Kellogg Targets Dynamic, Integrated Inventory Target Setting

Food products giant goes live with SmartOps inventory planning and optimization software to improve product availability

Food products giant goes live with SmartOps inventory planning and optimization software to improve product availability

Pittsburgh — June 23, 2004 — Food products giant Kellogg Company has implemented the latest version of an inventory planning and optimization solution from SmartOps as part of an initiative to do dynamic and integrated inventory target setting for improved product availability while reducing total inventory.

Kellogg is using version 3.2 of the SmartOps Multistage Inventory Planning & Optimization (MIPO) software solution, which, the solution provider says, offers improved inventory planning decision support.

"With SmartOps, we can update important operating targets such as safety stocks more frequently and at a more granular level," said Rich Dregne, senior director of product availability for Kellogg. "Now we're able to more closely align our inventory deployment with what is actually expected by our customers in a dynamic environment."

At Kellogg, SmartOps MIPO 3.2 interfaces with the SAP and Manugistics systems to calculate optimal inventory targets for every item at every location across the forecast horizon. With SmartOps, Kellogg can automatically and dynamically update its inventory targets across the entire supply chain resulting in higher product availability with a lower total investment in inventory.

SmartOps says that MIPO helps customers determine the best possible inventory and product availability plans given inherent uncertainties, time-varying data, multi-location and inventory stage complexities, and aggressive customer service goals.

MIPO dynamically generates optimal inventory targets for each stage of the supply chain, while providing visibility into each reason inventory is needed — including safety, cycle, pre-build, pipeline and merchandising stock requirements, by item or stock-keeping unit (SKU) — to meet desired service levels.

The provider says that MIPO 3.2's optimized inventory targets serve as critical inputs into enterprise resource planning and advanced planning & scheduling systems so they function efficiently, delivering better intelligence for inventory planning and execution.

"We are particularly proud of being able to demonstrate value at Kellogg, given that this company was already considered to be a leader in supply chain planning and execution," said Sridhar Tayur, CEO and founder of SmartOps.

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