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Rethinking Supply Chains

 Click for a self
guided presentation on Elucidate that explains the 
problems without it, the opportunities it offers and 
the changes required to improve.
Case Study: How Replenishing Inventory by Pulling it thru the Supply Chain increases profits

Elucidate Inventory Replenishment Simulations

We are able to quantify some of your benefits from Elucidate through retroactive simulations. Pick 5 movers – products that are too often out of stock and ones that produce gross margin dollars rapidly. Then pick 20 more SKUs which are representative of your medium and slow moving products. Improving product availability is meaningful. Doing so with significantly less inventory investment is even more important. In fact, it constitutes a decisive competitive edge.

Your question is: “Will Elucidate work for us?” Based on a representative sample of your products, we can quantify some of your benefits from Elucidate through retroactive simulations.  

Pick 5 movers – products that are out too often and which have significant dollar volume. Then, pick 20 more SKUs which are representative of your medium and slow moving products. 
Two types of data are needed to run a simulation. The first is transactional data. Only four fields of transactional data are needed: Transaction Date, Product ID, Quantity Consumed and Quantity Received. This data can be in any convenient format. Multiple entries for the same day and zero entries are fine. Examples of acceptable formats are shown below.

See Figure 1 in Whitepaper. 

It is best to have a year’s worth of transactions to show seasonality. When replenishment times are long, it is preferable to have ten or more replenishment time’s worth of transactional data. 
 
The second type is product data, as below: 


See Figure 2 in Whitepaper.

The Ending On-hand is technically redundant but allows us to verify the accuracy and completeness of the transactional data. Lead time should be in calendar days.


See Figure 3 in Whitepaper.

The chart above shows a typical sample simulation. The purple dotted line represents actual on-hand inventory during one year. The solid blue line represents the inventory levels Elucidate would have held. For this one product there was over $100,000 of inventory reduction without shortages (see subheading).
It is IDEA’s sense is that there is only one reason for inventory – to support sales. If there is enough inventory to protect sales, having more is a waste. Inventory can protect sales in two ways: through availability and changing the available range. Elucidate dramatically improves profitability and financial health. Send DavidBurch@IDEAllc.com data on your products. We’ll quickly respond with your specifically applicable simulated results.

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