SQUEEZE PLAY

Now that spring is well under way, it’s easier to see the similarities between supply chain management and baseball: Both occupations require their practitioners to work with split-second timing and to make the most of available resources, as in stretching a sure-fire stand-up double into a triple. That’s just the sort of advantage that inventory optimization tools can give users, states a recent report from Forrester Research Inc.

HARD HITTERS

Inventory optimization programs, as defined by Forrester, are “solutions that determine the optimal level of inventory to meet customers’ demand while minimizing inventory holding and transportation costs.” Traditionally, companies have attempted to balance inventory holding costs and customer satisfaction by rationalizing distribution networks, installing available-to-promise apps, or deploying order management software that handles multiple sales channels.

Inventory optimization tools, however, go far beyond these functions. They can help firms determine optimal inventory levels, identify the effects of policy changes related to inventory, and discover the best areas for new investment. Planners can revise stock levels based on changes in supply and demand, such as the addition of a new supplier.

The Forrester report concludes that such providers of inventory optimization tools as SmartOps, i2, and Optiant will probably get the most effective traction for their products by concentrating on solutions that can be adapted to integrate with ERP or supply chain management suites. For more information, visit www.forrester.com.

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