The Three Primary Pains of Modern Inventory Optimization

Source: Microsoft Industry Blogs

Supply chain complexity has increased dramatically in the past decade. As today’s consumers expect more personalized goods and product diversity rises, manufacturers are feeling the effects. Product proliferation has led to greater demand volatility and an industry shift as manufacturers see more of their revenue coming from a wider range of slower moving products. Old inventory management strategies, such as gut instinct approximations and a one-size-fits-all approach to demand planning, fail to address these challenges of the modern manufacturing supply chain. Let’s look at the three primary pains manufacturers face today.

1) The long tail: Intermittent demand and “unforecastable” SKUs ​

2) Managing an exploding number of SKU-Locations

3) Overreactive response to volatile demand

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