytics

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