Demand-Driven Inventory Optimization and Replenishment

Chapter 8Reviewing the Three Proof of Value Engagements

Oftentimes, I am asked to demonstrate inventory optimization, and I get sucked into a vortex of various things a user might do to update or change to make sure the information being loaded is correct so that the outputs are optimal. The viewer of the demonstration is left with more questions than answers.

Things changed for the better when I decided to have a little fun with the demonstration and ask the rhetorical question, “How would you like to see a demonstration of a day in the life of an inventory optimization analyst?” When everyone indicated they thought that was a great idea, I shut off the screen and said, “Here it is.”

You could see the light bulbs going off over the heads of people in that demonstration when they realized inventory optimization is not so much a demo of additional work as it is a backend process that allows for improvements in the overall enterprise resource planning (ERP) system and requires little, if any, major inputs on a daily or weekly basis. It is not there to create more work; it is there to reduce the workload.

When inventory optimization is working correctly, the time and effort placed on buyers to create and execute replenishment plans decreases dramatically. The day in the life of a buyer using inventory optimization shifts from 70 percent tactical to 70 percent strategic. Buyers can let inventory optimization do the heavy lifting of normal inventory control and normal replenishment ...