Achieving Inventory

Process Optimization^™

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The right balance between inventory investment and meeting operational needs can only be achieved through true inventory optimization. This requires knowledge of inventory management, parts usage, procurement, supply chain, and an understanding of the behaviours and management processes that drive them. We call this Inventory Process Optimization™ (IPO).

The different emphasis of IPO achieves significantly better results than software programs as it identifies opportunities that ‘traditional algorithm-based optimization’ does not and, in fact, cannot identify. In addition, because the resulting actions are process based, the results from these opportunities can be maintained for many years, they are not short term ‘slash and burn’ outcomes.

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Process Optimization™: A Two Stream Process}

Inventory Process Optimization™uses a two stream process that is specifically designed for MRO, materials, and engineering spare parts inventory and involves training the team of people that actually influence your results.

Stream 1: Individual Parts Review The Individual Parts Review utilizes our Inventory Cash Release^® (ICR^®) Process and comprises three key elements: Focus on the high dollar value items Utilize ‘7 Actions’ for Inventory Reduction Involve a wide team and build their skills This approach is fully transparent so that you will know who made which decisions and why. It is because the logic of software algorithms is not transparent that most users don’t trust the outcomes and ultimately override the recommendations. With our approach this does not happen.		Stream 2: Management Process Review The Management Process Review addresses the management processes that have an ongoing impact on your materials and spares inventory management results. The steps are: Appraisal of your current inventory management practices. Identification and agreement with the team on the issues and behaviours that have a negative impact on inventory levels. Identification and agreement with the team on the actions required for achieving lasting results. The output of the Management Process Review is an agreed action plan and timetable to address issues and behaviors.

Read the Inventory Process Optimization™ White Paper		Download a copy of our simple, step-by-step methodology

Download a comparison of different optimization approaches		Review recent case studies