Fuel for change: ILOG solution seeks to solve higher transportation and inventory costs
The costs associated with storing and managing inventory are rising rapidly. According to the 18th Annual State of Logistics Report , published by the Council of Supply Chain Management Professionals , inventory carrying costs rose 49 percent between 2002 and 2006. Globalization and increased complexity in supply chain management make it difficult to identify the true drivers of inventory costs.
Tools like ILOG Inventory Analyst allow developing global inventory optimization strategies to improve inventory turns and free up working capital. Additionally, ILOG Product Flow Optimizer is used to create stocking and distribution strategies that analyze trade-offs between transportation, warehousing, inventory carrying costs and service requirements, providing the optimal path of delivery from the source directly to consumers.
The latest version of ILOG Inventory Analyst also addresses integration issues that prevent organizations from adopting an inventory optimization tool.
“While the value of inventory optimization is unchallenged, rising fuel costs have placed even more attention on every aspect of cost within the supply chain,” says David Simchi-Levi, professor at MIT, coauthor of Designing and Managing the Supply Chain , and chief science officer at ILOG. “The ability to manage your inventory and customer-service levels more effectively will reduce unnecessary expediting and hence transportation costs. ILOG’s Inventory Analyst 7.0 and ILOG Product Flow Optimizer 7.0 integrate easily with existing ERP solutions and complement ILOG’s advanced planning and scheduling software.”
According to Brock Cummings, senior supply chain analyst at World Kitchen LLC —a long-time user of ILOG tools, “Since upgrading to the new release of ILOG Inventory Analyst, we have seen significant improvements in ease of use and integration. The new scenario wizard and data store import functions have reduced the extract, transform and load time by more than 75 percent. Our safety stock solution includes our [SAP] ERP backbone, MS Access, Sharepoint, and ILOG Inventory Analyst.”