Data tracking and profit capture
While the concept of “multi-echelon”—whether referring to an overall supply chain design, inventory optimization or forecasting—has been around for years, increasing supply chain pressures—such as “intelligent” consumer, continuous economic recovery conditions and sporadic inventory demands—are causing CPG companies and retailers to take note and focus on the way they power their processes through best-in-class optimization.
“The key pain points become how do companies best manage and plan for volatility—both economic volatility and that which is specific to rapid variations in demand,” explained Lewis. “The way that leading-class companies are looking at this right now is to take control of their inventory and policies across the entire supply chain to achieve lower inventory levels and reduce the out-of-stocks. A lot of out-of-the-box solutions these days will look only at one node of the supply chain—they only have visibility going out and coming in. Not having complete visibility adds a significant amount of unknown and a significant increase in the amount of inventory that is being held end-to-end. It’s not efficient and it really does not add a whole lot of service to your supply chain. Running this sort of multi-echelon inventory optimization is a core process that regularly tunes their policies to keep inventory closely aligned with changing conditions. So it’s not just reorganizing your processes but it’s powering them with best-in-class optimization into everything that you are doing in making decisions,” concluded Lewis.