Technology Solutions

Inventory Optimization

Today’s tough economic conditions, characterized by increased competition, short product life cycles, increased outsourcing, and increased demand uncertainty, make it more challenging to manage your inventory policies and decide where exactly to hold how much inventory. By taking into account the supply, demand, and lead time variability of your entire supply chain, Oracle® Inventory Optimization enables you to cost effectively balance revenue, cost, customer service levels, and inventory budgets while determining your inventory postponement strategy.


Postponement and risk pooling

Oracle® Inventory Optimization uses postponement and risk pooling to help you determine where to hold inventory to guarantee a desired service level and at what stage of production to hold inventory. It can consider all your manufacturing plants, distribution centers, central warehouses, and even your suppliers and customers. In addition, it considers your bill of materials to calculate how much inventory to hold at the finished goods, subassembly, and raw material level. Oracle® Inventory Optimization solves the complex issue of balancing the time and cost you need to incur to get a product to a customer, without paying high costs to hold every product configuration close to your customer’s locations.

Mitigate supply chain risk by managing supply chain variability

To optimize your inventory investment, you need to account for all of the variability in your supply chain. Demand variability occurs due to seasonal factors, forecast errors, promotions, or new product introductions. Supply variability occurs due to lead-time uncertainties and supplier performance issues such as product quality and unreliable delivery. Capturing the variability in demand and supply enables you to obtain the precise determination of the inventory investment that is required to meet your customer service objectives, at the lowest possible cost, while remaining within your available inventory budget.

Determine your most profitable channels, products, and customers

Typically, your customer service target is not a single number. You might have different goals for different products, customers, or sales channels. Oracle® Inventory Optimization helps determine the most profitable targets to strive for as well as optimize the use of your scarce resources to focus on achieving the most profitable product and sales mix. You can also define different service levels at various levels as every product, sales channel, and customer does not need to have the same service level.

For planners, not programmers

Oracle® Inventory Optimization leverages cutting-edge optimization and risk pooling techniques to determine the most optimal solution, yet it was designed For Planners Not ProgrammersTM, empowering your inventory analysts and planners to make decisions intuitively and quickly.

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