Demand-Driven Inventory Optimization and Replenishment shows how companies can support supply chain metrics and business initiatives by removing the weak points built into their inventory systems. Beginning with a thorough examination of Just in Time, Efficient Consumer Response, and Collaborative Forecasting, Planning, and Replenishment, this book walks you through the mathematical shortcuts set up in your management system that prevent you from attaining supply chain excellence. This expanded second edition includes new coverage of inventory performance, business verticals, business initiatives, and metrics, alongside case studies that illustrate how optimized inventory and replenishment delivers results across retail, high-tech, men's clothing, and food sectors.

Inventory optimization allows you to avoid out-of-stock situations without impacting the bottom line with excessive inventory maintenance. By keeping just the right amount of inventory on hand, your company is better able to meet demand without sacrificing the cost-effectiveness of other supply chain strategies. The trick, however, is determining "just the right amount"and this book provides the background and practical guidance you need to do just that.

Inventory optimization is benefitting companies around the world, as exemplified here by case studies involving Matas, PWT, Wistron, and Amway. When inefficiencies are built into the system, it's only smart business to identify and remove themand implement a new streamlined process that runs like a well-oiled machine.Demand-Driven Inventory Optimization and Replenishment is an essential resource for exceptional supply chain management.

ROBERT A. DAVIS is a Principal Product Manager in the Supply Chain Management Solutions group at SAS Institute. Prior to joining SAS, Davis worked for over twenty years with Nestlé and ConAgra in their Grocery Products Divisions. During that time, he helped develop best practices in account management, trade spending analysis, and replenishment planning. He has been recognized with national awards for excellence in sales and business management. At SAS, he has helped develop expertise in supply chain cost analysis in the fast-moving consumer products industry, inventory optimization, service parts optimization, and sales and operations planning. He is a recognized global expert in multi-echelon inventory and replenishment optimization.

Preface xi

Acknowledgments xiii

About the Author xv

Chapter 1 Creating Demand-Driven Supply 1

Chapter 2 Achieving Timely and Accurate Responses to Customer Demand 19

Chapter 3 Just-in-Time and Enterprise Resource Planning Rise Together 43

Chapter 4 How Does Days of Supply Wreak Havoc on the Supply Chain? 67

Chapter 5 What Will You Accomplish with Inventory Optimization? 87

Chapter 6 Shifting the Focus from an Algorithm Discussion to a Business Discussion 109

Chapter 7 Fitting Unlimited Optimization into a Constraining World 139

Chapter 8 Reviewing the Three Proof of Value Engagements 159

Chapter 9 Inventory Optimization in the Real World: Matas A/S 193

Chapter 10 The Strategic Value Assessment 217

Chapter 11 A View of an Inventory Optimization Installation 233

Chapter 12 Inventory Optimization in Supply Chain Verticals 253

Chapter 13 Pulling It All Together 275

Epilogue 291

Index 295