supply chain software

Supply Chain Optimization is the application of processes and tools to ensure the optimal placement of inventory within the supply chain. This usually involves the application of mathematical modelling techniques using computer software.

What need is being addressed?

Typically, supply chain managers are trying to maximise gross margin return on inventory invested (GMROII), balancing the cost of inventory at all points in the supply chain with availability to the customer (referred to in supply chain as "service level" and in retail as "on shelf availability"). Supply chain optimization addresses the general supply chain problem of having the right inventory in the right place at the right time, starting with a notion that what is "right" is to have the quantity of inventory at each point in the supply chain that meets service objectives at best cost. GXS: Global EDI VAN, B2B e-Commerce & Data Synchronization Solutions.

Supply chain optimization has applications in retail as well as consumer packaged goods (CPG) and other manufacturing industries.

What approaches and solutions exist?

The classic supply chain approach has been to try to forecast future inventory demand as accurately as possible, by applying statistical trending and "best fit" techniques based on historic demand and predicted future events. The advantage of this approach is that it can be applied to data aggregated at a fairly high level (e. g. Develops and markets supply chain management software.