Most businesses realize that one of the important ways they compete is via their supply chains. From an inventory standpoint, companies use inventory-reduction programs to free up cash to make new investments or to improve profit margins. Multi-Echelon Inventory Optimization (MEIO) is the technology for the jobbut this discipline also brings with it a multi-echeloned way of thinking that can dramatically change the company’s competitive posture.
MEIO provides the ability to visualize the echelons and enable broader thinking. Therefore, it has the power to elevate participants-perspectives and persuade them to adopt new ideas. No matter how good the procurement teams are, or how good the demand planning team or the factory scheduling teams are, they will always tend to make independent decisions without understanding the impact those decisions have on others. Multi-echelon views of the business uniquely enlighten people by giving them data, improving cross-functional behavior, and creating constructive dialogue and teamwork.
MEIO is not just a safety stock calculator, nor is it just for strategy exercises. It needs to be part of the business dynamic, allowing organizations to respond to markets and flex as needed to save both cash and customers while fine-tuning supply chain performance.