Inventory Optimization


Inventory optimization is a critical element in managing company assets. On the one hand, inventory can be treated as a cost to reduce as other expenses.

Lingaro can offer a comprehensive end-to-end inventory optimization program from current state inventory analysis to designing and implementing high-performing inventory reporting solutions.

I. The current state inventory analysis

Analysis of the current state of Client’s inventory to identify and understand potential issues. This analysis can contain all or selected elements from below:

  • Up to bottom analysis from aggregated inventory level to item level to structure current inventory state. The study will allow an understanding of where the inventory is coming from and future areas for deep analysis.
  • Bottom-up analysis from item level to aggregated level to spot item level anomalies that sum up on the aggregated level and are significant from inventory value to focus.
  • Excess analysis: understanding of non-productive and excess stock to identify the source of Excess
  • Understand inventory structure from different categories: - Item type (finished goods, materials, raw materials, etc.) - BU, Location (geographical, plant, DC, WH, etc.) - Item quality status (active, on-hold, reject, etc.) - Inventory function (cycle, buffer, pipeline, anticipated)
  • Understand inventory characteristics: - Physical (value, size, density, etc.) - Demand (sales volume, volatility, sales duration, etc.) - Supply (availability, location, reliability, etc.)
  • Measure inventory from a different perspective: - Operational (value, volume, days-on-hand, cube, etc.) - Financial (inventory turnover, days in inventory, days sales outstanding, COGS, etc.)
  • Understand variability in the planning environment: (internal and external supply, demand forecast and nature of the demand variability)
  • Build inventory reference model. Reference point based on demand and lead time assumptions to compare the current stock level with theoretical ‘perfect’ stock. The model can help to identify critical areas and understand whether current high-level planning assumptions and KPIs are correct.
  • Portfolio size of line and PIPO process planning assumptions: Review current product from size and demand frequency perspective as well high-level assumptions for PIPO process (Phase In Phase Out).
  • Current state description, potential focus areas and future recommendations. Describe the current inventory state, findings, focus areas and future recommendations.

II. Implementation and monitoring results

Lingaro supports companies from start to finish during reporting solutions implementation. We share our broad experience gathered during many implementation projects across different industries and business areas. A good understanding of our client's current state and future needs and the proper preparation are critical success factors during technology implementation projects.

Lingaro offers the best team of business and technology experts. We are focusing not solely on technology but also on E2E business processes and future user experience to deliver a comprehensive assessment and plan for solution implementation.

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