In distribution, managing inventory is a beast. Competition is relentless and supply, wickedly unpredictable. So you stock up. At some point, executives notice the high cost of this and demand an urgent inventory reduction. You start to sweat. Service levels and sales can’t suffer because you’re also on the hook for that. More sweat. So what do you do? You listen to today’s episode… which offers prescriptive strategies on how to reduce inventory 10% in 90 days.
Jeff Ritter, seasoned LifeLine Consultant at Blue Ridge, and Dan Craddock, PlanningPosts evangelist join the show to explain how to reduce inventory in both manual planning environments and those where advanced supply chain planning tools are in use — such as machine learning-based analytics, automated demand forecasting and replenishment optimization solutions, and even pricing optimization solutions — to work better and faster.
Episode 12 Show Notes
Will: Welcome back to the PlanningPosts Podcast. I’m Will Haraway, your guest host and host of Supply Chain Now Radio.
The theme and feel of today’s podcast will be Urgency! It is about a challenge thrown at every inventory planning team every year or two.
You just got your first cup of coffee…. You and your team just sat down to place orders when your CEO walks into the department and makes the announcement:
“WE NEED TO DROP INVENTORY 10%. AND… WE NEED TO DO IT IN 90 DAYS.”
I believe all of our listeners who have spent any time in or around the inventory planning profession have heard these words, and you are probably having some P.T.S.D. over it right now. You have been there.
Alright. So YOU NEED TO REDUCE INVENTORY 10%. Don’t worry about why; someone has decided that for you. You need a plan. We are here to help. And I have two guys here who are chomping at the bit to give you that plan.
You’ve heard of the company College Hunks Moving Junk? Well today we have Inventory Guys Reducing Supplies. Welcome again, Jeff and Dan!
Dan: Thanks, Will… Proud to be an Inventory Guy and I love this topic because it is so real. We have all been there and this is a perfect chance to help our community put a plan together BEFORE that next bold request happens.
Not only have I been in this spot, but I’ve had the chance to work with Jeff in this spot over the years……
Jeff, what reaction do you have when you think of those times that this request came up?
Jeff: [says hello and shares his reaction and quick memories]
Will: Guys, this is clearly a common request and a hot topic. What’s the best way to share great information with our audience, since people are on different systems and strategies?
Dan: Jeff and I talked about this and we are going to approach by splitting the audience into two groups, even though we want everyone to listen and learn from all of it:
The first group we’ll call the manual planners. They’re using things like an ERP solution, spreadsheets or other manual process to plan.
Our second group is the advanced planners. Pretty self-explanatory, but just in case you had too many beers last night or something… They’re using an advanced supply chain planning solution (of any level or sophistication).
We’ll give strategies for each group here.
Will: Sounds good. And don’t forget that this request is unique because there is an u...