Ensuring the right products are in the right place and at the right time is critical for companies also dealing with supply chain constraints and a high degree of variability. Uncertainty has become the name of the game and the only way to effectively optimize inventory through continuous, data-driven assessments, planning, and decision-making.
In the past, inventory requirements were predictable as inventory drivers were stable. Companies could effectively “set it and forget it” regarding supply chain planning. This is no longer the case, and that’s why traditional solutions and processes have failed.
“The top question companies are asking right now is: ‘Why can’t I reduce my inventory levels?’” says Lora Cecere, founder at Supply Chain Insights. “This is a true concern in an era where organizations have added 27 more days of inventory since 2007, which marked the beginning of the Great Recession. The problem is that companies that implemented advanced planning systems took a ‘set it and forgot it’ approach and didn’t look at how to adjust to the lead time changes. The question becomes: How do you make sure that the optimization engines are really working with this heightened variability?”
In response to this question, more companies are developing fluid inventory policies that work best when organizations have greater visibility, closer supplier partnerships, a timely sense of demand, and continuous adaptation of forecasts and plans to optimize inventory levels—onsite and in transit. Having fluid inventory policies and processes has become increasingly important in the current business environment, where inventory is no longer “free.”
Using GAINS, companies can get up and running quickly. The results come rapidly in the form of freed-up working capital, increased sales, better service levels, and reduced operating costs. Once in place, the supply chain design and planning solution provides greater inventory planning visibility and helps companies continually improve their inventory positions. These are critical wins at any time, but they’re vital when companies are forced to simultaneously deal with soaring inflation, rising business costs, and a high degree of variability.
When the environment is stable, businesses can accurately predict their supply chain needs within a tight range. When high levels of volatility and uncertainty replace that stability, one needs technology platforms that can proactively monitor external signals and help respond to them and predict future needs.
The pronounced supply volatility that emerged during the global pandemic may be easing, but this is no time for companies to take their foot off the inventory management gas pedal. The next disruptive event is likely waiting around the next corner, which makes now the perfect time for organizations to adopt supply chain solutions that continuously right-size their inventory positions using a robust,cloud-based platform for supply chain design and planning like GAINS.
As supply chains expand to include more supply sources, the uncertainty and volatility associated with those networks grow exponentially. “Inventory is a hedge for managing complexity,” says Bill Benton, Co-Founder of GAINS. “And, it’s a key controllable lever that allows you to manage that risk and create higher levels of supply chain resiliency.”
GAINS Performance Optimization Platform
With GAINS, any organization can harness the same power previously exclusive to large enterprises. The company’s proven demand, supply, and inventory optimization platform delivers continuous cost and profit optimization to companies of all sizes.
Using our Proven Path-to-Performance (P3) implementation methodology, GAINS helps companies progress in their digital journeys—from multi-billion dollar enterprises to smaller or mid-market organizations that may need extra help in this area. GAINS University provides ongoing training to the GAINS community.
Using a pragmatic approach to supply chain management, GAINS helps companies implement its solution in phases, gaining incremental value through continuous improvement versus a prolonged comprehensive transformation. GAINS can reconfigure inventory policies to allow companies to right-size their inventory and achieve their desired service levels. In some cases, this may require increased investment in inventory in some areas and a reduction in others. GAINS helps companies accomplish this balancing act in a way that optimizes inventory investment and the return on invested capital while achieving the desired service levels.
The GAINS solution also helps companies develop robust scenario planning. Knowing how each of several scenarios may play out, organizations can make inventory decisions based on those outcomes— effectively “covering the bases” in the event of an unexpected challenge.
Too complex for spreadsheets and manual processes
Because of the modern supply chain’s complexity, size, and scope, there’s too much interplay and interaction to rely on error-prone spreadsheets and time-consuming manual processing. Companies are looking to automate many decisions, prioritizing their team’s valuable time to focus on higher-value tasks.
In one instance, Benco Dental, the largest privately owned full-service distributor of oral healthcare technology and supplies serving over 30,000 dental professionals, used GAINS to help enhance its practices. As a growing distributor in a competitive market, Benco Dental’s success depends on two primary factors: superior customer service and a broad portfolio of value-added services. In a business that prides itself on superior service, these goals are even more challenging given new product introductions and availability of low-volume items with sporadic demand across its robust product portfolio of over 60,000 items.
Fueled by improved S&OP and the GAINS inventory optimization capabilities, the business opportunities became clear:
GAINS gave the Benco Dental team the insights they needed to realign inventory confidently and move forward faster to gain market share.
Towards the Future
Competitive advantage will come to those companies that can continuously assemble, reassemble and recombine unique customer, product, and channel relationships quickly. No longer can network design and planning be a periodic exercise. It must become a continuous one. “Businesses face constant change and need to manage unique product, customer, and channel flows continuously,” adds Dave Shrager, President of GAINS. “To free up working capital and fulfill customer promises, companies need to be informed using a higher frequency of supply chain design operationalized through planning execution. The industry needs a new paradigm, an information architecture that couples design and planning with a focus on performance – the GAINS Performance Optimization Platform.”