Inventory Optimization Tool in Excel - Inventory optimization model
Inventory Optimization Tool in Excel by SCMDOJO is available to access from this link --- https://www.scmdojo.com/academy/best-...
Inventory is the lifeblood of every wholesaler, distributor, or manufacturer. It is essentially money sitting in the form of the product you are selling.
Inventory comprises an important part of current assets, particularly in the manufacturing industry. 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, then put it into the structure and then identify E&O, recalculate Safety Stock, 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.
The Inventory Optimization Tool will act as a decision support tool and help you calculate Planned Safety stock both in terms of quantity and value, along with Inventory Turns & Days on Hand as KPIs.
This inventory optimization model will suggest you coverage of months of stock available, for example, •0-3 months 3-6 months, Excess or Obsolete.
It will assist you to decide if the SKU should be Made to Stock or Made to Order based on the decision model we have built.
It will also tell you how many SKUs you have are Usable inventory, and how many are Excess material or Obsolete Materials. It will also tell you the usual ABC analysis. All of it in one simple extract report from your ERP system.
Inventory optimization techniques used here are easy to run. You can follow the instructions in the next section of this video and when purchased you will also get a get full training document along with Excel Model.
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