Optimise every line and level
October 1st 2007

Barloworld Optimus says its inventory optimisation tool, Optimiza, calculates ideal levels of safety stock and optimal replenishment orders for every line item at every level in the supply chain, helping 300 global customers cut stock levels by up to 50 per cent

Consistently returning stock level reductions between 15 and 50 per cent with service levels ramped-up and sustained by as much as 20 per cent, Barloworld Optimus claims Optimiza is gaining a reputation as an advanced and powerful yet easy-to-use inventory optimisation tool.

The preferred optimisation application for more than 300 major organisations worldwide, the company puts its increasing uptake down to the fact that, unlike traditional inventory re-ordering systems, the tool takes into account the unique supply and demand characteristics of individual companies' supply chains – constructing highly personalised inventory models and building-in 'what if?' scenarios exclusively based on their unique supply chain characteristics.

Optimiza allows companies to scientifically determine what inventory is needed to achieve required service levels based on existing and projected supply and demand uncertainties. At the same time, the tool provides the basis for companies to accurately calculate and maintain optimal safety stock and replenishment orders while also projecting future investment and warehousing requirements.

Comprehensive and structured to direct attention specifically to the areas most likely to yield the greatest improvements in the shortest time-scale, the company says Optimiza's chief strength is its ability to calculate ideal levels of safety stock and optimal replenishment orders for every line item at every level in the supply chain.

The versatile and robust application also provides levels of intelligence and flexibility not generally available in ERP systems, delivered via an easy-to-follow interface.

Key areas where Optimiza is designed to make a marked difference include: Supplier and lead-time management: by setting up routes of supply; establishing and forecasting lead times; monitoring delivery performance; developing supplier collaboration Inventory modelling and strategic planning: by establishing realistic inventory objectives and linking them to replenishment of individual line items; setting safety stock using line-item risk profiles; developing models driven by service; and facilitating 'what if?' scenarios modelling Stock profiling and Classification: by defining what stock should be held at which locations; profiling product ranges including slow movers and critical items; 'Slice-and-Dice' data according to more meaningful groups Replenishment and Distribution: by generating and managing new orders; reviewing daily order pipelines using Cockpit technology; setting up distribution requirements using fair-share algorithms; collaborating with suppliers using futureorder projections Forecasting and Demand Planning: by using Tournament-based forecasting drawn from historical data; managing future events such as promotions; forecasting slow-moving items; monitoring forecasting performance Key Performance and Process Monitoring: by measuring inventory performance against pre-determined targets; measuring process improvements; providing daily/weekly/monthly key performance indicators; monitoring inventory 'health' and evaluating performance by userdefined groupings.

Optimiza worked to great effect for IMI Norgren – reducing UK inventory stock levels by 26 per cent over a six month period while maintaining availability within target levels.

Guy Dunkerley, IMI Norgren European Logistics Director, said that before selecting Optimiza on pan-European basis, each European market company managed its own inventory in isolation with no central visibility, collaboration or co-ordination.

Post-Optimiza – which has now become the inventory optimisation system for the whole of Europe – the company has recorded significant improvements to the efficiency of the supply chain operation, while forecasting has fostered a consistent approach across all European market companies.

Optimiza Demand Planner Optimiza's demand-planning stable-mate Optimiza Demand Planner (ODP) prompts highly effective switches from 'just in time' forecasting to accurate demand planning.

Designed to give planners an early and accurate view of future sales plans, booked orders and demand forecasts, the net results are typically 15 per cent less inventory, 17 per cent improvement in perfect order performance and 35 per cent shorter cash-to-cash cycle – significantly impacting on company financials.

Both Optimiza and ODP have been developed to interface with in-house Host or ERP systems in a number of different ways – including simple flat file transfer, direct database interface tools or Barloworld Optimus' SAP Certified Interface tool, ETL.

Barloworld Optimus' acquisition of Radical Global in 2005 brought advanced global supply chain modelling tool CAST into the company's product portfolio. With its running-mate CAST-FE for carbon emission modelling, the applications now have more than 350 licencees and over 1300 trained users in Europe and the US.

Used widely by third party logistics, manufacturing, consulting and retail companies to evaluate and identify different supply chain strategies – in turn leading to significant cost savings and service improvements – the company says the tool allows customers to design and configure the optimal supply chain infrastructure at a time that effective modelling and environmental issues have never been more critical.