Terra Technology Unveils Inventory Optimization Solution

Real-Time Inventory aims to decrease safety stock requirements while improving service levels for consumer products companies

Real-Time Inventory aims to decrease safety stock requirements while improving service levels for consumer products companies

Norwalk, CT — May 9, 2006 — Forecasting solution player Terra Technology has released a new inventory optimization solution intended to help consumer products companies set inventory levels more accurately and decrease safety stock levels.

Terra, a provider of real-time forecasting (RTF) solutions, said that its new Real-Time Inventory (RTI) solution uses advanced mathematical formulas to help consumer products companies decrease safety stock levels by 10 percent or more while improving service levels and reducing out-of-stocks.

Unlike other inventory optimization solutions, RTI measures actual forecast error over actual lead time to determine inventory requirements, not estimates derived from weekly or monthly measurements, according to Terra. Using actual error rather than derived estimates significantly improves results, the solution provider said.

Key features of Real-Time Inventory include integration with other systems to minimize data entry and maintenance work; the capability to update inventory targets every day based on actual demand, not once a quarter; an understanding of the differences between manufactured and sourced SKU's, including lead-time flexibility, schedule compliance and transportation variability; and differentiation of service levels based on SKU characteristics, seasonality and lifecycle.

"Typical inventory for consumer products companies is 74 days, while out-of-stocks range from 6 to 12 percent," said Robert F. Byrne, Terra's president and CEO. "That means that manufacturers are holding more than two months of inventory and still the right products are not on the store shelves at the right time. RTI solves this dilemma, enabling consumer products companies to lower inventory holding costs, improve customer service levels and increase profits at the same time."

Real-Time Inventory is now available directly from Terra Technology.

Additional Articles of Interest

— For an in-depth look at how agribusiness Syngenta is reducing inventory while maintaining customer service levels by building a demand planning process based on a collaborative forecasting solution, see the SDCExec.com article " Forecasting Processes from the Ground Up ."

— Working to improve demand visibility at your company but stumped on how to improve demand accuracy? For some tips to get you started, read "Overcoming Forecast Error with Real-time Forecasting," an In Depth article on SDCExec.com.

— For more information on demand planning and forecasting, see the analyst articles in the April/May 2004 and February/March 2005 issues of Supply & Demand Chain Executive.