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Home » Services » Inventory Planning » Inventory Policy Development
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Inventory Policy Development
What Is It?
Chainalytics' Inventory Policy Development services can help you set optimal inventory levels of finished goods, work-in-process, and raw materials throughout your supply chain network. By focusing on having the right quantity of product at the right time a company can profitably satisfy customer demand and service expectations with minimal overall inventory investment.
What Do We Do?
Chainalytics Inventory Policy Development service will determine the best inventory stocking policy, days-on-hand, re-order levels for each item at each location while considering your current inventory deployment, service level strategy, and inherent demand and supply variability,. Through the development of inventory policies, you will understand by product and location where there are opportunities to reduce inventory or requirements to expand inventory investment to meet stated service levels. Depending on your industry, we will define the optimal item-location level inventory policy to include:
- Frequency of reviewing inventory levels
- Safety stock to buffer against demand and supply variability/uncertainty
- Cycle stock to take advantage of transportation or production efficiencies
- Pipeline inventory to represent items in transit across the network
- Pre-build stock to support seasonal periods or known demand peaks driven by capacity constraints
- Raw materials and work-in-process inventory to buffer adjacent production processes
- Forward-buy investment inventory to take advantage of price breaks or promotions
Can Inventory Policy Development reduce your total inventory investment and help you maintain your service level performance at the same time? Do you find yourself asking the following questions?
- Are we holding too much or too little inventory to meet stated service levels?
- How should my inventory policy adopt to seasonal demand patterns?
- What is my pre-build strategy given the constraints on my production or procurement capacity?
- What is the overall impact to my inventory positions and operational costs from adopting lean/flexible manufacturing philosophies that increase the frequency and decrease the size of replenishment shipments?
- What are my inventory requirements now that I have lengthened my supply chain with global sourcing alternatives?
Is It Right For You?
You are an ideal candidate for Inventory Policy Development if you have challenges in meeting your customer expectations with your current level of inventory investment and are using rules of thumb to plan inventory levels, and are looking to:
- Reduce inventory through policies individually determined for each item at each location,
- Reduce your inventory investment while supporting differentiated service level commitments to different sales channels,
- Optimize working capital by adopting inventory policies that take advantage of transportation economies and quantity discounts,
- Identify excess and obsolete inventory and evaluate disposition options.
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