Inventory Planning - Operations, Logistics Management Video Lecture | Logistics Management - B Com

Multi Ashkelon optimization have you
ever wondered how you could reduce your
inventory levels within your
distribution network while at the same
time ensuring high availability using
the multi exelon concept now you can
your inventory could be reduced by up to
20 percent how does it work you might
ask let's have a look at an industry
example this is mr. Weber mr. Weber is a
supply chain manager he is responsible
for a large network of warehouses like
many other supply chain managers mr.
Weber is under significant pressure to
reduce his costs he realizes that a lot
of money is tied up in inventory along
the way mr. Weber has attempted to
reduce his inventory levels within his
network however he has not been able to
find a lasting solution in order to
understand why mr. Weber has not been
successful let's have a detailed look at
one of his warehouses this particular
warehouse is managed by mr. Fischer the
warehouse serves the customers at the
end of the supply chain for example mrs.
Turner mr. Fischer much like his boss
mr. Weber is focused on reducing his
costs in the past mr. Fischer tried to
reduce his costs simply by reducing his
inventory levels this was however not
the optimal solution as the availability
for certain items became an issue and
customers such as mrs. Turner were not
satisfied with the resulting service
levels after realizing his mistake mr.
Fischer decided to optimize his
inventory levels using a specialized
software system he was able to keep his
inventory low while at the same time
meeting the requirements of the
customers at the end of the supply chain
mr. Fisher's retail warehouse receives
its stock from a regional warehouse
which is supplied by a central warehouse
the entire network is built upon these
three basic levels mr. Weber has decided
to implement IT supported inventory
optimization in every warehouse in order
to ensure that all nodes within the
network are properly provided for and to
help maintain optimal stock levels mr.
Weber now has every reason to be
satisfied with the operation of a supply
chain however the costs still seem too
high there is one aspect he is
overlooking the level 4 level
optimization excludes the opportunity
for further optimization across the
entire network decisions made in one
warehouse reduce further options within
the entire network unfortunately mr.
Weber is out of ideas there is a concept
that can help mr. Weber further reduce
inventory levels across the entire
network Multi excellent optimization the
inventory found within each of the three
levels or so-called echelons are no
longer successively analyzed and
optimized but rather as a whole the
central question here is it more
cost-effective to store inventory at the
beginning of the supply chain or at the
end close to the end customer or is it
best to have the stocks spread across
the entire network the software solution
add one tests all possible inventory
configurations and takes into
consideration factors such as storage
costs and capacity limits across all
warehouses within the network
the result is an optimized allocation of
stocks and an overall reduction of
inventory within the network that is up
to 20 percent lower as the successive
optimization results
this can all be reached while
maintaining maximum availability for the
customers at the end of the supply chain
at the end of the day mrs. Turner
along with all decision-makers within
the network can be thoroughly pleased
with these results