Skip to content
Microsoft Industry Blogs

Today’s fast-moving market, with growing globalization, competition and compressed product lifecycles, has forced manufacturers to rethink their supply chain planning and operations. The modern supply chain is increasingly complex, requiring close collaboration with hundreds (and sometimes thousands) of partners, contractors, suppliers, distributors, and customers.

Many supply chain managers struggle to find the right balance between keeping their customers happy and freeing up working capital. A new generation of inventory optimization solutions are enabling manufacturers to overcome this challenge by transforming inefficient inventory practices. Here are three ways that you can transform your business with intelligent, automated inventory optimization:

1. Calculate and adjust optimal inventory levels across the supply chain

Inventory is often managed in a linear, outdated way. Mismanaged inventory is one of manufacturers’ biggest inefficiencies, needlessly tying up working capital through holding costs and obsolescence and impacting the bottom line. Traditional inventory management relies heavily on ineffective and unscientific processes—such as rules of thumb, arbitrary segmentation, and guesswork. These legacy systems lack the responsiveness to adjust to real-time market conditions, and can result in a reactive, error-prone approach.

To eliminate these issues, successful manufacturers are implementing intelligent tools that leverage internal and external data to adjust inventory levels across the supply chain. Using advanced analytics, these multi-echelon inventory optimization systems convert underperforming inventory into an agile, responsive, and proactive contributor to business success.

2. Balance service level targets and working capital

As customers demand increasingly differentiated and personalized goods and manufacturers work to adapt by producing a wider variety of products, a “one-size-fits-all” approach to meeting customer service levels is no longer effective. For example, the modern car owner has an increased amount of stylistic options for aftermarket parts such as tires, rims, or steering wheels, and demand for these personalized” long tail” items is sporadic. To achieve ongoing service commitments across the value chain, the right people, parts, products, and services must be effectively orchestrated.

Today’s manufacturing leaders utilize flexible systems that automatically model demand and optimize inventory to achieve desired service level targets, effectively addressing product proliferation while maintaining an efficient use of working capital and manufacturing resources. Organizations maximize inventory efficiency to balance high service levels with lower operational costs across the board.

3. Embrace digital transformation with an automated, intelligent platform

Leading manufacturers are transforming the modern supply chain by leveraging advanced analytics and sophisticated data processing. This digital transformation enables manufacturers to increase their service levels and free up working capital. Additionally, by implementing highly automated systems, manufacturers are empowering their employees to take advantage of their supply chain expertise, instead of focusing on more mundane inventory, forecasting and data management tasks.

Manufacturing leaders are streamlining operations, cutting costs, and freeing up human capital by plugging data they already have into intelligent inventory optimization solutions. Inventory optimization is an easily implemented transformation initiative that has an immediate and significant impact on the bottom line.

Get started today

ToolsGroup Multi-Echelon Inventory Optimization (MEIO), Built on Microsoft Cloud technology, is an accessible and comprehensive MEIO solution that utilizes an intelligent optimization engine powered by advanced analytics. The solution enables customers to use the data they already have to increase service levels, decrease costs, and extend analysis downstream to further enhance optimization. Its proprietary self-learning analytics are highly reliable, even for slow moving and intermittent demand items.

Customers have seen powerful results with ToolsGroup MEIO. One automotive parts manufacturer improved their customer service levels from 92% to 98%, while reducing inventory by 15%, and realizing a $6 million working capital improvement. Try the ToolsGroup MEIO solution for yourself on Microsoft AppSource today.