STOCKHOLM, Sweden – 4 June 2015 – Today, Syncron International, an aftermarket inventory optimization company, released changes to its inventory management software.
Users can now to set default delivery modes for refill, on-demand and risk of run-out orders. The mapping of order reason to the delivery mode can be made at the supplier level or the item level. This change will increase customer satisfaction by reducing delivery errors.
“Orders triggered through a standard refill process can be delivered by truck; on-demand orders can be delivered by express rail; and rush orders can be delivered by air,” said Maksymilian Humpich, product manager for inventory at Syncron. “By defining the appropriate delivery option by order reason, users can avoid excessive transportation costs while ensuring that the items are delivered on time.”
In addition to setting the default delivery mode, users can now simulate the delivery mode for refill orders. The process estimates the total annual cost of stocking and delivering an item in each scenario – truck, rail and air. The optimal delivery mode is suggested to the user, together with the estimated annual cost savings.
The Syncron inventory management solution uses ABC analysis to categorize inventory. ABC analysis divides items into three groups, with A items being the most valuable, B items in the middle and C items being the least valuable.
The ABC analysis improves visibility and control while optimizing service levels. However, ABC analysis focuses on sales volume, which is not the only metric that determines the importance of an item. Margin and risk of stock-out should also influence the inventory strategy.
To help users consider margin and stock-out when planning inventory, Syncron allows the user to set and simulate service level boundaries. This service level optimization can be run on either the group (ABC) or item level. Item level optimization is constrained by limits defined for the group or demand type. The system allows each item to have a different target service level to provide a truly optimal result.
With this release, Syncron also introduced a service level curve, which plots the optimal total target stock value by total target service level. It allows the user to see the policy’s current position compared to the optimal curve. The service level curve has two approaches. One approach determines the highest target service level that can be achieved without increasing costs. The other approach establishes the lowest inventory cost at the same or higher service levels.
In addition, a new seasonal profile tool shows how well a seasonal profile fits the actual demand of an item. The tool indicates the gain in forecast accuracy. It compares the seasonal forecast with the forecast that does not use seasonality. This tool helps users determine if seasonality should be applied to an item.
“The businesses we serve often overlook seasonality when planning inventory. Little attention is given to the issue because the majority of parts, as well as the capital equipment, are not seasonally driven,” said Tomas Wennerstein, product expert for inventory at Syncron. “Tools like this new seasonal profile automatically evaluate whether seasonality should be applied to an item or group of items. Comparing the existing forecast to a seasonally adjusted forecast can help improve service and save money.”
When reviewed at the individual item level, often there isn’t enough information for slow moving items to create a reliable seasonality index. The software groups items to identify subtle but valuable seasonal trends.
Syncron also added a demand decomposition graph, which visually breaks down demand into components, including moving average, de-seasonalized demand and seasonal factors. The graph is used to better understand the seasonal curve of an item’s demand history. In addition, the user can now make a visual comparison of an item’s individual seasonal profile with available group profiles, which allows the user to assign an item directly to the most suitable group profile.
With these enhancements, Syncron expands its service to the aftermarket, which is an area of expertise for the company. Syncron customers using version 14.2 are already benefiting from these enhancements.
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