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Closed-Loop Dynamic Inventory Optimization is a core process that regularly tunes policies across the supply
chain to keep inventory closely aligned with changing conditions. But, the organizational value of such an
approach goes beyond the more obvious metrics of improving service levels, order lead times, and inventory
- Higher performing supply chains can incur lower selling costs
- Better replenishment enables faster collection of receivables
- Utilization of optimal inventory targets results in less cash tied up in inventory
- Optimal use of existing distribution assets (warehouses, fleet) reduces need for capital investments.
- Better cash flow from lowered supply chain costs and unnecessary assets drive higher credit rating
- and lower borrowing costs
Dr. Michael S. Watson, Ph.D., WW Optimization & Supply Chain Lead at IBM,
Remzi Ural, Global Supply Chain Management Solutions Lead, Consumer Products Industry at IBM
Dan Gilmore – SCDigest Editor