Demand-Driven Inventory Optimization and Replenishment: Creating a More Efficient Supply Chain

CHAPTER 5

What Will You Accomplish with Inventory Optimization?

I have had the great fortune of working with three gentlemen who have influenced me when it comes to all things inventory optimization. Tugrul Sanli, Jinxin Yi, and Xinmin Wu have, literally, taught me inventory optimization over the past 12 years. As I started to write this chapter, I looked for the best way to share information about the inner workings of inventory optimization without going overboard on technical jargon. The more I looked around, the more I kept coming back to the same information. Drs. Tugrul Sanli, Jinxin Yi, and Xinmin Wu have been the authors of the SAS Inventory Optimization User Guide since it started publication back in the early 2000s. Over the years, it has been upgraded with new information as it became available and included in the solution. I spoke with each of them about the use of their information in this book, and I am particularly thankful that they gave me the opportunity to pass on a lot of the information found in the SAS Inventory Optimization User Guide for reference material. While I have added verbiage here and there, the technical information comes directly from the user guide at SAS.

HOW DOES INVENTORY OPTIMIZATION IMPROVE THE ERP SYSTEMS?

So, what does inventory optimization do to counteract the shortcomings found in present-day enterprise resource planning (ERP) and supply chain management (SCM) systems? In a nutshell, it turns days of supply on its head so that each ...