ON BOARD INTELLIGENCE (OBI) have announced the availability of Planning Studio 100 release 8. Using sophisticated algorithms, OBI enables companies to optimise inventory levels across millions of SKUs on a daily basis with virtually no need for user intervention.
Traditionally, stock holding companies have calculated safety stock based on the lead time and the variability of monthly demand. Although better than just setting an arbitrary stock cover, this practice suffers from a number of approximations:-
- The accumulation of demand into ‘buckets’ loses the detail of actual demand.
- The approximation of forecast error over the lead time becomes poorer if the lead time is different to the bucket size.
- The assumption of the normal distribution often breaks down approaching the service levels required.
OBI takes a different approach, using actual order data taken directly from ERP and generating a daily lead time forecast to cover the target service level. The lead time forecast is then used to directly place orders for purchasing, production and distribution.
By using advanced techniques including Artificial Intelligence, space state modelling, sampling, bootstrapping, neural networks, genetic algorithms and Montecarlo search, Planning Studio 100 is capable of generating millions of daily lead time forecasts.
By using the accurate lead time forecast, requirements can be calculated to achieve the target service level without the need for safety stock.
Planning Studio 100 is currently used by companies across a wide range of industries such as retail, flooring, white goods, medical equipment, and automotive service parts.
Find out how to take Supply Chain Planning to the next level by visiting www.obi-corp.com or contacting Gareth Brentnall – Gareth.Brentnall@obi-corp.com.