Stock Optimizer

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Stock Optimizer Solution (SOS) is a comprehensive suite of software that enables organizations to plan and manage inventories in more simplistic way. SOS application allows you to analyze inputs and outputs of goods trough time, make decisions in accordance with your strategic business plans and ensure balanced inventory levels while respecting service levels and minimizing risk.

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The Seven Steps Approach

Inventory is the consequence of many different strategic and tactical choices across an organization, and Inventory optimization is the science of making these choices more rational, profitable, and data driven. This program follows LOGIKO's proven methodology for inventory optimization to guide you through the „jungle“ of inventory management and give you the direction (milestones) that you need to reach the „holy grale“ - lower inventory levels while respecting service levels and minimizing risk of losing sales.

Seven Steps Inventory Optimization is Your Best Choice for Inventory Optimization

No matter what ERP system is implemented in your company, LOGIKO designed and developed a STANDALONE application in 7 steps that will help you manage your inventory. This program consists of 7 steps - 7 functionality to guide you through inventory management and give you the direction that you need to reach the lower costs of inventory while minimizing risk of losing sales:

1st STEP - ABC analysis of inventory
Not all products are equally important. You certainly have enough work to do and therefore you can not spend the same amount of time with products that can hardly be sold as with the best-sellers.
The ABC analysis is supposed to enable you to focus on the essential processes in the supply chain. Its goal is to separate the essential from the nonessential. The focus of this activity is to be directed to the most profitable area (A parts), while the costs in the other areas are to be reduced by the simplification of processes (for example, by implementing a usage control).
The ABC analysis is a primary analysis. It can be used as a basis for follow-up or secondary analyses such as the segmentation or the XYZ analysis.

2nd STEP - XYZ analysis
Surely you agree that for some items are easier to forecast demand than for some others. This analysis helps you to find items easier to forecast so you can automate their ordering and spend more time to forecast demand for those (items) which are more difficult to predict.

The XYZ analysis enables you to perform the next step of the inventory analysis and tells us about the fluctuation of demand for some products The following typical classification has been generally established:
X materials - characterized by a constant, non-changing usage over time. The requirements fluctuate only slightly around a constant level so that the future demand can basically be forecast quite well. Unfortunately, experience has shown that even the forecast for X products can be poor.
Y materials - The usage of these materials is neither constant nor sporadic. With Y materials, you can often observe trends, for example, that the usage increases or decreases for awhile, or that it is characterized by seasonal fluctuations. For these materials, it’s harder to obtain an accurate forecast.
Z materials - These materials are not used regularly. The usage can strongly fluctuate or occur sporadically. In these cases, you can often observe periods with no consumption at all. The creation of a forecast is extremely demanding and very difficult. It is useful to further subdivide the Z materials into Z1 and Z2 materials, the latter being used even less regularly than the Z1 materials. This enables you to trigger detailed counteractive measures for particularly critical materials.

3rd STEP - "Dead" stock
How to detect "dead" stock at an early stage when we stil sell them - but slower, so that later they do not become pure cost. Analysis of the Inventory turnover allows us to detect "dead" stock on time in order to proactively reduce the costs of their care in the future.

4th STEP - Safety Stock
Cost of Inventory can be a substantial amount of money. But it is possible to define a safety stock for each item based on desired availability in accordance to importance and fluctuation of items. So this cost could be lower if you use calculation of Safety stock with Seven Steps Inventory Optimizer .

5th STEP - Cycle Stock
Cycle Stock is portion of stock available or planned to be available in a given period for normal demand, excluding excess stock and safety stock. This functionality helps procurement professionals in determining the ordering quantities

6th STEP - Determining the Reorder point (ROP)
At what inventory level (called the reorder point) should I place an order if my goal is to minimize the sum of annual holding, ordering, and shortage costs?

7th STEP - Having problems with inventory accuracy?
Maintaining inventory accuracy must be an integral part of the attitude of the organization. Like quality, customer service, and plant safety, accuracy must be promoted throughout the organization as everyone's responsibility. Yeah, I know it's easer to say it than to do. That's why LOGIKO designed and developed this functionality to make it easier for you in maintaining inventory accuracy.