Stock Optimizer System

www.logiko.hr | What can Stock Optimizer do? Page 1

LOGIKO – Logistics Consulting 2010

1st STEP - ABC Analysis:

Not all products are equally important. You certainly have enough work to do and therefore you can

not spend the same amount of time with products that can hardly be sold as with the best-sellers.

The ABC analysis is supposed to enable you to focus on the essential processes in the supply chain.

Its goal is to separate the essential from the nonessential. The focus of this activity is to be directed

to the most profitable area (A parts), while the costs in the other areas are to be reduced by the

simplification of processes (for example, by implementing a usage control).

The ABC analysis is a primary analysis. It can be used as a basis for follow-up or secondary analyses

such as the segmentation or the XYZ analysis.



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2nd STEP - XYZ analysis

Surely you agree that for some items are easier to forecast demand than for some others. This

analysis helps you to find items easier to forecast so you can automate their ordering and spend

more time to forecast demand for those (items) which are more difficult to predict.

The XYZ analysis enables you to perform the next step of the inventory analysis and tells us about the

fluctuation of demand for some products The following typical classification has been generally

established:

X materials - characterized by a constant, non-changing usage over time. The requirements fluctuate

only slightly around a constant level so that the future demand can basically be forecast quite well.

Unfortunately, experience has shown that even the forecast for X products can be poor.

Y materials - The usage of these materials is neither constant nor sporadic. With Y materials, you can

often observe trends, for example, that the usage increases or decreases for awhile, or that it is

characterized by seasonal fluctuations. For these materials, it’s harder to obtain an accurate forecast.

Z materials - These materials are not used regularly. The usage can strongly fluctuate or occur

sporadically. In these cases, you can often observe periods with no consumption at all. The creation

of a forecast is extremely demanding and very difficult. It is useful to further subdivide the Z

materials into Z1 and Z2 materials, the latter being used even less regularly than the Z1 materials.

This enables you to trigger detailed counteractive measures for particularly critical materials.



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3rd STEP - cross analysis of ABC / XYZ

In order to provide a fuller interpretation of the results obtained with the ABC and XYZ analysis it is

possible, and necessary to make cross analysis ABC / XYZ. From this analysis we get nine groups of

products with the characteristics of ABC and XYZ analysis, to which can you make then an individual

approach and determine the strategy of procurement and storage for each and every of them

separately.



4th STEP - "Dead" stock

How to detect "dead" stock at an early stage when we stil sell them - but slower, so that later they do

not become pure cost. Analysis of the Inventory turnover allows us to detect "dead" stock on time in

order to proactively reduce the costs of their care in the future.



5th STEP - Safety Stock calculation on the basis of preferred stock availability and ABC & XYZ analysis:

Cost of Inventory can be a substantial amount of money. But it is possible to define a safety stock for

each item based on desired availability and in accordance to importance and fluctuation of items. So

this cost could be lower if you use calculation of Safety stock with Stock Optimizer.



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6th STEP - Having problems with inventory accuracy?

Maintaining inventory accuracy must be an integral part of the attitude of the organization. Like

quality, customer service, and plant safety, accuracy must be promoted throughout the organization

as everyone's responsibility. Yeah, I know it's easer to say it than to do. That's why LOGIKO designed

and developed this functionality to make it easier for you in maintaining inventory accuracy.



Export to Excel:

After selecting the day or week in which we want to make a cyclical counting by clicking the Save

button, the system exports the list of items to be counted.

Documents

Stock Optimizer System