Multi-Echelon Inventory Optimization (MEIO) Shown to Reduce Inventory Investment up to 30 Percent While Improving Customer Service Levels
ATLANTA–(BUSINESS WIRE)–#supplychain–Logility, Inc., accelerating the digital transformation to automate supply chain optimization and advanced retail planning, today announced the availability of the report, “Leveraging Inventory for Profitable Growth.” The research, conducted by Elastic Solutions and sponsored by Logility, identifies the top pressures driving inventory optimization (IO) initiatives, the solutions implemented to support inventory optimization, and how executives believe they compare with industry peers.
Every supply chain team must balance inventory investments with service level performance or run the risk of excess inventory and trapped working capital, or too little inventory and lost sales. Finding the right balance is critical to boosting service levels while simultaneously reducing costs. The research found many supply chain practitioners identify inventory optimization as a top priority to support company goals and objectives, identify the cause of excess inventory and help mitigate the impact of demand volatility. Artificial intelligence (AI)-based solutions like Logility’s digital supply chain platform, can quickly provide inventory form and function recommendations across raw materials, work in process and finished goods.
According to the survey, more than half of the respondents noted IO is a regular discipline that is part of the sales and operations planning (S&OP) processes. However, more than 75 percent said they rely on ERP (enterprise resource planning) solutions to manage inventory policies. This roadblock highlights a significant opportunity for companies to further reduce working capital through the use of more advanced and innovative solutions. For example, through “what-if” scenario evaluations based on the use of Digital Twins, Multi-Echelon Inventory Optimization (MEIO) has been shown to reduce inventory investment between 10 – 30 percent while improving customer service levels.
Additional Highlights from the Research:
- 37 percent of respondents believe their inventory turns are better than industry peers
- 54 percent believe they have up upwards of 20 percent excess inventory in their network
- Nearly half of all respondents review inventory policies on a monthly cadence
“This research highlights that supply chain executives understand the tangible benefits inventory optimization brings to the business yet they struggle to break free of ERP systems and homegrown solutions to capture game-changing business value,” said Karin Bursa, executive vice president, Logility. “This leaves significant working capital trapped within their supply chain networks. Logility’s MEIO solution employs machine learning to leverage real-time supply chain and market data to account for the impact of variability in demand and deliver continual and automatic updates driving inventory investments.”
Download your complimentary copy of the report, “Leveraging Inventory for Profitable Growth,” to see how your organization compares.
Accelerating the digital supply chain from product concept to customer availability, Logility helps companies seize new opportunities, sense and respond to changing market dynamics and more profitably manage their complex global businesses. Logility Voyager Solutions™ leverage an innovative blend of artificial intelligence (AI) and advanced analytics to automate planning, accelerate cycle times, increase precision, improve operating performance, break down business silos and deliver greater visibility. Logility’s SaaS-based platform transforms sales and operations planning (S&OP) and integrated business planning (IBP) processes; demand, inventory and replenishment planning; global sourcing; quality and compliance management; product life cycle management; supply and inventory optimization; manufacturing planning and scheduling; retail merchandise planning, assortment and allocation. Logility customers include Big Lots, Fender Musical Instruments, Husqvarna Group, Parker Hannifin, Verizon Wireless, and VF Corporation. Logility is a wholly owned subsidiary of American Software, Inc. (NASDAQ:AMSWA). To learn how Logility can help you make smarter decisions faster, visit www.logility.com.
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