Customers are under tremendous pressure these days. Pressure to meet rising customer expectations for product availability, to reduce supply chain costs, and to outperform competitors and capture market share.

At the same time, globalization is increasing supply chain complexity – while fragmented markets and product lines foster higher demand uncertainty. It doesn't help that many companies operate in disconnected IT environments where functional units tend to make isolated decisions based on inconsistent data. In such environments, forecasts are consistently inaccurate, and so, responding effectively to demand fluctuations is difficult at best.

The SAP Enterprise Inventory Optimization application by SmartOps is a solution that enables manufacturing, distribution, and retail companies to pursue optimal product availability, while significantly reducing inventory and working capital.

Leveraging data contained within SAP software systems, SAP Enterprise Inventory Optimization performs analytics and optimization to sense changes in demand, supply, and network alignment – and responds by providing dynamic, optimal inventory positioning. SAP Enterprise Inventory Optimization provides a comprehensive, enterprise-scale process for optimizing, managing, and monitoring inventory stocking levels for finished product and raw material component at all stocking locations, in a multitier distribution or manufacturing supply chain.

Balancing Service Levels and Inventory Investment

SAP Enterprise Inventory Optimization by SmartOps optimizes the balance between service levels and inventory investment in these ways:

• Coordinates capacity, inventory, demand, lead time, and product availability variables to calculate how much inventory should be carried by item, location and time period
• Provides a multistage modeling approach that calculates the relationships among inventories, service levels, capacity, and costs across all stocking locations – and stages across different types of supply chains within organizations
• Enables planners to set and manage targets such as safety stocks more frequently at granular level, supporting lean processes
• Helps customers realize savings from improved customer service levels, lower inventory and working capital reduction
• Offers a comprehensive demand-supply management solution, along with supply change management and advanced planning and optimization
• Accurately tracks and streamlines inventory positions throughout an order-to-cash value chain, using advanced algorithms