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Seven Easy Estimates Reveal What to Expect from Inventory Optimization


Inventory Reduction Inventory Optimization Inventory Management

Multi-echelon inventory optimization (MEIO) right-sizes buffers and recommends where inventory should be held across all tiers of the supply chain. The benefits of multi-echelon inventory optimization have been well established by the experiences of companies worldwide, across all industries. MEIO initiatives typically reduce inventory while simultaneously raising service levels, resulting in dramatically improved profitability and happier customers. But what specific results should your unique company expect to receive?

Supply chain teams interested in exploring the benefits they may expect to achieve need a place to begin the internal conversation. Seven Easy Estimates Reveal What to Expect from Inventory Optimization outlines a practical first step in predicting the ultimate impact an MEIO initiative will have on your business, spanning five individual benefits streams:
- Inventory reduction (one time)
- Increase in working capital (recurring)
- Reduction in logistics cost burden (recurring)
- Savings from lower obsolescence (recurring)
- Revenue uplift from fewer permanently lost sales orders (recurring)

MEIO’s combination of one-time inventory reduction plus multiple streams of recurring benefits generates a positive financial impact that goes above and beyond the freeing up of working capital.


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