Every successful team has a book of plays to help them maximize their success, and it is no different for your team to maximize your success with StockIQ.
Objective
The objective of StockIQ is to make it easy for supply chain professionals to plan, forecast, and replenish inventory.
With StockIQ, you are able to optimize your inventory levels to achieve your desired customer service level, while carrying the lowest level of inventory to maximize profitability.
Inputs and Outputs
In support of this objective there are ultimately only two main inputs for which the planner is responsible:
- Service Level Targets - These are your targets for what level of service you want to provide to your customers.
- A Demand Forecast - This is our projection of what you think your customers will buy. In StockIQ, the demand forecast is statistically generated from past demand history unless you create your own manual overrides. Our goal is to have the error of this forecast be as low as possible.
These two inputs lead to two important outputs, and these outputs are geared towards the goal of setting your inventory levels to meet your goals:
- Safety Stock Recommendations - Safety Stock (aka Buffer Stock) is a guard against supply and demand variability / forecast error. This value is something you tune to help balance stock outs vs inventory investment.
- A Replenishment Forecast (aka Supply Plan) - This the plan of replenishment for your inventory in the form of Purchase Orders, Transfer Orders, and Work Orders. It is based on your forecasted and actual demand, in addition to your safety stock recommendations.
With a replenishment plan and a safety stock value in place, we then have the operational pieces we need to manage inventory such that you try to always stay above safety stock, below some max inventory levels, keep inventory as efficient as possible, and service your customers to your desired target.
With these goals in mind, let's continue with the first piece - setting your service level targets and safety stock parameters