Expert Insight: Guest Contribution

By David Johnston, Vice President, JDA Software

  August 4, 2008  

Responding to Customer Demand with Advanced Inventory Optimization and Management Solutions


How Can Manufacturers Effectively Synchronize Demand, Logistics and Production to Mitigate Out-of-Stocks and Excess Inventory and Respond Successfully to Consumer Demand Volatility?

Johnston Says:
Increasingly, companies are investing in advanced IT solutions that support and elevate S&OP to enable integrated business planning.

What do you say? Send us your comments here

Consumer goods manufacturers are no strangers to cyclical demand volatility, exacerbated by a challenging economy, with shortening product life cycles, rampant promotions and markdowns, and a proliferation of purchasing options.

Manufacturers have high stakes in inventory management and optimization, with minimal margin for error or complacency.

In today’s global environment, manufacturing success depends on the ability to operate with a global view. How can manufacturers effectively synchronize demand, logistics, and production to mitigate out-of-stocks and excess inventory and respond successfully to consumer demand volatility?

A responsive supply chain is critical in today’s market; real-time data and accurate forecasting fuel supply chain efficiency. Companies relying on fragmented and outdated information, processes, and technologies are at risk of losing ground.

Forward-looking companies are seeking to strike a balance between demand, capacity, and profit across their entire organization. Furthermore, many are making the shift from consensus demand management to profit and revenue optimization.

For this reason, companies are rethinking how they approach sales and operations planning (S&OP), including taking a global approach to S&OP rather than a disparate and decentralized process.

Increasingly, companies are investing in advanced IT solutions that support and elevate S&OP to enable integrated business planning. Moreover, they’re selecting solutions that will help them adjust to demand shifts and more accurately source, produce, and deliver products.

This includes fully integrated, scalable solutions proven in an array of applications - from inventory optimization, forecasting and demand planning, logistics, and transportation management.

Many companies have already deployed sophisticated technology to improve demand forecasting, product life cycle management, achieve procurement economies of scale, and ensure consistently responsive manufacturing practices, including:

  • The largest meat processing company in the world recently leveraged inventory optimization software to deal with consumer demand spikes and generate one view of demand across its supply chain, sales, and marketing operations.
  • A leading manufacturer of consumer products implemented a transportation and logistics management software that helped reduce transportation costs by 7 to 10 percent.
  • A consumer goods supplier to a leading warehouse club deployed software to reduce inventory levels, increase sales, boost inventory turn-around, and improve forecast accuracy.

Enterprise-wide architecture can provide 360-degree global visibility, whether to factories on-shore or off, logistics suppliers, distribution centers, and retailers. Intelligent investments in global enterprise planning can enable companies to gain greater visibility into their entire supply chain and the consumer-centric market, so planning and execution decisions are accurate demand data. Manufacturers are coming to expect and demand software solutions that provide the complete picture - an end-to-end overview of supply chain to retail partners.

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