Optimize your inventory and stop chasing better service levels by increasing your inventory. Our solution uses a proprietary “Total Cost Optimization” approach.
Baxter can help you optimize both your service levels and inventory cost with intelligent inventory planning.
No other solution incorporates Stockout Cost, or the costs of stock not being available to meet inventory demand, into its analysis.
Factors for Stockout Cost include:
- Lost Sales /Margin
- Expedited Transportation Cost (inbound and outbound)
- Expedited Production Runs
- Service Level Penalties
- Individual Customer / Product Criticality
- Lost Productivity
Prophet by Baxter will analyze your supply chain to calculates target stock levels that balance the total cost of the inventory, the total cost of a stock out, and the stability cost (to change targets) while achieving customer service commitments.
Prophet also evaluates your regional warehouses to identify the need for replenishment and rebalancing based on our Backlog Criticality Index (BCI) algorithm.
BCI calculates the real and potential costs of each backorder along with the real and potential savings of the available replenishment and redeployment options. Our approach is superior to the traditional fair share, closest stock, and least freight cost approaches commonly used. These do not adequately account for the risk of stockout at the supplying location or the opportunity cost of each potential backorder.