Overview
Single-echelon inventory optimization (independent safety stock at each location) over-stocks the network by 20-40%. Each location independently provisions safety stock for the same demand variability, duplicating buffers. Multi-echelon optimization pools risk upstream, holds safety stock where it is most efficient, and achieves the same service level with less working capital.
The Multi-Echelon Inventory Optimization System positions stock across network tiers based on lead times, demand variability, and service-level targets — with stocking policies (Min/Max, R/Q, (s,S)) selected per SKU class and per-tier safety stock formulas that account for upstream uncertainty.
What you get: - Network structure mapping (suppliers → DCs → warehouses → stores) - Demand aggregation and variability at each tier - Stocking policy selection (Min/Max, R/Q, (s,S)) per SKU class - Multi-echelon safety stock placement (risk pooling logic) - Service-level targets per customer/SKU segment - Working capital calculation and reduction opportunity - What-if scenarios (lead time change, service level change) - ABC-XYZ classification driving policy assignment
Built for: supply chain planners, operations directors, and working capital managers who need to release cash tied up in duplicated safety stock across the network without service degradation.