The bullwhip effect is a concept for explaining inventory fluctuations or inefficient asset allocation as a result of demand changes as you move further up the supply chain. As such, upstream manufacturers often experience a decrease in forecast accuracy as the buffer increases between the customer and the manufacturer.
I mean who suffers directly when finished product inventory runs amuck by level, mix, or availability? Well, we all do, don’t we? After all, if we made it and can’t sell it, what have we done? Or, what if we promised it to customers but haven’t made it? Until we give finished goods velocity, no profits roll into the business meaning, no revenue (assuming when it sells, it gains velocity). Just think of the other side of the coin when it goes to the scrap heap for a write off (terminal velocity).
When you talk to any manufacturer no matter how large or small about their concerns, improved inventory management is bound to be a part of the conversation. To celebrate manufacturing day today, we thought it would be beneficial to take a closer look at how inventory strategy keeps evolving using an infographic from Arkieva based on research conducted by Aberdeen.
Supply Chain Talk: Controlling Working Capital and Inventory – Is There a Pot of Gold at The End of the Rainbow?
How can businesses improve working capital management? In this week’s ‘Supply Chain Talk’, Arkieva CEO Harpal Singh discusses how to identify inventory buffer factors to help control working capital fluctuations.
Wondering how inventory is modeled in supply chain planning systems? Here's what you need to know.
Optimize: To make as perfect, effective, or functional as possible For many companies, the term “inventory optimization” has become more of a catch phrase than an actual reality. The idea of cutting inventory costs while maintaining the same level of customer service is rather elusive. Yet, almost all manufacturing businesses would agree that unlocking inventory
When it comes to inventory optimization, companies often have to play a delicate balancing game to ensure that they have optimal levels of inventory. If your forecast numbers are too high, you run the risk of holding costly excess inventory and reducing available cash on hand. If your forecast numbers are too low on the
Sales and Operations Planning is a continuous business process that enables firms from hospitals to chemicals to respond to emerging situations intelligently. Today we will discuss the relevance of buzz words such as Analytics, Predictive Analytics, Data Science, and Machine Learning, for S&OP.
I was lucky to attend the Gartner Supply Chain Executive Conference in Phoenix last May. 1 of the keynote speakers was Mike Duke, the former CEO of Walmart. He summarized his career in 10 pieces of advice he got from 10 key persons throughout his life. His parents, his teacher, his first boss, … Advice
Good handling of market demand data is one of the most vital concepts in any supply chain. But how to create powerful demand planning implementation? The five-step approach outlined below provides guidance.