Inventory is the lifeblood of every wholesaler, distributor, or manufacturer. It is essentially money sitting in the form of the product you sell. Inventory comprises an integral part of current assets, particularly in the manufacturing industry, making Inventory Optimization Tool a must-have process. However, do you know which inventory optimization models to choose?
A lot of cash flow is committed to inventories so as to ensure a smooth flow of production to meet a demanding customer service level. However, maintaining inventory also involves holding or carrying costs along with opportunity costs. Therefore, identifying inventory reduction strategies or inventory optimization becomes critical for supply chain and operations professionals.
Inventory Optimization is a time-consuming task. I remember my days as a planner when every 3 months, I had to download data from the ERP system, put it into the structure, identify E&O, recalculate Safety Stock, and identify changes in Made-to-Stock, Made-to-Order, and redo the whole ABC analysis. It used to take me 3-5 days of dedicated effort.
To help SCMDOJO Community we have developed an inventory optimization tool in Excel that will do all that and more in minutes & hours rather than days, and in less than $70! NO need to pay hundreds of thousands of $$ to software companies.
Output You Will Get from Inventory Optimization Tool:
- The total cost of goods sold
- Current inventory had
- Planned Safety stock value
- Inventory Turns
- Days on Hand
- Current on-hand inventory (in $ value & % to total) grouped in coverage of months of stock available
- Inventory optimization proposals (A. Stock to stock with new safety stock levels; B. Stock to non-stock; C. Non-stock to non-stock; D. Non-stock to Stock with new SS levels)
- Current on-hand inventory profile in terms of (A. Usable inventory; B. Excess inventory; C. Obsolete Inventory)
Executive Summary of Inventory Segmentation & Analysis Provided by Inventory Optimization Tool
What Files You Will Get Once Purchased?
- Inventory Optimization Tool in Excel (Filename: Model)
- Input Template (Filename: Input)
- Inventory optimization Tool Work Instructions DIY (do-it-yourself) Training Document (Filename: Training Document SCMDOJO)
Introduction & Tutorial on How to Use The Inventory Optimization Tool
The objective of this guide is to describe the present use, application and characteristic of selecting various inventory planning methods, and to explain how the methods are applied by the supply chain professionals.
This Excess and Obsolete Inventory Policy provides guidance for shrinkage, obsolescence and excess inventory in the inventory allowance accounts on their ledgers.