Transforming Inventory Management for Supply Chain Resilience
Introductory article of Christian Lütkemeyer at Miebach
In today’s volatile and fast-evolving business environment, supply chains are facing multiple challenges that demand agile solutions. Black Swan events like pandemics, trade wars, and geopolitical shifts, coupled with rising customer expectations, have significantly affected inventory management. To thrive in this volatile environment, companies must rethink their inventory strategies. At Miebach, we help businesses tackle these challenges head-on, enabling them to build resilience and unlock new efficiencies.
Dramatic Shifts in Inventory Dynamics
Recent years have seen a dramatic shift in inventory dynamics. Companies have substantially increased their inventory levels to cushion against supply chain uncertainties. In fact, the largest 3,000 companies globally have grown their inventories by a staggering 50% since 2017. But this approach is not without consequences:
Soaring Costs: High-interest rates have quadrupled inventory costs over the past three years, squeezing profitability.
Lack of Transparency: Over half of companies report limited visibility into their stock situations, with many struggling to identify root causes for high inventory levels.
Clearly, traditional methods of inventory management are no longer sufficient. Companies need actionable insights and innovative tools to address inefficiencies and reduce costs effectively.
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Introducing Miebach's Inventory Mining Approach
By focusing on the root causes of high inventory, our Inventory Mining approach provide companies with the tools and strategies to transform their inventory practices. Here's how that makes a difference:
- Cost Reduction: We’ve achieved results like an €8 million reduction in capital costs for clients through differentiated service level portfolios and robust inventory risk management.
- Sustainable Processes: Our solutions empower companies to respond 50% faster to disruptive events, enhancing agility and resilience.
- Data-Driven Insights: Leveraging big data dashboards, we provide clients with unparalleled transparency, enabling them to challenge existing inventory settings and uncover hidden opportunities.
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The Power of the Inventory Control Tower
Central to our methodology is the Inventory Control Tower, a powerful tool that transforms inventory management into a proactive, strategic function. With this system, businesses gain:?
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1. Data Transparency: Consolidating data from disparate sources into a unified structure for real-time insights.
2. Optimized Operations: Enhanced visibility to make informed decisions, eliminate uncertainty, and streamline operations.
3. Seamless ERP Integration: Smoother workflows and better alignment with enterprise systems, ensuring sustainable operations.
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Strategic Inventory Placement with TCTS Models
Another critical aspect of our approach is strategic inventory placement. Using Total Cost to Serve (TCTS) models, we help companies:
- Optimize inventory placement by SKU, customer, channel, or region.
- Build intuitive Power BI dashboards for full transparency and visibility.
- Foster efficient, stakeholder-supported decision-making processes.
This strategy reduces service costs, improves operational efficiency, and unlocks capacity for growth, offering clients a competitive edge in the marketplace.
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A Proven Track Record of Success
Our expertise has driven tangible results for clients across industries. In one case, an industrial company with a 250% inventory increase over three years partnered with Miebach to overhaul its inventory management. The result? A shift from reactive problem-solving to a proactive, data-driven strategy that dramatically reduced costs and improved operational efficiency.
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Learn more in the upcoming case studies series how to set-up your inventory management to manage disruptions effectively and seize new opportunities for growth.
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