Lumpy demand items have posed a unique challenge in determining safety stock targets based on desired service levels. Traditional deterministic technologies like APS and ERP systems fall short when dealing with products having skewed distribution and the need to meet higher service levels since they don’t account for the uncertainty inherent in intermittent demand patterns.
Logility has developed an innovative solution to address this challenge. We’ve introduced a way to automatically detect if the demand pattern is normally distributed or intermittent, low and lumpy – which would benefit from a probabilistic approach to forecasting. This enables organizations to calculate more accurate safety stock targets for even their most difficult to forecast items. This approach goes beyond the limitations of traditional methods and empowers businesses to maintain the desired service levels without overstocking. With Automated Inventory Policies, clients can effortlessly and automatically identify whether a particular item/location record should utilize the probabilistic approach or adhere to the traditional normal distribution-based method.
Improved Customer Satisfaction
By consistently meeting service level targets, your customers are more likely to receive their orders on time, leading to increased satisfaction and loyalty.
Achieving consistent service levels, even for products with skewed distribution, can set your business apart from competitors and attract more customers.
Having the ability to adapt your inventory strategy to lumpy or intermittent demand items quickly allows your business to respond more effectively to changing market conditions and customer preferences.
Strategic Resource Allocation
By reducing the capital tied up in excess safety stock, you can allocate resources to other strategic initiatives such as product development, marketing, or expansion.
Automated Inventory Policies offer tangible benefits to businesses grappling with the unique challenges of lumpy or intermittent demand items.
Our probabilistic approach ensures that you maintain the right level of inventory for lumpy or intermittent demand items, preventing overstocking while meeting your service level targets.
Enhanced Service Level
Achieve the desired service levels even for products with skewed distribution, enhancing customer satisfaction and loyalty.
The automatic determination feature simplifies the process, reducing the complexity of implementing the probabilistic approach.
Make informed decisions based on statistical analysis, reducing the guesswork and uncertainty associated with lumpy or intermittent demand items.