Supply chains run on inventory. If inventory is reduced without negatively impacting service levels, revenue increases while working capital, expedites and write-offs decline.
Companies with global supply chains, numerous stock-keeping units (SKUs) and unpredictable demand and supply have difficulty achieving this because many optimization solutions cannot fully represent real-life conditions or perform computations fast enough.
Best-in-Class Multi-Echelon Inventory Optimization E2open Multi-Echelon Inventory Optimization has been proven in extremely large supply chains to generate better results by using a more accurate measurement of forecast error. The solution takes into consideration real-life conditions such as shelf life and storage capacity and enables root-cause and what-if scenario analyses.
The outcome is not only a better inventory plan, but also one that supports more frequent target-setting for better tracking of current conditions.
E2open uses high-quality daily demand predictions for each SKU to measure daily forecast error. Error is then calculated over exactly as many days as the lead time for each SKU. When a forecast is available from E2open’s
Demand Sensing solution, E2open Multi-Echelon Inventory Optimization uses the same forecast error computation for consistency and speed.
