Whitepapers
Inventory Optimisation - the science behind growing profit, ROA and customer service levels
The Boston Consulting Group (BCG), an internationally recognized leader in business strategy and operational policy consulting, recently published an analysis of the growth in U.S. market volatility, for 5 major industries, over the past 50 years. (Harvard Business Review, July 2011).
In all industries the study shows that market volatility has increased and continues to do so. The study’s authors, both managing partners at BCG, imply that the forecasting and planning tools which “market leader” companies are currently using will not be able to keep up with this growing market volatility. They suggest that new tools are needed, tools that provide a higher degree of accuracy and the ability to sense market behaviour before that changing behaviour has the ability to negatively impact a company’s revenue.
Think of such tools as having the ability to sense heat before it gets to the point of combustion. Being able to dynamically sense demand or supply change before that change “combusts” into a major problem that consumes resources, cash, market share, and, if prolonged, company viability. Click here to download or view in your browser.
In all industries the study shows that market volatility has increased and continues to do so. The study’s authors, both managing partners at BCG, imply that the forecasting and planning tools which “market leader” companies are currently using will not be able to keep up with this growing market volatility. They suggest that new tools are needed, tools that provide a higher degree of accuracy and the ability to sense market behaviour before that changing behaviour has the ability to negatively impact a company’s revenue.
Think of such tools as having the ability to sense heat before it gets to the point of combustion. Being able to dynamically sense demand or supply change before that change “combusts” into a major problem that consumes resources, cash, market share, and, if prolonged, company viability. Click here to download or view in your browser.
GAINS SAP Integrator Overview
GAINS SAP Integrator (GSI) facilitates communication between SAP and GAINS using IDocs (Intermediate Document), a standard data structure for electronic data interchange between SAP and external applications. Inbound (SAP-to-GAINS) message traffic is managed through IDoc interfaces, where the SAP integration engine uses a mapping schema to convert IDoc messages to GAINS-specific XML (Extensible Markup Language) messages. To process outbound (GAINS-to-SAP) messages, the SAP integration engine identifies appropriate IDoc interfaces based on the received message type from GAINS’ Web Services and makes an XSLT (Extensible Style sheet Language Transformation) data transformation to handle the message execution in SAP. Click here to download or view in your browser.
GAINS Oracle Integration Overview
GAINS has a long track record of integration success with Oracle. To facilitate the exchange of data between Oracle and GAINS, the GAINS Integration Toolkit (GIT) was developed by GAINS as a purpose-specific utility strictly for GAINS-related interfacing. It enables precise mapping of fields between
Oracle and the GAINS database. The diagram in the document below provides a summary-level data flow between GAINS and Oracle. Click here to download or view in your browser.
Oracle and the GAINS database. The diagram in the document below provides a summary-level data flow between GAINS and Oracle. Click here to download or view in your browser.
GAINS Provides the Foundation Critical to Optimise SI&OP (Sales, Inventory, & Operations Planning)
The tangible success of SI&OP (Sales, Inventory, & Operations Planning) is predicated not only on the reports with which one directly interacts, but with the values on which those aggregate (e.g., ‘financial’) plan numbers are based. This foundation begins with detailed forecasts (by Item, Location, and, optionally, Channel/Customer) as well as detailed inventory plans and sourcing rules.
These fundamental values are critical to ensuring that the SI&OP plan both synchronizes properly with the aggregate plan and that the target inventory turnover and service goals are both met as expected. Without this foundation of detailed forecasts and optimised inventory policy, SI&OP merely comprises aesthetically pleasing reports where control knobs are only loosely connected to what transpires at the detailed level (i.e., ‘in the trenches’) where operational and financial performance is determined.
With that said, the process and reports with which the SI&OP team and executives interact must be effective. Also, the SI&OP culture must be instilled in the organisation. Both of these are requisite for success. At the end of this paper, we review our abilities to ably fulfill these needs. The primary focus of this paper is GAINS unique ability to provide the foundation critical to success as introduced above. Click here to download or view in your browser.
These fundamental values are critical to ensuring that the SI&OP plan both synchronizes properly with the aggregate plan and that the target inventory turnover and service goals are both met as expected. Without this foundation of detailed forecasts and optimised inventory policy, SI&OP merely comprises aesthetically pleasing reports where control knobs are only loosely connected to what transpires at the detailed level (i.e., ‘in the trenches’) where operational and financial performance is determined.
With that said, the process and reports with which the SI&OP team and executives interact must be effective. Also, the SI&OP culture must be instilled in the organisation. Both of these are requisite for success. At the end of this paper, we review our abilities to ably fulfill these needs. The primary focus of this paper is GAINS unique ability to provide the foundation critical to success as introduced above. Click here to download or view in your browser.