Primarius OMS Inventory Optimisation
 
 

Introduction

OMS Inventory Optimisation

The OMS Toolset

OMS Customised Solutions

Primarius Approach

Benefits of OMS  

OMS Inventory Optimisation
OMS Inventory Optimisation
Primarius provides our OMS inventory Optimisation software solution to radically improve a company’s ability to manage their inventory. This system, hosted on Primarius’ server, provides a unique and previously unavailable solution to a serious gap in business solutions.

 Click to view OMS Demonstration


Introduction

Delivering Increased Profitability and Cash Flow Through Professional Inventory Control Solutions

Having the right stock, at the right time, in the right quantity and at the right location is no easy feat for any business. Often the necessary skills or systems are not available to assist in managing this complexity. Failing to get the mix correct will see customers dissatisfied because of product out of stocks, inventory levels climbing due to increased levels of unsold product, valuable cash being tied up in non-productive assets and business growth faltering. Providing business with successful, cost-effective and simple tools and systems to manage this complexity is what Primarius excels at.

Every distributor, wholesaler or manufacturing business in Australia is faced with key inventory, cash flow and funding decisions that will affect the profitability of the business.

Any business that manages stock is faced with conflicting priorities – keeping stock levels low so that existing cash flows can support the business and having enough stock to meet expected sales. Key scheduling, purchasing, transport, storage, communications and financing challenges exist in determining the best solutions. Primarius’ objective is to assist in this decision-making by providing the business with the tools and systems to determine what inventory needs to be bought, when, in what quantity and stored in what location to maximise sales opportunities, increase stock turns and free-up working capital to enable business growth.

Summarised, our objectives are to provide our clients with the tools, systems and methodologies to enable them to improve inventory stock turns, reduce product out of stocks and maximise the use of working capital used to fund inventory investments.

OMS Inventory Optimisation

OMS is a best of breed advanced planning system designed by Primarius to optimise the use of inventory. OMS has been developed to increase stock turns, reduce inventory levels and improve customer service – that is, allow orders to be filled on time, in full, with considerably less inventory than before.

Results Obtained
The following results were obtained using the OMS toolset -


THE OMS Toolset

Primarius’ OMS Toolset incorporates a sophisticated demand planning toolset, capable of producing a product forecast for every item, in every location, accounting for trends, seasonality and promotional activity. Against this forecast of product demand, OMS uses a sophisticated supply planner which determines the best quantity of items to be bought, and when, to meet financial and operational constraints such as inventory level values or stock turn targets. Finally OMS applies a distribution planning system, enabling the company to transfer the right stock to the best location to meet customer needs.

Some typical business benefits provided by OMS include:

Business Inventory Profitability Solutions
•  Product Forcasting for every item at every location

•  Reductions in Products Out of Stock

•  Overstock Control and Visibility

•  Reduction in Expedited Freight Costs

•  Improved Inventory Management

•  Bill of Material planning functionality
•  Supplier Forecasts

•  Range Performance Reviews

•  Budget Management - Sales Forecasts

•  Cash Flow Forecasting

•  Distribution Planning

•  Promotions Planning functionality


OMS Customised Solutions


Primarius’ systems are easily customised to meet the unique requirements of clients in various industries – importing, wholesaling, retailing, distribution, manufacturing and spare parts support are some of the many industries covered by Primarius’ solutions. Even in the same industry each client may face different challenges and Primarius can provide solutions to suit that industry, marketplace or characteristics of our clients, blending different inventory and stock control needs and objectives.


Primarius’ Approach

Whether a company is a manufacturer, distributor, wholesaler or importer, it has to manage inventory in a variety of stages – as part of a Bill of Material, as Raw Material, Work In Progress or as a Finished Good; as dependent demand or independent demand items; and possibly at multiple warehouse or manufacturing locations. This means many thousands of items need to be managed, every day of every week, and there is not enough resource in time, people and systems available to manage this complexity.

How OMS manages this complexity is by allowing the business to focus on key products and allow the system to manage the vast majority of non-critical actions. OMS uses Pareto analysis to identify the core products which are vital to the success of the business – those 20% of the products producing 80% of the revenue. Forecasting the demand for these items and then developing optimised supply plans which can be reviewed by the business are key ingredients of Primarius’ OMS toolset. The remaining 80% of products are managed by rules and techniques set by the business and controlled by OMS, freeing up valuable resources and ensuring that essential products are tightly controlled and monitored. Supplier lead-times, product importance, existing stock levels and purchase orders already placed are factored in to buying plans which are designed to optimise the levels of inventory held and to maximise the business’ ability to deliver all orders on time and in full.

The steps we follow to implement this system are –

Stage 1 – Identify Improvement Opportunities

• Obtain inventory-related data – sales, existing inventory holdings, open purchase orders

• Create forecasts for all products

• Model impact of varying inventory policies and settings via scenarios

• Determine inventory improvement potential - $ savings, stock turns, order fill rates, cash flow improvement –    based on each scenario

Stage 2 – Determine Inventory Objectives and Parameters

• Confirm target scenario and objectives for new inventory settings – stock levels, customer service levels, stock    turns required for all products

• Determine appropriate inventory settings to achieve targets based on scenarios modelled

Stage 3 – Implementation

• Create routines to import data

• Confirm data integrity

• Confirm forecasts and inventory settings

• Commence

Ease of Implementation

The OMS Toolset can be installed, configured and implemented in under one month. The Toolsets are hosted on Primarius’ servers and only require 3 files to be uploaded before the system can be utilised. IT involvement and software capital costs are avoided by this approach.


Benefits of OMS

• Increased Sales

      o Potential Missed Sales identified in advance to allow corrective action to be taken

      o OMS identifies high margin, high volume products and protects them from going out of stock

• Reduced Supply Lead-times

      o Supply forecasts can be provided to Suppliers, reducing replenishment lead-times

• Reduced Costs

      o Reduced stock on hand levels

      o Reduced MOQs

      o Reduced levels of product obsolescence

      o Reduced storage space

      o Reduced handling costs

      o Reduced distribution costs

• Improved Cash Flow

      o Increased stock turns

      o Reduced value of items purchased

      o Cash Flow Forecasting



 
"Our objectives are to
provide our clients with
the tools, systems and
methodologies to enable
them to improve inventory
stock turns, reduce product
out of stocks and maximise
the use of working
capital . . ."
 
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