How to optimize your inventory over multiple locations

Inventory Optimization

Suppose you have a business which sells products all over the world. You need to store a lot of products in multiple locations or warehouses, in order to reduce the shipping cost and the lead time for serving certain geographical regions.

Now the question is: do you need a location dependent strategy for inventory replenishment or not? Let us suppose you use a location independent strategy. In this case, you may use the product aggregated sales and with a demand forecasting strategy, you are able to estimate a certain reorder quantity in order to cover the global product needs. But, how do you split this reorder quantity? You may think about an equal splitting among the locations.

Unfortunately, due to the fact that each location has its own product need, this strategy which considers an aggregation over all the locations, could lead to high stockout or overstock risks for a certain location. In order to deal with this problem, you may think about a transportation of missing product quantities between locations, but it can result in a very expensive operation.

On the contrary, the state of art strategy proposed by Intuendi, is location-dependent. In fact, it considers the aggregated products sales for each location and then it forecasts the location product need. So, for each location you will have the right quantity avoiding stockouts and overstocks, without any transportation cost.

What are you waiting for start optimizing your inventory all over the world with Intuendi.

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July 7, 2018 - intuendi