goals, yet with a minimal inventory investment, says Angela Iorio, director, customer advocacy, partners and social, with ToolsGroup. For example, MEIO software can recommend appropriate inventory levels for materials, components, subassemblies, and finished goods at any point in the supply chain. The model, along with an advanced replenishment solution, also helps companies determine the ideal replenishment frequency for each product at each location. So, the solution could determine that one distribution center needs deliveries of red lipstick every two weeks, while another needs deliveries every three weeks. Belcorp has consistently maintained a fill rate exceeding 95%. With the implementation of the ToolsGroup solution, management’s goal is to sustain or slightly improve this performance while simultaneously reducing total inventory value by 10 to 15%. The ToolsGroup solution also empowers centralized demand planning, gathering overall requirements and dynamically assigning distribution priorities to each level, ensuring fair allocation logic to minimize stockouts at peripheral locations. This helps reduce costs across the supply chain and streamline operations. Planners gain a centralized view of the company’s supplies across the network, with insights into inventory levels, service levels, and supplier performance. They can see both overall demand and the specific products most in demand. With this insight, they can determine the optimal level of safety stock needed to achieve the planned service level for each product at a given location. GETTING PRETTY IN PHASES Belcorp’s supply chain leadership is handling its implementation of SO99+ in phases, which began in mid-2023 with a subset of products. This enables management to continually monitor performance and check that they’re not adversely impacting other supply chain KPIs.
With more than 2,000 SKUs and a constantly changing product mix, Belcorp needed best-in-class demand planning. By using ToolsGroup’s SO99+, the company optimized its inventory strategies.
approximately in half by implementing a push inventory strategy at select strategic distribution centers. However, this boosted inventory levels at the DCs. “With SO99+, our goal is to optimize and reduce this inventory while maintaining air freight’s efficient performance,” Rodríguez explains. Managing complex inventory requirements takes agility, advanced algorithms, visibility, and automated processes that enable companies to respond efficiently to market changes. For Belcorp, information about supply and demand variability is a must. The less time Belcorp spends preparing information, the more it can dedicate to deciding how to take action. “The efficiency of our sales and operations planning process provides a competitive edge,” Frasquet says. Through its partnership with ToolsGroup, Belcorp can automatically meet service levels, optimize inventory, automate processes, manage exceptions, and work smarter. Along with its goal of reducing inventory levels by 10 to 15%, it aims to improve service levels, decrease air freight use, and adopt inventory planning automation. As it continues to define its supply chain digital roadmap, Belcorp plans to implement ToolsGroup’s lot size optimization module with price break constraints. n
Balancing inventory levels across Belcorp’s network likely will be completed in six to eight months, Rodríguez predicts. One reason is the phased approach Belcorp is taking with implementation and adoption. Lead times also come into play. For instance, the lead times for some materials, such as the glass containers for fragrances, can extend between five to seven months. INFORMATION OFFERS A BETTER LOOK Before implementing ToolsGroup’s automated MEIO model, it often took Belcorp six to eight weeks to optimize its inventory levels. The dynamic market and Belcorp’s need to continually introduce new products limited the usefulness of the information generated. With the ToolsGroup solution, Belcorp can run sales and operations planning scenarios as often as necessary, and with a more sophisticated, data- driven approach. They can, for instance, make minor adjustments to the supply plan as needed and monitor the short- term evolution of demand and supply. They are able to plan ahead, avoid putting out fires, and work by exceptions. “We now have more powerful insights to make data-driven decisions regarding the trade-off between service levels and inventory investments,” Rodríguez notes. Before implementing SO99+, Belcorp had cut its airfreight costs
June 2024 • Inbound Logistics 85
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