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Home » Industries » Industrial Distribution
Industrial Distribution
Remember the good old days? Distribution companies would stock the warehouse with inventory and then go out and sell what they had on hand to customers. Today's story doesn't resemble that model. Now it is all about increasingly demanding customers, suppliers with a large proliferation of products, pressure on margins, and complex supply chains. Offshore sources create longer, less flexible lead times. Brand extensions and shorter product life cycles increase the number of SKU's and obsolescence risk.
Key Absolute Value solution elements for the Industrial Distribution Industry
| Long lead times |
Absolute Value's best-fit, formula-based forecasting allows for more accurate stocking decisions. It is complemented by the system's Net Time Phased Expected inventory function that provides the most accurate replenishment view across time. |
| A very large number of SKUs to manage, including small quantity items that don't have recurring usage, but must be on-hand for part failure replacements. |
Absolute Value can identify a low usage item as sporadic and, under user control for the number of periods that do have usage, automatically develop a target quantity to maintain. |
| It is easy to purchase inventory beyond the life cycle of a product without realizing that too much is being purchased. |
Absolute Value provides ultimate visibility by defining a forecast trend, and highlighting products so that the user can preview the forecast in order to avoid purchasing products that would otherwise require a markdown in order to sell them. |
| Handling special order and non-stock items |
When items are flagged as non-stock items, if their quantity goes negative, Absolute Value will suggest a purchase as a special order. |
| Accommodating kitting in the forecast |
Absolute Value can accommodate kits. When the user forecasts the finished goods, the system will automatically calculate and forecast their components. |
| Complexities in handling consigned inventory |
Absolute Value treats consigned inventory as an additional branch location, and automatically suggests transfers to replenish branches based on their defined replenishment path. Often branches carry a 1 to 2 week supply of an item that may have a much longer lead time. Absolute Value reviews anticipated transfers, within the vendor lead time, when suggesting the purchase of an item. |
| Complexities of handling more expensive items |
More expensive items should be purchased at a distribution center level and pushed to warehouses. Absolute Value provides the visibility to purchase at the DC level and replenish by location as needed. |
| Effective identification and handling of surplus (more than needed in that location at that time) and excess inventory (obsolete). |
Absolute Value identifies inventory need, surplus, and excess across your company on a daily basis and gives you the visibility of your entire company when making a buying decision. Multiple warehouse transfers are also taken into consideration. |
| Product line forecast |
The Forecast can be summarized based on any combination of company, location, item category, product group, etc., and can be represented in quantity, cost, or price. Adjustments made to any of the forecast summary levels can be pro-rated back as individual adjustments to each item in that level. |
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